The Companies Act 2006 is the most significant companies legislation since 1948. It is a massive body of law, comprising 1,350 sections and 16 schedules. There has been a complex timetable for implementation, starting in January 2007, but the most important and far-reaching provisions finally came into effect on 1st October 2009.
The Act comprises a complete re-casting of our company law. Some provisions are merely restatements of existing law, but there are some really significant changes and there are very many minor amendments. Among the many effects are:
- new documents and forms for the registration of companies;
- new Companies forms for all procedures;
- no need to register a company's objects (unless it is a charitable company or other such body which is required by other legislation to set out specific objects in its articles);
- no need to have an authorised share capital;
- new rules about the acceptability of new company names;
- no requirement to have a company secretary;
- new Model Articles, which replace Table A and the effective abolition of the memorandum of association;
- directors may register a service address, which need not be their residential address. This will be the address available to the public (Companies House must still be notified of the residential address, though this is usually available only to a restricted range of government bodies and credit rating agencies);
- new rules on directors' duties; and
- many other changes to company procedures and rules.
The Companies Act is a hugely important piece of legislation as far as the majority of social enterprises are concerned. If the venture in question is a company registered in England or Wales, then (sometimes with a few exceptions) it will be subject to all of the provisions of company law as laid down in the Act, as well as the majority of the statutory instruments enacted which concern companies (e.g. the Company Directors' Disqualification Act 1986).
This is in addition to any other responsibilities the enterprise must exercise under any other legislation which bears relevance to it. For example, a charitable company is subject to the provisions of the Companies Act (because of its status as a limited company) but also to those set out in the Charities Act (because it is also registered as a charity). Similarly, CICs - while a different 'type' of company - are still companies, and as such must comply with the Companies Act as well as with the Companies (Audit, Investigations and Community Enterprise) Act 2004 and the Community Interest Company Regulations 2005.
We are able to provide expert advice on virtually all areas of the Companies Act and related legislation pertaining to social enterprises, charities and non-profit organisations. Should you wish us to advise you on any such matter, please contact us.