Companies Act comes into Full Force
The biggest overhaul of company law is completed today when the final elements of the Companies Act 2006 are brought into force, with 2.5 million British companies set to benefit from a range of measures that simplify and strengthen the way they do business.
To save business time and money Government departments now issue all their changes to business regulations on two dates per year – 6th April and 1st October. This is part of the Government’s commitment to promote better regulation, regulating only where necessary, doing so in a proportionate and targeted way, and reducing bureaucracy wherever possible.
From today, new businesses will be able to save valuable time and money with simpler model articles, making it easier to start up and run companies. Other measures will help shareholders and investors by encouraging disclosure of strategic, forward looking information through enhanced business review.
Key provisions of the Companies Act 2006 include:
- Creating separate and simpler model Articles of Association for small companies, reflecting how they operate
- Enabling greater use of electronic communications with shareholders therefore avoiding unnecessary cost and time consuming administration
- Making it an offence to carry on business in the UK under a name that gives so misleading an indication of the nature of the activities of the business as to be likely to cause harm to the public.
Business Minister Ian Lucas said:
"We are working hard to create the best environment for businesses to thrive and it is paying off, with the UK recognised by the World Bank as the best place in Europe to do business.
"Common Commencement Dates help companies to plan ahead, saving them time and money. The changes under the Companies Act will help 2.5 million British companies and deliver benefits to business of around £300M a year."
The changes have been widely welcomed by businesses because many of the measures have been introduced to reflect how companies already operate, minimising the burden on business to adapt to new regulation.
The following regulations are also coming into force:
Department for Business – National Minimum Wage and Tipping
Department for Transport – Local Transport Act
HM Treasury – Credit Rating Agencies