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. The act was brought into force in stages, with the final provision being commenced on 1 October 2009. It largely superseded the Companies Act 1985.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 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 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. It is the single, longest piece of legislation passed by Parliament, totalling 1,300 sections and 16 schedules.

Implementation

A small portion of the act, including section 43 which transposed the EU Transparency Directive into UK law, came into effect on royal assent in November 2006. The first and second Commencement Orders then brought further provisions into force in January 2007 and April 2007. The implementation timetable for the remainder of the Act was announced in February 2007, by Margaret Hodge, Minister for Industry and the Regions. The third and fourth Commencement Orders brought a further tranche of provisions into force in October 2007, and the fifth, sixth and seventh in April and October 2008. The eighth commencement order, made in November 2008, brought the remainder of the Act into force with effect from October 2009. The staggered timetable was intended to give companies sufficient time to prepare for the new regime under the act, rather than implementing all 1,300 sections of the act on one day. Another reason for the staggered implementation is that, despite the act's size, a great many sections provide for subsidiary legislation to be brought in by Secretary of State, which required time to draft. Implementation of the act was the responsibility of the Department for Business, Innovation and Skills.

Directors

The act replaced and codified the principal common law and equitable duties of directors, but it does not purport to provide an exhaustive statement of their duties, and so it is likely that the common law duties survive in a reduced form. Traditional common law notions of corporate benefit have been swept away, and the new emphasis is on corporate social responsibility. There are seven statutory duties placed on directors which are as follows: Although the changes to directors' duties were the most widely publicised (and controversial) feature of the legislation, the Act also affects directors in various other ways:

General provisions

The Act contains various provisions which affect all companies irrespective of their status: This change was made after intensive lobbying by the accounting profession in the United Kingdom.

Private companies

One of the more touted aspects of the new legislation was the simplification of the corporate regime for small privately held companies. A number of the changes brought about by the Act apply only to private companies. Significant changes include:

Public and listed companies

The Act also seeks to promote greater shareholder involvement, and a number of new requirements are introduced for public companies, some of the provisions of which only apply to companies whose shares are listed on the main board of the London Stock Exchange (but, importantly, not to companies whose shares are listed on AIM).

Contents

Arrangements and reconstructions

Part 26 (sections 895–901) refers to arrangements and reconstructions to be applied between a company and its creditors or members. The principle which allows for 75% of the creditors or members (by value owed or held) to determine a workable arrangement is sometimes referred to as "creditor democracy".

Strategic reports

The Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013 amended the Act with effect from 1 October 2013 and in respect of reporting years ending on or after 30 September 2013, creating a duty for large companies to prepare a "strategic report" which includes "a fair review of the company’s business", and describes "the principal risks and uncertainties" facing it. The Companies, Partnerships and Groups (Accounts and Non-Financial Reporting) Regulations 2016 added a requirement that the strategic report include specified non-financial information, as required by the European Union's Non-financial Reporting Directive (NFRD). The contents of a non-financial information statement must include: