The Economic Crime and Corporate Transparency Act 2023 (ECCTA)

The ECCTA is a significant piece of new legislation that all Companies and LLP’s must be aware of. It is intended to prevent abuse of UK corporate structures, increase corporate transparency, and reduce economic crime.

Many of the immediately relevant reforms relate to changes to Companies House and the corporate filing requirements.

Identity verification

The ECCTA introduces new identity verification procedures for Directors, Persons with Significant Control (PSCs), relevant officers of relevant legal entities (RLEs), Members of LLPs and those filing any documents at Companies House on behalf of someone else (such as a Company Secretary).

All newly appointed and existing Directors and PSCs will be required to verify their identity at Companies House. Details of the exact verification process will be set out in yet to be published regulations. However, it is expected that the ID can be verified directly with Companies House or indirectly through an authorised Corporate Service Provider and Burgess Hodgson will be acting as an authorised Corporate Service Provider on behalf of our clients.

There will be transitional arrangements for existing Directors and PSCs to verify their ID but it is expected that existing Directors and PSCs will need to confirm their identity by the time of the delivery of their next Confirmation Statement following the implementation of the ID verification process.

Individuals that do not verify their identity will commit an offence and may incur a penalty. Companies that have unverified Directors will also commit an offence.

Please note that it is intended for these new measures to start being introduced from Spring 2025.

Ban on corporate Directors

Corporate Directors will be banned subject to a limited exception. The exception requires the corporate Director to have a legal personality (registered in the UK) and all the Directors of the corporate Director will have to be natural persons and have had their ID verified.

Register of Members

The register of Members must be maintained at the registered office. It will need to record the full names and a service address for each Member. Companies must also provide information about their Members to Companies House in a one-off statement to include a full list of all shareholders in their first Confirmation Statement provided after this element of the ECCTA is in force.