With approximately 1,300 sections, the Companies Act 2006 was passed in order to modernise and simplify company law, codify directors’ duties, grant improved rights to shareholders and simplify the administrative burden carried by UK companies. It is basically your “go to” for all things company law! Although some lawyers criticise it for being too detailed and trying to cover every eventuality, I actually kind of like it! You can navigate it relatively easily and well, it’s all there! SO if you have a UK company and are at a loss with UK Company Law, the Companies Act 2006 is a good resource to turn to. You can access it right HERE for FREE.
So what can you look forward to educating yourself about in the Companies Act 2006? Well, amongst many (many, many, many – it is the longest piece of legislation in the UK) other things, it sets out the following:
1. a company’s formation (modernised to facilitate incorporation over the Internet…so er…what are you waiting for?);
2. a company’s duties including those that can be fulfilled electronically (YES, so much easier);
3. a company’s communications with its shareholders (this can be done electronically via a website – again, way EASIER);
4. directors’ duties (codified for the first time) including an obligation to promote the success of the company (yup you are OBLIGED to do this by English LAW), to consider the community and the environment (this is CORPORATE RESPONSIBILITY), the interests of employees, and to be fair to shareholders (this is arguably why Google restructured its business);
5. the rights of indirect shareholders, including the right to sue the company’s director(s) if fraud or negligence is suspected;
6. company naming rules and company governance e.g. limited companies are no longer required to have a company secretary, and can be run by one director;
7. company ‘model’ Articles of Association, provided by Companies House (this is your company’s CONSTITUTION);
8. share capital rules (simplified for private companies); and
9. formalities for execution of documents.
This epic piece of legislation may be very detailed and a bit daunting at first BUT I think it is incredibly useful – it is basically Wikipedia for UK Company Law. If you have a query about your company and its operations, skim through the index of the Companies Act 2006 and see what you can find out THEN follow up with your lawyer IF you have to!
Please like and please share!