February 18, 2025 Challenges presented by the ECCTA reforms for Companies
Identity verification is one of several measures the UK government is implementing to enhance oversight of those submitting information to Companies House. The ECCTA also establishes the role of ACSPs.
An ACSP is a third party that submits information to Companies House and can conduct identity verification. There are several reasons why an organisation may turn to an ACSP. In some instances, it is because they are legally required to, in others because using an ACSP offers many benefits.
You must use an ACSP
- Unverified – If your details are unverified, you must use an ACSP to file information for your firm with the registrar.
- Filing for ‘other entities’ – As mentioned in our previous article in this newsletter, even if your details are verified, you cannot file information on the register for another firm. This may cause issues in some instances, for example, for group companies where an employee for one subsidiary can no longer file for another group company.
- Limited Partnerships (LPs) – For LPs several rules have been made more strict and certain activities can only be carried out by an ACSP: registering an LP, filing confirmation statements and filing changes to certain information.
You may prefer to use an ACSP
- Managing risk and liability – Under the new rules it is now an offence for a person to deliver a false, deceptive or misleading filing or statement to the Registrar “without reasonable excuse”. Previously it was only an offence if this was done knowingly; however, the new changes lower the threshold and increase risks to firms and employees. If you do not frequently file on the register and/or are unsure about the Companies Act you may wish to work with an ACSP to mitigate the risk of incorrect filings. These liabilities are incurred by the person filing.
- Internal Resource constraints – some firms may be well-versed with the rules regarding filings, but find internal teams are already at capacity. An ACSP can help, especially during business periods.
- Simplify processes – An ACSP can help simplify and speed up processes e.g. If you are incorporating a company, an ACSP can help incorporate the company and conduct the necessary verification checks at the same time. Otherwise, if the directors are unverified the incorporation would not be able to go ahead, and it would require two separate processes.
- Convenience – for busy directors or high net-worth individuals, it would be more convenient to appoint an ACSP who offers a managed service rather than requiring them to verify their identity themselves. ACSPs can also provide reminders for recurring annual requirements.
- Updates – ECCTA is an evolving area of law with changes being phased over the next few years. ACSPs can help clients keep up to date with the latest.
Summary
The ECCTA will introduce significant changes to how UK companies and their key personnel interact with the Companies House register. In some cases, using an ACSP is a legal requirement. However, even when not mandatory, many companies and individuals will find that using an ACSP simplifies the process, reduces compliance risks, and ensures that their obligations under the new regime are met efficiently and professionally. Elemental will be acting as an ACSP and we will continue to keep you updated on the latest.
