After receiving Royal Assent in October 2023, the Economic Crime and Corporate Transparency Act 2023 (ECCTA) has been coming into force in stages bringing stricter regulation for businesses with stronger enforcement powers for authorities. The impact on businesses will come into force from 18 November 2025. The next stage of mandatory ID verification will also be phased in. Alex Hall, Legal Director in the Corporate Law team at Blacks Solicitors discusses the next stage of changes and the impact this will have on UK businesses.
What does the law say?
The ECCTA marks a major overhaul of the UKโs corporate regulatory framework, creating a strengthened role for Companies House. It includes the introduction of stricter requirements for data accuracy, more powers for Companies House to investigate and take action, and stronger enforcement to combat fraud. Some of the key changes already in effect include:
- Companies House has been granted significantly increased investigatory and enforcement powers, aimed at improving the integrity of information held on the public register and deterring illicit conduct.
- Reforms have been made to broaden the grounds on which company names can be rejected, including where a name is likely to mislead with regards to the nature of a companyโs business, or could be used to perpetrate fraud.
- As part of the incorporation process, share subscribers are now required to declare that a company is being formed for a lawful purpose, with the directors making ongoing annual statements confirming that the companyโs activities and intended activities remain lawful.
- Companies must now ensure their registered office is situated at a verifiable address at which correspondence is likely to reach a representative of the business.
- Companies are also required to provide a valid and monitored email address. New companies will have to do this at the point of incorporation, and existing entities have been required to provide this in a confirmation statement (submitted after 4 March 2024).
- Professional services providers (such as law firms and accountants) who are subject to anti-money laundering legislation are able to register as Authorised Corporate Service Providers (โACSPโ). ACSPs can file documents at Companies House on behalf of their clients and conduct identity verification for individuals.
Autumn 2025 changes as ECCTA comes into force
On 18 November 2025 significant new measures will be brought in to verify individualsโ identities. Identity verification will become mandatory as part of all new company incorporations, and for newly appointed directors and People with Significant Control (PSCs).
A 12-month transition period will also begin, during which over seven million existing directors and PSCs must verify their identity. Verification will be required as part of the annual confirmation statement. Identity verification can be carried out using the Companies House online portal, at a Post Office or via an ACSP.
Businesses face stricter regulation and stronger enforcement with ECCTA
Whilst the autumn changes focus on prospective companies, they will also impact existing incorporated businesses, their directors and shareholders. Previously, legislative updates centred on setting up new companies correctly, however, owners must now meet ECCTAโs identity verification requirements.
Non-compliance can lead to unlimited fines, criminal charges or even imprisonment. Business owners should ensure that they, their teams, and their advisers fully understand the requirements and are ready to respond swiftly to maintain compliance and avoid potential penalties.
What is next?
After November, the next implementation stage is set for spring 2026, when:
- A mandatory requirement for all presenters (those filing documents at Companies House on behalf of a company) to have their identity verified in the same way as all directors and PSCs will be introduced.
- A mandatory requirement for all third party agents filing on behalf of companies to be registered as ACSPs will be introduced.
- New powers for Companies House to reject documents delivered by disqualified directors, unless they are delivered by an ACSP for specified filings permitted by law will be introduced.
PA Life’s Recommended Supplier directory is a trusted source of top class suppliers to meet the business needs of EAs, PAs and other corporate buyers.
