The Companies Act 2006 Explanation
A Summary Of The Companies Act 2006 Explanation.
The Companies Act 2006 remains the origin of UK law. It, therefore, assists as the principal source of company law. The act remains the longest in the history of Parliament. Built around some 1,300 sections. However, now amended by the 2009 Corporation Tax Act.
Corporate governance requires a company’s articles of association which is a document along with the memorandum of association form the company’s constitution. It also determines the duty of directors,
Amendments to the 2006 act, then changed gradually. The final amendment, however, was finalised October 2009. These changes, therefore, affected UK company law.
The fundamental changes, companies act 2006 explanation therefore, being:
- Extra stipulations for private and public registered companies in England and Wales, Scotland plus Northern Ireland;
- executed The European Unions Transparency Obligation and Takeover Directives;
- arranged (laws or rules) into a systematic code relating to various common law principles;
- revised or reinstated most features of the 1985 Companies Act;
- implemented a single united UK company law regime. Northern Ireland treated separately to the UK.
How Does The Companies Act 2006 Then Affect Business?
Before the act, directors duty in the main led by case law. The 2006 Act codified the duties of company directors into a statutory statement.
The main duties :
At all times;
- Ensure as a director, you then act within your powers utilising skill and experience;
- always promote the success of the company, therefore, ensuring a benefit for shareholders;
- ensuring independent judgement at all times;
- you exercise reasonable care skill and diligence at all times;
- avoid conflicts of interest at all times;
- third-party benefits, must not be accepted at any time;
- make known interest transactions or arrangements with the company. Duties ensure minimum standards directors adhere to;
- trade within the company’s capacity;
- company has adequate business funding;
- file accounts and report at companies house in electronic ;
- ensure the company has adequate business insurance;
- as appropriate Government Licence approved in order to trade;
- avoid fraudulently trading;
- if turnover requires, appoint a statutory auditor;
- maintain a registered office;
- ensure confirmation statement (Annual return) filed;
- ensure if public company all political donations;
communicate with shareholders, give notice of meetings, record resolutions and meetings, written resolutions.
Who does the Companies Act 2006 then apply to?
Introduces provisions for private and public companies. Applies a single company legal administration then across the United Kingdom. It, therefore, replaces the two separate systems for Great Britain and Northern Ireland.
What is Section 1000 of the Companies Act 2006?
Section 1000 – Authority to strike off a company not taking on business or running. If the companies house registrar then has plausible cause to understand that a company is not carrying on business or in operation. The registrar may inquire whether the company is carrying on business or in operation.