Economic Crime & Corporate Transparency Act 2023 Changes to Appointing and Terminating the Appointment of Directors

How to appoint a company director and the subsequent termination of the appointment are essential components of corporate governance for any private limited company. 

The Economic Crime & Corporate Transparency Act 2023 (ECCTA) is introducing mandatory identity verification (IDV) for both new and existing directors and once this goes live, companies will need to be more aware than ever as to how directors are appointed and when they may and may not continue to act. This includes the much stricter rules that will govern the use of corporate directors.

The ECCTA is a landmark legislation designed to give Companies House new and enhanced powers to help disrupt economic crime. 

Considering these changes, we have:

• updated our guidance note to companies in relation to the appointment of directors. This covers a discussion of how directors are appointed as well as the changes being introduced under the ECCTA; and 
• created a new, discrete guidance note in relation to the termination of appointment of directors. This provides an overview of the various ways that an appointment may be terminated as well as the consequences for directors remaining in place once the changes under the ECCTA are introduced.

This is another opportunity for companies to make sure all their directors know about the upcoming IDV requirements and act accordingly.