Companies Act 2006

Part 1 — General introductory provisions

Companies and Companies Acts

Companies

1

• (1) In the Companies Acts, unless the context otherwise requires—

• (2) Certain provisions of the Companies Acts apply to—

• (a) companies registered, but not formed, under this Act (see Chapter 1 of Part 33), and

• (b) bodies incorporated in the United Kingdom but not registered under this Act (see Chapter 2 of that Part).

• (3) For provisions applying to companies incorporated outside the United Kingdom, see Part 34 (overseas companies).

The Companies Acts

2

• (1) In this Act “the Companies Acts” means—

• (a) the company law provisions of this Act,

• (b) Part 2 of the Companies (Audit, Investigations and Community Enterprise) Act 2004 (c. 27) (community interest companies), and

• (c) the provisions of the Companies Act 1985 (c. 6) and the Companies Consolidation (Consequential Provisions) Act 1985 (c. 9) that remain in force.

• (2) The company law provisions of this Act are—

• (a) the provisions of Parts 1 to 39 of this Act, and

• (b) the provisions of Parts 45 to 47 of this Act so far as they apply for the purposes of those Parts.

Types of company

Limited and unlimited companies

3

• (1) A company is a “limited company” if the liability of its members is limited by its constitution.

It may be limited by shares or limited by guarantee.

• (2) If their liability is limited to the amount, if any, unpaid on the shares held by them, the company is “limited by shares”.

• (3) If their liability is limited to such amount as the members undertake to contribute to the assets of the company in the event of its being wound up, the company is “limited by guarantee”.

• (4) If there is no limit on the liability of its members, the company is an “unlimited company”.

Private and public companies

4

• (1) A “private company” is any company that is not a public company.

• (2) A “public company” is a company limited by shares or limited by guarantee and having a share capital—

• (a) whose certificate of incorporation states that it is a public company, and

• (b) in relation to which the requirements of this Act, or the former Companies Acts, as to registration or re-registration as a public company have been complied with on or after the relevant date.

• (3) For the purposes of subsection (2)(b) the relevant date is—

• (a) in relation to registration or re-registration in Great Britain, 22nd December 1980;

• (b) in relation to registration or re-registration in Northern Ireland, 1st July 1983.

• (4) For the two major differences between private and public companies, see Part 20.

Companies limited by guarantee and having share capital

5

• (1) A company cannot be formed as, or become, a company limited by guarantee with a share capital.

• (2) Provision to this effect has been in force—

• (a) in Great Britain since 22nd December 1980, and

• (b) in Northern Ireland since 1st July 1983.

• (3) Any provision in the constitution of a company limited by guarantee that purports to divide the company's undertaking into shares or interests is a provision for a share capital.

This applies whether or not the nominal value or number of the shares or interests is specified by the provision.

Community interest companies

6

• (1) In accordance with Part 2 of the Companies (Audit, Investigations and Community Enterprise) Act 2004 (c. 27)—

• (a) a company limited by shares or a company limited by guarantee and not having a share capital may be formed as or become a community interest company, and

• (b) a company limited by guarantee and having a share capital may become a community interest company.

• (2) The other provisions of the Companies Acts have effect subject to that Part.

Part 2 — Company formation

General

Method of forming company

7

• (1) A company is formed under this Act by one or more persons—

• (a) subscribing their names to a memorandum of association (see section 8), and

• (b) complying with the requirements of this Act as to registration (see sections 9 to 13).

• (2) A company may not be so formed for an unlawful purpose.

Memorandum of association

8

• (1) A memorandum of association is a memorandum stating that the subscribers—

• (a) wish to form a company under this Act, and

• (b) agree to become members of the company and, in the case of a company that is to have a share capital, to take at least one share each.

• (2) The memorandum must be in the prescribed form and must be authenticated by each subscriber.

Requirements for registration

Registration documents

9

• (1) The memorandum of association must be delivered to the registrar together with an application for registration of the company, the documents required by this section and a statement of compliance.

• (2) The application for registration must state—

• (a) the company's proposed name,

• (b) whether the company's registered office is to be situated in England and Wales (or in Wales), in Scotland or in Northern Ireland,

• (c) whether the liability of the members of the company is to be limited, and if so whether it is to be limited by shares or by guarantee, ...

• (d) whether the company is to be a private or a public company , and

• (e) that the subscribers wish to form the company for lawful purposes.

• (3) If the application is delivered by a person as agent for the subscribers to the memorandum of association, it must state his name and address.

• (3A) The application must contain—

• (a) a statement of the required information about each of the subscribers to the memorandum of association (see section 9A),

• (b) a statement that none of the subscribers to the memorandum of association is disqualified under the directors disqualification legislation (see section 159A(2)),

• (c) if any of them would be so disqualified but for the permission of a court to act, a statement to that effect, in respect of each of them, specifying—

• (i) the subscriber’s name,

• (ii) the court by which permission was given, and

• (iii) the date on which permission was given, and

• (d) if any of them would be disqualified under the directors disqualification legislation by virtue of section 11A of the Company Directors Disqualification Act 1986 or Article 15A of the Company Directors Disqualification (Northern Ireland) Order 2002 (designated persons under sanctions legislation) but for the authority of a licence of the kind mentioned in that section or Article, a statement to that effect, in respect of each of them, specifying—

• (i) the subscriber’s name, and

• (ii) the date on which it was issued and by whom it was issued.

• (4) The application must contain—

• (a) in the case of a company that is to have a share capital, a statement of capital and initial shareholdings (see section 10);

• (b) in the case of a company that is to be limited by guarantee, a statement of guarantee (see section 11);

• (c) a statement of the company's proposed officers (see section 12);

• (d) a statement of initial significant control (see section 12A).

• (5) The application must also contain—

• (a) a statement of the intended address of the company's registered office , which must be an appropriate address within the meaning given by section 86(2); ...

• (aa) a statement of the intended registered email address of the company, which must be an appropriate email address within the meaning given by section 88A(2);

• (b) a copy of any proposed articles of association (to the extent that these are not supplied by the default application of model articles: see section 20); and

• (c) a statement of the type of company it is to be and its intended principal business activities.

• (5A) The information as to the company's type must be given by reference to the classification scheme prescribed for the purposes of this section.

• (5B) The information as to the company's intended principal business activities may be given by reference to one or more categories of any prescribed system of classifying business activities.

• (6) The application must be delivered—

• (a) to the registrar of companies for England and Wales, if the registered office of the company is to be situated in England and Wales (or in Wales);

• (b) to the registrar of companies for Scotland, if the registered office of the company is to be situated in Scotland;

• (c) to the registrar of companies for Northern Ireland, if the registered office of the company is to be situated in Northern Ireland.

• (7) In subsection (3A)(c) “permission of a court to act” means permission of a court under a provision mentioned in column 2 of the table in section 159A(2).

