Companies Act

The Companies Act comprises of 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 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 more in depth look at the Act
The Companies Act prescribes that every company must keep adequate accounting records
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.
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.
A private company is not required to have a secretary, while a public company must have a secretary.
Companies Act provisions protecting directors from liability
Recent changes mean that small and medium-sized businesses will now be able to obtain an audit exemption if they meet two out of three criteria relating to balance sheet total, turnover and number of employees.
Companies are automatically fined if accounts are not submitted on time. Accounts should be normally be filed for a private company nine months after the company's accounting reference date.
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.
The provisions relating to company formation are contained in Parts 1 to 7.