Economic Crime and Corporate Transparency Act 2023

The Economic Crime and Corporate Transparency Act 2023 (ECCTA) amends the Companies Act 2006 by introducing new requirements for the registration and maintenance of companies in England and Wales with the intention of tackling economic crime and improvement of corporate transparency.

Having received Royal Asset in October 2023, the ECCTA will be implemented through secondary legislation, which is yet to be published.

Objectives of ECCTA

The ECCTA aims to prevent organised criminals and fraudsters from using companies as a vehicle to abuse the UK’s open economy, strengthen the UK’s response to economic crime and support Companies House to improve the reliability and transparency of corporate data.

Key Measures Implemented by ECCTA

To achieve these aims, the Act implements various new measures which include:

Companies House Reforms

• Verification identity for all new and existing registered company directors, People with Significant Control and those delivering documents to the Registrar. Directors and PSCs who do not verify their ID will commit a criminal offence
• The ECCTA makes electronic filing compulsory
• Strengthening the Registrar’s powers to verify and decline data submitted to it or already on the register
• Improving financial information and data held on the register to increase transparency and reliability of corporate data
• Providing Companies House with more effective enforcement and investigatory powers to enable cross-checking of data with law enforcement bodies if there are suspicious or anomalous filings on the register
• Increasing the protection of personal information provided to Companies House to reduce the risks of fraud
• Overseas entities that own UK property must apply for registration at Companies House and provide information about their beneficial owners

Limited Partnership Reforms

• Tightening registration requirements for LPs
• Requires LPs to maintain a connection to the UK
• The Registrar will be able to de-register LPs which are dissolved or no longer carrying on business
   

Anti-Money Laundering Powers

• Companies will be required to record in the register of members both individuals’ member forename and surname and service address
• New corporate offence for failing to prevent fraud, which extends liability to an organisation if an associated person commits a specified offence for the organisation’s benefit unless the organisation can show it had reasonable fraud prevention procedures in place

If you have any questions about how the Economic Crime and Corporate Transparency Act may affect you or your business, please get in touch. I can be contacted on [email protected], or call on 01206 217371.