diff --git a/web/business-registry-dashboard/app/components/Form/AddBusiness/Base.vue b/web/business-registry-dashboard/app/components/Form/AddBusiness/Base.vue
index 335c27fb..afa09356 100644
--- a/web/business-registry-dashboard/app/components/Form/AddBusiness/Base.vue
+++ b/web/business-registry-dashboard/app/components/Form/AddBusiness/Base.vue
@@ -42,6 +42,7 @@ const loading = ref<boolean>(false)
 const formState = reactive<{
   partner: { name: string | undefined, certify: boolean | undefined },
   passcode: string | undefined,
+  passcodeErrorCode: number | undefined,
   delegation: { account: { name: string, branchName?: string, uuid: string } | undefined, message: string | undefined },
   options: number,
   selectedOption: string | undefined
@@ -51,6 +52,7 @@ const formState = reactive<{
     certify: undefined
   },
   passcode: undefined,
+  passcodeErrorCode: undefined,
   delegation: {
     account: undefined,
     message: undefined
@@ -78,7 +80,19 @@ const formSchema = computed(() => {
           .refine(val => /^\d+$/.test(val), t('form.manageBusiness.authOption.passcode.fields.passcode.error.coop.type'))
         : z.string({ required_error: t('form.manageBusiness.authOption.passcode.fields.passcode.error.default.required') })
           .min(8, t('form.manageBusiness.authOption.passcode.fields.passcode.error.default.length'))
-          .max(15, t('form.manageBusiness.authOption.passcode.fields.passcode.error.default.length'))
+          .max(15, t('form.manageBusiness.authOption.passcode.fields.passcode.error.default.length')),
+      passcodeErrorCode: z.number().optional()
+    }).superRefine((data, ctx) => {
+      if (data.passcodeErrorCode) {
+        const message = props.businessDetails.isCoop
+          ? t('form.manageBusiness.authOption.passcode.fields.passcode.error.coop.api', props.authOptions.length)
+          : t('form.manageBusiness.authOption.passcode.fields.passcode.error.default.api', props.authOptions.length)
+        ctx.addIssue({
+          code: 'custom',
+          path: ['passcode'],
+          message
+        })
+      }
     })
   }
 
@@ -204,19 +218,32 @@ async function submitManageRequest () {
       if (openAuthOption.value.slot === 'firm-option') {
         emit('businessError', { error: e, type: 'firm' })
       } else {
-        emit('businessError', { error: e, type: 'passcode' })
+        formState.passcodeErrorCode = e.response?.status || 500
+        await formRef.value?.validate('passcode', { silent: true })
+        // NB: setting to undefined so that the next time the schema is validated it clears this issue
+        formState.passcodeErrorCode = undefined
       }
     }
   }
   loading.value = false
 }
 
+const hasPasscodeErrors = computed((): boolean => {
+  const errors = formRef.value?.errors || []
+  return !!errors.filter(err => err.path === 'passcode').length
+})
+
+const hasPasscodeOption = computed((): boolean => {
+  return !!props.authOptions.find(option => option.slot === 'passcode-option')
+})
+
 watch(() => formState.selectedOption, () => {
   noOptionAlert.value = false // reset no option alert if selected option changes
   formRef.value?.clear() // clear form errors if selected option changes
 
   // reset form state if selected option changes
   formState.passcode = undefined
+  formState.passcodeErrorCode = undefined
   formState.delegation.message = undefined
   formState.delegation.account = undefined
   formState.partner.name = undefined
@@ -258,7 +285,10 @@ watch(() => props.authOptions, (newOptions) => {
         <div
           v-for="(option, index) in authOptions"
           :key="option.slot"
-          :class="authOptions.length > 1 ? 'space-y-4 pl-2' : 'space-y-4'"
+          :class="[
+            authOptions.length > 1 ? 'space-y-4 pl-2' : 'space-y-4',
+            option.slot === 'passcode-option' && hasPasscodeErrors ? 'border-l-4 border-red-500' : ''
+          ]"
         >
           <label v-if="authOptions.length > 1" class="flex cursor-pointer items-start space-x-3">
             <input
@@ -277,7 +307,7 @@ watch(() => props.authOptions, (newOptions) => {
                 {{ option.label }}
               </span>
               <span
-                v-if="option.slot === 'email-option' && (businessDetails.isCoop || businessDetails.isCorporation)"
+                v-if="option.slot === 'email-option' && hasPasscodeOption && (businessDetails.isCoop || businessDetails.isCorporation)"
                 class="mt-1 text-sm text-bcGovColor-midGray"
               >
                 {{ $t('form.manageBusiness.authOption.email.coopSubtext') }}
diff --git a/web/business-registry-dashboard/app/components/Form/AddBusiness/index.vue b/web/business-registry-dashboard/app/components/Form/AddBusiness/index.vue
index 6f1e90a2..34c5931e 100644
--- a/web/business-registry-dashboard/app/components/Form/AddBusiness/index.vue
+++ b/web/business-registry-dashboard/app/components/Form/AddBusiness/index.vue
@@ -39,9 +39,6 @@ const errorObj = ref<{ error: FetchError, type: string }>()
 const successObj = ref<{ type: string, value: string }>()
 
