It’s been six months since Companies House’s new Register of Overseas Entities went live and the transitional period has now ended. Penalties will be applied to those who have failed to comply with these new rules and affected overseas entities (and their officers) may face fines, imprisonment or both over the coming months. 

You might be reading this wondering what you’ve missed and what transitional period has ended. Well, don’t worry, we’re here to keep you updated.

As a brief recap:

• The Economic Crime (Transparency and Enforcement) Act 2022 (the “Act”) went live on 1 August 2022.
• The Act required all overseas entities (and every officer of that entity) to make an application to register the details of their beneficial owners on the Companies House Register of Overseas Entities (the “Register”).
• The Act made it a criminal offence for overseas entities and their officers to fail to make an application to the Register.
• The Act provided a ‘transitional period’ of six months for overseas entities and their officers to make their applications to the Register.
• This transitional period ended on 31 January 2023.

If this is all new information to you, don’t panic, you can find our full and complete articles here and here which explain the Act and the transitional period in more detail.

So, the transitional period has ended, what has actually happened during this time?

Well, The Guardian has published an article which sets out some interesting statistics and insight from Lord Callanan. The key points are:

• Only 19,510 out of 32,440 overseas entities have declared their beneficial owners.
• This means around 40% have not.

What’s going to happen to those entities who failed to join the Register?

All overseas entities who have not joined the Register will now be prevented from buying, selling, transferring, charging, and leasing land in the UK.

In addition, both the entity and its officers will now be deemed to have committed a criminal offence under the Act and will be liable for imprisonment, a fine, or both.

We forgot to make an application to the Register! What should we do?

It’s understandable if you accidentally missed the ending of the transitional period. Afterall, it was the end of the financial year for many and the holiday period too. If this is the position you find yourself in, you’ll be pleased to know that it’s not too late.

Whilst it’s unclear at this early stage whether rectifying your breach will prevent penalties from being applied, no action will almost certainly result in penalties. So, on the balance, it would be best to rectify your mistake as soon as possible.

If you have missed the transitional period and need assistance, please get in touch as soon as possible and we will work with you to help rectify the error and mitigate further consequences.