The Economic and Corporate Crime and Transparency Act 2023 (‘ECCTA’) provides Companies House with greater power to interrogate the data that it holds to ensure that the information it is provided with is accurate and that its services are not being used to hide criminal activity. ECCTA therefore focuses on three primary areas:
- ID Verification: ECCTA introduces a new requirement for directors and persons with significant control (‘PSC’ – those who own more than 25% of the voting rights or shares in a company) to verify their identity at Companies House or with an Authorised Corporate Services Provider (‘ACSP’ such as a solicitors or accountants).
- Information Sharing: ECCTA will allow firms to share information on economic crime, making it easier for regulated firms to share client data with each other where economic crime may be suspected.
- New Offences: ECCTA creates the offence of ‘failure to prevent fraud’ which will require large organisations, not-for-profit organisations and public bodies to introduce procedures to prevent fraud.
The timeline for reform
As the changes introduced by ECCTA are significant and wide-ranging, there are details and timings that are still to be finalised, however some reforms have already been introduced. I have laid out the following reforms that are worth noting:
From 25 February 2025: Companies House have been able to expedite the striking off process for companies that have been formed for a false basis and also carry out checks on ACSPs to allow them to carry out identity verification.
From 8 April 2025: Individuals can now voluntarily verify their identity either directly or through an ACSP.
By summer 2025: Companies House will be able to receive and consider applications from individuals seeking to have residential addresses suppressed from public disclosure in certain circumstances.
By autumn 2025: Companies House will make identity verification a compulsory part of incorporation and for new appointments of directors and PSCs and the 12-month transition phase for existing directors and PSCs to verify their identity will begin.
From 1 September 2025: The offence of failure to prevent fraud will be introduced. Directors of large firms should consider the procedures that are in place to prevent fraud from being committed by employees, agents, subsidiaries or other associated persons with the intention of benefitting the firms or their clients. Directors should be aware that management need not be aware of or have ordered the fraud and that the business will have a defence to the crime if it has reasonable prevention procedures in place.
By spring 2026: Companies House plan to:
- require the identity verification of presenters who are filing any document;
- require third party agents filing on behalf of companies to be registered as an ACSP; and
- be able to reject documents delivered by disqualified directors, unless they are delivered by an ACSP for specified filings permitted by law.
By the end of 2026: Companies House will be able to:
- require all limited partnerships to submit more information, providing greater transparency for users of the register; and
- start compliance activity against directors, PSCs and RLEs who have failed to verify their identity.
ID Verification
Companies House have recently updated their guidance on the ID verification process, with individuals now able to voluntarily verify their identity with Companies House from 8 April 2025. Individuals will either be able to verify their identity directly with Companies House through Companies House and the GOV.UK One Login or indirectly through an ACSP.
- Direct Verification with the Registrar: Individuals will be able to verify their identity through Companies House and the GOV.UK One Login. This service is intended to streamline the process for individuals to verify their identity when using multiple government services. An individual can verify their identity through GOV.UK One Login in three ways with the GOV.UK ID Check app,
- Verification by an ACSP: Alternatively, individuals will be able to have their ID certified by an ACSP who will then confirm to Companies House that they are satisfied that the information provided to them by the individual is true.
What is an ACSP?
An ACSP is an intermediary who is registered with a supervisory body for AML purposes and who already have obligations to carry out client due diligence which will include solicitors and accountants.
ACSPs will also be authorised to file documents at Companies House on behalf of individuals whose identities have been verified.
ACSPs are required to keep records for in connection with every individual whose identities have been verified by the provider. Companies House will have the power to suspend or remove an ACSP’s status should they have reason to believe that the ACSP is not fit to carry out its obligations.
Who needs to have their ID verified?
By autumn 2025, all new directors, PSCs and RLEs will be required to verify their identity in accordance with ECCTA, and a 12-month grace period will begin during which existing directors, PSCs and RLEs will be required to verify their identity at Companies House. Failure to do so will result in directors and shadow directors being prohibited from acting.
Acting without verified ID will be an offence, punishable by a fine.
The company will also be obliged to ensure that no individual undertakes any duties of a director without being identified. Should the company allow a director to act without first ensuring that their identity is verified, both the company and the existing officers of the company will be committing an offence.
However, it should be noted that, should the director act without first having verified their ID, their appointment will still be valid.
It should also be noted that Companies House currently plan to require anyone making a filing on behalf of a company to have their identity verified, with the current aim to introduce this requirement from spring 2026.
This note has been prepared based on our understanding of Companies House’s implementation plan in April 2025. We are monitoring the guidance provided by Companies House, and when in a position to do so, we will provide you with an update.
As always, if you have any questions, please do not hesitate to contact us.