As we enter the 2024/2025 financial year, UK companies are navigating a transformative period in corporate governance and compliance. The introduction of the Economic Crime and Corporate Transparency Act 2023 (ECCT Act) has ushered in a new era of heightened scrutiny and evolving obligations.
Update: September 2026
This article was originally published in April 2024, during the early implementation of the Economic Crime and Corporate Transparency Act 2023. Since then, a number of the reforms discussed below have progressed, including Companies House identity verification requirements and further changes to company filing and transparency arrangements.
The original article has been retained as a point-in-time view of the reforms and the practical issues organisations were considering at that stage. Companies should refer to current Companies House and GOV.UK guidance when determining the requirements and deadlines that apply to them.
In my conversations with clients and colleagues, it's become clear that while understanding and adapting to these changes is a top priority, implementation has been slow. However, the implications of what is the most significant overhaul of UK company law in recent years requires a more proactive approach to compliance and governance.
In this article, we’ll delve into the intricacies of the ECCT Act, providing a comprehensive overview of the fundamental changes and their practical implications so companies can take action. We will explore the immediate actions required for compliance and forward-looking measures to ensure ongoing adherence to the evolving regulations.
Understanding the ECCT Act
The Economic Crime and Corporate Transparency Act 2023 (ECCT Act) is a landmark piece of legislation introducing sweeping reforms to UK company law. The Act aims to tackle economic crime, improve transparency, and strengthen the UK's reputation as a trusted place to do business.
The primary objectives of the ECCT Act are threefold:
1. Combat economic crime: The Act introduces measures to prevent and detect fraudulent activities, money laundering, and other forms of economic crime. It seeks to close loopholes that criminals have previously exploited.
2. Enhance transparency: The Act aims to increase transparency in corporate ownership and control structures. It requires companies to provide more detailed and accurate information to Companies House, making it easier for authorities and the public to identify companies' actual owners and beneficiaries.
3. Strengthen Companies House's powers: The Act expands the role and powers of Companies House, enabling the registrar to take a more active role in improving the integrity of information held on the register. This includes greater powers to query information and share information with law enforcement agencies and other public authorities.
The legislative changes introduced by the ECCT Act responded to concerns about the misuse of UK corporate structures for fraud, money laundering and other forms of economic crime, as well as weaknesses in the accuracy and reliability of information held on company registers.
The ECCT Act is part of a broader package of measures aimed at tackling economic crime and promoting corporate transparency.
The key changes implemented under the ECCT Act
While the reforms are both ongoing and far-reaching, here are the key aspects companies need to be aware of:
New responsibilites for companies and directors
The ECCT Act introduces several new responsibilities for companies, directors, and Persons with Significant Control (PSCs):
1. Registered office address: From 4 March 2024, companies were required to maintain an “appropriate” registered office address where documents delivered to the company would be expected to come to the attention of someone acting on its behalf and where delivery could be acknowledged. A PO Box could no longer be used as the registered office address without an appropriate physical address.
2. Registered email address: From 4 March 2024, new companies were required to provide an appropriate email address on incorporation. Existing companies were required to provide an appropriate email address when filing their first confirmation statement with a statement date from 5 March 2024 onwards. Companies were also required to maintain an appropriate registered email address.
3. Lawful purpose statements: From 4 March 2024, subscribers forming a new company were required to confirm that the company was being formed for a lawful purpose. Existing companies were required to confirm in their confirmation statement that their intended future activities would be lawful.
4. Identity verification: The ECCT Act introduced identity verification requirements for company directors and Persons with Significant Control (PSCs), with implementation to follow through secondary legislation and changes to Companies House processes. At the time of publication, these requirements were not yet in force and companies were awaiting further information about the implementation timetable.
Enhanced powers of Companies House
The ECCT Act significantly expands the authority of Companies House to maintain the integrity of the corporate register:
1. Stronger name checks: From 4 March 2024, Companies House had greater powers to scrutinise company names, including names that could facilitate criminal purposes, suggest a connection with a foreign government or international organisation where none existed, or contain computer code.