Required information about the subscribers

9A

• (1) The required information about a subscriber who is an individual is—

• (a) name;

• (b) a service address.

• (2) The required information about a subscriber that is a body corporate, or a firm that is a legal person under the law by which it is governed, is—

• (a) corporate or firm name;

• (b) a service address.

• (3) In subsection (1) “name” means the individual’s forename and surname.

• (4) Where a subscriber is a peer or an individual usually known by a title, that title may be stated in the application for the registration of the company instead of the subscriber’s forename and surname.

• (5) The Secretary of State may by regulations—

• (a) amend this section so as to change the required information about a subscriber;

• (b) repeal subsection (4).

• (6) Regulations under this section are subject to affirmative resolution procedure.

Statement of capital and initial shareholdings

10

• (1) The statement of capital and initial shareholdings required to be delivered in the case of a company that is to have a share capital must comply with this section.

• (2) It must state—

• (a) the total number of shares of the company to be taken on formation by the subscribers to the memorandum of association,

• (b) the aggregate nominal value of those shares,

• (ba) the aggregate amount (if any) to be unpaid on those shares (whether on account of their nominal value or by way of premium), and

• (c) for each class of shares—

• (i) prescribed particulars of the rights attached to the shares,

• (ii) the total number of shares of that class, and

• (iii) the aggregate nominal value of shares of that class, ...

• (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (3) It must contain such information as may be prescribed for the purpose of identifying the subscribers to the memorandum of association.

• (4) It must state, with respect to each subscriber to the memorandum—

• (a) the number, nominal value (of each share) and class of shares to be taken by him on formation, and

• (b) the amount to be paid up and the amount (if any) to be unpaid on each share (whether on account of the nominal value of the share or by way of premium).

• (5) Where a subscriber to the memorandum is to take shares of more than one class, the information required under subsection (4)(a) is required for each class.

Statement of guarantee

11

• (1) The statement of guarantee required to be delivered in the case of a company that is to be limited by guarantee must comply with this section.

• (2) It must contain such information as may be prescribed for the purpose of identifying the subscribers to the memorandum of association.

• (3) It must state that each member undertakes that, if the company is wound up while he is a member, or within one year after he ceases to be a member, he will contribute to the assets of the company such amount as may be required for—

• (a) payment of the debts and liabilities of the company contracted before he ceases to be a member,

• (b) payment of the costs, charges and expenses of winding up, and

• (c) adjustment of the rights of the contributories among themselves,

not exceeding a specified amount.

Statement of proposed officers

12

• (1) The statement of the company's proposed officers required to be delivered to the registrar must contain the required information about—

• (a) the person who is, or persons who are, to be the first director or directors of the company;

• (b) in the case of a company that is to be a private company, any person who is (or any persons who are) to be the first secretary (or joint secretaries) of the company;

• (c) in the case of a company that is to be a public company, the person who is (or the persons who are) to be the first secretary (or joint secretaries) of the company.

• (2) For the required information—

• (a) in relation to proposed directors, see sections 167J and 167K;

• (b) in relation to proposed secretaries or joint secretaries, see sections 279J and 279K.

• (2A) The statement must, in the case of each individual named as a director, confirm that the individual’s identity is verified (see section 1110A).

• (3) The statement must also include a statement by the subscribers to the memorandum of association that each of the persons named as a director, as secretary or as one of the joint secretaries has consented to act in the relevant capacity.

If all the partners in a firm are to be joint secretaries, consent may be given by one partner on behalf of all of them.

• (4) The statement must also include a statement by the subscribers to the memorandum of association that no one named as a director is—

• (a) disqualified under the directors disqualification legislation (see section 159A(2)), or

• (b) otherwise ineligible by virtue of any enactment for appointment as a director.

• (5) Where any of the persons named as directors would be disqualified under the directors disqualification legislation but for the permission of a court to act, the statement must also include a statement to that effect, in respect of each of them, specifying—

• (a) the person’s name,

• (b) the court by which permission was given, and

• (c) the date on which permission was given.

• (6) In subsection (5) “permission of a court to act” means permission of a court under a provision mentioned in column 2 of the table in section 159A(2).

• (7) Where any of the persons named as directors would be disqualified under the directors disqualification legislation by virtue of section 11A of the Company Directors Disqualification Act 1986 or Article 15A of the Company Directors Disqualification (Northern Ireland) Order 2002 (designated persons under sanctions legislation) but for the authority of a licence of the kind mentioned in that section or Article, the statement must also include a statement to that effect, in respect of each of them, specifying—

• (a) the person’s name, and

• (b) the date on which the licence was issued and by whom it was issued.

Statement of initial significant control

12A

• (1) The statement of initial significant control required to be delivered to the registrar must—

• (a) state whether, on incorporation, there will be anyone who is either a registrable person or a registrable relevant legal entity in relation to the company, and

• (b) include the required particulars of any such person.

• (1A) If there is anyone who will be a registrable person, or a registrable relevant legal entity, in relation to the company on incorporation, the statement must also include—

• (a) a statement that none of them is disqualified under the directors disqualification legislation (see section 159A(2)),

• (b) if any of them would be so disqualified but for the permission of a court to act, a statement to that effect, in respect of each of them, specifying—

• (i) the person’s name,

• (ii) the court by which permission was given,

• (iii) the date on which permission was given, and

• (c) if any of them would be so disqualified by virtue of section 11A of the Company Directors Disqualification Act 1986 or Article 15A of the Company Directors Disqualification (Northern Ireland) Order 2002 (designated persons under sanctions legislation) but for the authority of a licence of the kind mentioned in that section or Article, a statement to that effect, in respect of each of them, specifying—

• (i) the person’s name, and

• (ii) the date on which the licence was issued and by whom it was issued.

• (2) It is not necessary to include under subsection (1)(b) the date on which someone becomes a registrable person or a registrable relevant legal entity in relation to the company.

• (3) If the statement includes required particulars of an individual, it must also contain a statement that those particulars are included with the knowledge of that individual.

• (4) “Registrable person”, “registrable relevant legal entity” and “required particulars” have the meanings given in Part 21A (see sections 790C and 790K).

• (4) In this section—

• “permission of a court to act” means permission of a court under a provision mentioned in column 2 of the table in section 159A(2);

• “registrable person” has the meaning given by section 790C (see also section 790J);

• “registrable relevant legal entity” has the meaning given by section 790C (see also section 790J);

• “required particulars” has the meaning given by section 790K.

Option to provide ID verification information about PSCs

12B

• (1) This section applies if an application for the registration of a company contains a statement of initial significant control that identifies a person who will be a registrable person, or a registrable relevant legal entity, in relation to the company on its incorporation.

