Limited Liability Partnerships And The Economic Crime Reforms

The Economic Crime and Corporate Transparency Act 2023 (“ECCTA”) represents one of the most significant overhauls of UK company law in recent years, with implications not just for companies, but also for limited liability partnerships (“LLPs”). Designed to enhance corporate transparency and clamp down on economic crime, the reforms introduce a range of new obligations that LLPs should start preparing for now.

Below, we have outlined the key practical considerations for LLP members and compliance officers in anticipation of the Act’s full implementation.

Identity verification

One of the main features of ECCTA is the introduction of identity verification requirements for certain persons connected with LLPs.

All members of LLPs will be required to verify their identities at Companies House, as well as any person with significant control. Once a person’s identity has been verified, they will receive a unique identifier (UID) and will be marked as verified.

If the LLP acts as a partner of another entity, the reform requires you to have a named managing officer who is an individual, so the Registrar is able to get in touch with this individual in relation to the LLP in its capacity as a partner.

Similarly, an LLP will only be able to act as a corporate director if all its members have had their identity verified.

Failure to comply with identity verification requirements will result in civil penalties and could render filings ineffective.

LLPs should review their current members and PSC register and identify which individuals will need to be verified and ensure they are prepared to complete the process when it goes live (although individuals can already voluntarily verify their identity).

The Registrar’s power

Under ECCTA, Companies House gains expanded powers to scrutinise filings, reject information, and share data with enforcement agencies.

Companies House filings

For the LLP’s own filing requirements, this can either be done by an Authorised Corporate Service Provider (“ACSP”) or a member of the LLP may do this on the firm’s behalf, but their identity must be verified.

Many LLPs provide formation and filing services. If an LLP wishes to deliver documents to Companies House in the course of providing these services for another company or firm, the LLP must register as an ACSP. A precondition of authorisation is that it is supervised for anti-money laundering purposes in the UK.

Registered Office and “appropriate address” requirements

All entities on the Companies House register must now maintain an “appropriate” registered office address – one where documents can be expected to come to the attention of a person acting on behalf of the LLP and where delivery can be recorded.

The use of PO boxes will no longer be permissible unless paired with a physical address that meets the criteria.

LLPs should audit their registered office address to ensure it complies, or if your LLP relies on a third-party address (e.g. a company formation agent), ensure it meets the new standards and update the register if necessary.

ECCTA introduces both civil and criminal penalties for failing to comply with new transparency, verification, and reporting obligations. Penalties may apply not only to the LLP as an entity but also to individual designated members or compliance officers.

It is important to provide training for LLP members and administrators to ensure awareness of their responsibilities and consider whether your LLP’s internal policies need updating to reflect these new duties.

Moving forward

The reforms are being implemented in phases, with identity verification and other key provisions expected to come into force gradually over the next 12 – 18 months. However, given the scale of the changes and the potential consequences of non-compliance, now is the time for LLPs to begin their preparations.

For bespoke guidance on how the Economic Crime and Corporate Transparency Act may affect your LLP – or assistance in reviewing your compliance framework – please contact our Corporate & Commercial team.