ECCTA: what directors need to know

Legal: Daniel Billson, Prettys Solicitors

The Economic Crime and Corporate Transparency Act 2023 (ECCTA) is one of the most significant developments in corporate governance and compliance for UK businesses in years. Its aim is to improve transparency, strengthen oversight and tackle economic crime – but for directors, it also brings new duties, risks and opportunities.

A new era of accountability

Policymakers have long recognised that outdated rules have made it too easy for bad actors to commit fraud by exploiting companies. Given Companies House’s passive role in receiving documentation, its records can be manipulated with relative ease by simply filing false information. The impact of these false filings has been increased by the tendency of – for example – banks and credit reference agencies to regard the Companies House register as a definitive source of corporate information, unwittingly relying on records that may be flawed or deliberately manipulated. 

ECCTA is the government’s answer to this; a modern framework that closes loopholes and raises the bar on governance. It grants Companies House new powers to verify the accuracy of information, investigate anomalies and share intelligence with enforcement agencies, effectively turning it from post box to gatekeeper. For directors, this means filings and company data will face greater scrutiny, and errors or omissions could attract closer attention than before.

Key changes for directors

• The introduction of a new corporate offence – failure to prevent fraud. As of September 1, 2025, large organisations can be held criminally liable if an employee, agent or subsidiary commits fraud for the company’s benefit, unless ‘reasonable procedures’ were in place to prevent it. Although the offence applies only to large companies, SMEs should also take note as fraudsters increasingly target smaller businesses.
• Companies House reform means directors and persons of significant control will need to undergo ID verification, and Companies House will actively query suspicious or inconsistent information. There are also deadlines by which such ID verification needs to be completed.
• New requirements for record-keeping, reporting and disclosure mean directors must ensure governance processes are robust and data is accurate. For example, from November 18, 2025, companies no longer need to maintain certain local statutory registers. Instead, this data will now be centralised at Companies House.

ECCTA places directors firmly in the spotlight and those who take decisive action now will ensure their companies remain both protected and compliant.

And compliance is not just about avoiding penalties. Transparent, well-run businesses enjoy competitive advantages: they inspire confidence in investors, attract higher-quality partnerships and strengthen customer trust. In an environment where stakeholders demand accountability, those who can demonstrate robust governance will stand out.