Section 76: Misleading indication of activities

177.     This section replaces section 32 of the 1985 Act. It provides power for the Secretary of State to direct a company to change its name, regardless of how long the company has had the name, in the specified circumstances. The circumstances are that, in his opinion, not only does the name give a misleading indication of the nature of the company's activities but also that the public are likely to suffer harm as a result. The company may appeal to the court, who may either confirm the direction or set it aside. It is an offence not to comply with the direction.

178.     The section also sets time limits for compliance with the direction (6 weeks) and the application to the court (3 weeks). If the court confirms the direction, it specifies the deadline for compliance.

CHAPTER 5: CHANGE OF NAME

Section 77: Change of name

179.     This section replaces section 28(1) of the 1985 Act. Under the existing provision, companies can only change their names:

• by special resolution; or

• following a direction by the Secretary of State in the restricted circumstances provided by section 31 of the 1985 Act, which apply only to companies exempt from their name concluding in "limited."

180.     This section also provides for the following means:

• whatever means are provided in the company's articles (this means that the company will be able to determine the procedures for changing its own name);

• by an order of the company names adjudicator if an objection under section 73 is upheld, or by a court following an appeal against the adjudicator's decision under section 74; and

• under section 1033 on the company's restoration to the register.

Section 78: Change of name by special resolution

181.     This section is a new provision. It requires the company to notify the registrar of a change of name when it has been agreed by special resolution. This requirement is in addition to the obligation under Chapter 3 of Part 3 to forward a copy of the special resolution to the registrar. Subsections (2) and (3) address the particular situation where a company has passed a special resolution to change its name but the change is not to take place until some other event has occurred (e.g. a merger). The notice of change of name must say that the change is conditional and whether the event has occurred. If the event has not yet occurred, the registrar will not act on the notice to change the name until she has received a second notice stating that the specified event has occurred. The registrar may rely on that statement without further evidence.

Section 79: Change of name by means provided for in company's articles

182.     This section is a new provision, supplementing the new provision (section 77(1)(b)) whereby a company may change its name by any means provided for in its articles. Subsection (1) requires the company to provide the registrar with both a notice of the name change and a statement that the change has been made in accordance with the company's articles. Subsection (2) ensures the registrar may rely on that statement without further evidence.

Section 80: Change of name: registration and issue of new certificate of incorporation

183.     This section, which partly replaces sections 28(6) and 32(5) of the 1985 Act, provides for the procedures that the registrar must perform before a company's proposed new name is effective. Subsection (2) provides for the checks both that the name meets all the requirements for a company's name in this Part of the Act and that the necessary documents have been provided. Subsection (3) provides for the company to be issued with a certificate of incorporation with the new name.

Section 81: Change of name: effect

184.     This section, which replaces sections 28(6) and 32(5) in part and, in total, section 28(7) of the 1985 Act, provides that the new name is effective as soon as the altered certificate of incorporation is issued. It also provides that the change of name does not affect the company's rights or obligations or legal proceedings by or against it in its previous name.

CHAPTER 6: TRADING DISCLOSURES

Section 82: Requirement to disclose company name etc

185.     This section replaces sections 348(1), 349(1), and 351(1) and (2) of the 1985 Act and, insofar as it applies to companies, section 4(1) of the Business Names Act 1985. It provides power for the Secretary of State to make regulations requiring every company:

• to display a sign with its name and specified other information at specified locations;

• to include its name and specified other information in specified documents and communications;

• to provide its name and specified other information to those who request it in the course of business (this is a new provision insofar as it applies to companies doing business under their registered names).

Section 83: Civil consequences of failure to make required disclosure

186.     This section replaces section 5 of the Business Names Act 1985, so far as it applies to companies. As recommended by the CLR (Final Report, paragraph 11.57), it follows the precedent of the Business Names Act as regards the civil consequences of failure to comply with the information requirements made in regulations under section 82: the provision for personal civil liability of officers in default in section 349(4) of the Companies Act 1985 is not included.

Section 84: Criminal consequences of failure to make required disclosures

187.     This section replaces sections 348(2), 349(2) and (3) and 351(5) of the 1985 Act and, insofar as it applies to companies, part of section 7 of the Business Names Act 1985. It makes it an offence not to comply with the requirements, to be specified in regulations under section 82, for every company to disclose its name and specified other information.

Section 85: Minor variations in form of name to be left out of account

188.     This section is a new provision. It means that the company's name as used to comply with the disclosure requirements need not be exactly the same as the registered name. The permitted differences are the case of the letters, the use of punctuation, accents, etc and formatting. However the differences must not result in there being a risk of confusion.

