The Companies Act 2006
Following an eight year company law reform consultation process, the Companies Bill finally received Royal Assent on 8 November 2006! The resulting Companies Act 2006 (CA06) is the longest Act ever to have been passed by parliament.
In general terms the aim of the Act is to simplify and modernise current company law so that it better meets today’s business needs. It also aims to provide flexibility for the future and keep company law accessible for those who use it.
CA06 repeals and restates almost all of the current Companies Acts. It introduces reforms which will affect directors, auditors, shareholders and company secretaries of private, public and quoted companies.
The government has stated that all of the Act’s provisions will be brought into force by October 2008 at the latest.
2007 will see further consultation to establish a number of more detailed requirements. Secondary legislation will eventually bring these into force.
With the exception of certain early provisions, for example those in respect of electronic communications between shareholders and the company, the current Companies Acts will continue to apply until CA06 is brought fully into force.
At the time of going to print details of how CA06 will apply to existing companies have not emerged. Again, this year will see the government consult further on this matter.
We will continue to keep you up to date with details of how the new law will affect you as it becomes effective.