Corporate Criminal Liability under the Economic Crime & Corporate Transparency Act 2023

As well as the many administrative and procedural changes that the Economic Crime and Corporate Transparency Act 2023 (ECCTA) is introducing for companies, there are also reforms being introduced for LLPs, a widening of the general false statement offence and significant changes being made to expand the exposure of corporates or partnerships to criminal liability. 

We have therefore created some additional information pages adding to our resources on the ECCTA.

These pages reflect that:

• Secondary legislation will be passed in due course which adapts company law, as amended by the ECCTA to the law governing LLPs. Amongst other measures, all members of LLPs and their PSCs will be required to verify their identity.
• Section 1112 of the Companies Act 2006 makes it an offence for a person to deliver a false, deceptive, or misleading filing or statement “knowingly or recklessly” to Companies House. The ECCTA has amended this to include, “without reasonable excuse”, therefore, creating a lower liability standard.
• Organisations that are bodies corporate or partnerships will become criminally liable from 26th December 2023 for the economic crimes of their senior managers acting within the actual or apparent scope of their authority. A senior manager is someone with a significant role in decision making or management with respect to the whole or a substantial part of the organisation. This will impact all companies.

A new offence of failing to prevent fraud is also being introduced. This will only apply to large organisations, i.e., satisfying two of the following three criteria: 

(1) >250 employees, 

(2) >£36m turnover, or 

(3) >£18m total assets. This will therefore not be relevant to SME businesses.

As with all other aspects of the ECCTA, companies should familiarise themselves with these upcoming changes.