Companies Act 2006
The Companies Act comprises approximately 1,300 sections and introduces new legislation which reflects the changing business environment.
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 company's members
The Companies Act requires that all companies must keep a register of members moreA more in depth look at the act
A more in depth look at the Act moreAccounting records
The Companies Act prescribes that every company must keep adequate accounting records moreAn auditor's rights to information
Auditors are appointed by the members and are accountable to them. As a result it is important that auditors are given the information they consider relevant to the fulfilment of their duty to members. moreAn historical record of the key changes
The Companies Act changes were introduced over almost three years. For the record, we include a historical account of when the various changes were enacted. moreAppointment of auditors
An auditor of a private company must be appointed for each financial year of the company, unless the directors resolve otherwise on the grounds that audited accounts are unlikely to be required. moreAppointment of directors
The legislation governing the appointment and removal of directors is contained in the Companies Act in Part 10 and comprises nine chapters and over 100 sections. Inevitably this section of our website cannot cover all the aspects of the Act, but endeavours to ... moreChanging the company name
The Companies Act permits a company to change its name. The provisions governing name change are found in sections 78 and 79. This may be achieved either by special resolution of the members or by other means provided by the company's articles. There are also p... moreChoosing a name for your company
A company name must not be offensive or suggest any connection with government or public authority, unless permission is granted by the Secretary of State. moreCompany secretary
A private company is not required to have a secretary, while a public company must have a secretary. moreDirector's transactions requiring members approval
Where a service contract is, or maybe, longer than two years. This is a complicated area of the Act and we recommend that advice be sought with regard to long term service contracts. moreDirectors' liabilities
Companies Act provisions protecting directors from liability moreDirectors' report
One of the requirements of the Companies Act is that the approved accounts must include a directors' report moreDirectors' service contracts
The company is required to keep directors' service contracts or any memorandum of terms at the company's registered office, or at any place specified under section 1136, as section 229 confers rights on members to inspect a request copies. moreDo you need an audit?
The turnover threshold which currently exempts most companies from a statutory audit is £6.5 million. However, small companies still have to produce full statutory accounts. moreFiling of accounts and late filing penalties
Companies are automatically fined if accounts are not submitted on time. Accounts should be normally be filed for a private company ten months after the company's accounting reference date (reduced to nine months for accounting periods starting on or after 6 April 2008). moreFinancial year
A company's financial year is determined by its accounting reference date in each calendar year. moreGeneral duties of directors
The general duties required of a director are set out in seven sections of the Companies Act. moreGroup accounts
The requirements of the Companies Act regarding the preparation of group accounts are based on the company's size. moreLoans to directors
The Companies Act permits a company to make a loan to a director. A loan or guarantee must be approved by a resolution of the members of the company. A resolution giving the necessary approval can only be passed when a memor... moreRecords of directors' meetings
The Companies Act requires a company to keep records of its director's meetings. The responsibility for these records rests with the company's Board of Directors. moreRegistered office
The registered office is the official address to which all communications and notices may be addressed. The company must at all times have a registered office and this must be a physical location and not a PO Box address. The country of the location o... moreRelated director agreements
The Companies Act requires that a company may not take part in an arrangement under which another person enters into a transaction that, if it had been entered into by the company, would have required approval under sections 197, 198, 200 or 201, and that person, in pursuance of the... moreShares and share capital
Shares in a limited company having share capital must each have a fixed nominal value and a share must be distinguished by its appropriate number, unless if at any time all the issued shares in a company are fully paid up and rank pari passu for all p... moreSigning of accounts: directors and auditors
Subject to certain exemptions, a company that meets the small company criteria in respect of a financial year is exempt from the requirement to have an audit of accounts for that year. moreSummary of sections of the Act
Please click on the links to expand and collapse the following navigation bars for more information and links to additional parts of the Act. moreKnowledge centre
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- A company's members
- A more in depth look at the act
- Accounting records
- An auditor's rights to information
- An historical record of the key changes
- Appointment of auditors
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- Changing the company name
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- General duties of directors
- Group accounts
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