The Economic Crime and Corporate Transparency Act 2023 (ECCTA)
The long anticipated Economic Crime and Corporate Transparency Act 2023 (ECCTA) became law on 23 October 2023
ECCTA is introducing significant reforms to the existing UK legislation with the aim to strengthen the safeguards against economic crime and improve corporate transparency.
With the exception of certain provisions on money laundering, the proceeds of crime, and the new offence of Corporate Criminal Liability, which are already in force, the vast majority of the ECCTA’s provisions will be coming into effect in phases during 2024. Each phase will be subject of a commencement order by a separate statutory instrument. Once the commencement dates are known, we will share a more detailed summary of the changes introduced in each phase.
ECCTA is also introducing further rules regarding the Register of Overseas Entities and crypto assets. These details are not covered in this summary.
The new requirements will affect corporate entities that are registered at Companies House (i.e. companies, LLPs and limited partnerships). Here we are referring to “companies” for ease.
Key changes and steps to take to be ready for the implementation phase
New requirements (click on the heading to download more details)
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In force from 4 March 2024
Consider whether the information previously filed at Companies House may be inaccurate or inconsistent in any way. Take steps to rectify early to avoid rejected filings which could impact new directors’ appointments and their ability to act.
In force since 26 December 2023
Implement robust internal compliance procedures and consider whether senior managers with a significant role in the business may need training to raise awareness of the new corporate criminal liability offence.
Identity verification and disqualification disclosure requirements – prohibition to act if not compliant
- are all current directors registered at Companies House. Notify the Registrar of any ceased appointments;
- if there is corporate director, is it still needed? Is it a UK company whose directors are all natural persons?
- are there are any discrepancies in the names currently registered that will be flagged up on ID verification?
- do the individuals running or controlling the company have valid ID documents?
If there is corporate director, consider is it still needed?
If it is not a UK company whose directors are all natural persons, take the steps in the next 12 months to remove them or replace them with a UK corporate director that meets the requirements.
Transparency of ownership
Check if the company’s registers, and the filings made at Companies House, show the full names of the shareholders. If not, take the steps to have the names rectified on the share register.
Accounts, reports and restrictions on changing the accounting reference date
Consider if there is a need to change the company’s ARD before the restriction comes into force. Going forward the changes will be permitted only once every five years.
- Check if general partner(s) are disqualified under CDDA. They will not be able to act and should be removed
- Does the GP’s “registered officer” have valid ID documents for ID-verification
- Be ready to set up registered email and registered office address in the UK
- General partner to be responsible for monitoring emails received at the LP’s registered email address
- Appoint an authorised agent to take care of the LPs Companies House filings
From 4 March 2024 requirements for incorporations will include:-
- Statement that the company is formed for a lawful purpose
- Company’s registered email address to be provided for communications from Companies House
- Only individuals whose identify has been verified can be appointed as directors and registered as PSCs
Consider whether there will be a need to incorporate a new company, register LLP or LP in 2024.
Ensure that individuals to be registered as the company’s first directors or PSCs have verified their identity.
First published: 16 December 2023
Updated: 29 January 2024
how we can help
Our company secretarial team can assist with an audit of your company’s statutory registers in the light of the new requirements under ECCTA, a review of the historical filings made at Companies House to identify discrepancies and with rectification of any inconsistencies in the historical filings.