First changes to Economic Crime and Corporate Transparency Act 2023

Following on from our article last year (which you can read here) covering the purpose and requirements to be introduced by the ECCTA, which applies to company law, the first changes are expected to be seen on 4 March 2024. All companies and advisers - irrespective of company size - should be aware of these changes as they are significant.

Recap

As a reminder, the ECCTA seeks to prevent the exploitation of companies by criminals, enhance law enforcement capabilities in combating economic crime, and improve the accuracy of data at Companies House. It grants greater powers to Companies House, aiming to boost transparency regarding UK companies and other legal entities, facilitating improved information sharing regarding suspected money laundering, fraud, and other economic offences.

Significant changes include:

• reforms to prevent the abuse of limited partnerships
• additional powers to seize and recover suspected criminal crypto assets
• reforms to give businesses more confidence to share information to tackle economic crime
• the introduction of a ‘Failure to Prevent Fraud’ offence
• introducing identity verification for registered company directors, people with significant control, and those who file on behalf of companies
• improving the financial information on the register so that it is more accurate
• providing Companies House with more effective investigation and enforcement powers, and introducing better cross-checking of data with other bodies
• enhancing the protection of personal information provided to Companies House
• changing the filing requirements for smaller companies

When does the ECCTA come into force?

Earlier this week, Companies House announced that it was aiming to introduce the first set of measures under ECCTA on 4 March 2024.

What are the first set of measures to be implemented under ECCTA?

• greater powers to query information and request supporting evidence
• stronger checks on company names
• new rules for registered office addresses
• a requirement for all companies to supply a registered email address
• a requirement for all companies to confirm they’re forming the company for a lawful purpose when they incorporate, and to confirm its intended future activities will be lawful on their confirmation statement
• the ability to annotate the register when information appears confusing or misleading
• taking steps to clean up the register, using data matching to identify and remove inaccurate information
• sharing data with other government departments and law enforcement agencies.

More details of the changes can be found on the Companies House blog here.

When do the other changes under ECCTA come into force?

The remaining measures, such as identity verification and changes to the filing of financial statements for small and micro entities will be introduced at a later date yet to be confirmed, and we will keep you up to date in advance of the changes.

Please contact your local Duncan & Toplis location for further information.