From 18 November 2025, Companies House will introduce the next major phase of the Economic Crime and Corporate Transparency Act (ECCTA), bringing in enhanced identity verification for individuals who control UK companies.
According to Moody’s, the changes represent one of the most significant overhauls of the incorporation system in decades and are designed to increase trust in the corporate register by ensuring that key individuals are verified before a business can be formed.
Under the new rules, anyone seeking to become a director, a Person with Significant Control (PSC), or a member of a Limited Liability Partnership (LLP) or Limited Partnership (LP) will be required to complete electronic identity verification. This must occur either before a company is incorporated or before the individual takes up their role. Verification can be completed directly through a government-run service or via an Authorised Corporate Service Provider (ACSP).
These measures aim to close longstanding loopholes that have allowed anonymous or fraudulent registrations to slip through, reducing opportunities for misuse of corporate structures.
The reforms have major implications for company formation agents, who will now need to register as ACSPs in order to continue offering incorporation services. This registration brings them under formal UK anti-money laundering (AML) supervision and requires them to maintain identity verification records for seven years. Registration carries a fee of £55 and introduces stricter oversight of the intermediaries responsible for a large proportion of UK incorporations.
These changes carry broader significance for the UK business landscape. While the country has built its reputation on a simple, low-cost incorporation process, this same accessibility has historically attracted criminal exploitation.
Fraud accounts for roughly 40% of all crimes in England and Wales, while Europol estimates that 86% of criminal groups within the EU rely on corporate structures to facilitate illicit activity. Shell companies, in particular, have been central to schemes involving money laundering, sanctions evasion, and other financial crimes. By enforcing clear identity checks for PSCs and directors, Companies House aims to increase accountability without undermining business formation.
For businesses, the practical impact will be noticeable. Directors and PSCs will now need to complete approved digital identity checks as part of the formation process. Costs are rising too: incorporation fees increased from £12 to £50 in 2024 and are expected to reach £100 in February 2026. Companies House has also been granted stronger powers to query suspicious filings, reject inaccurate information, and impose civil penalties of up to £10,000. More serious misconduct may lead to criminal prosecution or imprisonment, signalling a more assertive regulatory environment.
These reforms arrive at a time when geopolitical tensions and financial crime risks are intensifying globally. Reliable registry data and verified ownership details are becoming essential for onboarding, supplier due diligence, and overall risk management. The UK’s updated framework reflects a strategic shift toward transparency and corporate accountability, strengthening the integrity of the business landscape and supporting safer, more compliant commercial activity.
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