The Companies Act 2006 - Final Implementation
The Companies Act 2006 – Final Implementation
Any reader of “In Brief” will be aware of the gradual roll-out of the Companies Act 2006. On 1st October 2009 implementation of a substantial number of provisions of the Act took place.
Some key changes are mentioned in very brief outline below:
Share Capital – The concept of authorised share capital is abolished. Private companies seeking to reduce their share capital can do so by a special resolution supported by a solvency statement from each director. New companies will be able to issue an unlimited number of shares if they so choose.
Memorandum and Articles of Association – from October 2009, the memorandum will become a “snapshot” recording the facts at the time of incorporation. The Articles of Association will be the key document; private companies will be encouraged to use or adopt new default Model Articles of Association.
Formation of new companies – Any type of company can be formed with a single shareholder. There will be no requirement for companies to state their objects, though they may choose to do so.
Companies House Forms – all forms are in a new format from 1st October onwards.
So, what does the Companies Act 2006 achieve? The intention was to create a modern act which would replace previous legislation, giving companies greater flexibility, whilst enhancing transparency and improving investor protection. To know how your own business can benefit from any relaxation, should tread carefully to avoid any unwitting infringement or needs to consider changes to protect directors and shareholders, it is best to seek specific advice.