October 22, 2024 What do ACSPs do and why you might need one
The Economic Crime and Corporate Transparency Act 2023 (ECCTA) has introduced new measures aimed at tackling economic crime and increasing transparency. Many of these are designed to provide greater confidence over who is filing on the register.
The act introduces the role of authorised corporate service providers (ACSPs). An ACSP is a third party that submits information and can carry out identity verification. They are typically Trust and Company Service Providers, such as Elemental, or professional service providers such as law firms. They must be supervised by an AML supervisory body such as HMRC.
There are a number of 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 is preferable. The requirement may be to solve a temporary problem or using an ACSP may be an ongoing solution.
There are certain functions only an ACSP can perform; and others where the expertise and knowledge that an ACSP brings will be beneficial.
You must use an ACSP:
- Unverified – If your own details are unverified, you must use an ACSP to file information with the registrar (unless you work for an ACSP and are registered)
- Limited Partnerships (LPs) – For LPs a number of rules have been made more strict and certain activities can only be carried out by an ACSP e.g. registering an LP, filing confirmation statements, and filing changes to certain information.
You may prefer to use an ACSP:
- Managing risk and liability – It is an offence for a person to deliver a false, deceptive or misleading filing or statement to the Registrar “without reasonable excuse. It may be that you are unfamiliar with how to carry out AML checks or an overseas entity unfamiliar with UK rules in general. Working with an ACSP can help mitigate the risk of incorrect filings.
- 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 carry out the necessary verification checks at the same time. This avoids two separate processes.
- Internal Resource constraints – some firms may be well-versed in carrying out AML checks, but internal teams are already at capacity. An ACSP can help, especially given that some requirements will have a transition period where demand peaks and then drops, therefore only requiring a temporary resource.
- Convenience – for busy directors or high net-worth individuals, it may be more convenient to appoint an ACSP who offers a managed service. ACSPs can also offer reminders for annual requirements.
- Updates – ECCTA is an evolving area of law with changes being phased over the new few years. ACSPs can help clients keep up to date with the latest.
Summary
The ECCTA has introduced significant changes to how UK companies and their key personnel must manage identity verification. 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. If you would like to discuss the upcoming requirements further, please contact us.
