Once
you have
formed
your UK Limited Company it is important that you realise your
responsibilities as they are many and can be onerous. The Companies Act
2006 is the relevant piece of legislation that affects you and your
Limited Company.
Below we have given a brief guide to some of the main points covered by
the Companies Act 2006.
Company registration and
a company’s constitution
The procedures for registering a company have been changed due, in the
main, to the fact that the Act has introduced new provisions relating
to a company’s memorandum and articles of association.
Default Model Articles
There will continue to be default model articles, but there will be
separate model articles for private companies and public companies.
Memorandum of Association
The company memorandum will become a formal document recording the
position at the point of registration, with just the articles being the
continuing constitutional document.
For companies formed before 1 October 2009 any provisions contained in
their memorandum which go beyond the newly required limited information
will be regarded as provisions of their articles of association. Companies will no longer be required to specify their objects.
Company forms
Numerous changes have been made to company forms and the new forms will
be found on the Companies House website at
companieshouse.co.uk.
Directors addresses
The information that companies must file relating to their directors
will change so that for each director a service address and the country
of usual residence will be required, in addition to the home address.
The service address can be the same as the home address and can be the
registered office of the company. The home address is not in the public
domain and so will not be revealed if a company search is carried out,
unless the home address is the same as the service address. This will
apply from 1 October 2009 for new appointments; for existing directors,
a service address and the country of residence will be required in
Annual Returns made up to dates after 30 September 2009. Home addresses
will not be put on the public record after that date.
Secretaries addresses
The rules are different in relation to company secretaries. Only a
service address is required for a secretary (as opposed to both a home
address and a service address for directors). The service address can
be the home address or can be the registered office of the company.
Duties of directors
The Act now sets out the duties of directors and in particular the
general duties of directors in respect of conflicts of interest.
Reduction of capital
The Act introduces a new procedure for private companies to make
capital reductions supported by a solvency statement instead of by a
court order.
Company directors
All companies must have to have at least one natural person as a
director, so a company cannot be a sole director of another company
(some existing companies will have more time before the rules change).
There is a new minimum age of 16 for directors.
Company secretary
Private companies will no longer be required to have a company
secretary, although they may continue to have one if they wish.
Purchase of own shares
The restrictions under the Companies Act 1985 on financial assistance
by private companies for the acquisition of their own shares is
repealed.
Execution of documents
The rules relating to the execution of documents have been amended.
Accounts and audit
Most accounting and audit provisions will apply to accounts and reports
for financial years beginning on or after 6 April 2008. The detailed
statutory accounting and reporting requirements can now be found in
regulations (rather than in Schedules to the Act).
The reporting requirements for small companies are now set out in a
single set of regulations. The requirements themselves are largely
unchanged.
The time for private companies to file their accounts with the
Registrar of Companies has been reduced from 10 to 9 months from their
year end. The time for public companies to file their accounts with the
Registrar of Companies has been reduced from 7 to 6 months from their
year end. The medium sized group exemption from preparing consolidated
accounts has been removed – only small groups will be exempt.
Electronic communication
Companies can make greater use of electronic communications for
communication with shareholders.
Annual general meetings
Private companies will not need to hold an annual general meeting
unless they positively opt to do so.
Resolutions
The Act has made it easier for private companies to take decisions by
written resolutions.
Authorised share capital
For all companies incorporated on or after 1 October 2009 there will be
no authorised/nominal share capital.
Entrenchment of
provisions in articles
Companies can entrench certain provisions in their articles. This means
that if a provision is entrenched it can only be amended if certain
strict conditions are met.
Change of company name
The Act has changed the provisions whereby a company can change its
name. Under the 2006 Act a company can change its name using one of
four methods, dependant on the circumstances relating to the change. In
practice, for most companies a change of name will either be made by
special resolution or by other means provided for in the company’s
articles. This is a change in the law. For example, the company’s
articles could provide for a change of name to be made by the passing
of a directors’ resolution (as opposed to a special resolution passed
by members). However, if a company changes its name by such a method it
must give notice to the registrar and this notice must be accompanied
by a statement that the change of name has been made by means provided
for by the company’s articles.
Company names
The rules contained in the 2006 Act in relation to “same as” names are
stricter than under the 1985 Act.
Restoration of companies
If a company was struck off the register under the 1985
Act, application had to be made to the Court to have the company
restored. The 2006 Act introduces new legislation which provides for
“administrative restorations”. This method will be used in the main by
companies that have been removed from the register for failing to file
accounts. The Court will still retain the power to restore companies
where the Registrar is unable to act.
Voluntary dissolution
Under the 1985 Act only private companies could apply for voluntary
dissolution under section 652A. Under section 1003 of the 2006 Act
public companies may now make such applications.
The Registrar of Companies
The Act gives the Registrar of Companies a range of powers which
include the form and manner in which companies must deliver documents
to Companies House, including electronic delivery.
The powers include a power for the Registrar not to make certain
information available to the public. The most important information
concerns the residential addresses of a director, secretary or certain
members (see above).
