Are You Ready for the Economic Crime and Corporate Transparency Act? Key Changes for Businesses

The Economic Crime and Corporate Transparency Act 2023 (ECCTA) brings major changes to UK company law and the operation of Companies House. Whether you are a UK business, an LLP, or an international organisation with UK operations, these reforms will affect your compliance obligations and the way you manage company records. The ECCTA aims to strengthen the UK’s response to corporate and economic crime by improving transparency and accountability across all entities registered or operating in the UK.

This alert highlights the key changes, practical impacts, and what you should do to comply with provisions already in force and prepare for those that are forthcoming.

Mandatory Identity Verification – Effective 18 November 2025

From 18 November 2025, all new and existing directors and persons with significant control (PSCs) of UK-incorporated companies, as well as members of UK LLPs, must complete identity verification with Companies House. This requirement applies regardless of the nationality or residence of the individual, provided they hold an official position in a UK entity.

Individuals may currently verify their identity on a voluntary basis, either directly through Companies House’s One Login Portal or via an Authorised Corporate Service Provider (ACSP). ACSPs are professionals or organisations subject to anti-money laundering supervision in the UK, such as company formation agents, solicitors, accountants, chartered secretaries, and governance specialists.

Upon successful verification, each individual will be issued with a unique identifier by Companies House.

Failure to comply with the identity verification requirement by the specified deadline may result in financial penalties and restrictions on company filings.

Failure to Prevent Fraud

Effective 1 September 2025, large organisations incorporated in the UK (which meet at least two of the following criteria: more than 250 employees, more than £36 million turnover, more than £18 million in assets) are liable for failure to prevent fraud by associated persons (including employees, agents, subsidiaries, and other persons acting on behalf of the organisation), if the fraud is intended to benefit the organisation or its clients. Multinational organisations with UK subsidiaries should assess their UK operations for compliance.

An organisation commits the offence if a person associated with it commits a specified fraud offence with the intention of benefiting the organisation or their clients and the organisation did not have reasonable procedures in place to prevent fraud.

The offence covers a range of fraud offences, including fraud by false representation, fraud by failing to disclose information, fraud by abuse of position, and false accounting.

Organisations may rely on a statutory defence if they can demonstrate that “reasonable procedures” were in place to prevent fraud. These procedures should be tailored to the organisation’s size, complexity, and risk profile. Entities that do not meet this standard may be subject to prosecution by the relevant authorities and, if found guilty, could face significant fines. When determining penalties, courts will assess the adequacy of the organisation’s fraud prevention measures and its level of cooperation during investigations.

To mitigate risk, organisations should conduct regular risk assessments, maintain robust anti-fraud policies, and ensure staff receive appropriate training.

Enhanced Powers for Companies House

The ECCTA also provides Companies House with greater powers and authority to query, reject, and remove information from the register if it is suspicious, inaccurate, or fraudulent. These powers mean company filings will be subject to greater scrutiny and ongoing review. Companies House is also permitted to share data with UK law enforcement agencies.

Greater Transparency in Company Filings

UK companies and LLPs will be required to submit more comprehensive information regarding shareholders, PSCs, and registered office addresses. Overseas entities with UK subsidiaries or branches may also face increased scrutiny of their UK filings. The implementation of new digital filing systems will introduce stricter standards for company incorporation and annual returns. In addition, updates to the public register will enhance the accuracy and accessibility of company data.

Increased Sanctions and Enforcement

The ECCTA also introduces tougher penalties for non-compliance with UK company law. Criminal and civil sanctions may be imposed for breaches of the new requirements, including failure to verify identity, submit accurate information, or comply with Companies House queries. Both UK-based and international individuals with roles in UK entities should expect higher enforcement activity and greater risk of penalties for non-compliance.

What Should You Do?  

The ECCTA has been cited as a landmark piece of legislation, and its introduction has been welcomed by both regulators and industry stakeholders.

In light of these significant reforms, organisations, including international businesses with UK operations, are advised to proactively review their records and internal processes to ensure compliance with the ECCTA, particularly regarding identity verification and the accuracy of UK company filings. Preparation for more active engagement with Companies House is essential.

For tailored guidance on how the ECCTA may affect your organisation, or for support with compliance, please contact our team.