Search Legislation

Companies Act 2006

Changes to legislation:

There are outstanding changes not yet made by the legislation.gov.uk editorial team to Companies Act 2006. Any changes that have already been made by the team appear in the content and are referenced with annotations. Help about Changes to Legislation

Close

Changes to Legislation

Revised legislation carried on this site may not be fully up to date. Changes and effects are recorded by our editorial team in lists which can be found in the ‘Changes to Legislation’ area. Where those effects have yet to be applied to the text of the legislation by the editorial team they are also listed alongside the legislation in the affected provisions. Use the ‘more’ link to open the changes and effects relevant to the provision you are viewing.

View outstanding changes

Changes and effects yet to be applied to the whole Act associated Parts and Chapters:

  • Act amendment to earlier affecting provision S.I. 2008/373 reg. 11(1) by S.I. 2013/1971 reg. 9(a) (This amendment not applied to legislation.gov.uk. Amending Regulations revoked (1.10.2013) without ever being in force by S.I. 2013/2224, reg. 2)
  • Act amendment to earlier affecting provision S.I. 2008/373 reg. 3(4) by S.I. 2013/1971 reg. 4 (This amendment not applied to legislation.gov.uk. Amending Regulations revoked (1.10.2013) without ever being in force by S.I. 2013/2224, reg. 2)

Whole provisions yet to be inserted into this Act (including any effects on those provisions):

  • s. 156A-156C inserted by 2015 c. 26 s. 87(4)
  • s. 479A(2)(c)(zi) inserted by S.I. 2019/177 reg. 4(b)(i) (This amendment not applied to legislation.gov.uk. Reg. 4 substituted by regs. 4, 4A immediately before IP completion day by S.I. 2019/1392, regs. 1(2), 4)
  • s. 1110E-110G applied by S.I. 2009/1804, reg. 60 (as amended) by S.I. 2024/234 reg. 26
  • s. 11989A applied (with modifications) by S.I. 2009/1804, reg. 79A (as inserted) by S.I. 2024/234 reg. 46
  • Sch. 10 para. 6(2D) inserted by S.I. 2019/177 reg. 28(e) (This amendment not applied to legislation.gov.uk. Reg. 28(e) omitted immediately before IP completion day by virtue of S.I. 2020/523, regs. 1(2), 14(e)(iv))
  • Sch. 10 para. 7(2A) inserted by S.I. 2019/177 reg. 29(b) (This amendment not applied to legislation.gov.uk. Reg. 29 substituted immediately before IP completion day by S.I. 2020/523, regs. 1(2), 14(f))

Chapter 2U.K.Impediments to takeovers

Modifications etc. (not altering text)

Opting in and opting outU.K.

966Opting in and opting outU.K.

(1)A company may by special resolution (an “opting-in resolution”) opt in for the purposes of this Chapter if the following [F1five] conditions are met in relation to the company.

(2)The first condition is that the company has voting shares admitted to trading on a [F2UK] regulated market.

[F3(3)The second condition is that the company’s articles of association do not contain any restrictions on the transfer of shares or, if they do contain any such restrictions, provide that they are not to apply to—

(a)transfers to the offeror, or at the offeror’s direction to another person, during the offer period, or

(b)transfers to any person at a time during the offer period when the offeror holds shares amounting to not less than 75% in value of all the voting shares in the company.

(3A)The third condition is that the company’s articles of association—

(a)do not contain any restrictions on rights to vote at a general meeting of the company, or

(b)if they do contain any such restrictions, provide that they are not to have effect on rights to vote at a general meeting of the company that—

(i)decides whether to take any action which might result in the frustration of the takeover bid, or

(ii)is held at a time when the offeror holds shares amounting to not less than 75% in value of all the voting shares in the company,

unless the restrictions are compensated for by specific pecuniary advantages.

(3B)The fourth condition is that the company’s articles of association do not contain any other provision which would be incompatible with the requirements of subsection (3C).

(3C)Those requirements are—

(a)multiple-vote shares are to carry only one vote each at a general meeting of the company that decides whether to take any action which might result in the frustration of the takeover bid,

(b)multiple-vote shares are to carry only one vote each at a general meeting of the company which—

(i)is the first such meeting to be held after the end of the offer period,

(ii)is held at a time when the offeror holds shares amounting to not less than 75% in value of all the voting shares in the company, and

(iii)is called at the offeror’s request under section 969 in order to amend the company’s articles of association or to appoint or remove members of the board of directors, and

(c)at a time during the offer period when the offeror holds shares amounting to not less than 75% in value of all the voting shares in the company, shareholders are not to have any extraordinary rights to appoint or remove members of the board of directors.

