A major overhaul of UK company law has quietly begun, and it’s about to get very real for millions of business owners and directors. The Economic Crime and Corporate Transparency Act (ECCTA) is bringing in the biggest changes to Companies House in 170 years, and one new rule in particular is about to hit home: mandatory identity verification.

More than 5 million company directors, LLP members, and PSCs (people with significant control) will soon be legally required to verify their identity before they can form or manage a UK company. If you’re among them, ignoring this isn’t an option.

The change is designed to combat fraud, improve transparency, and stop criminals from hiding behind fake company structures. But it also puts the onus on legitimate business owners to navigate new bureaucracy—and fast.

The Edinburgh Reporter recently published a detailed breakdown of the changes, which you can read here: Big shake-up in company law: ECCTA identity verification – 5M people affected.

So what exactly is happening?

Starting in 2026, anyone setting up a company or listed as an officer or controller will need to verify their identity through Companies House or an Authorised Corporate Service Provider (ACSP). This will involve biometric data, passport scans, or other forms of official documentation. Failure to comply? Your company formation could be blocked—or worse, you could face criminal penalties for continuing to act without verification.

It’s not just new companies that will be affected. Existing directors and PSCs must also go through the verification process. While Companies House is expected to phase in the rules gradually, there will be firm deadlines. And once they hit, non-compliance could mean being struck off or fined.

Accountants, company secretaries, and legal advisers are already bracing for the added workload. Many are urging clients to act early, especially those with complex structures, overseas officers, or dormant companies that may now come under scrutiny.

While the goal is to clean up the corporate landscape, there’s no denying the scale of disruption this will bring. The UK has over 4.8 million active companies. Every one of them has at least one director who now needs to prove who they are.

Critics have raised concerns about data security and the burden on small businesses. But government officials argue that the benefits—cracking down on shell companies, stopping money laundering, and restoring trust in the UK as a legitimate place to do business—outweigh the costs.

For directors, the message is simple: don’t wait. The earlier you prepare, the smoother the transition will be.

This isn’t just a box-ticking exercise. It’s a foundational shift in how the UK regulates corporate identity—and if you’re a company decision-maker, it’s coming straight to your inbox, your workflow, and your legal responsibilities.

Start reading up, talk to your advisers, and make sure you’re ready. Because the ECCTA is not just a change in policy—it’s a change in the rules of the game.