 function handleError (e: { error: FetchError, type: string }) {
-  if (e.type === 'passcode') {
-    emit('passcodeError')
-  }
   errorObj.value = e
   currentState.value = 'FormAddBusinessError'
 }
diff --git a/web/business-registry-dashboard/app/components/Modal/ManageBusiness.vue b/web/business-registry-dashboard/app/components/Modal/ManageBusiness.vue
index 3b5ac3b5..cbd213d0 100644
--- a/web/business-registry-dashboard/app/components/Modal/ManageBusiness.vue
+++ b/web/business-registry-dashboard/app/components/Modal/ManageBusiness.vue
@@ -14,7 +14,6 @@ const props = defineProps<{
 }>()
 
 const emailSent = ref(false)
-const passcodeError = ref(false)
 
 const loading = ref(true)
 const hasBusinessAuthentication = ref(false)
@@ -147,8 +146,8 @@ onMounted(async () => {
 
 <template>
   <ModalBase
-    :alert="emailSent || passcodeError ? undefined : alert"
-    :title="emailSent || passcodeError ? $t('form.manageBusiness.headingRequestAccess') : $t('form.manageBusiness.heading')"
+    :alert="emailSent ? undefined : alert"
+    :title="emailSent ? $t('form.manageBusiness.headingRequestAccess') : $t('form.manageBusiness.heading')"
     @modal-closed="handleEmailAuthSentStateClosed"
   >
     <div class="flex flex-col gap-4 md:w-[700px]">
@@ -232,8 +231,7 @@ onMounted(async () => {
         :business-details="businessDetails"
         :is-corp-or-ben-or-coop="isCorpOrBenOrCoop"
         @email-success="emailSent = true"
-        @passcode-error="passcodeError = true"
-        @retry="emailSent = false; passcodeError = false"
+        @retry="emailSent = false"
       />
     </div>
   </ModalBase>
diff --git a/web/business-registry-dashboard/i18n/locales/en-CA.ts b/web/business-registry-dashboard/i18n/locales/en-CA.ts
index d50621c1..20d24ad9 100644
--- a/web/business-registry-dashboard/i18n/locales/en-CA.ts
+++ b/web/business-registry-dashboard/i18n/locales/en-CA.ts
@@ -350,13 +350,15 @@ export default {
               },
               error: {
                 coop: {
-                  required: 'Passcode is required, enter the passcode you have setup in Corporate Online',
+                  required: 'Please enter the passcode you have setup in Corporate Online',
                   length: 'Passcode must be exactly 9 digits',
-                  type: 'Passcode must be numeric'
+                  type: 'Passcode must be numeric',
+                  api: 'Please enter the correct passcode | Please enter the correct passcode or choose a different option below'
                 },
                 default: {
-                  required: 'Password is required',
-                  length: 'Password must be 8 to 15 characters'
+                  required: 'Please enter the password you have setup in Corporate Online',
+                  length: 'Password must be 8 to 15 characters',
+                  api: 'Please enter the correct password | Please enter the correct password or choose a different option below'
                 }
               }
             }
diff --git a/web/business-registry-dashboard/package.json b/web/business-registry-dashboard/package.json
index 735b3d40..6969bcc8 100644
--- a/web/business-registry-dashboard/package.json
+++ b/web/business-registry-dashboard/package.json
@@ -2,7 +2,7 @@
   "name": "business-registry-dashboard",
   "private": true,
   "type": "module",
-  "version": "1.2.9",
+  "version": "1.2.10",
   "scripts": {
     "build-check": "nuxt build",
     "build": "nuxt generate",