Uncovering ECCTA Part 1: ECCTA is here – What does it mean for your business?

Introduction

The UK’s corporate landscape is undergoing its most significant transformation in decades, and it’s all thanks to the Economic Crime and Corporate Transparency Act 2023 (ECCTA). This isn’t just another piece of legislation; it’s a fundamental re-engineering of the rules to combat the use of UK businesses for illicit activities like money laundering and fraud.

While previous efforts focused on small, incremental changes, ECCTA is a comprehensive overhaul with a clear and strategic objective: to fortify the integrity and transparency of the UK’s corporate sector.

One of the most significant shifts introduced by ECCTA is the transformation of the Registrar of Companies into a body with a more active role in policing corporate behavior. Companies House is no longer a passive entity that merely accepts filings; it is now an active gatekeeper with a clear mandate to scrutinise, challenge, and enforce the accuracy of the information it holds. This change fundamentally redefines the relationship between companies, their officers and the central registry.

Over the next few weeks, we will be diving deeper into the key elements of ECCTA, from the high-level headlines to the lesser-known details. We’ll provide you with practical insights and actionable advice to ensure your company remains compliant with these new and evolving rules.

A New Era of Corporate Accountability

ECCTA marks a new era where corporate accountability is no longer a choice—it’s a non-negotiable prerequisite for operating in the UK. This comprehensive reform is built on three interconnected pillars:

• A proactive Companies House: The role of Companies House is changing from a passive data repository to an active gatekeeper. It will have new powers to query and reject suspicious filings, remove inaccurate information, and proactively share data with law enforcement.
• Broadening corporate criminal liability: The Act introduces a “failure to prevent fraud” offence, which lowers the barrier for prosecuting companies for economic crimes. This places a significant new burden on businesses to have robust procedures in place to actively prevent fraud.
• Stringent transparency requirements: New measures, most notably identity verification for all new and existing directors and People with Significant Control (PSCs), are designed to ensure the accuracy and trustworthiness of the information held on the public register.

Phased Implementation: A Continuous Process

The changes from ECCTA won’t all happen at once. They will be rolled out over the next few years. This gives businesses time to get ready, but it also means you need to start planning now to make sure you stay on the right side of the law.

Stay tuned for our next post, where we will explore what “failure to prevent fraud” means and who is responsible.

If you have any questions in the meantime about what this means for you and your company, please contact us on contact@prosec-cosec.com