PART 6: A COMPANY'S REGISTERED OFFICE

Section 86: A company's registered office

189.     This section restates section 287(1) of the 1985 Act. It requires every company to have a registered office and provides for that office to be an address to which communications and notices may be sent. Section 1139 provides that the service of a document on a company is effective if it is sent to its registered office.

Section 87: Change of address of registered office

190.     This section restates section 287(3) to (6) of the provisions of the 1985 Act. It provides the means by which a company may change the address of its registered office.

Section 88: Welsh companies

191.     This section provides a definition of a Welsh company. A company can be set up as a Welsh company by delivering to the registrar a statement on formation that its registered office is to be situated in Wales (see section 9(2)(b)). Subsection (2) restates section 2(2) of the 1985 Act whereby a company may become a Welsh company by passing a special resolution (so that the register states that its registered office is to be situated "in Wales"). As recommended by the CLR, subsection (3) provides a mechanism whereby a company can cease to be a Welsh company (i.e. so that the register states that its registered office is to be situated in "England and Wales"). This is new. At present, while a company may choose to restrict the address of its registered office to Wales on formation or subsequently by special resolution, it is not possible under the 1985 Act for a Welsh company to drop the restriction so that its registered office address can be changed to anywhere in England and Wales.

192.     Welsh companies may deliver documents to the registrar in Welsh (see section 1104). Welsh companies may also end their company name with Welsh versions of the statutory indicators of legal status. For example, "cyfyngedig" in place of "limited" or "c.c.c." in place of "p.l.c." (see sections 58 and 59). When a company ceases to be a Welsh company using the procedure under this section, it may no longer take advantage of these provisions.

193.     Where a company passes a special resolution under subsection (2) or (3) (and so becomes or ceases to be Welsh company) subsection (4) provides that the registrar will amend the register and issue the company with a new certificate of incorporation.

PART 7: RE-REGISTRATION AS A MEANS OF ALTERING A COMPANY'S STATUS

194.     This Part of the Act is about the re-registration of companies. It replaces equivalent provisions in Part 2 of the 1985 Act. There are some substantive changes as well as amendments reflecting the new provisions of the Act about registration which are carried through to the re-registration provisions.

Introductory

Section 89: Alteration of status by re-registration

195.     This section provides for various ways under the Act by which a company may alter its status. As recommended by the CLR (Final Report, paragraph 11.6) it retains the current possibilities for re-registration, but there is one significant change to the 1985 Act regime: in line with the recommendations of the CLR (Final Report, paragraph 11.11), in future a public company will be able to re-register as an unlimited private company without first having to re-register as private limited - see section 109.

Private company becoming public

Section 90: Re-registration of private company as public

196.     This section restates section 43(1) and (2), and section 48 of the 1985 Act. It enables a private company (whether limited or unlimited) to re-register as a public company providing that certain conditions are met. These conditions are set out in subsections (2) to (4). They include a requirement for the company to make such alterations to its name and articles of association ("articles") as are necessary to reflect the fact that the company will be a public company. This will be particularly important for private companies formed under the Act who are using the model articles: in particular, the new model articles for private companies limited by shares formed under the Act will be written with such companies in mind and are unlikely to be suitable for use by a newly re-registered public company - see notes on sections 19 and 20.

197.     As now (see section 48 of the 1985 Act), an unlimited private company with a share capital will be able to re-register as a public company and this is reflected in subsection (4) of this section.

198.     Subsection (2)(e) retains the requirement that a private company may not re-register as a public company if it has previously re-registered as an unlimited company. The intention behind this provision is that a company should not be able to enjoy the benefits of limited liability or avoid the obligations that are attached to this, for example, the increased reporting requirements, by continually swapping from limited to unlimited status.

Section 91: Requirements as to share capital

199.     This section restates sections 45, 47(3) and 48(5) to (7) of the 1985 Act. It sets out the requirements as to share capital of a company that it is proposing to re-register as a public company. These requirements carry forward the provisions of current companies legislation, for example, the company's share capital must not be less than the authorised minimum (defined in section 763) and each of the company's allotted shares must be paid up at least as to a quarter of the nominal value of that share and the whole of any premium on in.

200.     Subsection (5) of this section replaces section 47(3) of the 1985 Act. It provides that the registrar must not issue a new certificate of incorporation on re-registration if the court has made an order confirming a reduction of capital which has the effect of bringing the company's allotted share capital below the authorised minimum (which remains at £50,000 but may be satisfied in sterling or euros - see section 763) or if the company has reduced its capital via the new solvency statement procedure for capital reductions (see section 642) or in connection with a redenomination of share capital (see section 626).

Section 92: Requirements as to net assets

201.     This section restates section 43(3)(b), (c) and (e), and (4), and section 46 of the 1985 Act. The requirements as to net assets for a public company remain unchanged (as now, these are determined by reference to the company's most recent balance sheet).

