ECCTA 2023 - Companies House publishes new implementation timeline

On 16 October 2024, Companies House published its indicative timeline for the rolling out of significant corporate law reforms under the Economic Crime and Corporate Transparency Act 2023 (ECCTA). The outline transition plan is a useful guide for professional advisors and practitioners and gives affected companies time to prepare for the reforms. 

ECCTA

ECCTA aims to combat economic crime by strengthening information-gathering systems on UK companies and limited partnerships. It also contains significant changes to the formation and ongoing administration of UK corporate entities. 

Since ECCTA received Royal Assent in 2023, its implementation has been taking place in a gradual manner. The first wave of changes, which focussed on querying new information contained in filings and generally took a less permissive approach to information on the register, came into force on 4 March 2024. As of last week, we now know more about the timelines for implementation of the new identity verification (IDV) and authorised corporate service provider (ACSP) regimes (see further below).

IDV introduces mandatory identity verification procedures for new and existing directors, beneficial owners and agents who file company information. They will be able to verify their identity details directly with Companies House or with ACSPs, which are registered third party providers. This aims to stem fraudulent appointments of individuals (such as disqualified directors) or unauthorised filings (such as names and addresses of citizens used without consent) on Companies House. 

After the transition period, companies that do not comply with the new regimes may face criminal or civil sanctions.

A gradual process

Companies House envisages that ECCTA will involve extensive secondary legislation (and additional guidance) over the next 18 months. Given the scale of incoming reforms whose implementation and transitional arrangements are expected to continue until 2027, Companies House does not consider it possible to set a firm timetable for the implementation for ECCTA. Timelines are also dependent on Parliamentary timetabling and will be kept under review. 

We do now, however, have a greater idea of key upcoming implementation milestones:

1. Greater strike-off powers: By Winter 2024 (into 2025), Companies House expects to be able to strike off companies registered on a false basis. 
    
2. Registration and scrutiny of ACSPs: By Spring 2025, certain professional advisers who are registered in the UK for anti-money laundering purposes will be able to enrol as ACSPs. Following checks from Companies House, ACSPs will be able to verify the identity of individuals subject to the IDV regime.
    
3. Increased confidentiality of residential addresses: By Spring 2025, Companies House envisions to enable individuals to protect their usual residential addresses from public disclosure where it currently appears on the register.
    
4. IDV regime: By Autumn 2025, directors and people with significant control (PSC) of newly incorporated companies will be required to register their details under the new IDV regime. Directors and PSCs of existing companies will have a transition period of 12 months to do so in their next confirmation statements. By Spring 2026, IDV will be compulsory for presenters filing documents at Companies House.
    
5. Limited partnership reforms: will commence no earlier than Spring 2026.
    
6. Software filing of accounts: There is no set timeline of this yet due to the complexity of the changes. Companies House will issue an extensive notice period before software-only filing of annual accounts becomes mandatory.

For further information on the transition plan timeline, please refer to: Economic Crime and Corporate Transparency Act: outline transition plan for Companies House - GOV.UK