What does this mean for UK-based businesses?

The ECCTA imposes several new provisions including, for example:

• Introduction of the Authorised Corporate Service Provider (ACSP). An ACSP must be granted authorised status by the Registrar of Companies (Registrar). ACSPs must be a relevant person under the Anti-Money Laundering (AML) legislation, such as lawyers and accountants. ACSPs can conduct verification checks on individuals required to be ID verified and file documents or statements with the Registrar on behalf of their clients.
• Compulsory identity verification for all new and existing company directors, members of LLPs, general partners of LPs, persons with significant control (PSC), relevant officers of registrable legal entities (RLE) and those delivering documents to the Registrar. The Registrar will have increased powers to verify and decline newly submitted or existing information on the register.
• Enhanced investigative and enforcement powers for Companies House, enabling them to cross-check data with private and public sector bodies and share information with law enforcement if they detect suspicious behaviour.
• Enhanced protection to personal information provided to Companies House and further legislation to prevent the misuse of corporate entities.
• Companies will need to ensure that their registered office is at an “appropriate address” and register an “appropriate email address”. “Appropriate” means an address where an email or a document sent to that address would be “expected to come to the attention of the person acting on behalf of the company”, therefore, PO Boxes are no longer satisfactory.
• New provisions on LPs, crypto assets, the Register of Overseas Entities (ROE) and money laundering.
• The expansion of the obligations of the ROE regime for overseas entities possessing or buying real estate in the UK. ROEs now have a duty to provide information to Companies House following the issue of a notice by the Registrar to require information under the Companies Act 2006. All registrable beneficial owners of overseas entities must now be disclosed on the register.
• Expansion of Corporate Criminal Liability, specifically the Identification Principle. The ECCTA now extends the common law “directing mind and will” to include senior people in a corporation, with the effect that a company can now be convicted if a senior person in a corporation commits an economic crime whilst acting within the scope of their authority.
• The Introduction of the Failure to Prevent Fraud Offence to hold organisations to account if they profit from fraud committed by their employees. This offence applies to all large bodies corporate, subsidiaries and partnerships meeting the following criteria: more than 250 employees; more than £36 million turnover; and more than £18 million in total assets. Listed in Schedule 13 of the ECCTA, a “fraud offence” encompasses common law offences, such as cheating the public revenue.
• SLAPPs are legal actions typically brought by corporations or individuals with the intention of harassing, intimidating and financially or psychologically exhausting opponents via improper use of the legal system. This is tackled in ECCTA in relation to SLAPPs that feature economic crimes. The overall intention is to provide defendants with greater protection, for example, enabling a defendant to use a new early dismissal mechanism where their case falls within the statutory definition of SLAPPs as determined by the court or, where a SLAPP case is allowed to proceed, there will also be a new costs protection that apply to avoid excessive cost burdens.

How can Michelmores assist?

It is our intention to become an ACSP so we will be able to support our clients in complying with the new requirements under the ECCTA as and when the relevant provisions come into force.

Successfully navigating the new policies and ensuring compliance with the obligations set out by the ECCTA will demand a unified approach for your business. Our dedicated Corporate Services team, led by specialists in the field of Corporate Governance and Company Law Compliance, and in collaboration with our specialist lawyers in the Business Group, Real Estate and Private Client teams, will provide cohesive guidance and solutions, helping you navigate the new legislation and prevent your organisation from committing an offence.