The Registrar of Companies acquired a number of new powers on 4 March 2024 under the provisions of the Economic Crime and Corporate Transparency Act 2023.
One power of direct relevance to property lawyers is the ability of the Registrar to require a person (including an overseas entity) to provide information to the Registrar for the purposes of determining whether that person has complied with the necessary registration requirements. This power is enshrined in a new Section 1092A of the Companies Act 2006, enabling the Registrar to serve a notice on the relevant person. Failure to comply with such a notice will be a criminal offence, resulting in imprisonment or a fine, or both.
This additional duty has now been added to paragraph 9 of Schedule 1A of the Land Registration etc. (Scotland) Act 2012. This is the part of the Act that says that if an overseas entity fails to comply with the duty to update its details on an annual basis in the ROE, then it is to be regarded as unregistered and so the Keeper must reject an application for registration of the relevant deed in these circumstances.
This sanction will now also apply if the overseas entity fails to comply with a notice from the Registrar to provide information under section 1092A: the overseas entity will be regarded as unregistered and the Keeper must reject the application.
The PSG understands that the Registrar has confirmed that Section 1092A notices will not be disclosed in a search of the ROE, nor will any response to such a notice. What will appear on the ROE is notification where an overseas entity has failed to comply with a Section 1092A notice, and that will show up in a search of the ROE.
By which time of course, it is too late – the entity will be deemed to be unregistered at that point.
The PSG is concerned that this may cause last minute issues when transacting with overseas entities, and has made some changes to the Overseas Entities part of the Schedules to the Offers to Sell and Offer to Lease, adding additional confirmations to be sought from an overseas entity, first: that it has not received any enquiries or communications from the Registrar relating to information in the ROE and second that it has not received a Section 1092A notice, or if it has, that it has complied with it to the satisfaction of the Registrar. The Registrar will engage with the overseas entity in advance of issuing a notice, and so the overseas entity should be well aware of the Registrar’s requirements.
When acting for or transacting with an overseas entity, it will be essential to directly enquire of the entity whether it has received any such communications from the Registrar, and to ensure that searches in the ROE are made as close to Completion as possible.