The Companies Act 2006 (Commencement No. 7, Transitional Provisions and Savings) Order 2008

Made: 16th July 2008

Laid before Parliament: 17th July 2008

Coming into force in accordance with article 1(2) and (3)

The Secretary of State makes the following Order in exercise of the powers conferred by sections 1296(2) and 1300(2) of the Companies Act 2006¹.

Citation and commencement

1

• (1) This Order may be cited as the Companies Act 2006 (Commencement No. 7, Transitional Provisions and Savings) Order 2008.

• (2) Article 8 of this Order comes into force on 11th August 2008.

• (3) The other provisions of this Order come into force on 1st October 2008.

Provisions coming into force on 1st October 2008

2

The following provisions of the Companies Act 2006 come into force on 1st October 2008—

• (a) sections 641(1)(a) and (2) to (6) and 642 to 644 (private companies: reduction of share capital supported by solvency statement);

• (b) section 654 (treatment of reserve arising from reduction of capital);

• (c) the following provisions—

• sections 610(2) to (4) (application to share premium account as if it were paid up share capital);

• 652(1) and (3) (liability of members following reduction of capital);

• 733(5) and (6) (application to capital redemption reserve as if it were paid up share capital),

so far as relating to a reduction of capital under the provisions mentioned in sub-paragraph (a);

• (d) section 1284(1) (extension of Companies Acts to Northern Ireland) so far as necessary for the purposes of the provisions mentioned in sub-paragraphs (a) to (c);

• (e) section 1286(1)(a) and (2)(a) (extension to Northern Ireland of Great Britain enactments relating to limited liability partnerships), so far as relating to the application to limited liability partnerships of the subject matter of Part 15 (accounts and reports), Part 16 (audit) and Part 42 (statutory auditors);

• (f) section 1295 and Schedule 16 (repeals), so far as relating to the repeals of the second sentence of section 141(4) of the Companies Act 1989² and of the second sentence of Article 75(4) of the Companies (No. 2) (Northern Ireland) Order 1990³;

• (g) paragraph 11(2) of Schedule 15 (amendment of definition of “regulated market” in section 103(1) of the Financial Services and Markets Act 2000⁴).

Transitional adaptations

3

• (1) Section 641 of the Companies Act 2006 (ways in which company may reduce its share capital) has effect with the following adaptations.

• (2) After subsection (1) insert—

(1A) Where a company reduces its share capital under subsection (1)(a), the special resolution under this section must make any necessary alterations of the company’s memorandum by reducing the amount of its share capital and of its shares.

• (3) In subsection (3) for “this section” substitute “subsection (1)(a)”.

• (4) In subsection (6) for “the company’s articles” substitute “the company’s memorandum or articles”.

4

• (1) Section 644 of the Companies Act 2006 (reduction of capital supported by solvency statement: registration of resolution and supporting documents) has effect with the following adaptations.

• (2) In subsection (1)(b), for “a statement of capital” substitute “a memorandum complying with subsection (2)”.

• (3) For subsection (2) substitute—

(2) The memorandum must show with respect to the company’s share capital as reduced by the resolution— (a) the amount of the share capital, (b) the number of shares into which it is to be divided, and the amount of each share, and (c) the amount (if any) at the date of the registration deemed to be paid up on each share.

5

• (1) Section 652 of the Companies Act 2006 (liability of members following reduction of capital) has effect with the following adaptation.

• (2) In subsection (1)(a), for “the statement of capital delivered under section 644 or 649” substitute “the memorandum delivered under section 644”.

Interpretation of provisions brought into force

6

Where an expression in a provision brought into force by this Order—

• (a) is defined in the Companies Act 1985⁵ or in the Companies (Northern Ireland) Order 1986⁶ (“the old definition”), and

• (b) is defined in the Companies Act 2006 by another provision not yet in force for the purposes of the provision brought into force (“the new definition”),

the expression has, for the purposes of the provision brought into force the meaning given by the old definition until the new definition is brought into force for the purposes of that provision.

