On October 26th 2023, the Economic Crime and Corporate Transparency Act 2023 received Royal Assent.
It introduces a number of sweeping reforms, some of which will come into effect via secondary legislation in the future.
Two matters of particular interest are the prohibition of corporate directors and the related requirement for identity verification.
In order to increase transparency and accountability, companies will no longer be able to appoint legal persons into directorship roles, and existing corporate directors will need to be replaced with natural persons.
There will be an exception to this rule, where the corporate director has itself only natural persons for directors, who have undergone an ID verification procedure.
Said procedure, involving the verification of ID documents either directly with Companies House or with an Authorised Corporate Service Provider (such as a notary) will eventually become mandatory for all directors and persons with significant control.
Once the prohibition of corporate directors comes into force, many companies will need to reconsider their entity structure. There will be a 12-month grace period from the point the ban is triggered, but it will be imperative that affected organisations approach the matter proactively.
Vanner Perez Notaries will be happy to assist your company with the restructuring and ID verification required to become compliant with the new framework. Additionally, we are happy to advise on how these changes may affect your international subsidiaries.
Feel free to get in touch by emailing firstname.lastname@example.org or by calling us on 0203 668 6626.