Company Law - what's in force?
Questions:
1. Companies Act 2006 – is it all in force?
The only sections that have not been brought into force are:
- section 22(2), which would have limited when a company’s articles may include entrenched provisions;
- section 327(2)(c) and Section 330(6)(c) which would have made void certain provisions in a company’s articles relating to the notices required for the appointment and termination of appointment of proxies in certain circumstances; and
- Section 1175 so far as it relates to Northern Ireland and the associated Part 2 of Schedule 9.
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2. Why have you not commenced section 22(2) of the Companies Act 2006?
Section 22(1) of the Companies Act 2006 defines “provision for entrenchment” and section 22(2) provides that such provisions can only be introduced in one of two ways: on formation, or by unanimous agreement of the members.
The Eighth Commencement Order would have commenced all of the remaining sections of Part 3 of the Companies Act, including all of section 22. After that Order was made, it was pointed out to us that there was some uncertainty as to whether the definition of “provision for entrenchment” in section 22(1) could catch provisions sometimes included in articles in connection with rights attached to classes of shares. This was a cause for concern because provisions that were caught could only be introduced by unanimous consent of all members, which might make it difficult to introduce or amend such provisions.
We therefore included an amendment to the Eighth Commencement Order in the Companies Act 2006 and Limited Liability Partnerships (Transitional Provisions and Savings) (Amendment) Regulations 2009 (SI 2009/2476) so that section 22(2) would not be commenced on 1 October 2009. BIS will consider and consult further about what to do about section 22(2), and will make an announcement in due course.
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3. Companies Act 2006 – have any changes been made to it?
The Act as originally enacted can be viewed here.
The Act as amended can be viewed here but please note that this may not be up-to-date; the Update Status Warning message should be checked.
Amendments made include:
- section 120 so that it does not apply to a company which is a participating issuer as it would not be possible for a company with uncertificated securities to comply with it;
- sections 855-856B relating to Annual Returns; and
- section 1201 so that a UK service address is required only if there is place of business in the UK.
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4. What parts of previous Companies Acts remain?
- Some Scots Law provisions, which are now devolved to the Scottish Parliament, and which are being replaced by the Scottish Parliament.
- Provisions about the Financial Reporting Council which are about the operation of that body and its subsidiaries, not about how companies generally conduct themselves
- Provisions about assisting overseas regulatory authorities, about financial markets, about the Financial Reporting Review Panel, and about insolvency all of which relate more to financial services law than company law.
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5. What is left behind in the 1985 Act?
- Company Investigations
- Orders imposing restrictions on shares following an investigation
- Provisions about Scottish floating charges and receivers
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6. What is left behind in the 1989 Act ?
- Powers to require information and documents to assist overseas regulatory authorities.
- Provisions about Scottish incorporated charities.
- Amendments and savings consequential upon the changes in the law made by the 1989 Act.
- Provisions about financial markets and insolvency
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7.What is left behind in the 2004 Act ?
- The provisions extending the functions of the Financial Reporting Review Panel (FRRP) to interim accounts and reports.
- Provisions about the financing and liability of the Financial Reporting Council (FRC) and its subsidiary bodies.
- Community interest companies.
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