• (2) In relation to any person who will be a registrable person, the statement may include a statement that the person’s identity is verified (see section 1110A).

• (3) In relation to any person who will be a registrable relevant legal entity, the statement may include a statement that—

• (a) specifies the name of one of its relevant officers (within the meaning given by section 790LO(6)) who is an individual and whose identity is verified, and

• (b) confirms that the individual’s identity is verified.

• (4) If a statement under subsection (3) is included in relation to a person who will be a registrable relevant legal entity, the application for registration of the company must be accompanied by a statement by the individual confirming that the individual is a relevant officer of that entity.

• (5) To find out what happens if the option in subsection (2) or (3) is not exercised, see sections 790LM and 790LO.

• (6) In this section—

• “registrable person” has the meaning given by section 790C, except that it does not include a person mentioned in section 790C(12)(a) to (d) (see also section 790J);

• “registrable relevant legal entity” has the meaning given by section 790C (see also section 790J).

Statement of compliance

13

• (1) The statement of compliance required to be delivered to the registrar is a statement that the requirements of this Act as to registration have been complied with.

• (2) The registrar may accept the statement of compliance as sufficient evidence of compliance.

Registration and its effect

Registration

14

If the registrar is satisfied that the requirements of this Act as to registration are complied with, he shall register the documents delivered to him.

Issue of certificate of incorporation

15

• (1) On the registration of a company, the registrar of companies shall give a certificate that the company is incorporated.

• (2) The certificate must state—

• (a) the name and registered number of the company,

• (b) the date of its incorporation,

• (c) whether it is a limited or unlimited company, and if it is limited whether it is limited by shares or limited by guarantee,

• (d) whether it is a private or a public company, and

• (e) whether the company's registered office is situated in England and Wales (or in Wales), in Scotland or in Northern Ireland.

• (3) The certificate must be signed by the registrar or authenticated by the registrar's official seal.

• (4) The certificate is conclusive evidence that the requirements of this Act as to registration have been complied with and that the company is duly registered under this Act.

Effect of registration

16

• (1) The registration of a company has the following effects as from the date of incorporation.

• (2) The subscribers to the memorandum, together with such other persons as may from time to time become members of the company, are a body corporate by the name stated in the certificate of incorporation.

• (3) That body corporate is capable of exercising all the functions of an incorporated company.

• (4) The status , registered email address and registered office of the company are as stated in, or in connection with, the application for registration.

• (5) In the case of a company having a share capital, the subscribers to the memorandum become holders of the shares specified in the statement of capital and initial shareholdings.

• (6) The persons named in the statement of proposed officers—

• (a) as director, or

• (b) as secretary or joint secretary of the company,

are deemed to have been appointed to that office unless ineligible for appointment to that office by virtue of any enactment.

Part 3 — A company's constitution

Chapter 1 — Introductory

A company's constitution

17

Unless the context otherwise requires, references in the Companies Acts to a company's constitution include—

• (a) the company's articles, and

• (b) any resolutions and agreements to which Chapter 3 applies (see section 29).

Chapter 2 — Articles of association

General

Articles of association

18

• (1) A company must have articles of association prescribing regulations for the company.

• (2) Unless it is a company to which model articles apply by virtue of section 20 (default application of model articles in case of limited company), it must register articles of association.

• (3) Articles of association registered by a company must—

• (a) be contained in a single document, and

• (b) be divided into paragraphs numbered consecutively.

• (4) References in the Companies Acts to a company's “articles” are to its articles of association.

Power of Secretary of State to prescribe model articles

19

• (1) The Secretary of State may by regulations prescribe model articles of association for companies.

• (2) Different model articles may be prescribed for different descriptions of company.

• (3) A company may adopt all or any of the provisions of model articles.

• (4) Any amendment of model articles by regulations under this section does not affect a company registered before the amendment takes effect.

“Amendment” here includes addition, alteration or repeal.

• (5) Regulations under this section are subject to negative resolution procedure.

Default application of model articles

20

• (1) On the formation of a limited company—

• (a) if articles are not registered, or

• (b) if articles are registered, in so far as they do not exclude or modify the relevant model articles,

the relevant model articles (so far as applicable) form part of the company's articles in the same manner and to the same extent as if articles in the form of those articles had been duly registered.

• (2) The “relevant model articles” means the model articles prescribed for a company of that description as in force at the date on which the company is registered.

Alteration of articles

Amendment of articles

21

• (1) A company may amend its articles by special resolution.

• (2) In the case of a company that is a charity, this is subject to—

• (a) in England and Wales, sections 197 and 198 of the Charities Act 2011;

• (b) in Northern Ireland, section 96 of the Charities Act (Northern Ireland) 2008 .

• (3) In the case of a company that is registered in the Scottish Charity Register, this is subject to—

• (a) section 112 of the Companies Act 1989 (c. 40), and

• (b) section 16 of the Charities and Trustee Investment (Scotland) Act 2005 (asp 10).

Entrenched provisions of the articles

22

• (1) A company's articles may contain provision (“provision for entrenchment”) to the effect that specified provisions of the articles may be amended or repealed only if conditions are met, or procedures are complied with, that are more restrictive than those applicable in the case of a special resolution.

• (2) Provision for entrenchment may only be made—

• (a) in the company's articles on formation, or

• (b) by an amendment of the company's articles agreed to by all the members of the company.

• (3) Provision for entrenchment does not prevent amendment of the company's articles—

• (a) by agreement of all the members of the company, or

• (b) by order of a court or other authority having power to alter the company's articles.

• (4) Nothing in this section affects any power of a court or other authority to alter a company's articles.

Notice to registrar of existence of restriction on amendment of articles

23

• (1) Where a company's articles—

• (a) on formation contain provision for entrenchment,

• (b) are amended so as to include such provision, or

• (c) are altered by order of a court or other authority so as to restrict or exclude the power of the company to amend its articles,

the company must give notice of that fact to the registrar.

• (2) Where a company's articles—

• (a) are amended so as to remove provision for entrenchment, or

• (b) are altered by order of a court or other authority—

• (i) so as to remove such provision, or

• (ii) so as to remove any other restriction on, or any exclusion of, the power of the company to amend its articles,

the company must give notice of that fact to the registrar.

Statement of compliance where amendment of articles restricted

24

• (1) This section applies where a company's articles are subject—

• (a) to provision for entrenchment, or

• (b) to an order of a court or other authority restricting or excluding the company's power to amend the articles.

• (2) If the company—

• (a) amends its articles, and

• (b) is required to send to the registrar a document making or evidencing the amendment,

the company must deliver with that document a statement of compliance.

• (3) The statement of compliance required is a statement certifying that the amendment has been made in accordance with the company's articles and, where relevant, any applicable order of a court or other authority.

• (4) The registrar may rely on the statement of compliance as sufficient evidence of the matters stated in it.

