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On 16 October 2024, Companies House released a Transition Plan, outlining a preliminary timeline for introducing the key company law reforms under the Economic Crime and Corporate Transparency Act 2023 (ECCTA). ECCTA represents a significant step forward in enhancing the integrity and accuracy of the UK company register, and certainly the largest program of reforms to Companies House since the establishment of corporate registrations in 1844. Since October, Companies House has announced further updates to the Transition Plan, which serves as a useful guide for all new and existing company directors, people with significant control of a company (PSCs) and anyone filing information on behalf of a company. Alongside the Transition Plan, several sets of regulations to advance the implementation of ECCTA have also been published.
This article sets out the key milestones in the Transition Plan, including milestones in relation to the roll out of Identity Verification (IDV).
Overview of key milestones
2024
- 4 March 2024 – Companies House implemented several measures to enhance the quality of information on the register by introducing new powers for Companies House to actively query and reject potentially fraudulent customer filings, streamlining the removal of inaccurate data, and eliminating misleading company names. A new definition for registered office addresses was introduced to prevent the use of PO boxes, enabling strike-off measures against companies if they do not provide an appropriate address within a specified period. Since this date, Companies House has also been able to require companies to provide a registered email address to allow Companies House to contact them quickly and efficiently, and to require companies to confirm that their future activities are lawful on incorporation and with the annual confirmation statement.
- 1 May 2024 – Companies House increased its incorporation and annual fees to fund further investigation and enforcement against those misusing the register.
- Since October 2024, Companies House has been able to issue financial penalties for any relevant offences under ECCTA and the Companies Act 2006. Companies that do not comply with their legal obligations, for example, to file their confirmation statements or accounts on time, could face financial penalties and lose Companies House’s support. More serious offences could result in civil action, director disqualification or potentially even criminal prosecution. Companies House will work closely with the Insolvency Service and other enforcement partners in order to investigate and prosecute offences committed by Companies. Directors convicted of such offences could end up with a criminal record.
- 20 December 2024 – The Information Sharing (Disclosure by the Registrar) Regulations 2024 came into force. The regulations allow Companies House to share information with insolvency practitioners and other insolvency officeholders if they suspect any fraudulent or wrongful behaviour; the circumstances are specified in regulation 4.
2025
- 23 January 2025 – The Registrar (Identity Verification and Authorised Corporate Service Providers) Regulations 2025 (IDV Regulations) and the Unique Identifiers (Application of Company Law) Regulations 2025 (UID Regulations) were published. These regulations, which were made on 20 January 2025, form part of the new IDV regime and make provision about IDV, Authorised Corporate Service Providers (ACSPs) and Unique Identifiers (UIDs), which we have covered in our previous article: ECCTA and Companies House Reforms: The Introduction of Identity Verification (IDV), Authorised Service Providers (ACSP) and Unique Identifiers (UIN) – Michelmores
Once in force, the regulations will improve the reliability of the information on the register and make it challenging for individuals to fraudulently use another person’s identity to set up or run a company. All directors, PSCs and those who file documents with the Registrar of Companies (Registrar) will need to verify their identity. All agents will have to be registered as an ACSP with the Registrar and will need to be registered in the UK and subject to the UK’s anti-money laundering (AML) regime to do so.
- 27 January 2025 – The Companies and Limited Liability Partnerships (Protection and Disclosure of Information and Consequential Amendments) Regulations 2024 came into force, including provisions that widen the range of circumstances in which individuals may apply to Companies House to protect their usual residential address from public disclosure on the register. This includes allowing individuals to apply to have their usual residential address protected where their residential address appears on the register because it was previously the company’s registered office address.
- From 25 February 2025:
- Individuals and organisations will be able to register as an ACSP, enabling them to carry out verification services ahead of the IDV regime becoming mandatory later in the year. Companies House will begin by allowing Trust and Company Service Providers (TCSPs) and other professional service providers (such as accountants and solicitors), who are registered for AML purposes, to carry out verification services for their clients and provide these details to the Registrar.
- The Registrar’s new power to expedite the strike off of a company registered on a false basis will also come into effect. Companies House will be able to annotate the register in specific situations involving disqualified directors and unresolved statutory notices. For example, when a company has a director who has been disqualified but has yet to terminate their appointment on the register, or where Companies House has issued a statutory notice to require more information from a person, but the matter remains unresolved.
- From 25 March 2025, individuals will be able to verify their identity voluntarily using GOV.UK One Login
- By Summer 2025, individuals will be able to apply to suppress the following information from historical documents: residential addresses in most instances when shown elsewhere on the register, day of birth for documents registered before 10 March 2015 (only the month and year of birth have been publicly displayed since 10 March 2015), signatures and business occupation.
- 1 September 2025 – New corporate criminal offence of failure to prevent fraud created by ECCTA will come into effect. The offence applies to large incorporated bodies and partnerships across all sectors and may also include some charities if they are incorporated and meet the criteria to be considered a ‘large organisation’. The offence will hold organisations to account for fraud committed by their employees, agents, subsidiaries or other ‘associated persons’ who provide services for or on behalf of the organisation, where the fraud is committed with the intention of benefitting the organisation or its clients. The government has published guidance on the new offence, which is available here.
- By Autumn 2025, Companies House should be able to make IDV mandatory for new director and PSC appointments, as well as incorporations, followed by a 12-month transition period for the more than 7 million existing directors and PSCs to verify their identity. The IDV will happen as part of the annual confirmation statement filing. Companies House published Registrar’s Rules relating to the new IDV regime on 5 February 2025, setting out the information and types of evidence individuals will be required to provide, and is expected to publish detailed guidance on the IDV regime shortly.
2026
- By Spring 2026, IDV for document presenters will likely be compulsory, and third-party agents must register as ACSPs in order to make filings on behalf of companies. Companies House will also reject filings from disqualified directors, unless these are delivered by an ACSP and permitted by law.
- By the end of 2026, Companies House should be able to: require all Limited Partnerships (LPs) to submit additional information for increased transparency; complete the IDV process for all individuals on the register and commence compliance activity against those who failed to verify their identity; and, finally, facilitate data cross-checking between Companies House and other public and private sector bodies.
Summary
In summary, Companies House reveal that implementation and transitional activities will continue until 2027, subject to Parliamentary scheduling. As updates of the upcoming implementation milestones continue to be released, companies and legal entities should begin preparing for when the reforms are officially implemented by ensuring that their registered email address is correct and up to date at Companies House and that emails are regularly monitored.
Companies House also has a dedicated website in relation to the reforms, where it continues to share updates: Changes to UK company law website.
How can Michelmores assist?
We want to help our clients navigate the changes introduced by the implementation of the ECCTA. We will continue to monitor the developments and publish further updates on our ECCTA Hub as and when the Government announces new measures.
Michelmores has a dedicated Corporate Services team led by experts in company law and corporate governance. The team will be happy to speak with you if you want to know more about the forthcoming Companies House reforms or how ECCTA will affect your company or organisation.
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