News & Events
Acting on the act: Companies Act 2006
Updated 14th December 2009
By Mike Jenkins, Head of Commercial at Harding Evans Solicitors
The final stage of the 3 year implementation of the Companies Act 2006 (the "Act") took place October 1 2009. This act has been the biggest change in company law in the last 20 years and affects every company in the United Kingdom. The article briefly introduces you to some of the key changes affecting a private company in the UK.
"New" private companies incorporated under the Act
New, simpler, model articles are available for "new" companies. these can be adopted in whole or in part and are designed to reflect the way most small businesses operate.
Effectively, the Act makes decision-making for companies simpler. There is no longer a statutory requirement for companies to hold an AGM, a company secretary is no longer required, it is easier to make decisions by passing written resolutions, and all meetings now required 14 days notice, irrespective of the resolution.
Companies can also act more flexibly, not just because they do not have to specify their objects in their memorandum, but by opting not to have a limit on their authorised share capital and acting without prohibition on financial assistance.
"Effectively, the Act makes decision making for companies simpler. "
New forms, including one for the annual return, are required to be filed at Companies House and many of these forms can now be filed electronically. Take note, the Act has also brought in harsher penalties for late filing of company accounts (up to £1,500).
Directors should be aware that some of the changes directly affect them. As well as the director's duties being clarified, directions now have the right to file a service address on the public record, rather than their private home address.
Existing private companies in transition
Some confusion is likely to follow the Acts implementation for professionals and laymen alike as, for example, the new forms may not be required for a filing obligation relation to a past event. Generally speaking however, documents accepted by Companies House up to September 30, 2009 will be subject to the old law and the old forms will therefore be required.
Existing companies' activities will be limited by their objects, so they will need to first make resolutions and amend their articles of association to benefit from the new unrestricted objects.
Private companies will not only need to be aware of the changes, but they will also need to ensure that their software and administrators can cope with the changes.