Companies House announces identity verification

Companies House has announced that authorised corporate service providers (ACSPs) can start to register from February 25th. This is a key step in implementing the new filing regime for Companies House introduced under the Economic Crime and Corporate Transparency Act 2023 (ECCTA).

With the aim of reducing fraud and increasing transparency, these reforms are set to reshape the regulatory landscape for all UK companies by introducing stricter compliance requirements and more stringent AML checks.

Increased compliance costs may push firms out

Until now, law firms, accountants and company formation agents have been able to make filings at Companies House without any formal oversight or regulatory supervision. However, under the new regulations, only registered ACSPs will be able to make key filings at Companies House. Operating as an ACSP will require firms to undertake more time-consuming and costly AML checks on behalf of their clients and at the same time, accept a greater level of operating risk in providing the services. Many law firms and other service providers may decide that these added costs and risks are too great, leading them to exit the market completely.

Market consolidation is expected, with fewer but more specialised providers

Firms that already specialise in company formations and compliance will have an advantage and gain market share, growing where others are leaving. Law firms and accountants that previously handled filings as something of a secondary service may stop doing so, leading to more outsourcing to dedicated corporate service providers and growth for specialist firms that can handle compliance more efficiently.

These regulatory changes will be phased in throughout 2025 and into 2026, meaning that service providers must act now to ensure they are ready for the new regime. ProSec is already supporting law and accountancy firms who have chosen to outsource their company secretarial services and is set up to register as an ACSP as soon as applications open on 25th February.

Naomi Rich, Chief Operating Officer at ProSec, said some firms that currently undertake this work will probably reconsider their position in the market. Even established law firms, both national and international, are outsourcing this work to ProSec because the increased cost and risk profile of this work means that it no longer makes business sense for them to continue in this market. This has meant that our business has grown prior to this announcement, and we believe it will continue to do so as more and more firms exit this area of work.