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Companies Act 2006
CHAPTER 46
CONTENTS
P ART 1
G ENERAL INTRODUCTORY PROVISIONS
Companies and Companies Acts 1 Companies 2 The Companies Acts
Types of company 3 Limited and unlimited companies 4 Private and public companies 5 Companies limited by guarantee and having share capital 6 Community interest companies
P ART 2
C OMPANY FORMATION
General 7 Method of forming company 8 Memorandum of association
Requirements for registration 9 Registration documents 10 Statement of capital and initial shareholdings 11 Statement of guarantee 12 Statement of proposed officers 13 Statement of compliance
ii Companies Act 2006 (c.^^46 )
Registration and its effect 14 Registration 15 Issue of certificate of incorporation 16 Effect of registration
P ART 3
A COMPANY ’S CONSTITUTION
C HAPTER 1
I NTRODUCTORY
17 A company’s constitution
C HAPTER 2
A RTICLES OF ASSOCIATION
General 18 Articles of association 19 Power of Secretary of State to prescribe model articles 20 Default application of model articles
Alteration of articles 21 Amendment of articles 22 Entrenched provisions of the articles 23 Notice to registrar of existence of restriction on amendment of articles 24 Statement of compliance where amendment of articles restricted 25 Effect of alteration of articles on company’s members 26 Registrar to be sent copy of amended articles 27 Registrar’s notice to comply in case of failure with respect to amended articles
Supplementary 28 Existing companies: provisions of memorandum treated as provisions of articles
C HAPTER 3
R ESOLUTIONS AND AGREEMENTS AFFECTING A COMPANY ’ S CONSTITUTION
29 Resolutions and agreements affecting a company’s constitution 30 Copies of resolutions or agreements to be forwarded to registrar
C HAPTER 4
M ISCELLANEOUS AND SUPPLEMENTARY PROVISIONS
Statement of company’s objects 31 Statement of company’s objects
iv Companies Act 2006 (c.^^46 )
Sensitive words and expressions 54 Names suggesting connection with government or public authority 55 Other sensitive words or expressions 56 Duty to seek comments of government department or other specified body
Permitted characters etc 57 Permitted characters etc
C HAPTER 2
I NDICATIONS OF COMPANY TYPE OR LEGAL FORM
Required indications for limited companies 58 Public limited companies 59 Private limited companies 60 Exemption from requirement as to use of “limited” 61 Continuation of existing exemption: companies limited by shares 62 Continuation of existing exemption: companies limited by guarantee 63 Exempt company: restriction on amendment of articles 64 Power to direct change of name in case of company ceasing to be entitled to exemption
Inappropriate use of indications of company type or legal form 65 Inappropriate use of indications of company type or legal form
C HAPTER 3
S IMILARITY TO OTHER NAMES
Similarity to other name on registrar’s index 66 Name not to be the same as another in the index 67 Power to direct change of name in case of similarity to existing name 68 Direction to change name: supplementary provisions
Similarity to other name in which person has goodwill 69 Objection to company’s registered name 70 Company names adjudicators 71 Procedural rules 72 Decision of adjudicator to be made available to public 73 Order requiring name to be changed 74 Appeal from adjudicator’s decision
C HAPTER 4
O THER POWERS OF THE S ECRETARY OF S TATE
75 Provision of misleading information etc 76 Misleading indication of activities
Companies Act 2006 (c. 46 ) (^) v
C HAPTER 5
CHANGE OF NAME
77 Change of name 78 Change of name by special resolution 79 Change of name by means provided for in company’s articles 80 Change of name: registration and issue of new certificate of incorporation 81 Change of name: effect
C HAPTER 6
T RADING DISCLOSURES
82 Requirement to disclose company name etc 83 Civil consequences of failure to make required disclosure 84 Criminal consequences of failure to make required disclosures 85 Minor variations in form of name to be left out of account
P ART 6
A COMPANY ’S REGISTERED OFFICE
General 86 A company’s registered office 87 Change of address of registered office
Welsh companies 88 Welsh companies
P ART 7
