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Companies Act 2006

The new Companies Act comprises approximately 1,300 sections and introduces new legislation which reflects the changing business environment. The Act contains new and updated legislation.

The Act provides for a single company law regime applying to the whole of the UK, so that companies will be UK companies rather than GB companies or Northern Ireland companies as at present. In Scotland, there are several areas where the Act deals with matters that are devolved.

Summary of the Act

PART SUMMARY
1 to 7 The fundamentals of what a company is, how it can be formed and what it can be called.
8 to 12 The members (shareholders) and officers (management) of a company
13 and 14 How companies may take decisions
15 and 16 The safeguards for ensuring that the officers of a company are accountable to its members
17 to 25 Raising share capital, capital maintenance, annual returns, and company charges
26 to 28 Company reconstructions, mergers and takeovers
29 to 39 The regulatory framework, application to companies not formed under the Companies Acts and other company law provisions
40 to 42 Overseas disqualification of directors, business names and statutory auditors
43 Transparency obligations
44 to 47 Miscellaneous and general

A three step approach

  1. Start small

    2. The Companies Act starts by approaching the legislative needs and obligations of private companies while there are additional requirements for public, quoted and traded companies. Previously legislation applied to all companies while providing for exemptions in certain circumstances for smaller companies or if shareholders agreed. It is important to note that private companies remain subject to much of the detail contained in this Act.

  2. Simplifying legislative arrangements

    3. In order to make the UK a country where it is easier to do business the Act seeks to simplify procedures and requirements for starting and running a company.

    Notwithstanding that objective, there is still a weighty tome of legislation to be complied with.

  3. Shareholder accountability

    4. These provisions mainly apply to listed companies. The Act seeks to make directors more accountable to shareholders.