The Companies Act 2006
The implementation of the Companies Act 2006 was completed on 1st October 2009. It is a piece of primary legislation that mainly applies to companies directly.
The previous Companies Act 1985 has been changed in order to meet four key objectives:
- To enhance shareholder engagement and long term investment culture
- To ensure better regulation
- To make it easier to set up and run a company
- To provide flexibility for the future
We have listed below a summary of the main changes which will affect you company. If these changes raise any questions, you should contact one of our solicitors at Ashton Morton Slack.
Making Decisions
You will no longer need to hold an annual general meeting (commonly known as an AGM)) unless 10% of the shareholders agree that one is necessary. Written resolutions (for matters such as amending the appointment of a director) will now only require majority approval, whether it is 75% or 50% plus one.
Directors
Every company formed under the Companies Act 2006 will have to have at least one Director.
The minimum age for a director is 16 years old with there being no maximum age limit.
Directors will also be obliged to provide Companies House with their address for service.
Company Secretary
From the 6 April 2008, your company will no longer be required to have a Company Secretary unless you want one.
Memorandum & Articles of Association
If you are intending to form a company, from October 2009 you will be able to produce a short document containing the facts of the company on set up. The main principles governing the company will then be placed into the Articles of Association which will assist with setting up and will also allow companies to use the Companies Houses standard set of Articles.
Companies will no longer need to include in these governing documents the object of the company.
Financial Matters
The Companies Act 2006 encourages companies to file their accounts electronically. Companies House believe that this will make the filing of accounts easier. It is for this reason that from April 2008 the deadline for filing accounts will reduce from ten months to nine months.
Financial assistance to buy a company's own shares will also no longer be prohibited.
Here at Ashton Morton Slack we have undergone training to understand the new changes. If you are unsure how this will affect your business, then contact the Company Law team at Ashton Morton Slack who can advise you.
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