Section 93: Recent allotment of shares for non-cash consideration

202.     This section restates section 44 of the 1985 Act. As now, where there has been an allotment of shares for non-cash consideration between the date of the balance sheet required under section 92 and the date that the company passed the resolution to re-register as a public company, the registrar will not entertain an application for re-registration unless the consideration for the allotment has been valued in accordance with section 596.

Section 94: Application and accompanying documents

203.     This section restates sections 43(3)(a) to (e) and 47(2) of the 1985 Act. It prescribes the contents of the application for re-registration where a private company is proposing to re-register as public. There is one important change, which is required as a result of the abolition of the current requirement for private companies to have a company secretary - see section 270. In future, where a private company is proposing to re-register as a public company the application for re-registration must include a statement of the company's proposed secretary where the company does not already have a secretary. The contents of this statement are prescribed in section 95.

204.     The application for re-registration must be accompanied by a statement of compliance - see section 90(1)(c)(ii) - which replaces the present requirement for a statutory declaration (or its electronic equivalent), contained in subsections 43(3)(e) and (3A) of the 1985 Act, with a requirement to make this statement (see note on section 13).

Section 95: Statement of proposed secretary

205.     This section is a new provision, which is required as a result of the abolition of the requirement for private companies to have a company secretary - see section 270. Where a private company is proposing to re-register as a public company and the company does not already have a company secretary, the application for re-registration must include details of the person or persons who will act as company secretary or joint secretaries on re-registration. The statement of proposed secretary must also contain a consent, given by the person or each of the persons named in the statement, to act as company secretary or joint secretaries. If all the partners in a firm are to be joint secretaries, one partner in the firm may give consent to act on behalf of all of the partners.

Section 96: Issue of certificate of incorporation on re-registration

206.     This section replaces section 47 of the 1985 Act. As now, where the registrar is satisfied that a company is entitled to be re-registered as a public company, she will issue a new certificate of incorporation (which must state that it is being issued on the re-registration of the company). On the issue of a new certificate of incorporation under this section: the company becomes a public company; the change to its name and any amendments that were made to the company's articles take effect; and the person (or persons) named as secretary (or joint secretaries) in the statement of proposed secretary (see section 95) is deemed to have been appointed as such.

207.     As now, the certificate of incorporation on re-registration is conclusive evidence that the company is now a public company and that the requirements of the Act as regards re-registration have been met.

Public company becoming private

Section 97: Re-registration of public company as private limited company

208.     This section replaces section 53 of the 1985 Act. It enables a public company to re-register as a private limited company if the conditions specified in subsection (2) are met. The conditions are the same as those which are presently set out in section 53 but there are two important changes:

• Consistent with the approach taken elsewhere in the Act, for example the sections on the re-registration of a private company as public, subsection (1)(c)(ii) of this section introduces a new requirement for a statement of compliance (see note on section 13).

• Subsection (2) introduces new provisions which enable the registrar to process an application for the re-registration of a company from public to private limited within the 28-day period during which dissenting members may apply to the court, under section 98, for an order cancelling the resolution for re-registration, providing that she is satisfied that such an application cannot be made. This change reflects the registrar's current practice.

209.     As now, the company must make such changes to its name and articles as are necessary in connection with it becoming a private company limited by shares or, as the case may be, a private company limited by guarantee.

Section 98: Application to court to cancel resolution

210.     This section restates section 54(1) to (3) and (5) to (6) of the 1985 Act. As now, where a public company has passed a special resolution to re-register as a private limited company, the requisite majority of the company's members (see subsection (1)) may apply to the court for the cancellation of this resolution. Such an application to the court must be made within 28 days of the resolution to re-register being passed and on hearing the application the court may confirm or cancel the resolution or make such other order as it thinks fit.

Section 99: Notice to registrar of court application or order

211.     This section replaces section 54(4) (7) and (10) of the 1985 Act. It makes it clear that, as now, where an application is made to the court under section 98 (that is, to cancel a resolution for re-registration as a private limited company), the company must immediately give notice to the registrar. Similarly, where the court has made an order in connection with such an application, the company must deliver a copy of that order to the registrar within 15 days of the order being made (or such longer time as the court may direct).

212.     Subsection (1) of this section is a new provision which requires the dissenting members, on making an application to court seeking to cancel the resolution for re-registration from public to private, to give notice direct to the registrar. This ensures that the registrar is aware of any applications which have been made under section 98 and therefore will enable the registrar to process the application for re-registration without further delay where she is satisfied that no application to court may be made - see note on section 97.

213.     Subsection (4) carries forward the offence in section 54(10) of the 1985 Act. Where the company fails to give notice to the registrar or fails to deliver a copy of the order made by the court under section 98 within the prescribed time limits (see subsections (2) and (3)), the company and every officer of the company who is in default commits an offence. The penalty for this offence is set out in subsection (5).

