ECCTA 2023: ‘is your company operating for lawful purposes?’
The Economic Crime and Corporate Transactions Act 2023 (‘ECCTA’) is making its way into law and when fully implemented will bring the biggest changes to UK company law since the Companies Act 2006 (‘CA 2006’).
This article focuses on private limited companies however, many of the ECCTA provisions that are now law also apply to public companies and LLPs.
Lawful purpose
The ECCTA makes it clear that a company must not be carrying out illegal business activities. This isn’t just about the company’s records being correct at Companies House, but whether it is operating within all the applicable laws of England and Wales.
When the company is first registered, the subscribers must now confirm that they are incorporating the company for lawful purposes. There is also an ongoing obligation for the company to confirm this at each confirmation statement.
Whilst some may view this as a tick box exercise, it is another “hook” for Companies House to hang enforcement action against a company if there is any question about its activities.
Incorporation
The ECCTA imposes a host of new requirements and transparency measures when applying to register a company using the mandatory incorporation form, IN01. These include:
- Information about subscribers: The IN01 now requires more information on each of the subscribers; including forename, surname and service address.
- Verification of Directors and PSCs: Companies House will reject the incorporation form if Unique Identifier (“UI”) codes have not been provided for all of the directors and PSCs. An individual can obtain their UI code by completing identity verification checks with Companies House.
- Registered email address: On incorporation, a company must confirm an email address to enable Companies House to communicate directly with the company. As such, the inbox must be regularly checked and the address kept up to date.
Company names
There are already restrictions to the names with which a company can be registered. For example, names that contain sensitive words which require Secretary of State approval and names which are too similar to that already registered at Companies House.
However, these restrictions have been expanded by the ECCTA with words added to the list of sensitive words and phrases. The ECCTA also extends the similar name test, so that a proposed company name cannot be the same as that of a company registered outside of the UK if an application is made to the court that it would lead to consumer.
The ECCTA has also removed the ‘significant start up costs and operating under the name’ defence to a company name challenge.
Registrar’s power to strike off a company registered on a false basis
The ECCTA expands the Registrar’s powers under the CA 2006, to allow the Registrar to strike off a company which, on an application to register or restore a company, contains information which is materially misleading, false or deceptive.
Expansion of the Registrar’s fee-raising powers
The expanded powers also allow the Registrar to increase Companies House’s fees to take into account the cost of investigations and enforcement activities anticipated under the ECCTA. However, the cost of some filings that do not require additional checks have been decreased.
The fees have recently been updated again, as of 1 February 2026, and these can be found here.
Statutory Registers
Whilst this option is not so commonly used these days, from 26 January 2026, companies are no longer permitted to use the central register of members and are instead required to hold their own register of members.
Register of members
The ECCTA has slightly amended the information to be recorded for each member on the register, bringing the requirements in line with that for directors and PSCs. The register must now record each member’s full first names, surnames and service address.
Except upon incorporation where this information is required in order to incorporate the company, the ECCTA now places the onus on the new member to provide their information within two months of becoming a member. However, a company can require the member to provide the information within only one month.
ECCTA introduces new offences where a member fails to provide their details (without a reasonable excuse) to the company, or they provide information that is misleading or false.
Register of directors, secretaries and PSCs
From 18 November 2025, the ECCTA has removed the requirement for companies to maintain their own:
- Register of directors and secretaries;
- Register of directors’ residential addresses; and,
- PSC register.
However, the duty to inform the Registrar of changes of the above information remains. New information regarding directors, secretaries and PSCs, including notifications becoming or ceasing to be any of the aforementioned positions, must be filed at Companies House within 14 days.
It should be said that in practical terms it is likely that these registers, in some form, will continue to be kept as when a company is sold or reorganised the information these Registers contain will still be relevant. Additionally, this information is still part of the information which must be confirmed on the annual confirmation statement and so it is still sensible for a company to keep.
Key takeaways
The purpose of the ECCTA is to increase accountability and transparency in order to prevent the abuse of UK corporate structures and to help tackle economic crime. All information filed with Companies House about a company, its officers, members and those with significant control must be correct and kept up to date.
We will be posting more articles which address other aspects of company maintenance and how this is affected by the phased implementation of the ECCTA.
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