Legalize / United Kingdom / Public General Act

Companies Act 1985

Type Public General Act

Publication 1985-03-11

State In force

Department Statute Law Database

Source legislation.gov.uk

Reform history JSON API

Part I — Formation and Registration of Companies; Juridical Status and Membership

Chapter I — Company Formation

Memorandum of association

Information as to compromise to be circulated.

1

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Reporting standards

2

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Limited partnerships: limit on number of members.

3

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Maturity analysis

4

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Procedure for objecting to alteration

5

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Provisions supplementing ss. 4, 5

6

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Articles of association

Articles prescribing regulations for companies

7

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Tables A, C, D and E

8

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Alteration of articles by special resolution

9

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Registration and its consequences

Documents to be sent to registrar

10

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Minimum authorised capital (public companies)

11

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Duty of registrar

12

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Effect of registration

13

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Managed funds

14

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Memorandum and articles of company limited by guarantee

15

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Managed funds

16

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Conditions in memorandum which could have been in articles

17

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Deferred acquisition costs

18

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Copies of memorandum and articles to be given to members

19

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Inclusion of financial instruments at fair value

20

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Registered documentation of Welsh companies

21

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

A company’s membership

Assets included at a fixed amount

22

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Membership of holding company

23

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Investments

24

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Chapter II — Company Names

Name as stated in memorandum

25

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Prohibition on registration of certain names

26

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Long term business

27

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Long term business provision

28

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Regulations about names

29

(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Provision for taxation

30

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Particulars of tax

31

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

General

32

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Prohibition on trading under misleading name

33

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Relief from section 56 in respect of group reconstructions.

34

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Chapter III — A Company’s Capacity; Formalities of Carrying on Business

Company's capacity: power of directors to bind it

35

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Form of company contracts

36

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Duty to register

37

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Scope of Part

38

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

General

39

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Relief from section 56 in respect of group reconstructions.

40

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Authentication of documents

41

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Events affecting a company's status

42

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Part II — Re-registration as a means of altering a company’s status

Private company becoming public

Re-registration of private company as public

43

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Consideration for shares recently allotted to be valued

44

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Additional requirements relating to share capital

45

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Meaning of " unqualified report " in s. 43(3)

46

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Certificate of re-registration under s. 43

47

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Modification for unlimited company re-registering

48

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Limited company becoming unlimited

Re-registration of limited company as unlimited

49

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Certificate of re-registration under s. 49

50

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Unlimited company becoming limited

Re-registration of unlimited company as limited

51

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Certificate of re-registration under s. 51

52

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Public company becoming private

Re-registration of public company as private

53

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Litigated objection to resolution under s. 53

54

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Certificate of re-registration under s. 53

55

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Part III — Capital Issues

Chapter I — Issues by Companies Registered, or to be Registered, in Great Britain

The prospectus

Matters to be stated, and reports to be set out, in prospectus

56

(1) Every prospectus issued by or on behalf of a company, or by or on behalf of any person who is or has been engaged or interested in the formation of the company, must comply—

(a) with Part I of Schedule 3 to this Act, as respects the matters to be stated in the prospectus, and

(b) with Part II of that Schedule, as respects the reports to be set out.

(2) It is unlawful to issue any form of application for shares in or debentures of a company unless the form is issued with a prospectus which complies with the requirements of this section.

(3) Subsection (2) does not apply if it is shown that the form of application was issued either—

(a) in connection with a bona fide invitation to a person to enter into an underwriting agreement with respect to the shares or debentures, or

(b) in relation to shares or debentures which were not offered to the public.

(4) If a person acts in contravention of subsection (2), he is liable to a fine.

(5) This section does not apply—

(a) to the issue to existing members or debenture holders of a company of a prospectus or form of application relating to shares in or debentures of the company, whether an applicant for shares or debentures will or will not have the right to renounce in favour of other persons, or

(b) to the issue of a prospectus or form of application relating to shares or debentures which are or are to be in all respects uniform with shares or debentures previously issued and for the time being listed on a prescribed stock exchange;

but subject to this, it applies to a prospectus or a form of application whether issued on or with reference to the formation of a company or subsequently.

Attempted evasion of s. 56 to be void

57

A condition requiring or binding an applicant for shares in or debentures of a company to waive compliance with any requirement of section 56, or purporting to affect him with notice of any contract, document or matter not specifically referred to in the prospectus, is void.

Document offering shares etc. for sale deemed a prospectus

58

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Rule governing what is an " offer to the public "

59

Exceptions from rule in s. 59

60

Prospectus containing statement by expert

61

(1) A prospectus inviting persons to subscribe for a company’s shares or debentures and including a statement purporting to be made by an expert shall not be issued unless—

(a) he (the expert) has given and has not, before delivery of a copy of the prospectus for registration, withdrawn his written consent to its issue with the statement included in the form and context in which it is in fact included; and

(b) a statement that he has given and not withdrawn that consent appears in the prospectus.

(2) If a prospectus is issued in contravention of this section, the company and every person who is knowingly a party to the issue of the prospectus is liable to a fine.

Meaning of "expert"

62

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Prospectus to be dated

63

A prospectus issued by or on behalf of a company, or in relation to an intended company, shall be dated; and that date shall, unless the contrary is proved, be taken as its date of publication.

