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Home > > Limited companies > Companies Act 2006 > An overview of key changes
An overview of key changes
Key changes introduced from 1 October 2009.
The Companies Act 2006 received Royal Assent on 8 November 2006 and is the longest Act ever passed by Parliament. The vast majority of the Act came into force by 1 October 2008 with some of the law effective January and April 2007. Other key dates for the introduction of the Act are 1 October 2007 ands 6 April 2008 all dates that coincide with the bi annual dates for the introduction of changes to legislation that affect business.
Changes effective:
- From January 2007
- From 6 April 2007
- From 1 October 2007
- From 6 April 2008
- From 1 October 2008
- From 1 October 2009
Provisions commenced in January 2007
With effect from 1 January 2007, provisions in the Act which give effect to recent amendments to the First Company Law Directive are in force. These changes are in large part designed to ensure increased facilities for e-communications with the national registrar of companies.
With effect from 20 January 2007, the following provisions linked to implementation of the Transparency Obligations Directive commenced:
- provisions on company communications to shareholders and others, which include provisions facilitating electronic communication;
- provisions concerning a public company's right to investigate who has an interest in its shares;
- and section 463, which sets out a statutory basis of directors' liability to the company in relation to the directors' report (including the business review), the directors' remuneration report and any summary financial statement derived from such reports.
All powers to make orders or regulations by statutory instrument will be commenced with effect from 20 January 2007.
From 1 January 2007, the Companies Act 1985 as amended requires the company's name to appear legibly in:
- all its business letters,
- all its notices and other official publications,
- on all its websites,
- all bills of exchange, promissory notes, endorsements, cheques, orders for money or goods purporting to be signed by or on behalf of the company, and
- all bills of parcels, invoices, receipts, and letters of credit.
In addition, the company's business letters, order forms and websites have to include fuller particulars, i.e.
- the company's place of registration and the number with which it is registered,
- the address of its registered office,
- in the case of an investment company, the fact that it is such a company, and
- in the case of a limited company exempt from the obligation to use the word "limited" as part of its name, the fact that it is a limited company.
All these requirements apply whether the document is in hard copy or electronic or any other form.
Provisions commenced from 6 April 2007
With effect from 6 April 2007, the following provisions in the Companies Act 2006 commenced:
Section 1063 which relates to fees payable to the registrar of companies;
Section 1281 of the Companies Act, which amends Part 9 of the Enterprise Act 2002 to give the Secretary of State the power to make an order enabling public authorities to disclose information to be used in civil proceedings or otherwise for the purpose of establishing, enforcing or defending legal rights.
Provisions commenced from 1 October 2007
Key changes: - The Companies Act sets out directors' responsibilities to their companies.
- Annual general meeting requirements change. Private companies will be able to conduct most business without holding a general meeting.
Technically, the following changes are introduced:
- Part 9 - Exercise of members' rights;
- Part 10 - A company's directors, other than provisions relating to directors' conflict of interest duties, directors' residential addresses and underage and natural directors;
- Part 11 - Derivative claims and proceedings by members;
- Part 13 - Resolutions and meetings, and, related to this, sections 485-488 of Part 16 (Audit);
- Part 14 - Control of political donations and expenditure;
- Part 15 Section 417 - Contents of directors' report: business review;
- Part 29 - Fraudulent trading;
- Part 30 - Protection of members against unfair prejudice;
- Part 32 - Company investigations: amendments.
Provisions commenced from 6 April 2008
Key Changes: - The period for filing accounts is reduced from ten months to nine months
- The position of company secretary becomes an optional appointment
- Shareholders may agree a limitation of auditors' liability.
Technically, the following changes are introduced:
- Part 12 - Company secretaries;
- Part 15 - Accounts and reports, other than section 417;
- Part 16 - Audit, other than sections 485-488;
- Part 19 - Debentures;
- Part 20 - Private and public companies;
- Part 21 - Certification and transfer of securities;
- Part 23 - Distributions;
- Part 26 - Arrangements and reconstructions;
- Part 27 - Mergers and divisions of public companies;
- Part 42 - Statutory auditors
- 121 and 128: register of members: removal of entries relating to former members.
- 811(4), 812 and 814: inspection of register of interests in a company's shares.
Provisions commenced from 1 October 2008
Technically, the following changes are introduced:
- 69 to 74: objection to company names.
- 82 to 85: trading disclosures.
- 155 to 159: provisions relating to corporate directors and under-age directors.
- 175 to 177: general duties of directors in respect of conflicts of interest.
- 182 to 187: declaration by a director of an interest in an existing transaction or arrangement.
- 641(1)(a) & (2)-(6), 642, 643, 652 and 654: new procedure for private companies to make capital reductions supported by a solvency statement instead of by a court order.
- repeal of the restrictions under the Companies Act 1985 on financial assistance for acquisition of shares in private companies.
Provisions commenced from 1 October 2009
Technically, the following changes are introduced:
Key changes: - An easier approach to forming and administration of new companies
- Concept of authorised share capital is abolished
- Directors may file 'service' rather than home address
- The right to challenge company names
- Companies permitted to give financial assistance for purchase of its shares
- Part 1 - General introductory provisions;
- Part 2 - Company formation;
- Part 3 - A company's constitution;
- Part 4 - A company's capacity and related matters;
- Part 5 - A company's name;
- Part 6 - A company's registered office;
- Part 7 - Re-registration as a means of altering a company's status;
- Part 8 - A company's members;
- Part 10 - A company's directors - provisions relating to directors' conflict of interest duties, directors' residential addresses and underage and natural directors;
- Part 17 - A company's share capital;
- Part 18 - Acquisition by limited company of its own shares;
- Part 24 - A company's annual return;
- Part 25 - Company charges;
- Part 31 - Dissolution and restoration to the register;
- Part 33 - UK companies not formed under the Companies Acts;
- Part 34 - Overseas companies;
- Part 35 - The registrar of companies;
- Part 41 - Business names
Introduction
Timetable
- Provisions commenced in January 2007
- Provisions commenced in April 2007
- Provisions commenced from 1 October 2007
- Provisions commenced from 6 April 2008
- Provisions commenced from 1 October 2008
- Provisions commenced from 1 October 2009
The Act In Depth
General
- Forming a company
- Choosing a name for your company
- Changing the company name
- Registered office
- A company's members
- Shares and share capital
Directors
- Appointment of directors
- General duties of directors
- Directors transactions requiring members approval
- Loans to directors
- Related agreements
- Directors' service contracts
- Directors' liabilities
- Records of directors meetings
- Company secretary
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