What ECCTA Means for Business Verification in 2026 and Beyond

Until the Economic Crime and Corporate Transparency Act (ECCTA) received Royal Assent on 26 October 2023, Companies House ran largely on trust. Whatever companies filed got published on the public register with no meaningful checks and no pushback.

Directors and persons with significant control (PSCs) weren’t routinely asked to prove who they were.

The practice of using PO boxes to hide actual addresses became common because people could assume multiple directorships in shell companies without any need to prove their identity through official business documents.

The consequences were not theoretical.

“According to the UK government’s own progress reporting, between December 2023 and February 2024, Companies House enforcement teams identified 786 companies that had been incorporated using names deceptively similar to well-established businesses.

It became a case that attracted significant media attention and revealed how the previous system could be systematically exploited.”

Moreover, “fraud accounted for an estimated 41% of all crime experienced by adults in England and Wales in the year ending September 2022. A substantial portion of that fraud ran through UK corporate structures that had never been subjected to meaningful identity scrutiny.”

That is the problem ECCTA was designed to solve.

What is ECCTA and What It Actually Does

The ECCTA 2023 is the biggest change to UK company law since corporations were first registered under British Law in 1844.

For the first time, there will be real consequences for corporations that fail to meet their legal requirements related to financial crimes, fraud, and money laundering. The legislation gives authorities the tools they need to do that.

The second major change concerns how Companies House will operate going forward. In the past, Companies House simply received filings from companies.

But now it introduces extensive rules that mandate Companies House to function as a corporate transparency monitoring agency, actively observing business activities rather than passively collecting data.

• The measures introduced fall into five broad categories.

1. Enhanced Registrar Powers

On and after 4 March 2024, Companies House will be able to request documentation from the customer to verify the validity of incoming data against it, and ultimately use it to reject an application based on suspicious activity. It can also remove incorrect information from the company’s official record.

The organizations will be able to send data to law enforcement, regulatory agencies, and other public-sector agencies.

2. Mandatory Identity Background Check

The Act establishes a requirement that all company directors and persons who have significant control, LLP members, and individuals who submit documents to Companies House must validate their identities.

The requirement exists for all people because it does not depend on their citizenship status or their current country of residence.

3. Anti-SLAPP Provisions

The Act allows the courts to dismiss Strategic Lawsuits Against Public Participation cases because they are intended to protect journalists, investigators, and civil society organizations from lawsuits meant to muzzle them in economic crime investigations.

4. Corporate Criminal Liability Reform

ECCTA widens the scope of the identification doctrine, the legal test for attributing an individual’s conduct to their organization, to cover economic crime offenses committed by senior managers acting within the scope of their authority.

It also introduces a new strict liability offense of failure to prevent fraud.

5. Register of Overseas Entities

The Economic Crime (Transparency and Enforcement) Act 2022 established the Register of Overseas Entities, which mandates foreign companies to reveal their actual owners who possess UK assets. The ECCTA 2023 improved transparency, together with enforcement mechanisms that extend throughout the corporate framework of the United Kingdom

What ECCTA Means for KYB Compliance Teams

The ECCTA directly reshapes the compliance context for any team responsible for verifying corporate counterparties in the UK.

The Quality Bar For Entity Data Has Risen.

Now that Companies House has the power to reject, challenge, and remove incorrect or fraudulent filings, the register is being cleaned over time. But “being cleaned” is not the same as “clean.”

Compliance teams that depend on a single point-in-time registry check and assume the information they retrieved yesterday remains accurate today are building their risk decisions on a moving baseline.

Beneficial Ownership is Now A Regulatory Enforcement Priority, Not A Compliance Formality.

The verification system, which ECCTA uses to confirm identities, together with the expanded corporate criminal liability framework, creates challenges for organizations.

The defense proves unworkable because the organization failed to establish its knowledge of the entities with whom it conducted business.

The UK Suspicious Activity Report (SAR) regime, the National Crime Agency, and sector regulators are all working from a more authoritative corporate register. The expectation is that regulated firms will too.

The Failure To Prevent Fraud Offense Creates Downstream Accountability.

If a business partner or third party associated with your organization commits fraud that benefits your business, your organization may face criminal liability.

This is not confined to onboarding; it encompasses the full lifecycle of a commercial relationship.

Thus, ongoing monitoring of third parties is no longer a best-practice enhancement but a risk-management necessity.

How The KYB Supports ECCTA Compliance

For compliance teams operating under ECCTA’s heightened transparency and liability regime, the difference between adequate KYB and defensible KYB comes down to the quality and source of the corporate data being used.

The KYB is a business verification and corporate intelligence platform that pulls data directly from official government registries and corporate registers across 250+ countries and states — not from aggregated or re-licensed third-party databases.

When Companies House updates a director record, that change is reflected in The KYB’s data because the source is authoritative. When a compliance team pulls a verification result, they are working from the same data layer that regulators and auditors use when they check.

Moreover, UBO identification through The KYB automates the traversal of layered ownership structures, subsidiaries, holding companies, nominee arrangements, and trust structures to identify the natural persons who ultimately own or control an entity.

This is the operational capability that closes the gap ECCTA creates. The Act mandates disclosure at the UK entity level.

The KYB’s UBO mapping traces what sits above, below, and alongside that entity across the full beneficial ownership chain.

Perpetual KYB addresses the ongoing monitoring obligation that the failure to prevent a fraud offense makes explicit. Continuous monitoring of verified business entities means that changes in directors, ownership structure, sanctions exposure, or adverse media generate alerts, not retrospective discoveries at the next periodic review.

Under ECCTA’s heightened liability framework, the time between a change in a counterparty’s risk profile and your compliance team’s awareness of that change is an exposure window. Perpetual KYB closes it.

Corporate Screening performs background checks on businesses. It includes their executives and ultimate stakeholders, by comparing them to worldwide sanctions databases, watchlists, PEP lists, and negative news content and legal enforcement records.

The system validates compliance with fraud prevention regulations by checking whether “associated persons” who represent your organization have any sanctions list, enforcement action, or negative media connections that require further investigation.

Therefore, for compliance teams looking to align their business verification process with ECCTA’s requirements, across registry-sourced entity data, automated UBO identification, and continuous monitoring, book a demo with The KYB to see how the platform works in practice.