Economic Crime and Corporate Transparency Act 2023

The long-awaited Economic Crime and Corporate Transparency Act 2023 (the Act) received royal assent on 26 October 2023. The Act introduces wide-ranging reforms to combat economic crime and to prevent the abuse of corporate structures. 

The new legislation generally applies to all entities registered with Companies House (including private and public limited companies, LLPs, limited partnerships, community interest companies and overseas companies). It also imposes new responsibilities for:

• all new and existing company directors;
• people with significant control of a company (PSCs); and 
• anyone who files information at Companies House on behalf of a company.

Although the Act is now law, many of its provisions will not become effective until implementing legislation has been passed and the necessary system changes have been introduced at Companies House. This means that some central elements of the reform, such as identity verification, will not be operative until spring 2025, or later. 

The first significant tranche of provisions came into force on 4 March 2024. These include the following:

• new rules for registered office addresses;
• a requirement for all companies to supply a registered email address;
• a requirement for all companies to confirm that they’re forming the company for a lawful purpose;
• stronger checks on company names; 
• greater powers for the registrar to query information on the register, request supporting evidence and to annotate the register when information appears confusing or misleading; and
• new rules on director disqualification.

To help fund the exercise of its enhanced powers of investigation and enforcement, Companies House increased its existing fees and introduced new fees from 1 May 2024. In addition, from 2 May 2024, new regulations gave Companies House the ability to impose financial penalties where a relevant offence has been committed.

The Government has published an outline transition plan setting out the intended timetable for implementation of some of the remaining key reforms under the Act, including:

• From 25 February 2025 – firms regulated by anti-money laundering legislation will be able to register as an Authorised Corporate Service Provider (ACSP) and then carry out identity verification for individuals.
• From 25 March – individuals will be able to voluntarily verify their identity.
• By autumn 2025 – Mandatory identity verification requirements will be introduced for initial directors and PSCs of newly incorporated companies. The 12 months transition period for existing directors and PSCs to verify their identity will also begin at the same time.
• By spring 2026 – New filing restrictions will come into effect requiring a person filing a document at Companies House to either be registered as an ACSP or to have completed identity verification.

The transition plan does not yet include implementation dates for the prohibition on corporate directors, changes to company registers and filings, nor for the reforms in relation to accounts and audit exemptions.

The Government has usefully published a website containing information on the main changes to be implemented by the Act.

Click on the links to the subpages to find out more about how the Act will affect companies and associated individuals.