Companies Act 2006 – Final implementation 1 October 2009

After a long wait, the new Companies Act is now fully effective.

Some of the key changes coming into effect on 1 October 2009, for private companies limited by shares are listed below.

Constitution of companies

In broad terms, an existing company will have to continue to comply with its existing memorandum and Articles (including any restricted objects) unless they are amended but for companies incorporated from 1 October 2009 their objects will be unrestricted, unless their articles of association (Articles) provide otherwise.

Model Articles will apply by default on formation (unless modified or excluded).  These Model Articles were designed with the needs of small, owner-managed businesses in mind, so the provisions have been kept as simple as possible.  Many companies will continue to require customised Articles.

Provisions can be entrenched in Articles (i.e. it can be stipulated that certain provisions can only be amended with the approval of a majority of more than 75%), but only on formation of the company or if all members agree.  Special notice of entrenched provisions must be filed with Companies House.

Share capital

Companies will no longer have an authorised share capital.  For existing companies with an authorised share capital, the relevant limit will continue to apply and will be treated as a restriction in their Articles, but can be removed by ordinary resolution.

Directors of a private company with only one class of share will not need prior authority from the company's members to allot shares, unless the company's Articles require otherwise.

Company names

Articles can permit a company to change its name without a special resolution – e.g. by a board resolution, or by approval of less than 75% of the company's members.

There will be new prohibitions on a company using a registered name or a business name that gives "so misleading an indication" of the nature of its activities "as to be likely to cause harm to the public". 

Privacy

Newly appointed individual directors will be able to keep their residential addresses off the public register, which will only publish service addresses (which could be, for example, the company's registered office address).

Companies House will hold two separate registers: the (private) Register of Directors’ Residential Addresses and the (publicly available) Register of Directors, containing directors’ service addresses.

All change at Companies House

All Companies House forms will change from 1 October 2009 to reflect the implementation of the CA 2006.  Submission of old forms will be rejected.

How we can assist

Our corporate lawyers have been assisting our clients to adapt to the new regime since the new act began to come into force in 2007.

If you require assistance with any company formation or management issue, let us know.