The Companies Act 2006 - Final Implementation

News
14 Oct 2009

As from 1st October 2009 the Companies Act 2006 will be fully implemented.  Over the last three years the Act has been phased in gradually and implementation of the final provisions of the Act signals a number of significant changes for companies throughout the UK.  Some of the key changes that came into force in October 2009 are as follows: -

 

1.      Allotment of Shares

 

As from 1st October 2009 private companies with only one class of shares will not need authority to allot shares unless the Articles of Association require it.  This provision applies to companies incorporated on or after 1st October 2009.  For existing companies a member’s resolution is required to confirm that the Director should have the powers given by the new provisions in the Companies Act.

 

2.      Annual General Meetings

 

Unless required by the Articles of Association, private companies which are non trading companies are no longer obliged to hold an Annual General Meeting and companies are no longer obliged to lay accounts and reports before an Annual General Meeting. 

 

3.      Authorised Share Capital

 

Companies are no longer required to have an authorised share capital.  If the Shareholders of the company want to restrict the number of shares issued by the company an amendment will be required to the Articles of Association in order to insert the appropriate provisions. 

 

4.      Change by a Company of its Name

 

Companies may now change their name by whatever means as is provided in the Articles of Association. 

5.      Financial Assistance

 

The general prohibition on the giving of financial assistance by a private company for the purchase of its shares and the private company whitewash procedure have both been abolished under the 2006 Act.

 

6.      Memorandum of Association

 

Prior to the 2006 Act the memorandum of Association of a company set out at the company’s main objects.  A major change in the 2006 Act is that the company’s objects will be unrestricted unless the Articles of Association specifically restricts the objects.  After 1st October 2009, the Act will treat the existing objects clause in the Memorandum of Association as provisions under the Articles of Association.  Any company wishing to amend objects to make them unrestricted will be able to do so by amending the Articles.  From 1st October 2009 onwards the purpose of the Memorandum of Association will be simply to record details of the initial subscribers of shares.

 

 

7.      Informal Correction of documents lodged for registration

 

From October 2009 the registrar will have the power to correct a document which would appear to be incomplete or inconsistent before registering it.  Initially, the formal correction procedure would only be available for registration of Mortgages and Charges.  Generally, the registrar’s powers have been broadened by the 2006 Act and this will enable the registrar to rectify the register by removing documents that are inaccurate.

 

8.      Merger of NI Companies Registry

 

In keeping with the intention that the 2006 Act will provide a uniform company law regime to apply to the whole of the UK, from 1st October 2009 the Companies Registry will integrate with Companies House.  Significantly, the NI Forms will no longer apply and the new set of Companies Act 2006 Forms must be used after 1st October 2009.  These are available on the Company House website and the online search facility previously available through the DETI website will now be available via the Companies House website.  The office will remain in Belfast to accept registration of documents but all telephone enquires and online enquiries will be conducted through the main Cardiff Office.

 

Further Assistance

 

Should you require any further advice and assistance then please contact our Company, Commercial and Employment Law Department.

 

Claire Fisher