The Economic Crime and Corporate Transparency Act 2023 (“ECCTA”) received royal assent in October 2023, marking the most significant reform to the UK’s corporate governance regime in over a century. Its purpose is to combat fraud, money laundering, and the misuse of UK corporate structures. To achieve this, the Act introduces sweeping changes that will impact almost all UK businesses, meaning that businesses of every size and sector must carefully assess and prepare for the changes it brings.
The ECCTA is implementing measures that combine greater oversight and stronger enforcement powers to tighten the UK’s anti-fraud and anti-money laundering framework. Importantly, the ECCTA has expanded the powers of Companies House, allowing it to become more proactive in the way it stores company information, ensuring corporate integrity. The ECCTA’s primary goal is to improve transparency, protect the UK economy from abuse, and ensure that accurate and trustworthy company information is available to the public.
The key reforms are as follows:
1. Identity Verification (“IDV”)
All company directors, Persons with Significant Control (“PSCs”)[1] , Relevant Legal Entities (“RLEs”)[2] , and all those making filings with Companies House must soon verify their identity either directly with Companies House or via a registered Authorised Corporate Service Provider (“ACSP”), such as a solicitor or accountant. The ACSP must be supervised under UK anti-money laundering regulations. It is estimated that 7 million individuals are expected to need to verify their identity in compliance with the ECCTA.
2. New Corporate Criminal Offence of “Failure to Prevent Fraud”
As of 1 September 2025, large organisations[3], including local authorities and charities can be held criminally liable if their employees, agents or other ‘associated persons’ commit fraud with the intention to benefit the organisation or their clients, unless reasonable preventative procedures are in place.
3. Improved Data Oversight
Companies House will be able to reject or query incorrect filings, flag false or misleading information, and also share data with law enforcement.
4. Greater Transparency for Limited Partnerships and Overseas Entities
Limited partnerships[4] will be required to file more comprehensive information from 2026, and additional disclosure obligations will also apply to overseas entities and trusts.
The implementation of ECCTA will be phased over the coming months, with several deadlines that businesses must track closely:
1. Companies House has already started the process of verifying ACSPs, speeded up the process of striking off false corporate entities, and is allowing voluntary identity verification.
2. On 18 November 2025, compulsory IDV will be introduced, and the following individuals will be required to verify their ID:
Furthermore, a 12-month transition period will begin for existing individuals in the positions listed above to complete their ID verification.
3. The “failure to prevent fraud” offence has already taken effect meaning large organisations must ensure they have robust anti-fraud procedures in place.
4. By spring 2026, IDV will be required for anyone filing documents at Companies House and only registered ACSPs will be authorised to submit filings on behalf of others.
5. By the end of 2026, Companies House can commence enforcement against non-verified directors, PSCs and RLEs. Those who have not engaged in IDV risk potential exposure to Companies House enforcement powers. For example, a director may face disqualification of their directorship and found to be committing a criminal offence for acting without verified ID. Companies which allow unverified directors to act for the company also risk committing an offence.
A director’s appointment will still be legally valid, even if they have not verified their identity, but they must not act in the role until the IDV is complete.
Your business should seek to stay ahead of the coming reforms and mitigate the risks associated with non-compliance. We would recommend you take the following steps:
1. Ensure that your registered email address with Companies House is current and monitored regularly to ensure you receive important updates and information.
2. Prepare for IDV by informing your directors, PSCs and RLEs of the upcoming IDV requirements and encourage them to complete voluntary IDV now to avoid delays when the mandatory rules begin on 18 November 2025. You will only need to verify an identity once, unless you are instructed otherwise.
IDV is free to complete using a GOV.UK One Login and only requires one valid form of photo ID. You can also verify your ID in person at a UK post office if you are unable to do so online. For full guidance on how to verify your identity for Companies House, please follow the link here.
3. Consider using an ACSP to assist in the process and check whether your solicitor or accountant is registered as an ACSP. Remember an ACSP can file information at Companies House on your behalf and maintain your IDV records, streamlining the compliance process.
4. If you think your business meets the size threshold for the new corporate offence of failure to prevent fraud, you should seek to implement or update your fraud prevention policies and conduct a risk assessment of your existing anti-fraud controls.
5. If you operate a limited partnership or are involved with overseas entities, you should prepare for expanded disclosure and reporting obligations in 2026. We will continue to monitor these requirements.
The ECCTA is a landmark reform reshaping UK corporate transparency and governance and businesses should be taking steps to ensure they remain compliant. Early engagement and robust internal procedures will be essential to avoid exposure to new enforcement measures.
If you require support navigating these changes, or have questions about your legal obligations, please contact us at info@culbertellis.com or call us on +44(0)204 600 9907.
[1] An individual holding significant control over the business (more than 25% of the company shares or voting rights).
[2] A corporate entity holding significant control over the business (more than 25% of the company shares or voting rights).
[3] A “large organisation” is defined in section 201 of the ECCTA as meeting two or three of the following criteria:
[4] A limited partnership is a business entity distinct from an LLP, Limited Company or general partnership and is governed by the Limited Partnership Act 1907.