R E - REGISTRATION AS A MEANS OF ALTERING A COMPANY ’ S STATUS
Introductory 89 Alteration of status by re-registration
Private company becoming public 90 Re-registration of private company as public 91 Requirements as to share capital 92 Requirements as to net assets 93 Recent allotment of shares for non-cash consideration 94 Application and accompanying documents 95 Statement of proposed secretary 96 Issue of certificate of incorporation on re-registration
Public company becoming private 97 Re-registration of public company as private limited company 98 Application to court to cancel resolution
Companies Act 2006 (c. 46 ) (^) vii
124 Company holding its own shares as treasury shares
Supplementary 125 Power of court to rectify register 126 Trusts not to be entered on register 127 Register to be evidence 128 Time limit for claims arising from entry in register
C HAPTER 3
O VERSEAS BRANCH REGISTERS
129 Overseas branch registers 130 Notice of opening of overseas branch register 131 Keeping of overseas branch register 132 Register or duplicate to be kept available for inspection in UK 133 Transactions in shares registered in overseas branch register 134 Jurisdiction of local courts 135 Discontinuance of overseas branch register
C HAPTER 4
P ROHIBITION ON SUBSIDIARY BEING MEMBER OF ITS HOLDING COMPANY
General prohibition 136 Prohibition on subsidiary being a member of its holding company 137 Shares acquired before prohibition became applicable
Subsidiary acting as personal representative or trustee 138 Subsidiary acting as personal representative or trustee 139 Interests to be disregarded: residual interest under pension scheme or employees’ share scheme 140 Interests to be disregarded: employer’s rights of recovery under pension scheme or employees’ share scheme
Subsidiary acting as dealer in securities 141 Subsidiary acting as authorised dealer in securities 142 Protection of third parties in other cases where subsidiary acting as dealer in securities
Supplementary 143 Application of provisions to companies not limited by shares 144 Application of provisions to nominees
viii Companies Act 2006 (c.^^46 )
P ART 9
E XERCISE OF MEMBERS’ RIGHTS
Effect of provisions in company’s articles 145 Effect of provisions of articles as to enjoyment or exercise of members’ rights
Information rights 146 Traded companies: nomination of persons to enjoy information rights 147 Information rights: form in which copies to be provided 148 Termination or suspension of nomination 149 Information as to possible rights in relation to voting 150 Information rights: status of rights 151 Information rights: power to amend
Exercise of rights where shares held on behalf of others 152 Exercise of rights where shares held on behalf of others: exercise in different ways 153 Exercise of rights where shares held on behalf of others: members’ requests
P ART 10
A COMPANY ’ S DIRECTORS
C HAPTER 1
A PPOINTMENT AND REMOVAL OF DIRECTORS
Requirement to have directors 154 Companies required to have directors 155 Companies required to have at least one director who is a natural person 156 Direction requiring company to make appointment
Appointment 157 Minimum age for appointment as director 158 Power to provide for exceptions from minimum age requirement 159 Existing under-age directors 160 Appointment of directors of public company to be voted on individually 161 Validity of acts of directors
Register of directors, etc 162 Register of directors 163 Particulars of directors to be registered: individuals 164 Particulars of directors to be registered: corporate directors and firms 165 Register of directors’ residential addresses 166 Particulars of directors to be registered: power to make regulations 167 Duty to notify registrar of changes
x Companies Act 2006 (c.^^46 )
193 Exception in case of company in winding up or administration 194 Exception for transactions on recognised investment exchange 195 Property transactions: civil consequences of contravention 196 Property transactions: effect of subsequent affirmation
