Companies House has recently published guidance on how to apply to remove an Overseas Entity (OE) from the Overseas Entity Register at Companies House and when that application can be made.
We considered the requirement for registration of an OE (as defined in the Economic Crime (Transparency and Enforcement ) Act 2022 (ECTEA)), and the updated information that had to be submitted to support such an application, in an earlier note, see here. We now consider when and how an application can be made for removal ("a removal application").
When can a removal application be made:
When an overseas entity has disposed of all of its "qualifying estates " in the UK (namely freehold or leasehold in excess of seven years which was bought on or after 1st January 1999 in England and Wales, 8 December 2014 in Scotland and 5 September 2022 in Northern Ireland), it can apply for removal of the OE entry at Companies House. This can only be done when the Land Registry no longer lists that OE as the registered proprietor of any such land or property.
As the Land Registry does not automatically record disposals, but relies on applications from new proprietors, it is important to ensure that any incoming buyers have appropriate contractual obligations ensuring that they do apply to register any acquisition as soon as possible and that they notify the OE when the application has been completed.
Also, as the Land Registry is experiencing significant backlogs, there may be a time lag between the actual disposal and the application being dealt with at Land Registry. It is important to appreciate that until removal, the OE's annual updating obligations at Companies House remain in force. If an OE does not comply with its updating requirements , Companies House will not process a removal application.
What information needs to be provided:
All information about the OE, its beneficial owners and managing officers must be correct as at the date that the removal application is submitted to Companies House.
So if there have been any changes which have not otherwise been notified as part of the annual updating requirements, the updated information, as verified by a UK regulated agent, must be submitted. The verification needs to have been carried out no more than three months before the date of the removal application. In the light of our comments about the Land Registry backlog (above) , it may be worthwhile considering the timing of when verification needs to take place (unless it straddles the annual updating requirements which necessitate updating in any case).
But if there have been no changes, and no updating is required, no verification checks are needed.
Summary:
If you are in the process of disposing of all qualifying estates in the UK, it's worth mentioning this to your contact at Howard Kennedy in advance so that they can carry out appropriate searches at the Land Registry. This will include checking there are no land entries that have been missed (e.g. titles for registered leases that have expired but not yet been removed). It is also sensible to have complied with the annual updating duty and have available all necessary information regarding changes for the verification agent so that you are in a position to give the required confirmations and information when submitting the removal application.
This is not legal advice and please be in touch with your usual contact at Howard Kennedy if you require further information.
This note sets out the position as at 7 May 2024.
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