An authorised corporate service provider (ACSP) is a type of intermediary between limited companies, LLPs, limited partnerships and Companies House. The role of ACSP is introduced by the Economic Crime and Corporate Transparency Act (ECCTA), which became law in October 2023. ACSPs will carry out identity verification checks on directors, PSCs and those delivering documents to the Registrar on behalf of companies. They are intended to provide the same level of regulatory assurance as direct verification with Companies House.
Authorised corporate service providers are most likely to conduct identity verification checks alongside other corporate services they already provide, such as company formations, accounting, legal or tax advice. ACSPs must already be supervised for anti-money laundering purposes and have an existing duty to conduct due diligence checks on clients. They must also be ID verified themselves.
In many ways ACSPs are similar to the regulated agents defined in the Economic Crime, Transparency and Enforcement Act which came previously. Regulated Agents are responsible for verifying details of overseas entities for the Register of Overseas Entities (ROE). In the same way, ACSPs are responsible for verifying the identities of individuals in UK entities for inclusion in the Companies House register.
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What do ACSPs do?
The role of ACSP involves:
- Conducting identity verification checks
- Delivering documents to Companies House on behalf of clients, as they may already be doing
- Maintaining records on identity verification checks for inspection
- Providing further information on those checks to Companies House at the Registrar’s request.
Why are ACSPs necessary?
For many years it has been easy to register fake companies, officers and people with significant control (PSCs) at Companies House. Anecdotes of directors called Donald Duck and suchlike are abundant. Some of these engage in money laundering and other economic crime via deliberately obscure chains of ownership. There is deemed to be a pressing need to nail down the identities of directors, PSCs and beneficial owners. This will improve the integrity of the companies register and contribute towards increased corporate transparency.
Historically Companies House has been at pains to point out that it does not verify the accuracy of the information filed on the register. Now it is transforming from a passive recipient of company information into an active gatekeeper, and ACSPs are one of its tools for that purpose.
Who needs to use an ACSP?
Under ECCTA, anyone registering companies or filing with the Registrar must have verified their identity. They can choose one of two routes for doing so:
- Directly with Companies House, via a new digital service involving a primary identity document such as driving licence or passport
- Via an ACSP.
Whichever method is used, a person’s verified status will remain valid for all future filings. Re-verification will only be needed if there is a change of personal details such as a name change.
Those who may choose to do their identity verification checks, registrations and filings via an ACSP include:
- Company directors
- PSCs (people with significant control) and RLEs (relevant legal entities)
- Members and partners of LLPs (limited liability partnerships)
- Anyone making filings with the Registrar.
LPs (limited partnerships) are under particular scrutiny and their applications for registration and notifications of changes must be submitted by ACSPs. This also applies to their confirmation statements, which are introduced in the ECCT Act for non-Scottish LPs (they are already required for Scottish LPs).
Who can be an ACSP?
A professional intermediary like an accountancy firm, legal adviser or company formation agent is well suited to be an authorised corporate service provider. They must be already active in conducting customer due diligence like anti-money laundering (AML) checks with their clients. They must also be registered with a supervisory body for AML such as the Financial Conduct Authority or one of the professional associations for accountants, bookkeepers and tax advisers. These attributes make them suitable for ACSP status as it will simply be building on their existing abilities to conduct checks.
Before making any filings as an ACSP the intermediary must register with Companies House to confirm their own AML – supervised status. They should provide a declaration that they have conducted all necessary identification checks on their clients. In the case of an individual, they must provide a statement that their own identity is verified.
Those wishing to apply for ACSP status need to be registered with Companies House and be a ‘relevant person’ under the Money Laundering, Terrorist Financing and Transfer of Funds (Information for the Payer) Regulations 2017. In the course of their business they must be one of the following:
- A credit institution
- A financial institution
- An auditor
- An insolvency practitioner
- An external accountant
- An external tax adviser
- An independent legal professional
- A trust or company service provider
- An estate agent
- A high value dealer
- A casino.
The application must include the name of the supervisory authority under which the applicant operates for the purposes of the AML regulations. The Registrar is obliged to check with the supervisory body that the applicant is known to and supervised by it.
Are there any risks to being an ACSP?
Professional firms that would qualify as ACSPs should consider whether they want to take on the additional risk and compliance burden of providing these services to their clients.
The ECCT Act has made it an offence to deliver ‘without reasonable excuse’ any document or make any statement to the Registrar that is misleading, false or deceptive. The offence is aggravated if the person is aware that they are doing so. No professional firm will want to have their name associated with a test case in which having a ‘reasonable excuse’ is examined in court. This may make some nervous about taking on the role of ACSP.
There are new criminal and civil consequences for failing to comply with requirements. For example, a PSC of a newly incorporated company commits a criminal offence if they fail to verify their identity within 14 days of incorporation. Furthermore, the Registrar will annotate the companies register to show the company’s unverified status. There is the possible risk of an ACSP causing reputational damage to a client.
HMRC will be responsible for supervising ACSPs and will prioritise taking action against ACSPs suspected of involvement in economic crime.
To be better informed about such risks, prospective ACSPs should consult their professional associations.
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