Effect of alteration of articles on company's members

25

• (1) A member of a company is not bound by an alteration to its articles after the date on which he became a member, if and so far as the alteration—

• (a) requires him to take or subscribe for more shares than the number held by him at the date on which the alteration is made, or

• (b) in any way increases his liability as at that date to contribute to the company's share capital or otherwise to pay money to the company.

• (2) Subsection (1) does not apply in a case where the member agrees in writing, either before or after the alteration is made, to be bound by the alteration.

Registrar to be sent copy of amended articles

26

• (1) Where a company amends its articles it must send to the registrar a copy of the articles as amended not later than 15 days after the amendment takes effect.

• (2) This section does not require a company to set out in its articles any provisions of model articles that—

• (a) are applied by the articles, or

• (b) apply by virtue of section 20 (default application of model articles).

• (3) If a company fails to comply with this section an offence is committed by—

• (a) the company, and

• (b) every officer of the company who is in default.

• (4) A person guilty of an offence under this section is liable on summary conviction to a fine not exceeding level 3 on the standard scale and, for continued contravention, a daily default fine not exceeding one-tenth of level 3 on the standard scale.

Registrar's notice to comply in case of failure with respect to amended articles

27

• (1) If it appears to the registrar that a company has failed to comply with any enactment requiring it—

• (a) to send to the registrar a document making or evidencing an alteration in the company's articles, or

• (b) to send to the registrar a copy of the company's articles as amended,

the registrar may give notice to the company requiring it to comply.

• (2) The notice must—

• (a) state the date on which it is issued, and

• (b) require the company to comply within 28 days from that date.

• (3) If the company complies with the notice within the specified time, no criminal proceedings may be brought in respect of the failure to comply with the enactment mentioned in subsection (1).

• (4) If the company does not comply with the notice within the specified time, it is liable to a civil penalty of £200.

This is in addition to any liability to criminal proceedings in respect of the failure mentioned in subsection (1).

• (5) The penalty may be recovered by the registrar and is to be paid into the Consolidated Fund.

Supplementary

Existing companies: provisions of memorandum treated as provisions of articles

28

• (1) Provisions that immediately before the commencement of this Part were contained in a company's memorandum but are not provisions of the kind mentioned in section 8 (provisions of new-style memorandum) are to be treated after the commencement of this Part as provisions of the company's articles.

• (2) This applies not only to substantive provisions but also to provision for entrenchment (as defined in section 22).

• (3) The provisions of this Part about provision for entrenchment apply to such provision as they apply to provision made on the company's formation, except that the duty under section 23(1)(a) to give notice to the registrar does not apply.

Chapter 3 — Resolutions and agreements affecting a company's constitution

Resolutions and agreements affecting a company's constitution

29

• (1) This Chapter applies to—

• (a) any special resolution;

• (b) any resolution or agreement agreed to by all the members of a company that, if not so agreed to, would not have been effective for its purpose unless passed as a special resolution;

• (c) any resolution or agreement agreed to by all the members of a class of shareholders that, if not so agreed to, would not have been effective for its purpose unless passed by some particular majority or otherwise in some particular manner;

• (d) any resolution or agreement that effectively binds all members of a class of shareholders though not agreed to by all those members;

• (e) any other resolution or agreement to which this Chapter applies by virtue of any enactment.

• (2) References in subsection (1) to a member of a company, or of a class of members of a company, do not include the company itself where it is such a member by virtue only of its holding shares as treasury shares.

Copies of resolutions or agreements to be forwarded to registrar

30

• (1) A copy of every resolution or agreement to which this Chapter applies, or (in the case of a resolution or agreement that is not in writing) a written memorandum setting out its terms, must be forwarded to the registrar within 15 days after it is passed or made.

• (2) If a company fails to comply with this section, an offence is committed by—

• (a) the company, and

• (b) every officer of it who is in default.

• (3) A person guilty of an offence under this section is liable on summary conviction to a fine not exceeding level 3 on the standard scale and, for continued contravention, a daily default fine not exceeding one-tenth of level 3 on the standard scale.

• (4) For the purposes of this section, a liquidator of the company is treated as an officer of it.

Chapter 4 — Miscellaneous and supplementary provisions

Statement of company's objects

Statement of company's objects

31

• (1) Unless a company's articles specifically restrict the objects of the company, its objects are unrestricted.

• (2) Where a company amends its articles so as to add, remove or alter a statement of the company's objects—

• (a) it must give notice to the registrar,

• (b) on receipt of the notice, the registrar shall register it, and

• (c) the amendment is not effective until entry of that notice on the register.

• (3) Any such amendment does not affect any rights or obligations of the company or render defective any legal proceedings by or against it.

• (4) In the case of a company that is a charity, the provisions of this section have effect subject to—

• (a) in England and Wales, sections 197 and 198 of the Charities Act 2011;

• (b) in Northern Ireland, section 96 of the Charities Act (Northern Ireland) 2008 .

• (5) In the case of a company that is entered in the Scottish Charity Register, the provisions of this section have effect subject to the provisions of the Charities and Trustee Investment (Scotland) Act 2005 (asp 10).

Other provisions with respect to a company's constitution

Constitutional documents to be provided to members

32

• (1) A company must, on request by any member, send to him the following documents—

• (a) an up-to-date copy of the company's articles;

• (b) a copy of any resolution or agreement relating to the company to which Chapter 3 applies (resolutions and agreements affecting a company's constitution) and that is for the time being in force;

• (c) a copy of any document required to be sent to the registrar under—

• (i) section 34(2) (notice where company's constitution altered by enactment), or

• (ii) section 35(2)(a) (notice where order of court or other authority alters company's constitution);

• (d) a copy of any court order under section 899 (order sanctioning compromise or arrangement) or section 900 (order facilitating reconstruction or amalgamation);

• (da) a copy of any court order under section 901F (order sanctioning compromise or arrangement for company in financial difficulty) or section 901J (order facilitating reconstruction or amalgamation);

• (e) a copy of any court order under section 996 (protection of members against unfair prejudice: powers of the court) that alters the company's constitution;

• (f) a copy of the company's current certificate of incorporation, and of any past certificates of incorporation;

• (g) in the case of a company with a share capital, a current statement of capital;

• (h) in the case of a company limited by guarantee, a copy of the statement of guarantee.

• (2) The statement of capital required by subsection (1)(g) is a statement of—

• (a) the total number of shares of the company,

• (b) the aggregate nominal value of those shares,

• (ba) the aggregate amount (if any) unpaid on those shares (whether on account of their nominal value or by way of premium), and

• (c) for each class of shares—

• (i) prescribed particulars of the rights attached to the shares,

• (ii) the total number of shares of that class, ...

