Are you prepared for the Economic Crime and Corporate Transparency Act 2023 ("ECCTA")?

The ECCTA Info Hub

Combatting Economic Offences: The Economic Crime and Corporate Transparency Act 2023

The Economic Crime and Corporate Transparency Act 2023 (ECCTA) is a significant legislative initiative introduced by the UK Government, aimed at combatting the exploitation of corporate structures in relation to fraud and money laundering. Receiving Royal Assent on 26 October 2023, the ECCTA introduces a host of reforms to Company Law and greater powers to Companies House, thereby affecting both new and existing corporate entities. The ECCTA applies to all UK registered legal entities, UK companies, UK Limited Liability Partnerships (LLP), UK Limited Partnerships (LP) and overseas companies with a UK establishment registered. Some provisions held by the ECCTA are already in force whilst others are expected to fully take effect over the coming years.

Key contact

Caroline Bamford

Director of Corporate Services

Contact

What does this mean for UK-based businesses?

The ECCTA imposes several new provisions including, for example:

Introduction of the Authorised Corporate Service Provider (ACSP). An ACSP must be granted authorised status by the Registrar of Companies (Registrar). ACSPs must be a relevant person under the Anti-Money Laundering (AML) legislation, such as lawyers and accountants. ACSPs can conduct verification checks on individuals required to be ID verified and file documents or statements with the Registrar on behalf of their clients.
Compulsory identity verification for all new and existing company directors, members of LLPs, general partners of LPs, persons with significant control (PSC), relevant officers of registrable legal entities (RLE) and those delivering documents to the Registrar. The Registrar will have increased powers to verify and decline newly submitted or existing information on the register.
Enhanced investigative and enforcement powers for Companies House, enabling them to cross-check data with private and public sector bodies and share information with law enforcement if they detect suspicious behaviour.
Enhanced protection to personal information provided to Companies House and further legislation to prevent the misuse of corporate entities.
Companies will need to ensure that their registered office is at an “appropriate address” and register an “appropriate email address”. “Appropriate” means an address where an email or a document sent to that address would be “expected to come to the attention of the person acting on behalf of the company”, therefore, PO Boxes are no longer satisfactory.
New provisions on LPs, crypto assets, the Register of Overseas Entities (ROE) and money laundering.
The expansion of the obligations of the ROE regime for overseas entities possessing or buying real estate in the UK. ROEs now have a duty to provide information to Companies House following the issue of a notice by the Registrar to require information under the Companies Act 2006. All registrable beneficial owners of overseas entities must now be disclosed on the register.

How can Michelmores assist?

It is our intention to become an ACSP so we will be able to support our clients in complying with the new requirements under the ECCTA as and when the relevant provisions come into force.

Successfully navigating the new policies and ensuring compliance with the obligations set out by the ECCTA will demand a unified approach for your business. Our dedicated Corporate Services team, led by specialists in the field of Corporate Governance and Company Law Compliance, and in collaboration with our specialist lawyers in the Business Group, Real Estate and Private Client teams, will provide cohesive guidance and solutions, helping you navigate the new legislation and prevent your organisation from committing an offence.

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Key changes

“The trend for greater corporate transparency is growing across the globe and the UK leads the way again with tackling corporate economic crime with the introduction of ECCTA. Most realise and accept that transparency in business is no longer an option but a ‘must’, so it is now vital for organisations to be ready for these changes. We are well placed and equipped to support our clients with the ECCTA compliance filing changes to Companies House as they develop in the years to come.”

Caroline Bamford

Key changes

ECCTA 2023 Timeline and Horizon Scanning

22 August 2022

The ECCTA’s prototype is established: the Economic Crime (Transparency and Enforcement) Act 2022, onset by the war in Ukraine and sanctions against Russia.

Register of Overseas Entities (ROE) principle is introduced. Overseas entities are obliged to register the beneficial owners of UK properties if the individual holds more than 25% of the shares or voting rights in the entity.

Michelmores Article: The Register of Overseas Entities ongoing requirements

Government Guidance: Register an overseas entity and its beneficial owners

26 October 2023

ECCTA receives Royal Assent

Michelmores Article: ECCTA and the Companies House Reforms

Legislation: ECCTA 2023

Companies House: Changes to UK Company Law

25 November 2023

ECCTA 2023, s 214 (sanctions enforcement: monetary penalties)

26 December 2023

ECCTA 2023, ss 196–198, Sch 12 (criminal liability of bodies, economic crimes).

ECCTA 2023, s 213 (reports on the implementation and operation of ECCTA 2023, Parts 1–3).

15 January 2024

ECCTA 2023, ss 22, 27, 67, 103, 147 (various national security-related defences and exemptions to new requirements concerning company names and identity verification requirements)

4 March 2024

Several provisions of the ECCTA come into effect, including:

section 2—a requirement to confirm lawful purpose on incorporation
sections 8–21, 23–26—stronger checks on company names and new rules for registered office addresses
section 28—appropriate address for registered office
sections 29, 30—a requirement for all companies to supply a registered email address
sections 79–87—greater powers given to Companies House to query, rectify and remove information from the register

Michelmores Article: ECCTA – Update on the Companies House Reforms and Draft Regulations

Michelmores Article: ECCTA – a Company’s Registered Office Address and the Requirement to Register an Email Address

Companies House: Changes to UK Company Law

1 May 2024

The Registrar of Companies (Fees) (Amendment) Regulations 2024 and Registrar of Companies (Fees) (Register of Overseas Entities) Regulations 2024 will come into force.

These regulations amend existing Companies House fees and introduce new fees, taking into account the cost of investigations and enforcement activities anticipated by Companies House under the ECCTA.

Michelmores Article: ECCTA – Update on the Companies House Reforms and Draft Regulations

Companies House: Changes to UK Company Law – Changes to Companies House Fees

2 May 2024

The Economic Crime and Corporate Transparency Act 2023 (Financial Penalty) Regulations 2024 come into force

Legislation: The Economic Crime and Corporate Transparency Act 2023 (Financial Penalty) Regulations 2024

22 May 2024

Companies House published draft Registrar’s Rules, which set out the information and evidence that will be required when applying for identity verification at Companies House under the new regime introduced by ECCTA 2023. The rules will be made under regulation 5 Registrar (Identity Verification and Authorised Corporate Service Providers) Regulations 2024.

Draft Companies and Limited Liability Partnerships (Protection and Disclosure of Information and Consequential Amendments) Regulations 2024 laid before Parliament. The regulations form part of the privacy reforms under ECCTA 2023 and will widen the range of circumstances in which individuals may apply to the registrar to protect their usual residential address.

Legislation: The Companies and Limited Liability Partnerships (Protection and Disclosure of Information and Consequential Amendments) Regulations 2024

23 May 2024

Publication of the draft Registrar (Identity Verification and Authorised Corporate Service Providers) Regulations 2024, which make provisions about identify verification, authorised corporate service providers (ACSP) as defined in ECCTA.

Legislation: The Registrar (Identity Verification and Authorised Corporate Service Providers) Regulations 2024

Expected late 2024

New Identity Verification Process.

All directors and people with significant control (PSCs) will need to complete identity verification, either directly with Companies House or through an Authorised Corporate Service Provider (ACSP).

Approx. between Autumn – Winter 2024/25

Companies House to introduce ID verification web portal. Authorised Corporate Service Providers (ACSPs) can begin to apply to be authorised. Individuals will have the ability to verify their ID in advance of the legal requirements.

Approx. Spring 2025 onwards

Identity verification roll out continues.