(3D)The references in subsections (3A)(b) and (3C)(a) to voting at a general meeting of the company that decides whether to take any action which might result in the frustration of the takeover bid includes a reference to voting on a written resolution concerned with that question.

(3E)For the purposes of subsections (3A)(b)(i) and (3C)(a), action which might result in the frustration of the takeover bid is any action of that kind specified in rules under section 943(1) made in accordance with paragraphs 17 or 18 of Schedule 1C.

(3F)The references in subsections (3), (3A) and (3C) to voting shares in the company do not include—

(a)debentures, or

(b)shares that, under the company’s articles of association, do not normally carry rights to vote at its general meetings (for example, shares carrying rights to vote that, under those articles, arise only where specified pecuniary advantages are not provided).

(3G)In subsection (3C), “multiple-vote shares” means shares included in a distinct and separate class and carrying more than one vote each.]

(4)The [F4fifth] condition is that—

(a)no shares conferring special rights in the company are held by—

(i)a minister,

(ii)a nominee of, or any other person acting on behalf of, a minister, or

(iii)a company directly or indirectly controlled by a minister,

and

(b)no such rights are exercisable by or on behalf of a minister under any enactment.

(5)A company may revoke an opting-in resolution by a further special resolution (an “opting-out resolution”).

F5(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7)In subsection (4) “minister” means—

(a)the holder of an office in Her Majesty's Government in the United Kingdom;

(b)the Scottish Ministers;

(c)a Minister within the meaning given by section 7(3) of the Northern Ireland Act 1998 (c. 47);

[F6(d)the Welsh Ministers;]

and for the purposes of that subsection “minister” also includes the Treasury, the Board of Trade [F7and], the Defence Council F8. . . .

(8)The Secretary of State may by order subject to negative resolution procedure provide that subsection (4) applies in relation to a specified person or body that exercises functions of a public nature as it applies in relation to a minister.

Specified” means specified in the order.

Textual Amendments

Modifications etc. (not altering text)

C2Ss. 966-973 applied (with modifications) (1.10.2009) by The Unregistered Companies Regulations 2009 (S.I. 2009/2436), regs. 3-5, Sch. 1 para. 14(1) (with transitional provisions and savings in regs. 7, 9, Sch. 2)

Commencement Information

I1S. 966 wholly in force at 6.4.2007; s. 966 not in force at Royal Assent, see s. 1300; s. 966 in force for specified purposes at 20.1.2007 by S.I. 2006/3428, art. 3(3) (subject to art. 5, Sch. 1 and with arts. 6, 8, Sch. 5); s. 966 in force at 6.4.2007 by S.I. 2007/1093, art. 2(1)(b) (with art. 11(1))

967Further provision about opting-in and opting-out resolutionsU.K.

(1)An opting-in resolution or an opting-out resolution must specify the date from which it is to have effect (the “effective date”).

(2)The effective date of an opting-in resolution may not be earlier than the date on which the resolution is passed.

(3)The [F9second, third, fourth and fifth] conditions in section 966 must be met at the time when an opting-in resolution is passed, but the first one does not need to be met until the effective date.

(4)An opting-in resolution passed before the time when voting shares of the company are admitted to trading on a [F10UK] regulated market complies with the requirement in subsection (1) if, instead of specifying a particular date, it provides for the resolution to have effect from that time.

(5)An opting-in resolution passed before the commencement of this section complies with the requirement in subsection (1) if, instead of specifying a particular date, it provides for the resolution to have effect from that commencement.

(6)The effective date of an opting-out resolution may not be earlier than the first anniversary of the date on which a copy of the opting-in resolution was forwarded to the registrar.

(7)Where a company has passed an opting-in resolution, any alteration of its articles of association that would prevent the [F11second, third or fourth condition] in section 966 from being met is of no effect until the effective date of an opting-out resolution passed by the company.

