Economic Crime and Corporate Transparency Act (ECCTA): Key Impacts, Compliance, and What Businesses Need to Know

Background

The Economic Crime and Corporate Transparency Act (ECCTA) is a UK law aimed at tackling economic crime by improving transparency around corporate entities, particularly by giving Companies House more power to verify information and investigate potential issues. 

The ECCTA introduces the biggest changes to Companies House since corporate registrations were established in 1844; its key aims are to strengthen the UK’s business environment, support national security and disrupt economic crime, while delivering a more reliable companies register to underpin business activity.  

The ECCTA received Royal Assent on 26 October 2023 but is being implemented in phases, with some provisions already in effect while others will come into force over time. In this Whitepaper, we will look at: 

• The ECCTA in detail, including Authorised Corporate Services Providers (ACSPs) and their role in the new legislation. 

• The key dates for the implementation of the ECCTA. 

• Who the ECCTA impacts. 

• How businesses can comply with the ECCTA. 

• The penalties for non-compliance with the ECCTA. 
  

The Economic Crime and Corporate Transparency Act (ECCTA) – an overview 

The aim of the ECCTA is to give Companies House “the power to play a more significant role in disrupting economic crime and supporting economic growth”. The goal is that, over time, the measures brought in by the Act WILL lead to improved transparency and more accurate and trusted information.  

Under the ECCTA, there will be new responsibilities for: 

• All new and existing company directors. 

• People with significant control of a company (PSCs). 

• Anyone who files information on behalf of a company. 

Under the new rules, identity verification will also apply to other registration types, including, for example, any members of a limited liability partnership (LLP).  

Once the ECCTA is implemented, checks can be completed directly with Companies House, or through an Authorised Corporate Service Provider (ACSP).  

ACSPs - also known as Companies House authorised agents – can be a business (for example, a limited company or partnership), or a person who files on behalf of others (sole trader), but they must be a regulated business i.e. supervised by a UK Anti-Money Laundering (AML) supervisory body. ACSPs can therefore include: 

• Company formation agents. 

• Solicitors. 

• Accountants. 

Under the ECCTA, all companies that file with Companies House on behalf of their clients must be a registered ACSP and have access/the means to complete robust and accurate identification and verification checks. 

Timeline of changes 

The Economic Crime and Corporate Transparency Act was enacted in October 2023, but its comprehensive changes are being implemented in phases. The initial phase focuses on cleaning up existing company register data held by Companies House in Cardiff (responsible for the registration of companies in England and Wales), Edinburgh (responsible for the registration of companies in Scotland) and Belfast (responsible for the registration of companies in Northern Ireland). 

The following stages will give Companies House further powers, including sanctioning new offences and enabling regulated (under AML law) professional service providers to become Authorised Corporate Service Providers (ACSPs) which will allow them to carry out the new verification requirements for their clients. By the Autumn, all new identity verification requirements for all directors and PSCs for new incorporations will come into force. 

Below is a summary of the ECCTA timeline so far:

• March 4 2024 – This has been the most important date of the Act so far, and required entities to provide a registered email address to Companies House as part of their core information; confirm that they are carrying out a 'lawful purpose' in their business activities and confirm that their registered address is an 'appropriate address' with  PO Box addresses no longer permitted as registered office addresses. Companies House also gained the power to share data with law enforcement agencies and to query and reject fraudulent or misleading information. 

• May 1 2024 - Companies House began charging higher incorporation and annual fees to fund its new enforcement powers. 

• October 2024 - Companies House gained the authority to issue financial penalties for relevant offences. 

• January 27 2025 – Companies House can receive and assess applications from individuals seeking to have residential addresses suppressed from public disclosure. 
  

Below is a summary of the key ECCTA implementation dates to come 

• March 25 2025 - Voluntary identity verification for individuals becomes available. 

• Spring 2025 - Companies House should be able to expedite the striking off of companies where the registrar has concluded the company has been formed on a false basis and carry out checks on Authorised Corporate Service Providers (ACSPs) to authorise them to carry out verification services – ACSPs will need to be registered in the UK and subject to the UK’s anti-money laundering regime. 

• Autumn 2025 – this is the key date for companies in the UK as it is when identity verification becomes mandatory for new directors and PSCs. This rule will come into effect immediately for new businesses, while for existing directors and PSCs, a 12-month transition period will begin. 

