Companies House’ Economic Crime and Corporate Transparency Act Implementation Update

The Economic Crime and Transparency Act 2023: Transforming Companies House and UK Corporate Regulation.

As we have mentioned in our previous new blogs, the Economic Crime and Corporate Transparency Act (ECCTA 2023) introduced significant reforms to Companies House, aiming to increase transparency within the UK’s corporate sector, disrupt economic crime, and enhance the overall business environment. This new piece of legislation represents the most substantial changes to Companies House since their launch in 1844, aligning its role with modern-day challenges and ensuring that the UK remains a secure and attractive destination for business.

As we have mentioned in our previous new blogs, the Economic Crime and Corporate Transparency Act (ECCTA 2023) introduced significant reforms to Companies House, aiming to increase transparency within the UK’s corporate sector, disrupt economic crime, and enhance the overall business environment. This new piece of legislation represents the most substantial changes to Companies House since their launch in 1844, aligning its role with modern-day challenges and ensuring that the UK remains a secure and attractive destination for business.

The Act establishes four key objectives for the UK Registrars of Companies, focusing on accurate document submission, maintaining a reliable register, preventing misleading information, and curbing unlawful activities like fraud and money laundering. The Act provides Companies House with new powers to monitor and manage the register, allowing it to reject suspicious filings, remove fraudulent entries, and share data with law enforcement.

In their recent communication, Companies House has advised Company Formation Corporate Service providers, solicitors and accounts that file information with the Registrar on behalf of the Companies, that a key reform - the introduction of mandatory identity verification for new company directors and persons with significant control (PSCs) – will roll out by autumn 2025, with existing directors having a 12-month period to comply, facilitated by Authorised Corporate Service Providers (ACSPs).

The Economic Crime and Corporate Transparency Act (ECCTA 2023) is being rolled out in phases over several years, with adjustments to registration fee, already introduced in May 2024, to support new responsibilities, including enhanced data integrity, New Powers to Challenge and Change Company Names and identity verification processes.

Key changes began in March 2024 with Companies House gaining powers to reject suspicious filings and share data with law enforcement.

By 2025, identity verification for directors and persons with significant control (PSCs) will be mandatory, with penalties for non-compliance. Further measures, including verification requirements for document presenters, will continue through to spring 2026, alongside restrictions on disqualified directors.

The Act also seeks greater transparency for limited partnerships (LPs) and reforms the filing process by requiring the use of software for submitting financial accounts.

From 2026, more detailed information will be required from LPs, while the option for small companies to file abridged accounts will be removed, aiming to improve the reliability and accessibility of financial data.

The overall implementation is complex, involving over 50 pieces of secondary legislation, and timelines will adjust based on legislative processes and stakeholder collaboration, with a focus on maintaining the integrity of the Companies House register.

The Economic Crime and Transparency Act 2023 brings significant reforms to UK corporate regulation, emphasising the importance of transparency, data accuracy, and preventing economic crime.

As these changes are implemented, company formation agents, like Coddan, will play a crucial role in helping businesses navigate the new requirements, particularly in the areas of identity verification and compliance with updated filing processes. Our expertise will be essential in ensuring that businesses meet the new standards and maintain a smooth registration process, ultimately supporting the Act's goal of fostering a more secure and reliable business environment in the UK.

We are very excited by these progressive changes to the UK Corporate Legislative infrastructure, and as always, we are here to help, support and guide our clients through any legislative transition. So, should you have any questions regarding anything that was mentioned in this particular article or any questions regarding setting up a business in the UK, selecting a correct business structure, choosing an appropriate business name, registration of Corporation Tax or VAT or annual compliance services of filing your company's Annual Confirmation Statement, get in touch with us by phone +44 207 935 5171, Submit A Consultation Request Form or drop us an email!