• (iii) the aggregate nominal value of shares of that class, and

• (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (3) If a company makes default in complying with this section, an offence is committed by every officer of the company who is in default.

• (4) A person guilty of an offence under this section is liable on summary conviction to a fine not exceeding level 3 on the standard scale.

Effect of company's constitution

33

• (1) The provisions of a company's constitution bind the company and its members to the same extent as if there were covenants on the part of the company and of each member to observe those provisions.

• (2) Money payable by a member to the company under its constitution is a debt due from him to the company.

In England and Wales and Northern Ireland it is of the nature of an ordinary contract debt.

Notice to registrar where company's constitution altered by enactment

34

• (1) This section applies where a company's constitution is altered by an enactment, other than an enactment amending the general law.

• (2) The company must give notice of the alteration to the registrar, specifying the enactment, not later than 15 days after the enactment comes into force.

In the case of a special enactment the notice must be accompanied by a copy of the enactment.

• (3) If the enactment amends—

• (a) the company's articles, or

• (b) a resolution or agreement to which Chapter 3 applies (resolutions and agreements affecting a company's constitution),

the notice must be accompanied by a copy of the company's articles, or the resolution or agreement in question, as amended.

• (4) A “special enactment” means an enactment that is not a public general enactment, and includes—

• (a) an Act for confirming a provisional order,

• (b) any provision of a public general Act in relation to the passing of which any of the standing orders of the House of Lords or the House of Commons relating to Private Business applied, or

• (c) any enactment to the extent that it is incorporated in or applied for the purposes of a special enactment.

• (5) If a company fails to comply with this section an offence is committed by—

• (a) the company, and

• (b) every officer of the company who is in default.

• (6) A person guilty of an offence under this section is liable on summary conviction to a fine not exceeding level 3 on the standard scale and, for continued contravention, a daily default fine not exceeding one-tenth of level 3 on the standard scale.

Notice to registrar where company's constitution altered by order

35

• (1) Where a company's constitution is altered by an order of a court or other authority, the company must give notice to the registrar of the alteration not later than 15 days after the alteration takes effect.

• (2) The notice must be accompanied by—

• (a) a copy of the order, and

• (b) if the order amends—

• (i) the company's articles, or

• (ii) a resolution or agreement to which Chapter 3 applies (resolutions and agreements affecting the company's constitution),

a copy of the company's articles, or the resolution or agreement in question, as amended.

• (3) If a company fails to comply with this section an offence is committed by—

• (a) the company, and

• (b) every officer of the company who is in default.

• (4) A person guilty of an offence under this section is liable on summary conviction to a fine not exceeding level 3 on the standard scale and, for continued contravention, a daily default fine not exceeding one-tenth of level 3 on the standard scale.

• (5) This section does not apply where provision is made by another enactment for the delivery to the registrar of a copy of the order in question.

Documents to be incorporated in or accompany copies of articles issued by company

36

• (1) Every copy of a company's articles issued by the company must be accompanied by—

• (a) a copy of any resolution or agreement relating to the company to which Chapter 3 applies (resolutions and agreements affecting a company's constitution),

• (b) where the company has been required to give notice to the registrar under section 34(2) (notice where company's constitution altered by enactment), a statement that the enactment in question alters the effect of the company's constitution,

• (c) where the company's constitution is altered by a special enactment (see section 34(4)), a copy of the enactment, and

• (d) a copy of any order required to be sent to the registrar under section 35(2)(a) (order of court or other authority altering company's constitution).

• (2) This does not require the articles to be accompanied by a copy of a document or by a statement if—

• (a) the effect of the resolution, agreement, enactment or order (as the case may be) on the company's constitution has been incorporated into the articles by amendment, or

• (b) the resolution, agreement, enactment or order (as the case may be) is not for the time being in force.

• (3) If the company fails to comply with this section, an offence is committed by every officer of the company who is in default.

• (4) A person guilty of an offence under this section is liable on summary conviction to a fine not exceeding level 3 on the standard scale for each occasion on which copies are issued, or, as the case may be, requested.

• (5) For the purposes of this section, a liquidator of the company is treated as an officer of it.

Supplementary provisions

Right to participate in profits otherwise than as member void

37

In the case of a company limited by guarantee and not having a share capital any provision in the company's articles, or in any resolution of the company, purporting to give a person a right to participate in the divisible profits of the company otherwise than as a member is void.

Application to single member companies of enactments and rules of law

38

Any enactment or rule of law applicable to companies formed by two or more persons or having two or more members applies with any necessary modification in relation to a company formed by one person or having only one person as a member.

Part 4 — A company's capacity and related matters

Capacity of company and power of directors to bind it

A company's capacity

39

• (1) The validity of an act done by a company shall not be called into question on the ground of lack of capacity by reason of anything in the company's constitution.

• (2) This section has effect subject to section 42 (companies that are charities).

Power of directors to bind the company

40

• (1) In favour of a person dealing with a company in good faith, the power of the directors to bind the company, or authorise others to do so, is deemed to be free of any limitation under the company's constitution.

• (2) For this purpose—

• (a) a person “deals with” a company if he is a party to any transaction or other act to which the company is a party,

• (b) a person dealing with a company—

• (i) is not bound to enquire as to any limitation on the powers of the directors to bind the company or authorise others to do so,

• (ii) is presumed to have acted in good faith unless the contrary is proved, and

• (iii) is not to be regarded as acting in bad faith by reason only of his knowing that an act is beyond the powers of the directors under the company's constitution.

• (3) The references above to limitations on the directors' powers under the company's constitution include limitations deriving—

• (a) from a resolution of the company or of any class of shareholders, or

• (b) from any agreement between the members of the company or of any class of shareholders.

• (4) This section does not affect any right of a member of the company to bring proceedings to restrain the doing of an action that is beyond the powers of the directors.

But no such proceedings lie in respect of an act to be done in fulfilment of a legal obligation arising from a previous act of the company.

• (5) This section does not affect any liability incurred by the directors, or any other person, by reason of the directors' exceeding their powers.

• (6) This section has effect subject to—

• section 41 (transactions with directors or their associates), and

• section 42 (companies that are charities).

Constitutional limitations: transactions involving directors or their associates

41

• (1) This section applies to a transaction if or to the extent that its validity depends on section 40 (power of directors deemed to be free of limitations under company's constitution in favour of person dealing with company in good faith).

Nothing in this section shall be read as excluding the operation of any other enactment or rule of law by virtue of which the transaction may be called in question or any liability to the company may arise.

• (2) Where—

• (a) a company enters into such a transaction, and

• (b) the parties to the transaction include—

• (i) a director of the company or of its holding company, or

• (ii) a person connected with any such director,

the transaction is voidable at the instance of the company.

