Companies Act 2006
The Companies Act 2006 (c 46) is an Act of the Parliament of the United Kingdom which forms the primary source of UK company law. It had the distinction of being the longest in British Parliamentary history: with 1,300 sections and covering nearly 700 pages, and containing 16 schedules (The list of contents is 59 pages long) but it has since been superseded, in that respect, by the Corporation Tax Act 2009.
The Act was brought into force in stages, with the final provision being commenced on 1 October 2009. It superseded the Companies Act 1985.
The Act provides a comprehensive code of company law for the United Kingdom, and made changes to almost every facet of the law in relation to companies. The key provisions are:
- the Act codifies certain existing common law principles, such as those relating to directors' duties.
- it implements the European Union's Takeover and Transparency Obligations Directives.
- it introduces various new provisions for private and public companies.
- it applies a single company law regime across the United Kingdom, replacing the two separate (if identical) systems for Great Britain and Northern Ireland.
- it otherwise amends or restates almost all of the Companies Act 1985 to varying degrees.
The Bill for the Act was first introduced to Parliament as "the Company Law Reform Bill" and was intended to make wide-ranging amendments to existing statutes. Lobbying from directors and the legal profession ensured that the Bill was changed into a consolidating Act, avoiding the need for cross-referencing between numerous statutes.
The reception of the Act by the legal professions in the United Kingdom has been slightly lukewarm. Concerns have been expressed that too much detail has been inserted to seek to cover every eventuality. Whereas a complete overhaul of company law was promised, the Act seems to leave much of the existing structure in place, and to simplify certain aspects only at the margins. In other areas, it is said to have complicated and obfuscated previously settled law and may make doing business more difficult for those operating small companies.
Read more about Companies Act 2006: Implementation, Directors, General Provisions, Private Companies, Public and Listed Companies, Contents
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