Section 100: Application and accompanying documents

214.     This section replaces section 53(1)(b) of the 1985 Act and contains new provisions. It prescribes the documents/information that must accompany the application for re-registration where a company is proposing to re-register from public to private limited. Consistent with the approach taken in the Act with other forms of re-registration, in future the application for re-registration as a private limited company must be accompanied by a statement of compliance - see note on section 13. (There is currently no requirement for a statutory declaration (or electronic equivalent) where a public company re-registers as a private limited company).

Section 101: Issue of certificate of incorporation on re-registration

215.     This section restates section 55 of the 1985 Act. As now, where the registrar is satisfied that a company is entitled to be re-registered as a private limited company, she will issue a new certificate of incorporation (which must state that it is being issued on the re-registration of the company). On the issue of a new certificate of incorporation under this section, the company becomes a private limited company and the change to its name and any amendments that were required to be made to the articles take effect.

216.     As now, the certificate of incorporation on re-registration issued under this section is conclusive evidence that the company is now a private limited company and that the requirements of the Act as regards re-registration have been met.

Private limited company becoming unlimited

Section 102: Re-registration of private limited company as unlimited

217.     This section replaces section 49, of the 1985 Act. As now, this section permits a private company that is limited by shares or, as the case may be, by guarantee, to re-register as an unlimited private company, providing that certain conditions are met (see subsection (2)) and all of the members have given their assent to the company being so re-registered. In the case of a deceased member, assent may be given by the personal representative of the deceased member's estate. Where a member is bankrupt, assent may be given by his trustee in bankruptcy (to the exclusion of the member in question).

218.     An "unlimited company" is a company not having any limit on the liability of its members.

219.     As now, a company may not re-register as an unlimited company, if it has previously been re-registered as limited (having previously been unlimited) or as unlimited (having previously been limited).

220.     The application for re-registration as an unlimited company must be accompanied by a statement of compliance (see note on section 13).

Section 103: Application and accompanying documents

221.     This section replaces section 49(8) and (8A) of the 1985 Act. It prescribes the contents of the application for re-registration where a company is proposing to re-register from private limited to unlimited and the documents/information that must accompany this application. The current requirement for a statutory declaration made by the directors on application for re-registration as an unlimited company is replaced by a requirement for a statement of compliance. Unlike other statements of compliance made under the Act (see, for example, section 13) the statement of compliance made on application for re-registration as an unlimited company must contain a statement made by the directors confirming that:

• the persons by whom or on whose behalf the form of assent is authenticated constitute the whole membership of the company; and

• if any of the members have not authenticated that form themselves, that the directors have taken all reasonable steps to satisfy themselves that each person who authenticated it on behalf of a member was lawfully empowered to do so.

222.     The contents of the directors' statement carry forward the provisions of section 49(8) of the 1985 Act.

Section 104: Issue of certificate of incorporation on re-registration

223.     This section restates section 50 of the 1985 Act. As now, where the registrar is satisfied that a company is entitled to be re-registered as an unlimited company, she will issue a new certificate of incorporation (which must state that it is being issued on the re-registration of the company). On the issue of a new certificate of incorporation under this section, the company becomes an unlimited company and the change to its name and any amendments that were required to be made to the articles take effect.

224.     As now, the certificate of incorporation on re-registration is conclusive evidence that the company is now an unlimited company and that the requirements of the Act as regards re-registration have been met.

Unlimited private company becoming limited

Section 105: Re-registration of unlimited company as limited

225.     This section replaces section 51(1) to (3) of the 1985 Act. As now, this section permits an unlimited company to re-register as a private limited company if certain conditions are met (see subsection (2)). As now, a re-registration from unlimited to limited requires a special resolution of the company's members, (which must specify whether the company is to be limited by shares or limited by guarantee). The company must also make such changes to its name and articles as are required to reflect the change in the company's status. As is the case under section 51(6) of the 1985 Act, this section does not permit the re-registration of an unlimited company as a public company (this section provides for the re-registration of an unlimited company as a private limited company). There is a new requirement for a statement of compliance (see note on section 13).

Section 106: Application and accompanying documents

226.     This section replaces section 51(5) of the 1985 Act and contains new provisions. It prescribes the contents of the application for re-registration where an unlimited private company is proposing to re-register as private limited and the documents/information that must accompany this application. Where the company is to be limited by guarantee, subsection (2)(b) requires the application for re-registration to be accompanied by a "statement of guarantee" (see note on section 11). It should be noted that there is no requirement for a statement of capital and initial shareholdings where the company is to be limited by shares. This is unnecessary because the company will be required to make a return of allotments to the registrar, under section 555 as soon as it allots shares subsequent to its registration and the return must be accompanied by a statement of capital.