On 21 January 2025, a significant update of the Economic Crime and Corporate Transparency Act 2023 (ECCTA) was published. The changes are designed to combat economic crime, prevent misuse of corporate structures, and improve corporate transparency in the UK. The reforms will have significant implications for businesses, requiring companies to verify key individuals, maintain accurate records, and comply with stricter filing requirements.
Failure to comply with the new regulations could lead to enforcement actions, penalties, and potential restrictions on company operations. To avoid these risks, businesses must understand their obligations and implement necessary compliance measures. In this newsletter, we examine some of the key changes in more detail.
Implementation Dates
The ECCTA updates will be introduced in phases, with several important deadlines to remember:
- 25 February 2025: Companies House will begin faster striking-off procedures for companies that have been formed on a false basis or fail to meet compliance obligations.
- 25 March 2025: Companies House will introduce a voluntary identity verification process for directors, persons with significant control (PSCs), and other key stakeholders. This allows individuals to verify their identity before mandatory requirements take effect.
- Autumn 2025: Identity verification becomes mandatory for all new company incorporations and new appointments of directors and PSCs. Existing company officers and PSCs must verify their identity when submitting their annual confirmation statements.
3CS will apply to be an ACSP when the registration opens. Once registered as an ACSP, we will be able to verify the required information on your behalf.
How Businesses Can Remain Compliant
To comply with the updated ECCTA rules, businesses should conduct an internal review to assess whether their records meet the new legal standards. Some questions you may want to ask include:
- Do your company records align with the new transparency requirements?
- Are directors and PSCs prepared for identity verification?
- Do you need to adjust your internal compliance processes to avoid penalties?
If you are unsure about updating your records with Companies House, we are here to provide expert guidance.
Prepare for Mandatory Identity Verification
One of the most notable changes under the ECCTA is the introduction of mandatory identity verification. Directors, PSCs, and other relevant individuals must verify their identity to continue holding their positions. Ideally, businesses should act now to ensure compliance when verification becomes mandatory in Autumn 2025.
If directors and PSCs fail to verify, they may be unable to continue serving in those roles.
Avoid Operational Disruptions
The ECCTA is part of a broader effort by the UK government to strengthen corporate governance and prevent economic crime. Companies that fail to comply with the new regulations may face:
- Delays in their filings or company registration processes.
- Financial penalties and enforcement action from Companies House.
- Increased scrutiny and reputational damage.
- Potential disqualification of directors who fail identity verification.
Compliance is essential to avoid these risks and ensure business continuity. 3CS can advise you on how the ECCTA applies to your business and assist in updating your records accordingly.
How 3CS Can Help
At 3CS, we offer comprehensive support to ensure your business complies with the updated ECCTA regulations. Our team of commercial solicitors can assess how the ECCTA affects your company and provide tailored guidance to help you navigate the changes. We assist with reviewing and updating company records at Companies House, ensuring that all filings meet the latest regulatory requirements.
3CS will apply to be an ACSP when the registration opens. Once registered as an ACSP, we will be able to verify the required information on your behalf, streamlining the compliance process and reducing administrative burdens. With our expertise, you can confidently move forward, focusing on your business operations. Please call 3CS today to discuss your requirements.
