Are you prepared for the Economic Crime and Corporate Transparency Act 2023 ("ECCTA")?
The ECCTA Info Hub

The ECCTA Info Hub

Combatting Economic Offences: The Economic Crime and Corporate Transparency Act 2023

The Economic Crime and Corporate Transparency Act 2023 (ECCTA) is a significant legislative initiative introduced by the UK Government, aimed at combatting the exploitation of corporate structures in relation to fraud and money laundering. Receiving Royal Assent on 26 October 2023, the ECCTA introduces a host of reforms to Company Law and greater powers to Companies House, thereby affecting both new and existing corporate entities. The ECCTA applies to all UK registered legal entities, UK companies, UK Limited Liability Partnerships (LLP), UK Limited Partnerships (LP) and overseas companies with a UK establishment registered. Some provisions held by the ECCTA are already in force whilst others are expected to fully take effect in the next two years.

Key contact
Caroline  Bamford
Caroline Bamford
Director of Corporate Services

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.

Key changes

“The trend for greater corporate transparency is growing across the globe and the UK leads the way again with tackling corporate economic crime with the introduction of ECCTA. Most realise and accept that transparency in business is no longer an option but a ‘must’, so it is now vital for organisations to be ready for these changes. We are well placed and equipped to support our clients with the ECCTA compliance filing changes to Companies House as they develop in the next 2 years.”

Caroline Bamford

Key changes

ECCTA 2023 Timeline and Horizon Scanning

22 August 2022

The ECCTA’s prototype is established: the Economic Crime (Transparency and Enforcement) Act 2022, onset by the war in Ukraine and sanctions against Russia.

Register of Overseas Entities (ROE) principle is introduced. Overseas entities are obliged to register the beneficial owners of UK properties if the individual holds more than 25% of the shares or voting rights in the entity.

26 October 2023

The Economic Crime and Corporate Transparency Act (ECCTA)

25 November 2023

ECCTA 2023, s 214 (sanctions enforcement: monetary penalties)

26 December 2023

ECCTA 2023, ss 196–198, Sch 12 (criminal liability of bodies, economic crimes).

ECCTA 2023, s 213 (reports on the implementation and operation of ECCTA 2023, Parts 1–3).

15 January 2024

ECCTA 2023, ss 22, 27, 67, 103, 147 (various national security-related defences and exemptions to new requirements concerning company names and identity verification requirements)

4 March 2024

Several provisions of the ECCTA come into effect, including:

  • section 2—a requirement to confirm lawful purpose on incorporation
  • sections 8–21, 23–26—stronger checks on company names and new rules for registered office addresses
  • section 28—appropriate address for registered office
  • sections 29, 30—a requirement for all companies to supply a registered email address
  • sections 79–87—greater powers given to Companies House to query, rectify and remove information from the register

1 May 2024

The Registrar of Companies (Fees) (Amendment) Regulations 2024 and Registrar of Companies (Fees) (Register of Overseas Entities) Regulations 2024 will come into force.

These regulations amend existing Companies House fees and introduce new fees, taking into account the cost of investigations and enforcement activities anticipated by Companies House under the ECCTA.

Expected late 2024

New Identity Verification Process.

All directors and people with significant control (PSCs) will need to complete identity verification, either directly with Companies House or through an Authorised Corporate Service Provider (ACSP).

Approx. between Autumn – Winter 2024/25

Companies House to introduce ID verification web portal. Authorised Corporate Service Providers (ACSPs) can begin to apply to be authorised. Individuals will have the ability to verify their ID in advance of the legal requirements.

Approx. Spring 2025 onwards

Identity verification roll out continues.

Key contact
Director of Corporate Services
Corporate Services Manager
Senior Paralegal