What Is the Economic Crime & Corporate Transparency Act?

• The Economic Crime and Corporate Transparency Act 2023 introduces major reforms to Companies House.
• All UK-registered companies face new obligations, including identity verification for directors.
• Companies House now has greater powers to challenge and reject information and enforce compliance.
• A new offence – failure to prevent fraud – will apply to large organisations that do not have reasonable procedures in place to deter fraud.
• SMEs are not directly affected by the failure to prevent fraud offence, but the principles behind it represent good business practice for all.

The Economic Crime and Corporate Transparency Act 2023 (ECCTA) is part of the UK government’s strategy to tackle fraud, money laundering, and other economic crimes.

It follows the Economic Crime (Transparency and Enforcement) Act 2022, which was passed urgently in response to Russia’s invasion of Ukraine. This Act primarily aimed to prevent wealthy Russian nationals and other foreign entities from abusing or exploiting the UK economy.

The 2023 Act builds on this and broadens efforts to ensure the business landscape is open, fair, and safe for legitimate companies and investors.

It brings the most significant changes to Companies House since it was first established in 1844. It also introduces new powers for law enforcement, changes to the rules governing limited partnerships, and the creation of new corporate criminal offences.

The Economic Crime and Corporate Transparency Act received royal assent in October 2023, so some provisions are already in force. Others – including new Companies House processes and the failure to prevent fraud offence – are in effect from Autumn 2025.

While some provisions of the Economic Crime and Corporate Transparency Act apply only to large organisations, several changes affect all UK-registered companies, regardless of size.

Directors, Persons with Significant Control (PSCs), and anyone filing on a company’s behalf must verify their identity with Companies House from Autumn 2025. This will apply to:

• New directors and PSCs during company formation
• Existing directors and PSCs retrospectively (within the 12-month transition period starting November 2025)
• Individuals filing information with Companies House (e.g., accountants or company secretaries)

The goal is to prevent fraudulent appointments and ensure only real, identifiable people are able to register with Companies House.

What to do now:

• Make sure your director and PSC information is up to date
• Verify your identity online with Companies House
• Ask your accountant or company secretary whether they’ll need to verify their identity

Companies House is no longer just a passive register. It now has the power to:

• Query and reject information submitted for filing
• Request additional evidence or clarification
• Share data with law enforcement and other public bodies

This means your filings will receive greater scrutiny. Inaccurate or misleading information may be flagged, removed, or result in further queries.

What to do now:

• Check that filings are accurate and consistent before submission
• Keep clear records of changes or decisions in case you are asked to provide supporting evidence
• Review your information held by Companies House and make any necessary corrections

The Act introduces new requirements for how company details must be submitted and maintained. These include:

• A requirement for all companies to maintain a registered email address
• Stricter rules around registered offices – PO boxes will no longer be acceptable
• Additional information in annual confirmation statements, including full shareholder lists
• A move toward fully electronic filing

These changes are designed to increase transparency and make it harder for fraudulent or inactive companies to operate unnoticed.

What to do now:

• Set up a monitored company email address for all filings and communications
• Confirm your registered office address meets the new “appropriate address” standard
• Familiarise yourself with the new confirmation statement format before your next filing

In addition to reforms to Companies House and the new failure to prevent fraud offence, the Economic Crime and Corporate Transparency Act introduces several other legal changes:

• Limited partnership reform – New rules apply to limited partnerships, including a requirement to maintain a UK-based registered office and greater transparency around partners.
• Powers to seize cryptoassets – Law enforcement agencies have expanded powers to seize and recover cryptoassets suspected to be linked to criminal activity.
• Director disqualification – New provisions allow courts to disqualify individuals who facilitate the appointment of fraudulent directors.
• Removal of unused company addresses – Companies House can now remove registered office addresses that are no longer appropriate or are being misused.
• Address strategic lawsuits against public participation (SLAPPs) – Courts now have greater powers to strike down SLAPPs, which are often misused by corporate entities to silence legitimate criticism from the public or media.
• Stronger overall legal framework – The ECCTA complements existing corporate transparency and anti-fraud provisions under the Legal Services Act 2007 to create a more cohesive framework for tackling economic crime.

These measures aim to close common loopholes and strengthen the UK’s overall corporate and financial systems. Most of these changes are being introduced gradually through secondary legislation.

The Economic Crime and Corporate Transparency Act also introduces a new corporate offence: failure to prevent fraud.

This offence is intended to hold organisations accountable if their employees, agents, or associates commit fraud for the organisation’s benefit. It applies even if senior management did not know about the offence.

A company can only avoid prosecution if it can prove reasonable steps were taken to detect and prevent fraud.

The offence currently applies only to “large organisations”. A large organisation is defined by the Companies Act 2006 as a company that meets at least two of the following three thresholds:

• More than £36 million in turnover
• More than £18 million in total assets
• More than 250 employees

The offence applies to a range of criminal fraud offences under existing UK law. These include:

• False representation (Fraud Act 2006)
• Failure to disclose information
• Abuse of position
• Obtaining services dishonestly
• Cheating the public revenue
• Companies Act offences such as fraudulent trading and false statements

Even if your organisation does not currently meet the threshold, it may do so in the future. And clients or partners may begin requesting proof that fraud risks are being actively managed.

To prepare:

• Conduct a fraud risk assessment tailored to your operations
• Identify weak points in financial controls and approval processes
• Document internal procedures and reporting mechanisms
• Assign responsibility for monitoring and updating controls
• Provide fraud awareness training for managers and staff

These steps may also help protect against other offences, including bribery and money laundering.

To avoid prosecution, large organisations must now actively detect and deter fraud. But the underlying principles, including risk identification, internal controls, and clear responses, are good practice for all businesses.

Our online Fraud Prevention and Risk Management for Managers course will help you prevent and respond to fraud.

For large companies, it provides evidence that you have taken reasonable steps to meet your new legal duties under the ECCTA. For others, it acts as a vital safeguard against fraud and economic exploitation.

The course provides practical guidance to help managers:

• Understand how fraud happens in the workplace
• Recognise your legal responsibilities and liabilities
• Identify and manage fraud risks in your team or business
• Implement effective internal controls and preventative measures
• Respond confidently if fraud is suspected or detected

This course is ideal for directors, managers, and anyone with responsibility for managing people, processes, or budgets.

Take action now to meet rising expectations – and help protect your business from serious financial and reputational harm.