Companies House is set to introduce a major overhaul of the UK’s incorporation process, with new identity verification rules coming into force on 18 November 2025. The changes, introduced under the Economic Crime and Corporate Transparency Act (ECCTA), aim to strengthen the accuracy and integrity of the UK’s corporate register.
According to Moody’s, by ensuring that individuals who control or manage companies are verified at the point of incorporation, the government hopes to close long-standing loopholes and reduce opportunities for abuse.
Under the new framework, directors, Persons with Significant Control (PSCs), members of Limited Liability Partnerships (LLPs), and Limited Partners (LPs) will all be required to complete electronic identity verification before a business can be registered or before they take up a role. Verification can be completed directly through the government portal or via an Authorised Corporate Service Provider (ACSP).
This marks a significant shift away from the previous regime, which allowed anonymous registrations and offered limited safeguards against fraudulent filings.
Company formation agents are also seeing their responsibilities expand. To continue supporting incorporations, these intermediaries must register as ACSPs and will fall under the UK’s anti-money laundering (AML) supervision regime.
They will also be required to store identity verification records for seven years, adding a new layer of operational and compliance overhead. Registration as an ACSP costs £55 and brings enhanced regulatory scrutiny to an industry that has historically faced minimal oversight.
The changes are being driven by the UK’s broader goal to curb economic crime. The country has long offered one of the simplest and cheapest incorporation processes globally—a strength for entrepreneurs, but also an avenue for criminals seeking to hide illicit activity behind opaque corporate structures.
Fraud accounts for roughly 40% of all crime in England and Wales, while Europol estimates that 86% of EU-based criminal networks rely on corporate vehicles to facilitate wrongdoing. Shell companies have been linked to money laundering, sanctions evasion, procurement fraud, and wider financial crime, raising concerns in policing and regulatory circles.
The introduction of digital identity checks for PSCs and directors is intended to make it far harder for bad actors to hide behind fictitious or unverified profiles. Companies House will now have clearer visibility of who is exercising control, enabling greater traceability and accountability without obstructing legitimate business formation. The reforms form part of a broader transparency push intended to modernise UK corporate governance.
Businesses preparing for incorporation will face several practical considerations. Directors and PSCs must now complete an approved digital identity verification process before a company can be registered. The cost of incorporation has already risen, increasing from £12 to £50 in May 2024, with another rise to £100 scheduled for February 2026. Companies House has also been granted enhanced enforcement powers. It can now challenge suspicious filings and issue civil penalties of up to £10,000 for false or misleading submissions. More serious offences may result in criminal prosecution or imprisonment.
For compliance teams, these reforms underline a growing shift toward transparency, verified ownership, and reliable data across the corporate landscape. As geopolitical risk intensifies and financial crime grows more sophisticated, trusted registry information is becoming critical for onboarding, supplier due diligence, AML risk assessments, and ongoing monitoring. The changes signal a new era in UK corporate governance—one where verification, accountability, and risk mitigation take centre stage.
Find more on RegTech Analyst
Copyright © 2025 FinTech Global
