Companies House Publishes Transitional Plan on ECCTA 2023: Key Points for Solicitors and Their Clients

On 16th October 2024, Companies House released its transitional plan for implementing the Economic Crime and Corporate Transparency Act (ECCTA) 2023. This landmark legislation aims to enhance transparency and combat economic crime, marking the most significant changes to Companies House since its inception in 1884. Here’s what you need to know:

Overview of the ECCTA 2023

The ECCTA 2023 is designed to reform the role of Companies House, ensuring more accurate and reliable information on the companies register. This will help strengthen the UK’s business environment, support national security, and disrupt economic crime.

Key Changes and Their Implications

1. Identity Verification:

o New Requirements: All new and existing company directors, people with significant control (PSCs), and anyone filing information on behalf of a company must undergo identity verification.

o Impact: This measure aims to prevent fraudulent activities and ensure that only verified individuals can manage or control companies.

2. Enhanced Information Accuracy:

o Registrar’s Objectives: The Act sets out objectives for registrars to ensure that information on the register is accurate and does not create a misleading impression.

o Impact: Maintains accurate records and promptly updating any changes to avoid penalties.

3. New Powers for Companies House:

o Disrupting Economic Crime: Companies House will have enhanced powers to prevent companies from engaging in unlawful activities.

o Impact: increased scrutiny and ensure compliance with all legal requirements to avoid enforcement actions.

4. Fee Increases:

o Cost Recovery: The implementation of these changes will be funded by an increase in Companies House Fees.

o Impact: Increase in costs associated with company registration and compliance.

Transitional Arrangements

The transitional plan outlines a phased approach to implementing these changes, with key dates and milestones to ensure a smooth transition.

Practical Steps for Clients

1. Prepare for Identity Verification: Ensure all relevant individuals are ready to undergo the verification process.

2. Review and Update Records: Regularly check and update company records to ensure compliance with the new requirements.

3. Budget for Increased Fees: Anticipate and plan for the increased costs associated with compliance.

Conclusion

Pepperells Solicitors can help clients navigate the ECCTA 2023, please contact any one of our offices and ask for the Business Desk.