Regulation Update: New Guidance for Implementation of Companies House Reforms

The Economic Crime and Corporate Transparency Act (ECCTA) came into force 12 months ago with the aim of strengthening the UK’s efforts to combat economic crime via a wide-ranging suite of reforms.  

Importantly the Act gives Companies House new and enhanced powers to scrutinise information provided by companies and their directors, turning it from a largely passive recipient of company information to a much more active gatekeeper.  

Background to the Companies House Reforms

Companies House now has enhanced abilities to verify the identities of company directors, remove fraudulent organisations from the register, and share information with criminal investigation agencies.  

This will serve to drive greater trust in UK companies both domestically and internationally.  The primary benefits of more accurate and reliable information in the register are that companies can better assess the risks posed by potential customers, business partners and suppliers, and reduce the incidence of fraud, money laundering and other types of financial crime.

However, some have viewed the reforms as a burden both in times of cost and resource, in particular the increased reporting requirements around beneficial ownership and identity verification of directors, shareholders, persons with significant control, and other agents.

Companies House has published a transition plan to assist companies in preparing for the changes. It outlines the timeline for the commencement of key provisions of the Economic Crime and Corporate Transparency Act 2023 (ECCTA 2023).

‍Outline plan for phased implementation of Companies House reforms

By the end of 2024/early 2025 Companies House will be able to:

• Issue financial penalties for any relevant offences under the new Act and the Companies Act
• Expedite the striking off of companies where the registrar has concluded the company has been formed for a false basis
• Annotate the register in a wider range of circumstances, such as when a company has a director who has been disqualified but has yet to terminate their appointment on the register, or where Companies House has issued a statutory notice to require more information from a person, but the matter remains unresolved

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Spring/Summer2025 this will be expanded so that Companies House can:

• Carry out checks on Authorised Corporate Service Providers (ACSPs) to authorise them to carry out verification services – ACSPs will be required to be registered in the UK and be subject to the UK’s anti-money laundering regime
• Allow individuals to voluntarily verify their identity
• Receive and assess applications from individuals seeking to have residential addresses suppressed from public disclosure in certain circumstances
• Allow access on request to certain trust information on the Register of Overseas Entities

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Then by autumn 2025 Companies House should be able to:

• Make identity verification a compulsory part of incorporation and new appointments for new directors and PSCs
• Begin the 12-month transition phase to require more than 7 million existing directors and PSCs to verify their identity – the identity verification will happen as part of the annual confirmation statement filing

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During 2026 a range of phased changes should empower Companies House to:

• Make identity verification of the presenters a compulsory part of filing any document
• Require third party agents filing on behalf of companies to be registered as an ACSP
• Reject documents delivered by disqualified directors as they will be prohibited from doing so, unless they are delivered by an ACSP for specified filings permitted by law
• Require all limited partnerships to submit more information, providing greater transparency for users of the register
• Complete the transition period for all individuals on the register requiring identity verification, and start compliance activity against those who have failed to verify their identity
• Facilitate greater cross-checking of information and data between Companies House and other public and private sector bodies

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The full plan can be found here.

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If you have questions about the Companies House reforms or the potential impact of the Economic Crime and Corporate Transparency Act, as well as how to stay ahead of implementation get in touch with a member of our team today.