The Economic Crime and Corporate Transparency Bill is in its final stages and will shortly receive Royal Assent.
This wide-ranging legislation aims to overhaul the UK's defenses against money laundering and corporate misdeeds. While directed mainly at large corporations and financial institutions, the bill also contains provisions that will impact small and medium enterprises (SMEs). As an SME owner, you should understand how this bill may affect your business.
Key Provisions for SME Businesses
One of the main elements of the bill is the introduction of a new Register of Overseas Entities. This will require foreign companies that want to own UK property or participate in UK public procurement to identify their true owners. As an SME, if you are owned in whole or in part by an overseas entity, you will need to take steps to identify that ultimate owner to comply with the new rules.
The bill also introduces increased powers for Companies House, the UK's registrar of companies. Companies House will be able to challenge suspicious information provided by companies during incorporation. As an SME owner, you need to ensure that all documentation provided to Companies House is accurate and complete. Deliberately filing misleading information could lead to criminal penalties.
Finally, the legislation gives the government new powers to more quickly and easily impose sanctions on those linked to Russia and other regimes. If you have any business dealings with sanctioned individuals or companies, you'll need to cease those immediately to remain compliant with the law. Violating sanctions could put your business operations at risk.
Staying Ahead of the Changes
The Economic Crime and Corporate Transparency Bill will usher in significant changes to the business regulatory environment in the UK. As the owner of an SME, it's essential that you monitor the progress of this legislation and prepare your business to comply with any new requirements. This may involve changes to record-keeping, due diligence procedures and end-client screening.
By staying informed and making necessary adjustments, your business can avoid running afoul of the new rules. With proactive planning, SMEs can manage the regulatory transition smoothly while still focusing on daily operations and growth.
If you have any questions, be sure to seek advice from your legal and accounting advisors. Strong compliance will keep your business on the right side of the new legislation.