Loans, quasi-loans and credit transactions 197 Loans to directors: requirement of members’ approval 198 Quasi-loans to directors: requirement of members’ approval 199 Meaning of “quasi-loan” and related expressions 200 Loans or quasi-loans to persons connected with directors: requirement of members’ approval 201 Credit transactions: requirement of members’ approval 202 Meaning of “credit transaction” 203 Related arrangements: requirement of members’ approval 204 Exception for expenditure on company business 205 Exception for expenditure on defending proceedings etc 206 Exception for expenditure in connection with regulatory action or investigation 207 Exceptions for minor and business transactions 208 Exceptions for intra-group transactions 209 Exceptions for money-lending companies 210 Other relevant transactions or arrangements 211 The value of transactions and arrangements 212 The person for whom a transaction or arrangement is entered into 213 Loans etc: civil consequences of contravention 214 Loans etc: effect of subsequent affirmation
Payments for loss of office 215 Payments for loss of office 216 Amounts taken to be payments for loss of office 217 Payment by company: requirement of members’ approval 218 Payment in connection with transfer of undertaking etc: requirement of members’ approval 219 Payment in connection with share transfer: requirement of members’ approval 220 Exception for payments in discharge of legal obligations etc 221 Exception for small payments 222 Payments made without approval: civil consequences
Supplementary 223 Transactions requiring members’ approval: application of provisions to shadow directors 224 Approval by written resolution: accidental failure to send memorandum 225 Cases where approval is required under more than one provision 226 Requirement of consent of Charity Commission: companies that are charities
C HAPTER 5
DIRECTORS ’ SERVICE CONTRACTS
227 Directors’ service contracts
Companies Act 2006 (c. 46 ) (^) xi
228 Copy of contract or memorandum of terms to be available for inspection 229 Right of member to inspect and request copy 230 Directors’ service contracts: application of provisions to shadow directors
C HAPTER 6
C ONTRACTS WITH SOLE MEMBERS WHO ARE DIRECTORS
231 Contract with sole member who is also a director
C HAPTER 7
D IRECTORS’ LIABILITIES
Provision protecting directors from liability 232 Provisions protecting directors from liability 233 Provision of insurance 234 Qualifying third party indemnity provision 235 Qualifying pension scheme indemnity provision 236 Qualifying indemnity provision to be disclosed in directors’ report 237 Copy of qualifying indemnity provision to be available for inspection 238 Right of member to inspect and request copy
Ratification of acts giving rise to liability 239 Ratification of acts of directors
C HAPTER 8
D IRECTORS ’ RESIDENTIAL ADDRESSES : PROTECTION FROM DISCLOSURE
240 Protected information 241 Protected information: restriction on use or disclosure by company 242 Protected information: restriction on use or disclosure by registrar 243 Permitted use or disclosure by the registrar 244 Disclosure under court order 245 Circumstances in which registrar may put address on the public record 246 Putting the address on the public record
C HAPTER 9
S UPPLEMENTARY PROVISIONS
Provision for employees on cessation or transfer of business 247 Power to make provision for employees on cessation or transfer of business
Records of meetings of directors 248 Minutes of directors’ meetings 249 Minutes as evidence
Companies Act 2006 (c. 46 ) (^) xiii
Public companies 271 Public company required to have secretary 272 Direction requiring public company to appoint secretary 273 Qualifications of secretaries of public companies
Provisions applying to private companies with a secretary and to public companies 274 Discharge of functions where office vacant or secretary unable to act 275 Duty to keep register of secretaries 276 Duty to notify registrar of changes 277 Particulars of secretaries to be registered: individuals 278 Particulars of secretaries to be registered: corporate secretaries and firms 279 Particulars of secretaries to be registered: power to make regulations 280 Acts done by person in dual capacity
P ART 13
R ESOLUTIONS AND MEETINGS
C HAPTER 1
G ENERAL PROVISIONS ABOUT RESOLUTIONS
