How will the Economic Crime and Corporate Transparency Act 2023 affect your business?
February 12, 2024
Ed Maycock

Companies House handed world-leading new powers to clamp down on economic crime

After receiving Royal Assent on 26 October 2023, the Economic Crime and Corporate Transparency Act 2023 (“the Act” or “the 2023 Act”) is set to complement the Economic Crime (Transparency and Enforcement) Act 2022 (“the 2022 Act”) with the introduction of several new measures. Amongst other things, most notably, the 2022 Act established the Register of Overseas Entities, giving wide powers to Companies House to obtain information on overseas entities that own UK property and their beneficial owners.

The 2023 Act, which provides further powers to Companies House forms ‘the biggest shakeup to the service in its 180-year history’, introducing ‘world-leading’ powers which will allow UK authorities to clamp down further on economic crime.

As we stand today, preparations are underway to implement these changes on or after 4 March 2024, although this is subject to finalisation and confirmation of transition periods. These will be announced to ensure a smooth and manageable process of adaptation for companies.

Part 1 of the Act: Companies House Reforms - An historic upgrade

The first part of the Act outlines how Companies House will transform into an 'active gatekeeper' of corporate information, aligning with its new statutory objective to ensure the integrity of its register. This involves the following key developments:  

The Act also introduces mandatory identification requirements for all directors, persons with significant control (“PSC”), and document filers. The verification will be able to be done directly through Companies House or indirectly via an authorised corporate service provider. In introducing this measure, efforts will be made to prevent the appointment of fictitious (‘front’ or ‘straw men’) directors. A 2022 impact statement estimated that between 5.7 million and 8.8 million individuals would need to verify their identity under this measure.

Further measures to be introduced to aid Companies House as part of Part 1 of the Act are briefly summarised below:

Part 2: Limited Partnerships (“LPs”) Reforms

The Act revises the framework for LPs, focusing on:

Part 3: New Measures for Organisational Accountability in Economic Crimes

The Act introduces two significant measures to strengthen accountability for economic crimes:

  1. A new 'failure to prevent fraud' offence, imposing strict liability on organisations if an associated person commits fraud to benefit the organisation or its clients.
  2. A reform in the identification doctrine for economic crimes, expanding the scope to cover senior managers and aligning with modern corporate structures.

These changes, which have been anticipated for some time, promise to bring enhanced clarity and robustness to our operations and compliance frameworks.

It’s important to note that, in this briefing, Part 1 of the Act is explained in greater detail due to the nature of our client base. If you feel that you would be more affected by the other parts of the Act, please get in touch with one of the team at Sanctoras, and we can provide some further guidance on these areas.

Next steps

We recognise the need for the following actions to take in light of the new legislation:

Be aware that strategies for the implementation of the Act are not static; they will incrementally adapt to ongoing legislative changes. Our commitment to continuous monitoring and adaptation is fundamental to helping our clients navigate the complexities of this regulatory landscape with confidence and clarity.

At Sanctoras, our primary role is to provide guidance tailored to the individual needs of our clients. We recognise that all companies will need to pay attention to the new changes, but that each client's situation is distinct.

Should you wish to engage us to provide personalised advice to address the specific challenges and opportunities presented to your business by the Act, please contact Ed Maycock via

How will the Economic Crime and Corporate Transparency Act 2023 affect your business?