• (3) Whether or not it is avoided, any such party to the transaction as is mentioned in subsection (2)(b)(i) or (ii), and any director of the company who authorised the transaction, is liable—

• (a) to account to the company for any gain he has made directly or indirectly by the transaction, and

• (b) to indemnify the company for any loss or damage resulting from the transaction.

• (4) The transaction ceases to be voidable if—

• (a) restitution of any money or other asset which was the subject matter of the transaction is no longer possible, or

• (b) the company is indemnified for any loss or damage resulting from the transaction, or

• (c) rights acquired bona fide for value and without actual notice of the directors' exceeding their powers by a person who is not party to the transaction would be affected by the avoidance, or

• (d) the transaction is affirmed by the company.

• (5) A person other than a director of the company is not liable under subsection (3) if he shows that at the time the transaction was entered into he did not know that the directors were exceeding their powers.

• (6) Nothing in the preceding provisions of this section affects the rights of any party to the transaction not within subsection (2)(b)(i) or (ii).

But the court may, on the application of the company or any such party, make an order affirming, severing or setting aside the transaction on such terms as appear to the court to be just.

• (7) In this section—

• (a) “transaction” includes any act; and

• (b) the reference to a person connected with a director has the same meaning as in Part 10 (company directors).

Constitutional limitations: companies that are charities

42

• (1) Sections 39 and 40 (company's capacity and power of directors to bind company) do not apply to the acts of a company that is a charity except in favour of a person who—

• (a) does not know at the time the act is done that the company is a charity, or

• (b) gives full consideration in money or money's worth in relation to the act in question and does not know (as the case may be)—

• (i) that the act is not permitted by the company's constitution, or

• (ii) that the act is beyond the powers of the directors.

• (2) Where a company that is a charity purports to transfer or grant an interest in property, the fact that (as the case may be)—

• (a) the act was not permitted by the company's constitution, or

• (b) the directors in connection with the act exceeded any limitation on their powers under the company's constitution,

does not affect the title of a person who subsequently acquires the property or any interest in it for full consideration without actual notice of any such circumstances affecting the validity of the company's act.

• (3) In any proceedings arising out of subsection (1) or (2) the burden of proving—

• (a) that a person knew that the company was a charity, or

• (b) that a person knew that an act was not permitted by the company's constitution or was beyond the powers of the directors,

lies on the person asserting that fact.

• (4) In the case of a company that is a charity the affirmation of a transaction to which section 41 applies (transactions with directors or their associates) is ineffective without the prior written consent of—

• (a) in England and Wales, the Charity Commission;

• (b) in Northern Ireland, the Department for Social Development.

• (5) This section does not extend to Scotland (but see section 112 of the Companies Act 1989 (c. 40)).

Formalities of doing business under the law of England and Wales or Northern Ireland

Company contracts

43

• (1) Under the law of England and Wales or Northern Ireland a contract may be made—

• (a) by a company, by writing under its common seal, or

• (b) on behalf of a company, by a person acting under its authority, express or implied.

• (2) Any formalities required by law in the case of a contract made by an individual also apply, unless a contrary intention appears, to a contract made by or on behalf of a company.

Execution of documents

44

• (1) Under the law of England and Wales or Northern Ireland a document is executed by a company—

• (a) by the affixing of its common seal, or

• (b) by signature in accordance with the following provisions.

• (2) A document is validly executed by a company if it is signed on behalf of the company—

• (a) by two authorised signatories, or

• (b) by a director of the company in the presence of a witness who attests the signature.

• (3) The following are “authorised signatories” for the purposes of subsection (2)—

• (a) every director of the company, and

• (b) in the case of a private company with a secretary or a public company, the secretary (or any joint secretary) of the company.

• (4) A document signed in accordance with subsection (2) and expressed, in whatever words, to be executed by the company has the same effect as if executed under the common seal of the company.

• (5) In favour of a purchaser a document is deemed to have been duly executed by a company if it purports to be signed in accordance with subsection (2).

A “purchaser” means a purchaser in good faith for valuable consideration and includes a lessee, mortgagee or other person who for valuable consideration acquires an interest in property.

• (6) Where a document is to be signed by a person on behalf of more than one company, it is not duly signed by that person for the purposes of this section unless he signs it separately in each capacity.

• (7) References in this section to a document being (or purporting to be) signed by a director or secretary are to be read, in a case where that office is held by a firm, as references to its being (or purporting to be) signed by an individual authorised by the firm to sign on its behalf.

• (8) This section applies to a document that is (or purports to be) executed by a company in the name of or on behalf of another person whether or not that person is also a company.

Common seal

45

• (1) A company may have a common seal, but need not have one.

• (2) A company which has a common seal shall have its name engraved in legible characters on the seal.

• (3) If a company fails to comply with subsection (2) an offence is committed by—

• (a) the company, and

• (b) every officer of the company who is in default.

• (4) An officer of a company, or a person acting on behalf of a company, commits an offence if he uses, or authorises the use of, a seal purporting to be a seal of the company on which its name is not engraved as required by subsection (2).

• (5) A person guilty of an offence under this section is liable on summary conviction to a fine not exceeding level 3 on the standard scale.

• (6) This section does not form part of the law of Scotland.

Execution of deeds

46

• (1) A document is validly executed by a company as a deed for the purposes of section 1(2)(b) of the Law of Property (Miscellaneous Provisions) Act 1989 (c. 34) and for the purposes of the law of Northern Ireland if, and only if—

• (a) it is duly executed by the company, and

• (b) it is delivered as a deed.

• (2) For the purposes of subsection (1)(b) a document is presumed to be delivered upon its being executed, unless a contrary intention is proved.

Execution of deeds or other documents by attorney

47

• (1) Under the law of England and Wales or Northern Ireland a company may, by instrument executed as a deed, empower a person, either generally or in respect of specified matters, as its attorney to execute deeds or other documents on its behalf.

• (2) A deed or other document so executed, whether in the United Kingdom or elsewhere, has effect as if executed by the company.

Formalities of doing business under the law of Scotland

Execution of documents by companies

48

• (1) The following provisions form part of the law of Scotland only.

• (2) Notwithstanding the provisions of any enactment, a company need not have a company seal.

• (3) For the purposes of any enactment—

• (a) providing for a document to be executed by a company by affixing its common seal, or

• (b) referring (in whatever terms) to a document so executed,

a document signed or subscribed(or, in the case of an electronic document, authenticated) by or on behalf of the company in accordance with the provisions of the Requirements of Writing (Scotland) Act 1995 (c. 7) has effect as if so executed.

Other matters

Official seal for use abroad

49

• (1) A company that has a common seal may have an official seal for use outside the United Kingdom.

• (2) The official seal must be a facsimile of the company's common seal, with the addition on its face of the place or places where it is to be used.

• (3) The official seal when duly affixed to a document has the same effect as the company's common seal.

