Last amended by Enterprise and Regulatory Reform Act 2013 in 2013. Amended directors' duties provisions and reformed the narrative reporting framework.
Independent editorial summary — not the official statute text. Read the official version on legislation.gov.uk.
Summary
The Companies Act 2006 is the principal statute governing company law in England & Wales. It is one of the longest Acts ever passed by Parliament, consolidating and reforming previous company legislation. It covers company formation, directors' duties, shareholder rights, accounts and audit, and company administration.
Key Points
- Companies may be limited by shares, limited by guarantee, or unlimited (s.3–4)
- Codified directors' general duties for the first time (ss.170–177)
- Directors must act within powers, promote success of the company, exercise independent judgment, avoid conflicts of interest, and not accept benefits from third parties
- Shareholders have pre-emption rights on new share issues (s.561)
- Derivative claims allow shareholders to bring proceedings on behalf of the company (Part 11)
- Unfair prejudice remedy protects minority shareholders (s.994)
- Annual accounts and reports must be filed at Companies House
Parts & Sections
Amendments History
2013 — Enterprise and Regulatory Reform Act 2013
Amended directors' duties provisions and reformed the narrative reporting framework.
2006 — Small Business, Enterprise and Employment Act 2015
Required companies to keep a register of people with significant control (PSC register).
Frequently asked questions
- What is the Companies Act 2006?
- The Companies Act 2006 is the principal statute governing company law in England and Wales. It consolidates and reforms previous legislation, covering key areas such as company formation, directors' duties, shareholder rights, accounts and audit, and company administration. It is one of the longest Acts ever passed by Parliament.
- What types of companies are recognised under the Act?
- Under the Act, companies can be structured as limited by shares, limited by guarantee, or unlimited. These different types determine how liability is handled and how the company is managed, providing flexibility for various business needs and ownership structures.
- What are the main duties of company directors?
- The Act codified general duties for directors for the first time. These include acting within powers, promoting the company's success, exercising independent judgment, avoiding conflicts of interest, and not accepting benefits from third parties. Directors must also declare any interest in proposed transactions with the company.
- What rights do shareholders have regarding new shares?
- Shareholders have pre-emption rights on new share issues, meaning they can buy new shares before they are offered to others. Additionally, shareholders can bring derivative claims on behalf of the company and use the unfair prejudice remedy to protect minority interests.
- Do companies have to file accounts with an official body?
- Companies are required to file annual accounts and reports at Companies House. This ensures transparency and allows stakeholders to review the financial performance and governance of the company in accordance with statutory requirements.
- What is a register of people with significant control?
- The Small Business, Enterprise and Employment Act 2015 required companies to keep a register of people with significant control. This register helps identify individuals who have substantial influence over the company, enhancing transparency and accountability in corporate governance.