• From Spring 2026 onwards - more requirements will come into force. The exact dates are not yet confirmed, but will include: 

• Bringing in identity verification requirements for document presenters 

• Ensure any agents filing on behalf of companies are registered as ACSPs and reject any documents filed incorrectly 

• Require all limited partnerships to submit more detailed information 

• Ensure that those existing directors and PSCs have verified before the transition period ends – and start compliance activity against those who haven’t 

• Introduce mandatory software-only filing for all accounts. And remove ‘abridged accounts’ option for small companies. 

• Require all companies to file profit and loss accounts (currently some smaller companies do not have to) 

Have you registered as an ACSP? 

If your business files with Companies House on behalf of clients will need to register as an ACSP. You must also be registered with at least one Anti-Money Laundering (AML) supervisory body i.e. HMRC, the FCA, the SRA. 

As the ACSP, your business will be responsible for running verification checks on key people within the businesses you are filing for – i.e. all directors and PSCs - this information must be filed with Companies House, and you must, as a business, keep records of these identity checks for seven years. 

How to register 

1. Check you can apply 

When the registration portal opens – details will be here – you will need to firstly check you are eligible to apply; to register a business as a Companies House authorised agent you must be either a director, general partner, or a partner member. Once registered, you will be able to add other people who work for the business to account. 

1. Verify yourself and the business 

You will need to verify your identity for Companies House and provide details about the business. This will include the business name and address, company number, company authentication code if an LLP of Ltd, and the correspondence address and email address. You will also need to provide AML registration details; this will include the supervisory body details and AML membership numbers/IDS. 

Being an ACSP 

Once you have been accepted, Companies House will create an agent account which will be accessible online and this will be how you meet the new ECCTA requirements, as through this account you will be able to: 

• Tell Companies House when you have verified someone’s identity. 
• File on behalf of clients as an ACSP. 

How do I confirm identities as an ACSP? 

In your role as an ACSP, you will need to verify all directors and PSCs identity at the point of Incorporation. There will be a 12-month period whereby you will have to also verify the identity of directors and PSCs of existing companies – this will be done at the point of filing their new Confirmation Statement. From Spring 2026, all LLPs will need to publish information of all shareholders. This means publishing shareholder information if your own business is an LLP, and also for any businesses you act as ACSP for. 

The verification process will need to include: 

• Biometric or photographic evidence that can be compared against the individual (such as a biometric passport, a UK biometric residence card or UK photocard driving licence) to verify their name and date of birth. 

• A valid email address. 

• A current residential address and supporting evidence of identity. 

Consequences of non-compliance 

A failure to comply with the new verification requirements under the ECCTA can result in significant penalties, including criminal charges, fines, and potentially even imprisonment, as it is considered an offence to not verify your identity when required by the Registrar of Companies. 

Non-compliance could also lead to company registrations being rejected if directors are not verified.  

Under the ECCTA there will also be a new offence which applies to the director or equivalent of an ACSP, of failure to notify Companies House of any changes to their supervisory body/bodies within a period of 14 days following the change. 

How SmartSearch can help 

SmartSearch are experts in digital compliance offering a wide range of market-leading digital verification solutions that align with ECCTA requirements. A key solution for ACSP’s looking to meet their new ECCTA obligations is SmartDoc. 

SmartDoc is an award-winning solution that uses facial recognition technology to support the verification of various documents, including passports, driving licenses, work permits, and visas. SmartDoc includes two innovative document validation services: 

• SmartDoc Advanced (Automated): combines machine-learning interrogation and an OCR algorithmic check on the ID document’s Machine Readable Zone (MRZ) to verify whether the document is genuine and unaltered, with a full data integration to identify document tampering.  

• SmartDoc Expert (Human Inspection): Involves border security-trained experts examining document security features and fraud indicators, providing an additional layer of scrutiny.  

SmartDoc’s innovative solution also includes: 

• Facial Recognition and Liveness Detection: SmartDoc uses biometric AI technology to compare live selfies with ID photos, incorporating passive and active liveness detection to confirm the presence of a live individual, thereby preventing impersonation fraud. 
   

• Screening for Sanctions and PEPs: SmartDoc utilises the Dow Jones WatchList lists to include real-time PEP and Sanctions screening with all checks, while ongoing monitoring ensures users are alerted to any status changes. 

By integrating SmartDoc's features, organisations can establish robust procedures, to enable them to conduct all the identification checks you need to complete under the new ECCTA requirements.