Preparing your firm for new rules on forming companies

A drive to crack down on fraud and money laundering has led to the introduction of the ECCTA, which  brings vital safeguards to ensure transparency and accuracy of data in the way companies are formed in the UK. For law firms working on company formations, this means both more complexity and more admin. 

The Act’s introduction means law firms need to register as Authorised Corporate Service Providers (ACSPs), changing their compliance obligations. For many firms, this creates new challenges around maintaining efficiency and upholding client commitments, and knowing how to navigate these changes without stretching resources.

How the change will affect firms

For law firms, the move to become an ACSP is more than just a tick-box exercise. It requires time, resources and meticulous oversight.

The first additional step is mandatory registration with Companies House, bringing increased scrutiny and more compliance responsibilities.

There are also processes for each company formation, including secure client verification procedures, which add layers of extra complexity to workflows.

The change also means increased regulatory liability. If a company formation goes wrong, this puts firms at risk of reputational and financial damage.

An ACSP also provides anti-money laundering supervision, which is needed to ensure the appropriate checks have been carried out on all company subscribers prior to filing.

Verifying identities

These checks include identity verification to a standard published by Companies House. This requires firms to stay informed of Companies House updates, and to potentially engage the services of an identity verification technology provider, meaning further expense.

From 18 November 2025, Companies House requires directors and people with significant control of companies (PSCs) to verify their identities in order to incorporate a company or be appointed to an existing company.

This means existing directors will need to confirm their identity is verified at the same time as they file their annual confirmation statement, during the 12-month transition period.

Existing PSCs will need to verify their identity on an appointed day within 12 months of the introduction of mandatory identity verification on 18 November

For firms already balancing their clients’ legal needs with existing compliance duties, this will be a challenge, and one they might not have anticipated when offering company formation and company secretarial services.

The Act will have a phased introduction, leaving firms little time to adapt. Waiting until the last minute increases the risk of disruption, delays and reputational harm. 

Working with a specialised partner

A partner organisation experienced in company formations is well placed to support law firms through these changes Some of the services they offer, which could benefit your firm include:

• Registering as an ACSP on your behalf, handling all formation-related compliance so you don’t have to.
• Ensuring full adherence to the ECCTA, providing peace of mind and protecting your firm from regulatory risks.
• Using their own Government-certified identity verification technology, ensuring all compliance checks are completed in accordance with Companies House requirements.

By outsourcing company formation needs, law firms can avoid costly internal restructuring and protect the firm from unnecessary risks—all while providing clients with a smooth, efficient service.

The Act may bring new challenges, but it also offers an opportunity to future-proof your firm by aligning with trusted partners who specialise in compliance.

Working with a partnership allows law firms to focus on what they do best—delivering exceptional legal advice and services to clients.

Dye & Durham offers a complete solution to alleviate the burden of becoming and ACSP and streamline the process. Discover how they can transform your company formation processes and keep your focus on what matters most: serving your clients. 

Find out more on the Dye & Durham website here

Watch the Law Society webinar: Navigating ECCTA 2023 – what you need to know

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