Transitional provisions and savings

7

• (1) Nothing in this Order affects the operation of section 140 of the Companies Act 1985 or Article 150 of the Companies (Northern Ireland) Order 1986 (liability of members on reduced shares) in relation to a reduction of capital under that Act or Order.

• (2) Section 654 of the Companies Act 2006 (treatment of reserve arising from reduction of capital) and any order made under that section apply in relation to reserves arising from—

• (a) a reduction of capital under Chapter 4 of Part 5 of the Companies Act 1985 or Chapter 4 of Part 6 of the Companies (Northern Ireland) Order 1986,

• (b) a reduction of capital under the provisions of the Companies Act 2006 mentioned in article 2(a) above, or

• (c) a reduction in the capital of an unlimited company not under those provisions,

irrespective of when the reduction occurred or the reserves arose.

• (3) The provisions mentioned in article 2(e) have effect in relation to accounts and the audit of accounts for financial years beginning on or after 1st October 2008.

• (4) Save as provided by article 2(e), nothing in this Order affects any provision of the Companies Act 1985 or the Companies (Northern Ireland) Order 1986 as applied by the Limited Liability Partnerships Regulations 2001⁷ or the Limited Liability Partnerships Regulations (Northern Ireland) 2004⁸ to limited liability partnerships.

Amendment of earlier commencement order

8

• (1) The Companies Act 2006 (Commencement No. 5, Transitional Provisions and Savings Order 2007⁹ is amended as follows.

• (2) In paragraph 15 of Schedule 4, after subparagraph (2) add—

(3) In section 518 (rights of resigning auditor) as it applies in relation to an auditor appointed before 6th April 2008, the reference to rights under section 502(2) shall be read as a reference to rights under section 390(1) of the 1985 Act or Article 398(1) of the 1986 Order.

Signed

Gareth Thomas — Parliamentary Under Secretary of State for Trade and Consumer Affairs — Department for Business, Enterprise and Regulatory Reform — 16th July 2008

Explanatory note

(This note is not part of the Order)

EXPLANATORY NOTE

This is the seventh Commencement Order made under the Companies Act (c.46). Part 47 and certain provisions in Parts 43, 44 and 46 of the Act came into force on the passing of the Act.

Article 2 brings into force on 1st October 2008—

• provisions about the reduction of the share capital of private companies supported by a solvency statement;

• a provision about the treatment of reserves arising from the reduction by any means of the capital of any company with a share capital;

• provisions about share premium account, liability of members following reduction of capital and capital redemption reserve so far as relating to a reduction of capital supported by a solvency statement;

• the extension of the Act to Northern Ireland so far as necessary for the purposes of the above provisions;

• the extension to Northern Ireland of enactments about limited liability partnerships (LLPs) previously extending only to Great Britain so far as they relate to the application to LLPs of Parts 15 (accounts and reports), 16 (audit) and 42 (statutory auditors) of the Act;

• the repeal of the second sentences of section 141(4) of the Companies Act 1989¹⁰ and Article 75(4) of the Companies (No. 2) (Northern Ireland) Order 1990, which prevent the restoration to the register of companies dissolved before 16th November 1969 (under the 1989 Act) or 11th March 1971 (under the 1990 Order);

• the amendment of the definition of “regulated market” in section 103(1) of the Financial Services and Markets Act 2000.

Articles 3, 4 and 5 make transitional adaptations of the provisions being brought into force by article 2(a) and (b), so that they can be read with provisions of the Companies Act 1985 and the Companies (Northern Ireland) Order 1986 which have not yet been replaced by other provisions of the 2006 Act.

Article 6 provides that if a provision being brought into force by this Order uses an expression defined in a provision of the 1985 Act or the 1986 Order which is still in force, that definition applies until it is repealed and replaced by the corresponding definition in the 2006 Act.

Article 7 makes transitional provisions.

Article 8 amends (on 11th August 2008) the Companies Act 2006 (Commencement No. 5, Transitional Provisions and Savings) Order 2007 by inserting an additional transitional provision about the rights of resigning auditors.

Footnotes