Textual Amendments

Modifications etc. (not altering text)

C3Ss. 966-973 applied (with modifications) (1.10.2009) by The Unregistered Companies Regulations 2009 (S.I. 2009/2436), regs. 3-5, Sch. 1 para. 14(1) (with transitional provisions and savings in regs. 7, 9, Sch. 2)

Consequences of opting inU.K.

968Effect on contractual restrictionsU.K.

(1)The following provisions have effect where a takeover bid is made for an opted-in company.

(2)An agreement to which this section applies is invalid in so far as it places any restriction—

(a)on the transfer to the offeror, or at his direction to another person, of shares in the company during the offer period;

(b)on the transfer to any person of shares in the company at a time during the offer period when the offeror holds shares amounting to not less than 75% in value of all the voting shares in the company;

(c)on rights to vote at a general meeting of the company that decides whether to take any action which might result in the frustration of the bid;

(d)on rights to vote at a general meeting of the company that—

(i)is the first such meeting to be held after the end of the offer period, and

(ii)is held at a time when the offeror holds shares amounting to not less than 75% in value of all the voting shares in the company.

(3)This section applies to an agreement—

(a)entered into between a person holding shares in the company and another such person on or after 21st April 2004, or

(b)entered into at any time between such a person and the company,

and it applies to such an agreement even if the law applicable to the agreement (apart from this section) is not the law of a part of the United Kingdom.

(4)The reference in subsection (2)(c) to rights to vote at a general meeting of the company that decides whether to take any action which might result in the frustration of the bid includes a reference to rights to vote on a written resolution concerned with that question.

(5)For the purposes of subsection (2)(c), action which might result in the frustration of a bid is any action of that kind specified in rules under section 943(1) [F12made in accordance with paragraph 17 or 18 of Schedule 1C].

(6)If a person suffers loss as a result of any act or omission that would (but for this section) be a breach of an agreement to which this section applies, he is entitled to compensation, of such amount as the court considers just and equitable, from any person who would (but for this section) be liable to him for committing or inducing the breach.

(7)In subsection (6) “the court” means the High Court or, in Scotland, the Court of Session.

(8)A reference in this section to voting shares in the company does not include—

(a)debentures, or

(b)shares that, under the company's articles of association, do not normally carry rights to vote at its general meetings (for example, shares carrying rights to vote that, under those articles, arise only where specified pecuniary advantages are not provided).

Textual Amendments

Modifications etc. (not altering text)

C4Ss. 966-973 applied (with modifications) (1.10.2009) by The Unregistered Companies Regulations 2009 (S.I. 2009/2436), regs. 3-5, Sch. 1 para. 14(1) (with transitional provisions and savings in regs. 7, 9, Sch. 2)

Commencement Information

I2S. 968 wholly in force at 6.4.2007; s. 968 not in force at Royal Assent see s. 1300; s. 968 in force at 6.4.2007 by S.I. 2007/1093, art. 2(1)(b) (with art. 11(1) and subject to transitional adaptations in Sch. 1 para. 4)

969Power of offeror to require general meeting to be calledU.K.

(1)Where a takeover bid is made for an opted-in company, the offeror may by making a request to the directors of the company require them to call a general meeting of the company if, at the date at which the request is made, he holds shares amounting to not less than 75% in value of all the voting shares in the company.

(2)The reference in subsection (1) to voting shares in the company does not include—

(a)debentures, or

(b)shares that, under the company's articles of association, do not normally carry rights to vote at its general meetings (for example, shares carrying rights to vote that, under those articles, arise only where specified pecuniary advantages are not provided).

(3)Sections 303 to 305 (members' power to require general meetings to be called) apply as they would do if subsection (1) above were substituted for subsections (1) to (3) of section 303, and with any other necessary modifications.

Modifications etc. (not altering text)

C5Ss. 966-973 applied (with modifications) (1.10.2009) by The Unregistered Companies Regulations 2009 (S.I. 2009/2436), regs. 3-5, Sch. 1 para. 14(1) (with transitional provisions and savings in regs. 7, 9, Sch. 2)

SupplementaryU.K.

970Communication of decisionsU.K.

(1)A company that has passed an opting-in resolution or an opting-out resolution must notify—

(a)the Panel, F13...

F13(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2)Notification must be given within 15 days after the resolution is passed F14....

(3)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.

(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.

