Find Business Grants
Graphic image of letter A

What Is The Companies Act 2006?

The Companies Act of 2006 is important to companies who don't always do the right thing when it comes to their business.

The Companies Act of 2006 is a statute in the United Kingdom that basically deals with regulating businesses and companies that lie in its jurisdiction. This act is considered to be one the longest to be in the British Parliament. It has 1300 sections and it is almost 700 pages long. The Table of Contents itself is 59 pages long.

But the Companies Act of 2006 is important to companies who dont always do the right thing when it comes to their business. There are so many different areas of the Companies Act of 2006 that we cant possibly list them all. So here are some topics that it does cover. For example, the Companies Act of 2006 covered the Company Formation UK. This is a practice of how companies go about incorporating themselves either by going to the Companies House or via Internet.

The Companies Act of 2006 covers the Execution of Documents; these are basic formalities for execution of documents that may need to be revised so a director or the secretary of a company can execute these documents on the companys behalf. This Act also covers Shareholder Meetings, Shareholders Communication and Distributions in Kind and much, much more.

The companies that must abide by the Act are Public and Listed Companies as well as Private Companies. For Public Company Formations UK, the Companies Act of 2006 will cover Business Review, which includes any information on environmental issues, employee issues and even social issues. The Business Review will also contain information of contracts and other business obligations.

The Companies Act of 2006 will also contain Voting by Institutions, Paperless Share Transfers and Transparency Obligations Directives. The Act covers all topics relating to business and that includes takeovers. The Private Companies must follow the Act in regards to Short Notice of Meetings, Allotment of Shares, Company Secretaries and Financial Assistance.

Some of the contents in the Companies Act have been changed and will be in effect starting January 2007. Some of those changes that are made are the Co identification of Directors duties when it comes to new duty to promote the success of the company. Another change included extending the rights of shareholders to sue the directors of a company for negligence and other defaults and rights to bring claims on behalf of the company.

Some of the other changes included making it easier for the laws of the company to be updated in the future. Other changes is facilitating e-communications and introducing different measures to allow companies to limit the liabilities of their auditors. The new changes allow promoting shareholders engagement and long-term investment culture through enhancing the powers and the proxies and enfranchising indirect investors.

Mike Novik provides how-to advice on small business and home-based work issues. He helps small businesses reach their fullest potential.

Mike Novik

Guest Articles Welcomed

As we cannot be experts in every relevant subject, we would love to receive 'guest' articles that may be of interest to anyone running their own business or thinking of doing so. ADD YOUR ARTICLE