Registration of prospectus

Registration requirement applicable in all cases

64

(1) No prospectus shall be issued by or on behalf of a company, or in relation to an intended company, unless on or before the date of its publication there has been delivered to the registrar of companies for registration a copy of the prospectus—

(a) signed by every person who is named in it as a director or proposed director of the company, or by his agent authorised in writing, and

(b) having endorsed on or attached to it any consent to its issue required by section 61 from any person as an expert.

(2) Where the prospectus is such a document as is referred to in section 58, the signatures required by subsection (1) above include those of every person making the offer, or his agent authorised in writing.

Where the offer is made by a company or a firm, it is sufficient for the purposes of this subsection if the document is signed on its behalf by two directors or (as the case may be) not less than half of the partners; and a director or partner may sign by his agent authorised in writing.

(3) Every prospectus shall on its face—

(a) state that a copy has been delivered for registration as required by this section, and

(b) specify, or refer to statements in the prospectus specifying, any documents required by this or the following section to be endorsed on or attached to the copy delivered.

(4) The registrar shall not register a prospectus unless it is dated and the copy of it signed as required by this section and unless it has endorsed on or attached to it the documents (if any) specified in subsection (3)(b).

(5) If a prospectus is issued without a copy of it being delivered to the registrar as required by this section, or without the copy so delivered having the required documents endorsed on or attached to it, the company and every person who is knowingly a party to the issue of the prospectus is liable to a fine and, for continued contravention, to a daily default fine.

Additional requirements in case of prospectus issued generally

65

(1) In the case of a prospectus issued generally (that is to persons who are not existing members or debenture holders of the company), the following provisions apply in addition to those of section 64.

(2) The copy of the prospectus delivered to the registrar of companies must also have endorsed on or attached to it a copy of any contract required by paragraph 11 of Schedule 3 to be stated in the prospectus or, in the case of a contract not reduced into writing, a memorandum giving full particulars of it.

(3) In the case of a contract wholly or partly in a foreign language—

(a) the copy required by subsection (2) to be endorsed on or attached to the prospectus must be a copy of a translation of the contract into English or (as the case may be) a copy embodying a translation into English of the parts in a foreign language, and

(b) the translation must be certified in the prescribed manner to be a correct translation.

(4) If the persons making any report required by Part II of Schedule 3 have made in the report, or have (without giving reasons) indicated in it, any such adjustments as are mentioned in paragraph 21 of the Schedule (profits, losses, assets, liabilities), the copy of the prospectus delivered to the registrar must have endorsed on or attached to it a written statement signed by those persons setting out the adjustments and giving the reasons for them.

Liabilities and offences in connection with prospectus

Directors, etc. exempt from liability in certain cases

66

(1) In the event of non-compliance with or contravention of section 56, a director or other person responsible for the prospectus does not incur any liability by reason of that non-compliance or contravention if—

(a) as regards any matter not disclosed, he proves that he was not cognisant of it, or

(b) he proves that the non-compliance or contravention arose from an honest mistake of fact on his part, or

(c) the non-compliance or contravention was in respect of matters which, in the opinion of the court dealing with the case, were immaterial or was otherwise such as ought (in the court’s opinion, having regard to all the circumstances of the case) reasonably to be excused.

(2) In the event of failure to include in a prospectus a statement with respect to the matters specified in paragraph 13 of Schedule 3 (disclosure of directors’ interests), no director or other person incurs any liability in respect of the failure unless it is proved that he had knowledge of the matters not disclosed.

(3) Nothing in section 56 or 57 or this section limits or diminishes any liability which a person may incur under the general law or this Act apart from those provisions.

Compensation for subscribers misled by statement in prospectus

67

(1) Where a prospectus invites persons to subscribe for a company’s shares or debentures, compensation is payable to all those who subscribe for any shares or debentures on the faith of the prospectus for the loss or damage which they may have sustained by reason of any untrue statement included in it.

(2) The persons liable to pay the compensation are—

(a) every person who is a director of the company at the time of the issue of the prospectus,

(b) every person who authorised himself to be named, and is named, in the prospectus as a director or as having agreed to become a director (either immediately or after an interval of time),

(d) every person who has authorised the issue of the prospectus.

(3) The above has effect subject to the two sections next following; and here and in those sections “promoter” means a promoter who was party to the preparation of the prospectus, or of the portion of it containing the untrue statement, but does not include any person by reason of his acting in a professional capacity for persons engaged in procuring the formation of the company.

Exemption from s. 67 for those acting with propriety

68

(1) A person is not liable under section 67 if he proves—

(a) that, having consented to become a director of the company, he withdrew his consent before the issue of the prospectus, and that it was issued without his authority or consent, or

(b) that the prospectus was issued without his knowledge or consent, and that on becoming aware of its issue he forthwith gave reasonable public notice that it was issued without his knowledge or consent, or

(c) that after issue of the prospectus and before allotment under it he, on becoming aware of any untrue statement in it, withdrew his consent to its issue and gave reasonable public notice of the withdrawal and of the reason for it.

(2) A person is not liable under that section if he proves that—

(a) as regards every untrue statement not purporting to be made on the authority of an expert or of a public official document or statement, he had reasonable ground to believe, and did up to the time of the allotment of the shares or debentures (as the case may be) believe, that the statement was true; and

Reading this document does not replace reading the official text published on legislation.gov.uk. Contains public sector information licensed under the Open Government Licence v3.0. We assume no responsibility for any inaccuracies arising from the conversion of the original CLML XML to this format.