The Economic Crime and Corporate Transparency Act 2023 (ECCTA) has significantly increased the obligations and liabilities facing directors of UK companies.
At the same time, it increased the risk of enforcement action by giving Companies House new powers to impose civil financial penalties for most Companies Act 2006 offences without the need for criminal proceedings.
This guide helps you understand the key obligations and liabilities, and what you should be doing now to comply.
Identity verification (IDV)
-
Verify the identity of any proposed new director before appointment and notify Companies House of the appointment within 14 days.
-
Confirm IDV for all current directors in the first confirmation statement due after November 18, 2025.
All directors of UK companies (or overseas companies with a registered UK establishment) must have their identity verified. This requirement came into force on November 18, 2025. There is a transition period for directors appointed prior to that date.
Further details on the IDV process can be found in our Guide to identity verification – how and when to verify your identity for Companies House.
New directors, whether appointed on incorporation or to an existing company, must have their identity verified before their appointment is filed at Companies House and, critically, before they begin acting as a director.
For directors appointed prior to November 18, 2025, companies must confirm that each director's identity has been verified in their first confirmation statement due after that date.
Those who act without having their identity verified (unless exempt) commit an offence. Breach carries a potentially unlimited fine and risks disqualification. The company also must ensure that directors do not act without their identity having been verified. Breach exposes both the company and its other directors to fines.
The company must notify Companies House of an appointment within 14 days. This notification must confirm that the director's identity has been verified, as well as include other "required information", such as date of birth and nationality. If notification is not made within 14 days, the director is prohibited from continuing to act. This is unless they reasonably believed the filing had been made.
Breach does not impact the validity of the appointment or acts carried out by the appointed person, but it could result in fines.
If any of the "required information" changes, the company must notify Companies House within 14 days. It is an offence not to do so which may result in a fine.
Also, it is an offence to provide false, misleading, or deceptive information to Companies House "without reasonable excuse". This carries an unlimited fine. However, a custodial sentence is possible where this done knowingly. This applies to all information provided to Companies House, including those relating to IDV, director appointments, and confirmation statements.
Ban on corporate directors
-
Review corporate directorships and monitor developments.
A date is yet to be set for the expected implementation of further restrictions on the use of corporate directors.
However, when these come into force, it is expected that only UK corporate entities with legal personality, whose directors are all natural persons who have had their identities verified, will be able to act as such.
Failure to prevent fraud offence
-
If your organisation qualifies as "large," review your fraud prevention procedures to ensure they are reasonable.
"Large" organisations can be held criminally liable for specified fraud offences committed by their associates (including employees, agents, and subsidiaries). This is unless they can demonstrate that they have reasonable fraud prevention procedures in place. The offence carries potentially unlimited fines.
An organisation will be "large" if it satisfies two of the following – more than: 250 employees, £36 million turnover, or £18 million assets.
Corporate criminal liability
-
Identify "senior managers", and review responsibilities and scope of authority
-
Review internal governance arrangements
The Crime and Policing Act 2026 extends the scope for criminal liability to potentially attach to a company for crimes committed by its senior managers.
From June 29, 2026, where a senior manager of a company, acting within the actual or apparent scope of their authority, commits any offence, that company could also be liable for the offence. Previously, under ECCTA, the category of crimes for which criminal liability could attach to a company was limited to specified economic crimes.
Disqualified directors
-
Conduct disqualification checks before every appointment
All directorships terminate automatically on disqualification, and the appointment of any person disqualified from being a director under the relevant disqualification legislation will be void.
From a date to be confirmed, disqualified persons will also be precluded from acting as a subscriber, or proposed person with initial significant control, on incorporation of a new company.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
[View Source]
