ECCTA Compliance Guide
The Economic Crime and Corporate Transparency Act (ECCTA) is a landmark UK law designed to combat economic crime, fraud, and money laundering while enhancing transparency over corporate entities. It introduced major reforms to Companies House, including mandatory identity verification for directors and a new "failure to prevent fraud" offence for large organizations.
Key components of ECCTA include:
- Companies House Reforms: Provides powers to query, challenge, and reject information filed with Companies House, enabling it to act as a "gatekeeper" against fraud.
- Failure to Prevent Fraud: A new strict liability offence (effective September 2025) holding large corporations accountable if they fail to prevent employees or agents from committing fraud to benefit the business.
- Corporate Liability Expansion: Makes it easier to hold companies liable by changing the "identification principle" to include acts by senior managers, not just company directors.
- Crypto Seizure: Enhanced powers for law enforcement to seize, freeze, and recover crypto-assets used in crime.
- Identity Verification: Mandatory ID verification for all new and existing company directors, PSCs (People with Significant Control), LLP members, Limited Partnership partners and those filing company information.
These changes, which began coming into effect in late 2023 with more extensive changes in 2024 and 2025, aim to improve the accuracy of the UK’s business registry and strengthen national security by curbing illicit financial activity.
The specific requirement - that the IDs of all UK company directors and PSCs, etc, must be verified - commenced on 18 November 2025. Existing directors must verify their identities by the first confirmation statement date that occurs after this date while new directors must verify immediately upon appointment.
UK company directors and PSCs, etc, have until the second half of November 2026 to verify their identities and fully comply with the new legal requirement.
In order to comply, UK company directors could use the GOV One login route or, alternatively, they will probably find it easier, simpler and quicker to use an ACSP such as directorverifications.com (which is a trading name of Finovium Limited ACSP).
Non-compliance with the new law will trigger very harshly-worded letters from Companies House that threaten prosecution and/or financial penalties. Continued non-compliance will lead to prosecution and fines.
Furthermore, Companies House will forbid non-compliers from filing any documents at Companies House and prevent them from becoming directors of other companies.
