Companies Act 2006

The Companies Act 2006 (the "2006 Act") effects the most sweeping and significant alteration of UK companies legislation for over 20 years. Significant portions of the 2006 Act were implemented on 1 October 2007, 6 April 2008 and 1 October 2008, with the remainder coming into force on 1 October 2009.

Main Changes The main provisions of the 2006 Act becoming effective on 1 October 2009 relate to the formation and constitutional documents of companies, share capital and the redemption and purchase by a company of its own shares. These and certain other changes are discussed in more detail below.

Provisions To Be Implemented on 1 October 2009 Formation of a company (sections 7-16 of the 2006 Act). A single individual will be able to form any type of company, not just a private company.

There will be a change to some of the filing requirements when forming a new company. Principally, a statement of capital and initial shareholdings in the prescribed form will be required to be delivered to Companies House on an application for the registration of a company having a share capital. The statement of capital will include:

the total number of issued shares in the company to be taken on formation the aggregate nominal value of those shares details of the rights attaching to each class of shares the amount paid up and/or to be paid up on each share. A statement of compliance with the provisions of the 2006 Act will still have to be provided along with the other incorporation documents to Companies House, but this will no longer be required to be a statutory declaration.

Constitution of a company (sections 17-28 of the 2006 Act). The memorandum of association will cease to form part of a company's constitution and will simply be a snapshot of the subscriber(s) on incorporation. It will be in a prescribed form and the only information that it will contain will be the name of the company, a statement that the subscriber(s) wish to form the company and, if the company is to have a share capital, a statement that the subscriber(s) will take at least one share. All provisions in the memoranda of existing companies, other than provisions required by the new style of memorandum, will be deemed to be provisions of the company's articles of association.

A company's constitution will, by definition, include the company's articles and any of the constitutional-type resolutions and agreements now specified in the 2006 Act.

Companies will be able to "entrench" provisions of their articles, either on formation or subsequently by unanimous agreement of the members. Once a provision is "entrenched" it can...