The Economic Crime and Corporate Transparency Act 2023 (“ECCT Act”) is designed to tackle economic crime and improve transparency of corporate entities. The intention is that the ECCT Act will strengthen measures in the United Kingdom against corporate fraud, enhance fraud prevention, safeguard victims, and establish accountability for fraudulent activities conducted by employees within organisations.
The ECCT Act received Royal Assent on 26 October 2023, and it is anticipated that the measures will come into effect in 2024.
What does this mean for you?
Among other provisions, the ECCT Act creates a requirement for all directors and persons with significant control (PSCs), as well as others making filings, to verify their identity with Companies House. There will be two ways to verify your identity either through Companies House via a third-party digital service or through an Authorised Corporate Service Provider (an “ACSP”). An ASCP must be registered with a supervisory body for anti-money laundering purposes and based in the UK, such as Burnett & Reid LLP. An ACSP will be able to verify an individual’s identity with Companies House on their behalf.
If you do not comply with the identity verification requirements there can be both criminal sanctionsand civil penalties including being unable to file statutory filings and incorporations/registrations of new companies being rejected. For directors, failing to verify could also result in being prohibited from acting as a director.
The Companies House register will show where someone has an unverified status. Companies House will also gain further powers such as the ability to remove or decline information, already on or submitted to the companies register.
The ECCT Act will empower the Registrar of Companies to:
- question information currently on the register and request further information
- remove or reject information from the register, which is incorrect or misleading
- share information with law enforcement
- instruct companies to change their name and reject future inappropriate names
- protect individuals where their identity has been used without their consent
You will need a registered email address
The ECCT Act requires every company to have a registered email address. This will be requested either when the company is incorporated or when the company files their next confirmation statement. Failure to provide an email address will be considered an offence, punishable through fines.
The email address needs to be monitored by someone authorised to act on behalf of the company.
Failure to comply with the requirements set out in the ECCT may result in the company receiving a criminal conviction, a fine and any sentences imposed for individuals who are also found guilty of the same offence. The maximum fine will depend on the offence, however for the most serious crimes an unlimited fine will be available.
Shareholders
The ECCT Act will also now requires shareholders to provide their full name, for example names must be listed as ‘John Smith’ instead of ‘J Smith’.
The government will introduce a one-off requirement for private companies, and traded companies where shareholders hold at least 5% of the issued shares of any classes of the company, to provide a full list of shareholder names.
After the Act comes fully into force companies must provide a full list of shareholder names via the next confirmation statement.
How can Burnett & Reid LLP help you?
We are a corporate service provider and as such we can verify identities and provide a registered email address to meet the above requirements. Our company secretarial and registrar services provide a review service to ensure that the information we hold and is held at Companies House is accurate and eases the company administration burden.
We currently provide company secretarial and registrar services to local companies based in Aberdeen and Aberdeenshire, reach out and let us take some of the company administration