The Economic Crime and Corporate Transparency Act 2023 (ECCTA) received Royal Assent on 26 October 2023 and is being implemented by the government in phases, allowing both Companies House and companies time to prepare for the fundamental changes contained in the Act.
Once fully in force, the ECCTA will radically transform the role of Companies House, significantly increase the level of transparency in relation to corporate entities established in the UK and introduce changes to the corporate liability regime for economic crimes.
The passing of the ECCTA follows consultations in 2019 and 2020, a white paper containing the government's final plans for reform published in February 2022 and the laying of the draft bill in September 2022 (you can read more on the background to the ECCTA on our blog here). A number of significant amendments were made to the bill as it moved through the parliamentary process, in particular including the relatively late insertion of the changes to corporate criminal liability.
Implementing the ECCTA
To date, there have been three significant commencement dates, in March and May 2024, and September 2025, and the government has published a transition plan which outlines its programme of works to implement the rest of the changes in the ECCTA. It anticipates that implementation activity and transitional periods will continue into 2027.
We have created a series of snapshots covering the different aspects of the reform, which are being continually updated to reflect the implementation process.
1. The transformation of Companies House
The ECCTA is transforming Companies House, turning it from a largely passive recipient of information to a much more active gatekeeper. Under provisions inserted into the Companies Act 2006 (CA 2006) by the ECCTA, since 4 March 2024 Companies House has had the power to query any information submitted for filing, to request further evidence in relation to submitted information and/or to reject any filings. Companies House also now has the power to remove material from the register more swiftly than was the case prior to March 2024.
Enhancing Companies House's role as an active gatekeeper of the public register, in May 2024 provisions of the ECCTA were brought into force allowing Companies House to impose civil financial penalties as an alternative to its powers to commence prosecutions in the courts for most offences under the CA 2006. It could only exercise this power however once it had published guidance on how it would use the power, which it did in October 2024.
Under further changes yet to be brought into force, Companies House will also be able in the future to require all information to be filed electronically.
See our snapshot on the transformation of Companies House here.
2. Identity verification
From autumn 2025, identity verification (IDV) requirements will be introduced on incorporation or appointment for all new company directors and people with significant control (PSCs), and a 12-month transition period will commence for existing directors and PSCs to verify their identity. From spring 2026, these requirements will extend to those filing information with Companies House. Directors and PSCs who do not verify their ID will commit a criminal offence and/or incur a civil penalty and companies that have an unverified director on their board will also commit an offence.
Ahead of the requirements becoming mandatory, since 8 April 2025 in-scope individuals have been able to complete the IDV process on a voluntary basis, using one of the three IDV routes available – online directly with Companies House, in person at a Post Office or via UK company formation agents that register with Companies House, so called authorised corporate service providers or ACSPs.
See our snapshot on identity verification here.
3. Miscellaneous company administration changes
The ECCTA makes a number of changes to the administration of companies, designed to reduce compliance burdens and improve the quality of the information on the register. Some of the changes were brought into force in March 2024, including the requirement to provide Companies House with an email address through which companies can be contacted by Companies House and a new lawful future activities confirmation in the annual confirmation statement. Further changes will be introduced later in the implementation process, including to the incorporation requirements and statutory registers.
See our snapshot on miscellaneous company administration changes here.
4. Limited partnerships
The ECCTA also contains provisions introducing registration and transparency requirements for limited partnerships, with the most significant changes slated to be introduced no sooner than spring 2026. The changes follow reforms proposed in April 2018 by the government to UK limited partnership law to strengthen the legal framework and limit the risk of limited partnerships being used for illicit activities (see our corporate update 2018/9).
See our snapshot on changes for limited partnerships here.
5. Corporate criminal liability for economic crimes
The government has also used the ECCTA to introduce changes to corporate criminal liability, implementing two of the options for reform set out in a 2022 Law Commission paper (see our briefing on the Law Commission paper here).
The two changes are: (i) the introduction of a new strict liability corporate offence of failure to prevent fraud where a company does not have reasonable fraud prevention procedures in place, which came into force on 1 September 2025; and (ii) amendments to the so-called 'identification doctrine' for economic crime, where companies can be held criminally liable for the acts of their officers or employees if they represent the company's 'directing mind and will' such that their actions can be attributed to the company concerned, which came into force in December 2023.
See our snapshot on changes to corporate criminal liability here.
6. Prohibition of corporate directors
Although not part of the ECCTA, in its February 2022 White Paper which outlined many of the reforms contained in the ECCTA, the government committed to commencing the ban on corporate directors (which was inserted into the CA 2006 by the Small Business, Enterprise and Employment Act 2015). It is anticipated that this prohibition will be brought into force as part of the ECCTA implementation process, along with the principles-based exception outlined in the 2022 White Paper.
See our snapshot on the ban of corporate directors here.
Once implementation of the ECCTA is complete, the landscape for administration of companies in the UK and the role of Companies House as the custodian of the register of companies will have been radically transformed.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