281 Resolutions 282 Ordinary resolutions 283 Special resolutions 284 Votes: general rules 285 Votes: specific requirements 286 Votes of joint holders of shares 287 Saving for provisions of articles as to determination of entitlement to vote
C HAPTER 2
W RITTEN RESOLUTIONS
General provisions about written resolutions 288 Written resolutions of private companies 289 Eligible members
Circulation of written resolutions 290 Circulation date 291 Circulation of written resolutions proposed by directors 292 Members’ power to require circulation of written resolution 293 Circulation of written resolution proposed by members 294 Expenses of circulation 295 Application not to circulate members’ statement
Agreeing to written resolutions 296 Procedure for signifying agreement to written resolution 297 Period for agreeing to written resolution
xiv Companies Act 2006 (c.^^46 )
Supplementary 298 Sending documents relating to written resolutions by electronic means 299 Publication of written resolution on website 300 Relationship between this Chapter and provisions of company’s articles
C HAPTER 3
R ESOLUTIONS AT MEETINGS
General provisions about resolutions at meetings 301 Resolutions at general meetings
Calling meetings 302 Directors’ power to call general meetings 303 Members’ power to require directors to call general meeting 304 Directors’ duty to call meetings required by members 305 Power of members to call meeting at company’s expense 306 Power of court to order meeting
Notice of meetings 307 Notice required of general meeting 308 Manner in which notice to be given 309 Publication of notice of meeting on website 310 Persons entitled to receive notice of meetings 311 Contents of notices of meetings 312 Resolution requiring special notice 313 Accidental failure to give notice of resolution or meeting
Members’ statements 314 Members’ power to require circulation of statements 315 Company’s duty to circulate members’ statement 316 Expenses of circulating members’ statement 317 Application not to circulate members’ statement
Procedure at meetings 318 Quorum at meetings 319 Chairman of meeting 320 Declaration by chairman on a show of hands 321 Right to demand a poll 322 Voting on a poll 323 Representation of corporations at meetings
Proxies 324 Rights to appoint proxies 325 Notice of meeting to contain statement of rights 326 Company-sponsored invitations to appoint proxies 327 Notice required of appointment of proxy etc 328 Chairing meetings
xvi Companies Act 2006 (c.^^46 )
354 Power to limit or extend the types of company to which provisions of this Chapter apply
C HAPTER 6
R ECORDS OF RESOLUTIONS AND MEETINGS
355 Records of resolutions and meetings etc 356 Records as evidence of resolutions etc 357 Records of decisions by sole member 358 Inspection of records of resolutions and meetings 359 Records of resolutions and meetings of class of members
C HAPTER 7
S UPPLEMENTARY PROVISIONS
360 Computation of periods of notice etc: clear day rule 361 Meaning of “quoted company”
P ART 14
CONTROL OF POLITICAL DONATIONS AND EXPENDITURE
Introductory 362 Introductory
Donations and expenditure to which this Part applies 363 Political parties, organisations etc to which this Part applies 364 Meaning of “political donation” 365 Meaning of “political expenditure”
Authorisation required for donations or expenditure 366 Authorisation required for donations or expenditure 367 Form of authorising resolution 368 Period for which resolution has effect
Remedies in case of unauthorised donations or expenditure 369 Liability of directors in case of unauthorised donation or expenditure 370 Enforcement of directors’ liabilities by shareholder action 371 Enforcement of directors’ liabilities by shareholder action: supplementary 372 Costs of shareholder action 373 Information for purposes of shareholder action
Exemptions 374 Trade unions 375 Subscription for membership of trade association 376 All-party parliamentary groups 377 Political expenditure exempted by order
Companies Act 2006 (c. 46 ) (^) xvii
378 Donations not amounting to more than £5,000 in any twelve month period
Supplementary provisions 379 Minor definitions
P ART 15
A CCOUNTS AND REPORTS
C HAPTER 1
I NTRODUCTION
