The Economic Crime and Corporate Transparency Bill received Royal Assent on 26 October 2023, becoming the Economic Crime and Corporate Transparency Act 2023 (ECCTA).  

ECCTA contains a range of measures to tackle economic crime and improve corporate transparency.  While parts of the Act deal with wider aspects of economic crime, including enforcement over cryptoassets, money laundering and failure to prevent fraud, much of ECCTA is concerned with the oversight and transparency of corporate structures in the UK.

Companies House reform

In what Companies House is itself describing as one of the most significant moments in its long history, the role of Companies House will change.  From being a largely passive recipient of information, it will become a more active gatekeeper over the creation of companies and the custodian of more reliable data.  It will have new powers to check, remove or decline information submitted to it, and more effective investigation and enforcement powers. 

Corporate transparency

Part 1 of ECCTA includes many changes to the Companies Act 2006 to increase transparency and reduce the risk of abuse.  These include:

• identity verification for all new and existing registered company directors, people with significant control and those who file on behalf of companies;
• a new requirement for companies to provide Companies House with an email contact address;
• a new requirement for a registered office address to be an "appropriate address", i.e. one at which, in the ordinary course, a document addressed and delivered to the company would be expected to come to the attention of someone acting for the company and where the delivery can be recorded by obtaining an acknowledgement of delivery;
• a prohibition on new directors acting where their appointment has not been notified to Companies House within 14 days of appointment and for so long as the notification remains outstanding;
• changes to the rules on company registers, including the abolition of the requirement for companies to keep their own registers of directors, directors' residential addresses, secretaries and people with significant control;
• new protections against the misuse of company and business names;
• new company incorporation requirements to include a statement by subscribers that the company is being formed for a lawful purpose;
• a new statement in the annual confirmation statement that the company's future activities will be lawful;
• a one-off requirement for existing companies to provide a snapshot of membership information;
• the streamlining of the filing framework for small and micro-entity companies; and
• enhanced protection of personal information provided to Companies House to protect individuals from fraud and other harms.

Part 2 of ECCTA deals specifically with limited partnerships (LPs), including Scottish LPs, amending the Limited Partnerships Act 1907 to modernise the regulatory regime for this type of partnership and tackle abuse.  Part 3 makes some changes to the Economic Crime (Transparency and Enforcement) Act 2022 which established a new Companies House register of overseas entities that own qualifying real estate in the UK.

When will these changes happen?

Most of the Act will be implemented through as yet unpublished secondary legislation.  Some of the changes will also require significant development and upgrades to Companies House systems and procedures. 

In a post published to coincide with ECCTA receiving Royal Assent, the Registrar of Companies has indicated that changes likely to be implemented in early 2024 include:

• the requirement for all companies to register an email address with Companies House;
• the new rules on registered office addresses;
• the lawful purpose confirmation requirements; and
• Companies House's enhanced powers to query and check information, to remove inaccurate information and to share data with other government departments and law enforcement agencies.

The new identity verification regime is not included in this list of early measures.

Additionally, Companies House has indicated that it will be increasing some of its fees from early 2024.  Companies House fees are set on a cost recovery basis which means that they must cover the cost of the services Companies House delivers.