Navigating corporate transparency and compliance: new legal considerations under the ECCTA

Since the introduction of the Economic Crime and Corporate Transparency Act (ECCTA) in October 2023, significant reforms to corporate governance and anti-money laundering measures have occurred in the UK. While initial provisions came into effect last year, businesses are now being urged to deepen their understanding of the Act, as further obligations are set to come into force this spring and beyond.

New Measures Coming Into Force

The Registrar (Identity Verification and Authorised Corporate Service Providers) Regulations 2025, passed on 20 January 2025, will implement further provisions of the ECCTA. These changes will roll out in phases over the coming months, affecting how businesses interact with Companies House and strengthening measures to prevent fraudulent activity within UK-registered entities.

Key Changes for Authorised Corporate Service Providers (ACSPs)

One of the most immediate changes affects Authorised Corporate Service Providers (ACSPs). In an effort to improve the accuracy and reliability of corporate filings, all individuals and organisations presenting information to Companies House will be required to verify their identity. This applies to all ACSPs, who must now be authorised by the UK Registrar of Companies and will also be designated as “Companies House authorised agents.” Only these approved ACSPs will be permitted to submit filings and oversee identity verification requirements on behalf of companies.

Registration and identity verification for ACSPs commenced on 25 February 2025. This requirement is expected to increase transparency, ensuring that only verified individuals and entities interact with Companies House to prevent misuse and fraudulent activity.

Identity Verification for Company Officers and PSCs

Another major change involves the mandatory identity verification of company officers and persons with significant control (PSCs). Once the provisions are fully in force, all company directors, LLP members, general partners of limited partnerships, and PSCs will be required to verify their identities. This will apply to any entity subject to disclosure under the Companies Act 2006.

• From 25 March 2025, voluntary identity verification is available for existing directors, LLP members, and PSCs.
• By autumn 2025, identity verification will become mandatory for all new appointments.
• Any corporate member of an LLP or general partner of an LP must submit details of a verified managing officer or director. Any registration failing to provide verified management details will be rejected by Companies House.
• New and existing company officers and third-party agents filing on behalf of businesses must hold a verified Companies House account.
• Directors must verify their identity before or during the registration process. Failure to comply within the required timeframe will constitute an offence and may result in civil penalties.

These measures aim to ensure a more robust and transparent corporate register, reducing the risk of fraudulent directorships and unlawful activities.

Suppression of Residential Addresses

To balance transparency with privacy concerns, Companies House now has the power to accept applications from individuals requesting that their residential address be suppressed from public disclosure, provided it was previously used as a registered office address. This provision came into effect on 27 January 2025 and is designed to enhance privacy protections while maintaining corporate accountability.

Future Provisions Under ECCTA

Further changes under the ECCTA will be introduced in a phased manner over the next few years, affecting multiple aspects of corporate governance.

• Verification for Limited Partnerships (LPs): The identity verification process for general partners and PSCs of limited partnerships is set to commence in spring 2026, with full compliance expected by autumn 2026.
• Restrictions on Corporate Directors: The use of corporate directors will be restricted, ensuring that only companies with an entirely natural person board can appoint corporate directors. Every corporate director must also have verified their identity. This measure is expected to be enforced by the end of 2026.
• Enhanced Shareholder Information: Companies will be required to disclose more detailed information about shareholders and their shareholdings in the register of members.
  • Companies must record the full names of all shareholders.
  • Private companies and traded companies where shareholders hold at least 5 percent of issued shares of any class must provide a one-off full shareholder list, updated annually via confirmation statements.
  • Any exemptions from providing PSC information will require disclosure of the reason for exemption and details of the regulated market where PSC information is published.

Digitisation and Filing Requirements

Companies House is modernising corporate record-keeping through mandatory digital filing of company accounts. To align with international best practices, companies will be required to submit accounts using the Inline Extensible Business Reporting Language (iXBRL) format.

This digitisation effort aims to enhance the usability and comparability of financial information by requiring each financial element to be appropriately tagged. The government is also evaluating whether to reduce the time allowed for filing accounts. However, no immediate changes have been made, though legal provisions have been included in the Act to facilitate potential future amendments in this area.

Dormant companies will also face additional scrutiny. Those claiming dormant company status must now file an eligibility statement, providing Companies House with additional evidence to ensure transparency and deter under-reporting.

Strengthening Information Sharing with Regulators

The ECCTA introduces a variety of measures to facilitate information sharing between Companies House, law enforcement agencies, regulatory bodies, and the private sector. Such information-sharing will occur only under conditions outlined in the Act, ensuring that it is proportionate and appropriate while supporting the government’s economic crime prevention efforts.

The government’s objective remains increasing transparency over who controls UK-registered companies, while ensuring that transparency measures do not inadvertently expose individuals to fraud or security risks.

To achieve this balance, the government has proposed additional protections for personal information. Directors and PSCs already have limited rights to suppress certain personal details, and discussions are ongoing regarding broadening these rights to protect individuals facing significant risks, including in cases where suppressing all personal particulars may be justified.

Practical Considerations for Solicitors

Solicitors advising clients on ECCTA compliance should:

• Ensure corporate clients understand the mandatory identity verification obligations and plan for the autumn 2025 deadline.
• Confirm that ACSPs used by clients are authorised and fully compliant with the new verification regime.
• Review data protection measures, particularly residential address suppression, to protect clients from fraud risks.
• Monitor upcoming restrictions on corporate directors and changes to limited partnership governance.
• Guide clients on enhanced shareholder and PSC reporting obligations.
• Prepare for the mandatory digital filing transition, ensuring clients meet iXBRL standards.

The ECCTA marks a significant shift in corporate compliance, and practitioners should take a proactive role in ensuring clients are well-prepared for the evolving regulatory landscape. Staying ahead of these changes will be crucial for mitigating legal risks and ensuring full compliance with the new framework.