Companies Act 2006

The Companies Act 2006 received Royal Assent in November 2006.  Implementation began in October 2007 and was completed in October 2009.


Key principles

The new legislation was drafted on a "Think Small Company First" principle. It uses simpler language and removes the private company from a number of procedures and regulations. New provisions have been added to reflect various European Directives, including provisions relating to takeovers and disclosure of information.


Company Formation

  1. Private companies can be formed by one person. There is no need to appoint a company secretary and one person may be both director and shareholder;
  2. The memorandum is replaced by a much shorter document saying that the members wish to form a company and agree to take at least one share;
  3. Authorised share capital is abolished;
  4. At least one natural person is required to act as company director;
  5. Company directors may register a service address at Companies House as well as a residential address. The service address, which may be the company's registered office, will be public, and the residential address will be held confidential;


Company administration

  1. The requirement to appoint a secretary is abolished. Anything that is required to be done by the secretary may be done by a director or a person authorised by the director;
  2. The obligation to file an annual return remains;
  3. A private company is not required to hold an annual general meeting;


Shares

  1. A private company with only one class of shares may allot shares without shareholder authority, unless its articles provide otherwise;
  2. Shares may be issued direct to bearer;
  3. Shares may be denominated in any currency;


Directors

  1. Children under 16 may not be appointed as directors;
  2. ompanies may not act as the sole corporate director;


Articles of association

Standard form articles for private companies limited by shares will apply;


Meetings and resolutions

The shareholder written resolution are passed with the signature of the appropriate percentage of members;


Accounts and Auditors

The filing date for the accounts of a private company is shortened to 9 months after the end of the relevant accounting reference period.

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