This subsection does not extend to Scotland.

• (4) A company having an official seal for use outside the United Kingdom may—

• (a) by writing under its common seal, or

• (b) as respects Scotland, by writing subscribedor authenticated in accordance with the Requirements of Writing (Scotland) Act 1995,

authorise any person appointed for the purpose to affix the official seal to any deed or other document to which the company is party.

• (5) As between the company and a person dealing with such an agent, the agent's authority continues—

• (a) during the period mentioned in the instrument conferring the authority, or

• (b) if no period is mentioned, until notice of the revocation or termination of the agent's authority has been given to the person dealing with him.

• (6) The person affixing the official seal must certify in writing on the deed or other document to which the seal is affixed the date on which, and place at which, it is affixed.

Official seal for share certificates etc

50

• (1) A company that has a common seal may have an official seal for use—

• (a) for sealing securities issued by the company, or

• (b) for sealing documents creating or evidencing securities so issued.

• (2) The official seal—

• (a) must be a facsimile of the company's common seal, with the addition on its face of the word “Securities”, and

• (b) when duly affixed to the document has the same effect as the company's common seal.

Pre-incorporation contracts, deeds and obligations

51

• (1) A contract that purports to be made by or on behalf of a company at a time when the company has not been formed has effect, subject to any agreement to the contrary, as one made with the person purporting to act for the company or as agent for it, and he is personally liable on the contract accordingly.

• (2) Subsection (1) applies—

• (a) to the making of a deed under the law of England and Wales or Northern Ireland, and

• (b) to the undertaking of an obligation under the law of Scotland,

as it applies to the making of a contract.

Bills of exchange and promissory notes

52

A bill of exchange or promissory note is deemed to have been made, accepted or endorsed on behalf of a company if made, accepted or endorsed in the name of, or by or on behalf or on account of, the company by a person acting under its authority.

Part 5 — A company's name

Chapter 1 — General requirements

Prohibited names

Prohibited names

53

A company must not be registered under this Act by a name if, in the opinion of the Secretary of State—

• (a) its use by the company would constitute an offence, or

• (b) it is offensive.

Names for criminal purposes

53A

A company must not be registered under this Act by a name if, in the opinion of the Secretary of State, the registration of the company by that name is intended to facilitate—

• (a) the commission of an offence involving dishonesty or deception, or

• (b) the carrying out of conduct that, if carried out in any part of the United Kingdom, would amount to such an offence.

Sensitive words and expressions

Names suggesting connection with government or public authority

54

• (1) The approval of the Secretary of State is required for a company to be registered under this Act by a name that would be likely to give the impression that the company is connected with—

• (a) Her Majesty's Government, any part of the Scottish administration , the Welsh Assembly Government or Her Majesty's Government in Northern Ireland,

• (b) a local authority, or

• (c) any public authority specified for the purposes of this section by regulations made by the Secretary of State.

• (2) For the purposes of this section—

• “local authority” means—a local authority within the meaning of the Local Government Act 1972 (c. 70), the Common Council of the City of London or the Council of the Isles of Scilly,a council constituted under section 2 of the Local Government etc. (Scotland) Act 1994 (c. 39), ora district council in Northern Ireland;

• “public authority” includes any person or body having functions of a public nature.

• (3) Regulations under this section are subject to affirmative resolution procedure.

Other sensitive words or expressions

55

• (1) The approval of the Secretary of State is required for a company to be registered under this Act by a name that includes a word or expression for the time being specified in regulations made by the Secretary of State under this section.

• (2) Regulations under this section are subject to approval after being made.

Duty to seek comments of government department or other specified body

56

• (1) The Secretary of State may by regulations under—

• (a) section 54 (name suggesting connection with government or public authority), or

• (b) section 55 (other sensitive words or expressions),

require that, in connection with an application for the approval of the Secretary of State under that section, the applicant must seek the view of a specified Government department or other body.

• (2) Where such a requirement applies, the applicant must request the specified department or other body (in writing) to indicate whether (and if so why) it has any objections to the proposed name.

• (3) Where a request under this section is made in connection with an application for the registration of a company under this Act, the application must—

• (a) include a statement that a request under this section has been made, and

• (b) be accompanied by a copy of any response received.

• (4) Where a request under this section is made in connection with a change in a company's name, the notice of the change sent to the registrar must be accompanied by—

• (a) a statement by a director or secretary of the company that a request under this section has been made, and

• (b) a copy of any response received.

• (5) In this section “specified” means specified in the regulations.

Names suggesting connection with foreign governments etc

56A

A company must not be registered under this Act by a name that, in the opinion of the Secretary of State, would be likely to give the false impression that the company is connected with—

• (a) a foreign government or an agency or authority of a foreign government, or

• (b) an international organisation whose members include two or more countries or territories (or their governments).

Permitted characters etc

Permitted characters etc

57

• (1) The Secretary of State may make provision by regulations—

• (a) as to the letters or other characters, signs or symbols (including accents and other diacritical marks) and punctuation that may be used in the name of a company registered under this Act; and

• (b) specifying a standard style or format for the name of a company for the purposes of registration.

• (2) The regulations may prohibit the use of specified characters, signs or symbols when appearing in a specified position (in particular, at the beginning of a name).

• (3) A company may not be registered under this Act by a name that consists of or includes anything that is not permitted in accordance with regulations under this section.

• (4) Regulations under this section are subject to negative resolution procedure.

• (5) In this section “specified” means specified in the regulations.

Computer code

Names containing computer code

57A

A company must not be registered under this Act by a name that, in the opinion of the Secretary of State, consists of or includes computer code.

Prohibitions where a company has been required to change a name

Prohibition on re-registering name following direction

57B

• (1) Where a company’s name has at any time been changed following a direction under section 67, 75, 76, 76A or 76B, or an order under section 73, the company must not subsequently be registered under this Act by the original name or a name that is similar to it.

• (2) But subsection (1) does not prevent the registration of the company by any name approved by the Secretary of State.

• (3) In subsection (1)—

• (a) the reference to the name of a company being changed following a direction under a particular section includes a case where a new name is determined for the company under section 76D because of its failure to comply with the direction;

• (b) the reference to the name of a company being changed following an order under section 73 includes a case where a new name is determined for the company under section 73(4) because of its failure to comply with an order.

Name that another company has been directed to change

57C

• (1) Where a company has at any time been directed under section 67, 75, 76, 76A or 76B, or ordered under section 73, to change its name, no other company may be registered under this Act by that name or a name that is similar if—

• (a) that company is an existing company and there is a person who has, or has had, a relevant relationship with both companies, or

• (b) an application has been made for the registration of that company and, if it is registered, there will on its incorporation be a person who has, or has had, a relevant relationship with both companies.

• (2) But subsection (1) does not prevent the registration of the company by any name approved by the Secretary of State.

