The Economic Crime and Corporate Transparency Act 2023 (ECCTA) represents one of the most significant overhauls of the UK’s corporate regulatory framework in recent years. Its central aim is to strengthen the integrity of UK corporate structures, improve transparency, and tackle economic crime.
For limited companies and their advisers, the changes brought in by ECCTA will have a direct impact on how businesses and their advisers interact with Companies House and keep certain of their records.
Why is ECCTA considered necessary
For many years, the UK’s corporate registry system has displayed significant vulnerabilities, making it a target for misuse and manipulation. One of the most concerning issues has been the ease with which fraudulent companies could be incorporated and exploited. It has also been relatively simple, for example, for fraudsters to hijack the credit ratings of legitimate businesses by registering new entities with deceptively similar names. Inaccuracy of filed information is widespread, and it takes little effort to uncover inconsistencies or outdated information within company filings.
This position has been the product of the traditionally passive role played by Companies House and the ease with which Companies House filings have been able to be made. Until now, individuals have been able to submit filings on behalf of companies without needing to provide evidence of authority which is a position which fraudsters have learned to exploit. The impact of false filings has been increased by the tendency of, for example, banks and credit reference agencies, to regard the Companies House register as a definitive source of corporate information, unwittingly relying on records that may be flawed or deliberately manipulated.
The introduction of ECCTA represents a fundamental shift in the role of Companies House from passive recorder to active regulator and gatekeeper. The legislation brings in a suite of reforms designed to enhance the accuracy, reliability, and integrity of the register with the aim of restoring confidence in its use as a trusted source of corporate data and is guided by three core government objectives, namely:
- To prevent misuse of UK corporate entities by organised criminals, fraudsters, kleptocrats and terrorists;
- To strengthen the fight against economic crime, including new powers for law enforcement to seize crypto assets and enhanced information-sharing across the financial sector; and
- To support enterprise by improving the reliability of Companies House data, making it a more dependable source for business transactions and lending decisions.
Key Changes under ECCTA
Guided by the three core objectives, the key reforms introduced by ECCTA include mandatory identity verification for directors and persons with significant control (PSCs), stricter requirements for registered offices and authorised email addresses for companies and enhanced powers to cross-reference data and share information with law enforcement.
- Identity Verification
This change is likely to be the one most noticed by legitimate companies and their advisers. The aim is to ensure that all directors and PSCs are formally identified to Companies House. Whilst individuals have been able to verify their identity to Companies House since 8 April 2025 on a voluntary basis, from 18 November 2025, registration will become compulsory for:
- All new company directors and PSCs;
- All new members of LLPs; and
- Anyone delivering documents to Companies House (such as company secretaries).
(Required Individuals)
For any Required Individuals who have not yet completed identity verification checks as part of the voluntary process, there will be a 12-month transitional period beginning on 18 November 2025 during which verification must be completed. The final deadline for each individual will be linked to the date on which their company is due to file its annual confirmation statement within that 12-month window. Identity verification must be completed no later than the date of that statement to remain compliant.
Company secretaries will not be required to verify their identity as part of the changes being introduced, unless they are going to file Companies House documents on behalf of the company.
How to Verify
There are three verification routes available to Required Individuals:
- Self-verification by an individual via the gov.uk One Login or the Post Office.
- Verification through an Authorised Corporate Service Provider (ACSP) using digital tools.
- Manual verification by an ACSP, requiring specialist document-checking expertise.
It is likely that many lawyers and accountants will become ACSP’s to enable them to continue to provide the service of filing documents on behalf of clients which they have undertaken for many years. ACSP’s must be supervised by a UK anti-money laundering supervisory body and must formally register as an ACSP with Companies House. Once registered, an ACSP will be subject to ongoing compliance requirements, including around identity verification, record-keeping (for at least 7 years), and cooperation with regulatory and enforcement authorities.
Failing to register but acting as an ACSP and failing to comply with any compliance requirements is a breach of the law – penalties, including fines, criminal sanctions, and loss of professional authorisation are possible consequences of any breach.
2. Company Registers
From 18 November 2025, companies will no longer need to maintain certain local statutory registers (e.g. registers of directors, secretaries, PSCs, and usual residential addresses). Instead, this information will be centralised at Companies House. A company will still need to keep its own separate register of members. The current obligation to do that is not changing.
It will be essential that shareholders provide the required information to Companies House within the prescribed timeframes and ensure its accuracy. Penalties for failure include fines and, in serious cases, criminal prosecution and imprisonment.
3. Filing Requirements
Companies will soon also be required to record and report to Companies House a one-off list of all current members. The date applying to this requirement has yet to be announced. Once implemented, an up to date list will be required to be provided each time a company’s confirmation statement is filed.
From 1 April 2027, all companies will be required to file their accounts with Companies House using commercial software. Many accountants will have that software, but businesses should ensure that they will be able to meet the changed requirement by the implementation date.
4. Corporate Governance and Fraud
From 1 September 2025, ECCTA introduced a new corporate offence – failure to prevent fraud. The offence applies to large organisations and is designed to shift corporate culture from reactive to proactive fraud prevention, especially in large organisations where internal complexity can mask misconduct. Large organisations will need to undertake the following key actions in order to mitigate and minimise any risk of falling foul of this new offence:
- Leadership commitment to anti-fraud culture;
- Regular fraud risk assessments across operations;
- Tailored prevention policies and internal controls;
- Due diligence on staff and third parties;
- Clear training and communication to foster awareness;
- Ongoing monitoring and review to ensure effectiveness.
For these purposes a large entity is one that meets two or more of the following criteria in any financial year:
- Annual turnover: More than £36 million
- Balance sheet total: More than £18 million
- Number of employees: More than 250
These thresholds apply on a consolidated basis for groups of companies, meaning a parent company must consider the figures of its entire corporate group.
5. Protection of Personal Information
Whilst a lot of the changes under ECCTA put a strong focus on increasing transparency, since 21 July 2025, individuals have been able to apply to suppress certain personal details from historic filings, including residential addresses, dates of birth, signatures and business occupations, not least because fraudsters have found access to these useful. This will largely relate to directors but anyone who has historically provided information to Companies House should consider using this right.
Summary
ECCTA represents a major step forward in enhancing the integrity of publicly recorded company data. By strengthening trust in the information held at Companies House and taking a more proactive stance against economic crime, the legislation has a significant role in reshaping elements of corporate administration and governance. While the reforms place greater responsibility on companies and their advisers, they also offer important safeguards for companies and individuals. Early engagement, careful planning, and ongoing compliance will be essential to adapting successfully and ensuring that companies remain both protected and compliant in this new regulatory environment.
How Prettys Can Help
Prettys has already registered as an ACSP with Companies House and can assist clients directly with identity verification, support advisers whose clients may need our help, together with advising on the wider governance, compliance and corporate law issues arising from ECCTA.
For further information or advice, please contact Sarah Lewis, 01473 298202 / 07825 381984).
