Have You Received the Brown Envelope?
The Economic Crime and Corporate Transparency Act 2023
The Economic Crime and Corporate Transparency Act 2023 (ECCTA) came into force in 2023 and has been phased in throughout 2023 to 2026. It introduces significant changes and reform of Companies House, changing how company information is collected, verified and enforced. The underlying intent of the Act is to tackle and reduce fraud, money laundering, corporate abuse, and national security risks. And if you haven’t complied, then a brown envelope from Companies House threatening penalties may be about to land on your doormat.
The changes introduced switch the role of Companies House from being a passive recipient of information to a much more proactive role. It introduces identity verification, enhanced enforcement powers, stricter filing obligations and a new corporate fraud offence.
The new objectives of Companies House
The Act introduces new statutory objectives for the Registrar, including:
- Ensuring required documents are properly delivered
- Improving the accuracy and completeness of the public register
- Preventing false or misleading information
- Stopping companies from facilitating unlawful activity
This means the role of Companies House has changed from record-keeper to verifier and enforcer.
Who is affected?
New responsibilities apply to:
- Company directors (new and existing)
- People with Significant Control (PSCs)
- Anyone filing on behalf of a company
- Third-party agents and professional service providers
- Limited partnerships
- Large organisations subject to fraud prevention duties
Identity verification: A major reform
Identity verification is one of the most significant changes under ECCTA.
From 18 March 2025, Trust and Company Service Providers (TCSPs), accountants, and solicitors have been able to register as Authorised Corporate Service Providers (ACSPs) to conduct identity checks for clients.
Between 8 April 2025 – 17 November 2025, there was a voluntary period in which individuals could verify their identity early to prepare for mandatory enforcement.
From 18 November 2025, identity verification becomes mandatory for new directors and PSCs and a 12-month transition period began for existing directors and PSCs. Verification is linked to annual confirmation statements. By 18 November 2026, all directors and PSCs must be verified and enforcement against those who have not complied will begin.
How verification works
Verification uses GOV.UK One Login and requires a passport or driving licence. It involves facial-recognition and biometric checks and then a personal verification code is issued for future filings.
Consequences of non-compliance
The are a raft of potential penalties that include:
- Rejected filings
- Civil penalties
- Director disqualification
- Potential striking-off
- Criminal enforcement in serious cases
The first default letters from Companies House have already been sent.
New corporate offence: Failure to prevent fraud
From 1 September 2025, large organisations commit an offence if they fail to prevent fraud by employees or associates, unless they can demonstrate adequate prevention procedures in place. The offence is punishable by an unlimited fine.
Abolition of Statutory Registers
Effective from 18 November 2025, companies will no longer need to maintain local statutory registers for:
- Directors
- Directors’ residential addresses
- Secretaries
- People with Significant Control (PSCs)
Instead, companies must file this information at Companies House.
Register of Members still required
Companies must still maintain a register of members (shareholders) internally, held at:
- The registered office; or
- A Single Alternative Inspection Location (SAIL)
Companies previously using the central register must:
- Create a full internal register of members
- Store it at the registered office or SAIL
- Note that records were previously held centrally
- Make it available for public inspection
Although no longer required, many companies may continue maintaining internal registers for:
- Corporate governance
- Due diligence
- M&A readiness
- Investor and lender confidence
Registers remain valuable for transactional warranties and compliance audits.
Limited partnerships
By no earlier than spring 2026, limited partnerships will be required to provide additional ownership and transparency information.
Companies House will also begin publishing more shareholder data to improve visibility over company ownership.
Mandatory digital account filing
Companies House plans to require accounts to be filed via software only, following a formal notice period. This remains under development due to system complexity.
Key compliance deadlines
- 14 days to notify Companies House of changes to directors, PSCs, or secretaries
- Acting as a director without notification within 14 days will become an offence
- Identity verification required before confirmation statements (or sooner for new appointments)
- Large organisations must prepare for fraud-prevention obligations by September 2025
Sanctions
Since May 2024, Companies House have been able to impose civil penalties of up to £10,000 per offence. Companies House may now also question, reject, and share data with law enforcement and government bodies.
Failure to comply may lead to:
- Fines up to £5,000 (or £10,000 under certain expanded powers)
- Daily default fines (£1,000 + £100 per day for members’ register breaches)
- Criminal prosecution
- Up to 2 years’ imprisonment for false filings
- Director disqualification
- Company strike-off
Get in touch
The changes introduced by the ECCTA have changed the landscape for corporate regulation. Companies House has already become a much more proactive regulator, hence the brown envelope. With stronger enforcement powers, tighter identity controls, and heightened accountability for directors and businesses, it is absolutely essential for companies to make sure they are fully compliant with timely filings, verified identities and strong governance.
If you would like to discuss any of the issues raised in this article, please get in touch.
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