• (3) For the purposes of subsection (1) it is irrelevant whether the person has, or has had, a relevant relationship with both companies at the same time.

• (4) For the purposes of this section a person has a “relevant relationship” with a company if the person is—

• (a) an officer, or

• (b) a member or former member.

• (5) In subsection (1)—

• (a) the reference to the name of a company being changed following a direction under a particular section includes a case where a new name is determined for the company under section 76D because of its failure to comply with the direction;

• (b) the reference to the name of a company being changed following an order under section 73 includes a case where a new name is determined for the company under section 73(4) because of its failure to comply with an order.

Chapter 2 — Indications of company type or legal form

Required indications for limited companies

Public limited companies

58

• (1) The name of a limited company that is a public company must end with “public limited company” or “p.l.c.”.

• (2) In the case of a Welsh company, its name may instead end with “cwmni cyfyngedig cyhoeddus” or “c.c.c.”.

• (3) This section does not apply to community interest companies (but see section 33(3) and (4) of the Companies (Audit, Investigations and Community Enterprise) Act 2004 (c. 27)).

Private limited companies

59

• (1) The name of a limited company that is a private company must end with “limited” or “ltd.”.

• (2) In the case of a Welsh company, its name may instead end with “cyfyngedig” or “cyf.”.

• (3) Certain companies are exempt from this requirement (see section 60).

• (4) This section does not apply to community interest companies (but see section 33(1) and (2) of the Companies (Audit, Investigations and Community Enterprise) Act 2004).

Exemption from requirement as to use of “limited”

60

• (1) A private company is exempt from section 59 (requirement to have name ending with “limited” or permitted alternative) if—

• (a) it is a charity,

• (b) it is exempted from the requirement of that section by regulations made by the Secretary of State, or

• (c) it meets the conditions specified in—

• section 61 (continuation of existing exemption: companies limited by shares), or

• section 62 (continuation of existing exemption: companies limited by guarantee).

• (2) The registrar may refuse to register a private limited company by a name that does not include the word “limited” (or a permitted alternative) unless a statement has been delivered to him that the company meets the conditions for exemption.

• (3) The registrar may accept the statement as sufficient evidence of the matters stated in it.

• (4) Regulations under this section are subject to negative resolution procedure.

Continuation of existing exemption: companies limited by shares

61

• (1) This section applies to a private company limited by shares—

• (a) that on 25th February 1982—

• (i) was registered in Great Britain, and

• (ii) had a name that, by virtue of a licence under section 19 of the Companies Act 1948 (c. 38) (or corresponding earlier legislation), did not include the word “limited” or any of the permitted alternatives, or

• (b) that on 30th June 1983—

• (i) was registered in Northern Ireland, and

• (ii) had a name that, by virtue of a licence under section 19 of the Companies Act (Northern Ireland) 1960 (c. 22 (N.I.)) (or corresponding earlier legislation), did not include the word “limited” or any of the permitted alternatives.

• (2) A company to which this section applies is exempt from section 59 (requirement to have name ending with “limited” or permitted alternative) so long as—

• (a) it continues to meet the following two conditions, and

• (b) it does not change its name.

• (3) The first condition is that the objects of the company are the promotion of commerce, art, science, education, religion, charity or any profession, and anything incidental or conducive to any of those objects.

• (4) The second condition is that the company's articles—

• (a) require its income to be applied in promoting its objects,

• (b) prohibit the payment of dividends, or any return of capital, to its members, and

• (c) require all the assets that would otherwise be available to its members generally to be transferred on its winding up either—

• (i) to another body with objects similar to its own, or

• (ii) to another body the objects of which are the promotion of charity and anything incidental or conducive thereto,

(whether or not the body is a member of the company).

Continuation of existing exemption: companies limited by guarantee

62

• (1) A private company limited by guarantee that immediately before the commencement of this Part—

• (a) was exempt by virtue of section 30 of the Companies Act 1985 (c. 6) or Article 40 of the Companies (Northern Ireland) Order 1986 (S.I. 1986/1032 (N.I. 6)) from the requirement to have a name including the word “limited” or a permitted alternative, and

• (b) had a name that did not include the word “limited” or any of the permitted alternatives,

is exempt from section 59 (requirement to have name ending with “limited” or permitted alternative) so long as it continues to meet the following two conditions and does not change its name.

• (2) The first condition is that the objects of the company are the promotion of commerce, art, science, education, religion, charity or any profession, and anything incidental or conducive to any of those objects.

• (3) The second condition is that the company's articles—

• (a) require its income to be applied in promoting its objects,

• (b) prohibit the payment of dividends to its members, and

• (c) require all the assets that would otherwise be available to its members generally to be transferred on its winding up either—

• (i) to another body with objects similar to its own, or

• (ii) to another body the objects of which are the promotion of charity and anything incidental or conducive thereto,

(whether or not the body is a member of the company).

Exempt company: restriction on amendment of articles

63

• (1) A private company—

• (a) that is exempt under section 61 or 62 from the requirement to use “limited” (or a permitted alternative) as part of its name, and

• (b) whose name does not include “limited” or any of the permitted alternatives,

must not amend its articles so that it ceases to comply with the conditions for exemption under that section.

• (2) If subsection (1) above is contravened an offence is committed by—

• (a) the company, and

• (b) every officer of the company who is in default.

For this purpose a shadow director is treated as an officer of the company.

• (3) A person guilty of an offence under this section is liable on summary conviction to a fine not exceeding level 5 on the standard scale and, for continued contravention, a daily default fine not exceeding one-tenth of level 5 on the standard scaleone-tenth of the greater of £5,000 or level 4 on the standard scale.

• (4) Where immediately before the commencement of this section—

• (a) a company was exempt by virtue of section 30 of the Companies Act 1985 (c. 6) or Article 40 of the Companies (Northern Ireland) Order 1986 (S.I. 1986/1032 (N.I. 6)) from the requirement to have a name including the word “limited” (or a permitted alternative), and

• (b) the company's memorandum or articles contained provision preventing an alteration of them without the approval of—

• (i) the Board of Trade or a Northern Ireland department (or any other department or Minister), or

• (ii) the Charity Commission,

that provision, and any condition of any such licence as is mentioned in section 61(1)(a)(ii) or (b)(ii) requiring such provision, shall cease to have effect.

This does not apply if, or to the extent that, the provision is required by or under any other enactment.

• (5) It is hereby declared that any such provision as is mentioned in subsection (4)(b) formerly contained in a company's memorandum was at all material times capable, with the appropriate approval, of being altered or removed under section 17 of the Companies Act 1985 or Article 28 of the Companies (Northern Ireland) Order 1986 (S.I. 1986/1032 (N.I. 6)) (or corresponding earlier enactments).