ECCTA Incoming....No ID? No Entry

“No ID, no entry”. Soon, this familiar phrase won’t just be heard outside of bustling nightclubs—it will become the new reality at Companies House.

In our previous article about the impacts of the Economic Crime & Corporate Transparency Act 2023 (ECCTA) we covered the basics of the ID verification reforms at Companies House, and touched on how these may impact the day to day activities of companies.

In this article, we take a closer look at one of the upcoming changes; specifically, the amendments to section 167 of the Companies Act 2006. With the mandatory ID verification regime set to take effect from 18 November 2025, companies should start making preparations now to ensure that they are ready when the new requirements come into force.

As it currently stands, when a company appoints a director, it has 14 days to notify Companies House of the appointment, and the newly appointed director can carry out their duties immediately. If the company fails to notify Companies House of the appointment, it and every officer in default commits an offence under the Companies Act 2006 and is liable to summary conviction and a fine, including a daily default fine for continued non-compliance. In practice, these penalties are rarely enforced, and it is not unusual to see director appointments made late.

This all changes under the amendments made to section 167 by ECCTA. So, what do the changes look like? 

The first big change is that an individual must not act as a director unless their identity has been verified by Companies House or via an authorised corporate service provider registered with Companies House. There is also an obligation on the company to ensure that an individual does not act as a director, unless their identity has been verified.

It will also be an offence for an individual to act as a director unless the company has notified Companies House of that director’s appointment within the 14-day timeframe. Where the offence is committed by a firm, every officer of the firm who is in default also commits the offence. These offences are punishable by a fine. 

So, what does this mean in practice? With the introduction of these new offences, companies will need to update and tighten their onboarding procedures. Ensuring thorough compliance at the point of director appointment will no longer be optional—it will be an imperative. The individual will also be keen to ensure that the company has complied with its filing requirements although there are some limited defences, namely if a person can prove that they reasonably believed the notification had been filed. 

Significantly, while it will be an offence, failure to notify Companies House within the 14-day period will not affect the validity of the director’s actions.

Looking at the bigger picture, it’s also worth highlighting that ECCTA widens the grounds for director disqualification. When the relevant provision comes into force, a person may be disqualified if they are judged to be guilty of three or more “defaults” in a five-year period. Such defaults include non-compliance with filing obligations, identity verification for both directors and PSCs and other breaches of provisions in specified company-related legislation. 

So, what was once a routine tick-box exercise—filing a director’s appointment—now carries real weight. ECCTA has raised the stakes, and companies need to treat these updates with care and rigour.