General 380 Scheme of this Part
Companies subject to the small companies regime 381 Companies subject to the small companies regime 382 Companies qualifying as small: general 383 Companies qualifying as small: parent companies 384 Companies excluded from the small companies regime
Quoted and unquoted companies 385 Quoted and unquoted companies
C HAPTER 2
A CCOUNTING RECORDS
386 Duty to keep accounting records 387 Duty to keep accounting records: offence 388 Where and for how long records to be kept 389 Where and for how long records to be kept: offences
C HAPTER 3
A COMPANY ’ S FINANCIAL YEAR
390 A company’s financial year 391 Accounting reference periods and accounting reference date 392 Alteration of accounting reference date
C HAPTER 4
A NNUAL ACCOUNTS
General 393 Accounts to give true and fair view
Companies Act 2006 (c. 46 ) (^) xix
C HAPTER 6
Q UOTED COMPANIES: DIRECTORS ’ REMUNERATION REPORT
420 Duty to prepare directors’ remuneration report 421 Contents of directors’ remuneration report 422 Approval and signing of directors’ remuneration report
C HAPTER 7
P UBLICATION OF ACCOUNTS AND REPORTS
Duty to circulate copies of accounts and reports 423 Duty to circulate copies of annual accounts and reports 424 Time allowed for sending out copies of accounts and reports 425 Default in sending out copies of accounts and reports: offences
Option to provide summary financial statement 426 Option to provide summary financial statement 427 Form and contents of summary financial statement: unquoted companies 428 Form and contents of summary financial statement: quoted companies 429 Summary financial statements: offences
Quoted companies: requirements as to website publication 430 Quoted companies: annual accounts and reports to be made available on website
Right of member or debenture holder to demand copies of accounts and reports 431 Right of member or debenture holder to copies of accounts and reports: unquoted companies 432 Right of member or debenture holder to copies of accounts and reports: quoted companies
Requirements in connection with publication of accounts and reports 433 Name of signatory to be stated in published copies of accounts and reports 434 Requirements in connection with publication of statutory accounts 435 Requirements in connection with publication of non-statutory accounts 436 Meaning of “publication” in relation to accounts and reports
C HAPTER 8
P UBLIC COMPANIES : LAYING OF ACCOUNTS AND REPORTS BEFORE GENERAL MEETING
437 Public companies: laying of accounts and reports before general meeting 438 Public companies: offence of failure to lay accounts and reports
xx Companies Act 2006 (c.^^46 )
C HAPTER 9
Q UOTED COMPANIES: MEMBERS’ APPROVAL OF DIRECTORS ’ REMUNERATION REPORT
439 Quoted companies: members’ approval of directors’ remuneration report 440 Quoted companies: offences in connection with procedure for approval
C HAPTER 10
F ILING OF ACCOUNTS AND REPORTS
Duty to file accounts and reports 441 Duty to file accounts and reports with the registrar 442 Period allowed for filing accounts 443 Calculation of period allowed
Filing obligations of different descriptions of company 444 Filing obligations of companies subject to small companies regime 445 Filing obligations of medium-sized companies 446 Filing obligations of unquoted companies 447 Filing obligations of quoted companies 448 Unlimited companies exempt from obligation to file accounts
Requirements where abbreviated accounts delivered 449 Special auditor’s report where abbreviated accounts delivered 450 Approval and signing of abbreviated accounts
Failure to file accounts and reports 451 Default in filing accounts and reports: offences 452 Default in filing accounts and reports: court order 453 Civil penalty for failure to file accounts and reports
C HAPTER 11
R EVISION OF DEFECTIVE ACCOUNTS AND REPORTS
Voluntary revision 454 Voluntary revision of accounts etc
Secretary of State’s notice 455 Secretary of State’s notice in respect of accounts or reports
Application to court 456 Application to court in respect of defective accounts or reports 457 Other persons authorised to apply to the court 458 Disclosure of information by tax authorities