2. Information querying and removal: From 4 March 2024, Companies House had greater powers to query information that appeared incorrect or inconsistent with information it already held. The reforms also expanded the registrar’s ability to remove inaccurate, incomplete, false or fraudulent information from the register.
3. Data sharing: The ECCT Act expanded Companies House’s information-sharing powers, including its ability to share relevant information with law enforcement and other public authorities to support the prevention and detection of economic crime.
Anticipated changes and their timeline
Several changes had already come into effect from 4 March 2024, including:
Requirement for appropriate registered office and email addresses
Lawful purpose statements for new and existing companies
Stronger company name checks
Enhanced information querying and removal powers for Companies House
Tightened rules on director disqualification
Further changes were expected as implementation of the ECCT Act progressed. At the time of publication, these included:
Restrictions on the use of corporate directors, subject to limited exceptions and further implementing regulations
Mandatory identity verification for directors and PSCs, with implementation arrangements and timing still to be confirmed
Further expansion of Companies House’s information-sharing and data-matching capabilities
Commencement of the new failure to prevent fraud offence for large organisations
Changes to accounts filing requirements for small and micro-entities, including requirements relating to profit and loss accounts and changes affecting filing options.
Preparing for changes to UK company law
As the ECCT Act introduces significant changes to UK company law, businesses must develop strategic adaptation plans to ensure compliance and smooth operations. Key areas to focus on include accurate record-keeping, director and PSC identity verification, digital filing processes, and resource management.
Keeping company information accurate
With Companies House's enhanced powers to query and remove inaccurate information, companies must maintain precise and up-to-date records. This includes ensuring that registered office and email addresses are appropriate and current and promptly reporting any changes to company details. Periodic reviews of company information can help identify discrepancies and ensure that records remain accurate and up to date.
Preparing directors and PSCs for identity verification
With identity verification requirements expected to be introduced, companies could begin by identifying the directors and PSCs who would be affected and ensuring that their records were accurate and up to date. They could also monitor Companies House guidance as further details of the verification process and implementation timetable became available.
Preparing for new digital filing requirements
The ECCT Act also provided for further moves towards electronic filing, including changes to the way company accounts would ultimately be filed. As these requirements were implemented, companies would need to consider whether their existing systems and processes were suitable for the changing filing arrangements. Keeping staff responsible for company administration informed about Companies House requirements would also be important as implementation progressed.
Keeping up with legislative changes
With further ECCT Act measures still to be implemented, companies needed to keep track of developments and understand when new requirements would apply to them. Monitoring official communications from Companies House and GOV.UK provided an important way of keeping up to date as implementation progressed. Periodic reviews of company records, responsibilities and processes could also help identify areas requiring attention as new measures took effect.
Managing capacity for changing filing requirements
As further ECCT Act measures were implemented, companies needed to consider whether they had sufficient capacity to manage changing filing requirements, maintain accurate company information and coordinate the practical work involved. This could include reviewing responsibilities within the organisation, identifying gaps in capacity and bringing in additional support for defined areas of work where needed.
Corporate Assist can provide additional capacity where organisations need practical support with the work arising from regulatory change. This might include coordinating information from different teams, maintaining records and trackers, supporting reviews of existing documentation and providing defined Compliance & Risk Support or Corporate Governance Support alongside internal teams and specialist advisers.
Keeping pace with corporate transparency reforms
The ECCT Act introduced substantial changes to the UK company law framework, with implementation taking place over a number of stages. For companies, this reinforced the importance of understanding which requirements applied, when they took effect and what changes were needed to existing records, processes and responsibilities.
It also demonstrated the value of taking a forward-thinking approach to regulatory change. Identifying new requirements early, understanding their practical impact and coordinating the necessary information, records and actions can make regulatory change much easier to manage.
Find out more about our Compliance & Risk Support or get in touch to discuss your requirements.
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