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Economic Crime and Corporate Transparency Act (ECCT)

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(@victoria-garvin)
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A client has asked if we've done any work on the ECCT - they are struggling to get their head around it!

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(@lisa-keeling)
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I imagine the reason they are struggling to get their heads around it is because there is still a distinct lack of clarity around what the act is going to mean in practice for companies or exactly when the changes will come into force. Companies House have said they are "aiming" to introduce certain changes from 4 March, however, this (like a lot of the act), needs secondary legislation so this date is still dependent on parliamentary timetables.

It seems like identify verification will be the biggest piece of work for Co Sec teams. This covers all directors, PSCs, LLP members and anyone acting on behalf of a company. Although it is not entirely clear exactly how identities will be verified or when this will be required, Companies House have said that identities will need to be verified using ID documents, such as a passport, so a good piece of work the company can do to prepare for this would be to ensure they have valid passports on file for everyone in those categories.

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(@andrew-harvey-wrate)
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What is confusing is that although the ECCT received Royal Assent in October 2023 the secondary legislation and implementation haven't been enacted and only certain provisions below will come into force on 4 March 2024 but could possibly still slip to a later date:

  • The requirement for every company to provide Companies House with a registered email address: this is solely for Companies House to communicate with companies. Companies therefore need to decide which email address to give to Companies House. Please note that the email will not go on the public record.
  • Lawful purposes confirmation on incorporation and in annual confirmation statement: On incorporation, subscribers will have to confirm that the company is being incorporated for a lawful purpose. Existing companies will have to confirm annually that their future activities are lawful on the confirmation statement.
  • 'Appropriate' registered office address rules: every company will be required to have a registered office address that is 'appropriate', meaning, essentially, somewhere that post will be received by a person who will deal with it. No company will be allowed a PO Box address. Companies House is being given new powers to change a company's registered office which is not considered to be 'appropriate' to a default address.
  • Greater powers for Companies House to query information: Companies House will be given more powers to reject or query information filed at Companies House which it believes may be suspicious, fraudulent or in some other way damaging. It will also have powers to compel a person to provide information so it can make a determination about the queried filing.
  • Annotations on the register to flag potential issues with the information supplied to Companies House: where Companies House has queried information supplied to it but hasn't received any satisfactory response, it will be able to flag that information on the public register. You may start to see annotations on the register if you are doing company searches on, for example, creditors, customers or suppliers.

The following link gives more detail of when provisions are to be implemented: Changes to UK company law - Changes to UK company law 

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(@victoria-garvin)
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Companies House have helpful information on the changes Changes at a glance - Changes to UK company law Companies House changes

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(@andrew-harvey-wrate)
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I have given the details of what is needed for the ECCT changes on the attached document

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