The Economic Crime and Corporate Transparency Act 2023 (ECCTA) introduces significant reforms to UK company law, aiming to enhance transparency and combat economic crime. These changes, affecting directors, shareholders, and persons with significant control (PSCs), are being implemented in phases, with key provisions coming into force throughout 2024 and 2025.
1. Mandatory Identity Verification for Directors and PSCs
A core feature of the new rules is compulsory identity verification for anyone involved in the control or management of a company:
- Directors: All new and existing directors must verify their identity. Companies must report new appointments within 14 days. Unverified directors will not be permitted to act in their role.
- PSCs (Persons with Significant Control): Anyone with significant ownership or control of a company must also verify their identity.
- Registrable Legal Entities (RLEs): RLEs must appoint a verified “relevant officer” (typically a director) to act on their behalf.
Verification can be completed either through Companies House or via an Authorised Corporate Service Provider (ACSP), such as a regulated accountant or solicitor.
2. Updated Requirements for Company Registers and Member Information
To simplify record-keeping and improve accuracy, some statutory registers will now be held centrally by Companies House. This includes:
- The register of directors
- Directors’ residential addresses
- Secretaries
- Persons with Significant Control
However, companies must continue to maintain their own register of members (shareholders). New requirements include:
- Recording the full forename and surname of all members (no initials)
- Including a service address for each member
- Prohibiting the registration of any share transfer unless full member details are available
- Submitting a one-off list of members with the next confirmation statement after the changes take effect
3. Stricter Rules on Corporate Directors
From 2025, companies will only be allowed to appoint a corporate director if:
- The entity is a UK corporate body with legal personality
- All directors of that corporate director are natural persons (individuals) who have verified their identity
Companies with existing non-compliant corporate director arrangements will have 12 months to transition or remove the appointment.
4. Increased Powers for Companies House
Companies House will no longer act as a passive registrar. Under the ECCTA, it will now have extended powers to:
- Reject and query information submitted for filing
- Collaborate with enforcement bodies, including HMRC, the NCA and the Insolvency Service
- Impose financial penalties of up to £10,000 per offence
- Launch criminal investigations for offences such as identity fraud or false filings
5. What Are the Risks of Non-Compliance?
Failure to comply with the new obligations could lead to serious consequences for companies and individuals:
- Directors who fail to verify their identity may be prevented from acting and could face criminal penalties
- PSCs who fail to verify could be prosecuted or fined
- Companies failing to maintain accurate member registers may not be able to process share transfers or file a valid confirmation statement
- Non-compliant filings could be rejected, resulting in delays, penalties or enforcement action
- Filing false information or obstructing investigations could lead to fines, removal from the register, or in serious cases, imprisonment for up to two years
In short, non-compliance is no longer a small administrative oversight, it could have significant reputational, legal and financial implications.
How We Can Help
We support directors, company secretaries, and business owners in meeting their Companies House and governance obligations with confidence.
Our team can assist you with:
- Identity verification for directors and PSCs
- Reviewing and updating your company records
- Ensuring your registers and filings meet new legal standards
- Advising on share transfers, confirmation statements and corporate appointments
If you’re unsure how these changes affect your business, or you’d like support getting compliant, our expert team is here to help.
Let’s ensure your business remains fully compliant under the new regime, while you focus on growing it.