The Economic Crime and Corporate Transparency Act 2023 – Limited Companies and LLPs

The Economic Crime and Corporate Transparency Act (“ECCTA”) received Royal Assent in October 2023, with the first elements to impact companies and LLPs coming into force on 4 March 2024.

What are the aims of ECCTA?

Following on from the Government’s initiatives under the Economic Crime (Transparency and Enforcement) Act 2022, ECCTA aims to tackle economic crime and improve the transparency of corporate entities in the UK.

What has changed for limited companies and LLPs since ECCTA was brought into force?

• Companies House reform: Companies House now has investigative powers to verify, amend and / or remove information that has been filed on the register. Companies House also has the power to require documents to be delivered by electronic means only. All documents that require to be filed with Companies House will need to be filed electronically from 1 April 2027. We have systems in place to assist clients with electronic filings and will continue to do so as part of our role as an Authorised Corporate Service Provider (“ACSP”) (when that requirement comes into force).
  
  
• Registered office address: Companies and LLPs must ensure that their registered office is an appropriate address. We will continue to provide registered office services to clients to help meet this requirement.
  
  
• Registered email address: Every company and LLP is required to maintain an appropriate email address. We expect this to be used principally for communications with Companies House and HMRC. We have systems in place to provide a registered email service as part of our registered office service. 
  
  
• Confirmation statement: Confirmation statements need to include a statement that the future intended activities of the company or LLP are lawful. We currently assist clients with making annual confirmation statement filings and will continue to capture this disclosure in our service. 
  
  
• Incorporation: On incorporation of a company a statement is required confirming that neither the directors nor any Persons with Significant Control (“PSC”) are disqualified under directors’ disqualification legislation, as well as confirming that the company is being formed for a lawful purpose. This requirement is included in our incorporation service that we provide to clients.

What will follow at a later date?

• ACSPs: ECCTA introduces the new Authorised Corporate Service Provider role.  Companies House filings are often made by intermediary corporate service providers (including law firms). When the applicable provisions come into force, only corporate service providers authorised by the UK Registrar of Companies will be able to deliver documents to Companies House and complete newly introduced identity verification requirements. We have registered as an ACSP so we can continue to help clients make filings and meet the new requirements under ECCTA as and when they come into force.
  
  
• Identity verification: There will be an obligation to carry out identity verification in certain circumstances. This will apply to all new and existing company directors, directors of an overseas company with a UK establishment, PSCs and anyone submitting filings on behalf of a company, and for members and PSCs of an LLP. While identity verification will not become mandatory 18 November 2025, the system is now live, enabling individuals to voluntarily verify their identity. Existing individual directors, members of LLPs or PSCs will need to complete identity verification checks by the date that the company's or LLP's next annual confirmation statement is due at Companies House after 18 November 2025. 

The new identity verification requirements will have a significant impact on M&A transactions. 

• • Buyers will need to check that all current directors and PSCs of the target group have had their identities verified as part of due diligence. This process will need to be factored into the deal timetable where identity verification has not yet been completed.
    
    
  • Buyers must ensure that any incoming directors or PSCs have had their identities verified prior to the board(s) of the target group changing at completion. This will also apply to incorporations of newco stacks which will not be possible unless and until the first directors have had their identities verified.
    
    
  • Post completion, Companies House will be required to be notified of the appointments of any new directors and / or PSCs of the target group and will require confirmation that their identities have been verified. Robust internal processes will need to be implemented across portfolio companies to ensure ongoing compliance with the identity verification regime, particularly when changes are made to directors and / or PSCs from time to time.

Identity verification will, with very limited exceptions, be a one-off requirement so we do not anticipate it needing to be repeated on each deal involving an individual whose identity has already been verified. 

Burness Paull is ready to assist with these processes. 

• Corporate directors: The use of corporate directors will be restricted. Only UK corporate entities with legal personality can be appointed as corporate directors. The directors of these corporate directors must be natural persons and must verify their identity.
  
  
• Shareholders: More details regarding shareholders and their shareholdings will be required in the register of members and will be included in the first confirmation statement filed following the coming into force of these provisions of the Act.
  
  
• Statutory registers: Only a register of shareholders or members will be required to be maintained by companies and LLPs, as applicable. Companies and LLPs will be required to notify Companies House of any changes to directors / members, directors’ / members’ residential addresses, secretaries and PSCs within 14 days of the change taking effect. These changes are expected to come into force fully from 18 November 2025. We currently manage registers for clients and we will continue to maintain them as part of our company secretarial service. 
  
  
• Company accounts: From 1 April 2027, micro-entities will be required to file a balance sheet and a profit and loss account only, and small companies will be required to file a balance sheet, a profit and loss account and a director’s report. We currently assist clients with the filing of their accounts and will extend our service to ensure compliance with this new requirement.
  
  
• Incorporations: Any new company or LLP will be required to confirm that the identity of the directors or members, as the case may be, has been verified.

Further legislation

In due course, further legislation will be introduced to detail how these changes will take effect. We will keep this page updated with new information. You can also sign up for updates to stay informed and ahead of the curve on the Act’s impact on companies and limited liability partnerships.

Please get in touch with your usual contact within the Burness Paull corporate team to find out how we can help you navigate the Act’s impact on companies and limited liability partnerships.

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