What are the requirements?
The ECCTA aims to increase transparency and accuracy by introducing identity verification for:
- all new and existing company directors
- all new and existing persons with significant control (PSC)
- anyone who delivers documents to Companies House on their own behalf or on behalf of another, including authorised corporate service providers (ACSP)
There are two routes for verification:
- Companies House verifies an individual’s identity directly through the GOV.UK One Login platform; or
- an ACSP makes a statement confirming that it has verified an individual’s identity.
The role of the ACSP will be key to many companies and individuals whose filings are undertaken by their professional advisers. Accountancy firms and law firms who typically carry out this kind of work will need to apply to become an ACSP, which will require the organisation to be verified by Companies House. In order to qualify as an ACSP, the organisation or individual must be a relevant person for the purposes of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 so does not include overseas entities. Companies House has issued guidance on ACSPs here.
The scope of identity verification envisaged is very broad, encompassing all newly appointed and existing directors (including shadow directors) and PSCs or officers of RLEs. Verification will be carried out digitally and Companies House has issued guidance on how to meet the Companies House identity verification standard.
Once identity verification become mandatory, companies will need to provide a statement that the identity of the relevant directors/PSCs has been verified:
- on incorporation;
- on the appointment of a new director; and
- on the notification of a new PSC.
When do they take effect?
Companies House maintains an updated timeline for implementation in its Economic Crime and Corporate Transparency Act: outline transition plan, including the anticipated roll out of identity verification and requirements for businesses to register as an ACSP in order to carry out filings.
What are the consequences of not complying?
A director should not take any actions on behalf of the company until their identity is verified. Continuing to act as a director without being verified will amount to an offence committed by the company and every officer in default punishable by a fine; although, importantly, the actions undertaken by the director will not be invalidated. Directors who persistently act without having been verified may also face disqualification.
What can I do to prepare?
Companies can prepare now by ensuring that their directors are briefed on the requirements for identity verification and have the correct and up to date documentation ready.
If you would like to explore the company secretarial support we can offer, please contact Cosec@stevens-bolton.com.
Lucy Barnes