Textual Amendments

Modifications etc. (not altering text)

C6Ss. 966-973 applied (with modifications) (1.10.2009) by The Unregistered Companies Regulations 2009 (S.I. 2009/2436), regs. 3-5, Sch. 1 para. 14(1) (with transitional provisions and savings in regs. 7, 9, Sch. 2)

971Interpretation of this ChapterU.K.

(1)In this Chapter—

  • F15...

  • [F16“offeror”, in relation to a takeover bid, means the person making the bid;]

  • offer period”, in relation to a takeover bid, means the time allowed for acceptance of the bid by—

    (a)

    rules under section 943(1) [F17made in accordance with paragraph 13 of Schedule 1C;]

  • opted-in company” means a company in relation to which—

    (a)

    an opting-in resolution has effect, and

    (b)

    the conditions in section 966(2) and (4) continue to be met;

  • opting-in resolution” has the meaning given by section 966(1);

  • opting-out resolution” has the meaning given by section 966(5);

  • [F18“takeover bid” has the meaning given by paragraph 20(1) of Schedule 1C;]

  • F19...

  • voting rights” means rights to vote at general meetings of the company in question, including rights that arise only in certain circumstances;

  • voting shares” means shares carrying voting rights.

(2)For the purposes of this Chapter—

(a)securities of a company are treated as shares in the company if they are convertible into or entitle the holder to subscribe for such shares;

(b)debentures issued by a company are treated as shares in the company if they carry voting rights.

972Transitory provisionU.K.

(1)Where a takeover bid is made for an opted-in company, section 368 of the Companies Act 1985 (c. 6) (extraordinary general meeting on members' requisition) and section 378 of that Act (extraordinary and special resolutions) have effect as follows until their repeal by this Act.

(2)Section 368 has effect as if a members' requisition included a requisition of a person who—

(a)is the offeror in relation to the takeover bid, and

(b)holds at the date of the deposit of the requisition shares amounting to not less than 75% in value of all the voting shares in the company.

(3)In relation to a general meeting of the company that—

(a)is the first such meeting to be held after the end of the offer period, and

(b)is held at a time when the offeror holds shares amounting to not less than 75% in value of all the voting shares in the company,

section 378(2) (meaning of “special resolution”) has effect as if “14 days' notice” were substituted for “21 days' notice”.

(4)A reference in this section to voting shares in the company does not include—

(a)debentures, or

(b)shares that, under the company's articles of association, do not normally carry rights to vote at its general meetings (for example, shares carrying rights to vote that, under those articles, arise only where specified pecuniary advantages are not provided).

Modifications etc. (not altering text)

C8Ss. 966-973 applied (with modifications) (1.10.2009) by The Unregistered Companies Regulations 2009 (S.I. 2009/2436), regs. 3-5, Sch. 1 para. 14(1) (with transitional provisions and savings in regs. 7, 9, Sch. 2)

973Power to extend to Isle of Man and Channel IslandsU.K.

Her Majesty may by Order in Council direct that any of the provisions of this Chapter extend, with such modifications as may be specified in the Order, to the Isle of Man or any of the Channel Islands.

Modifications etc. (not altering text)

C9Ss. 966-973 applied (with modifications) (1.10.2009) by The Unregistered Companies Regulations 2009 (S.I. 2009/2436), regs. 3-5, Sch. 1 para. 14(1) (with transitional provisions and savings in regs. 7, 9, Sch. 2)

Commencement Information

I3S. 973 wholly in force at 6.4.2007; s. 973 not in force at Royal Assent, see s. 1300; s. 973 in force for specified purposes at 20.1.2007 by S.I. 2006/3428, art. 3(3) (subject to art. 5, Sch. 1 and with arts. 6, 8, Sch. 5); s. 973 in force at 6.4.2007 by S.I. 2007/1093, art. 2(1)(b) (with art. 11(1))

Back to top

Options/Help

Print Options

You have chosen to open The Whole Act

The Whole Act you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.

Would you like to continue?

You have chosen to open The Whole Act as a PDF

The Whole Act you have selected contains over 200 provisions and might take some time to download.

Would you like to continue?

You have chosen to open The Whole Act without Schedules

The Whole Act without Schedules you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.

Would you like to continue?

You have chosen to open The Whole Act without Schedules as a PDF

The Whole Act without Schedules you have selected contains over 200 provisions and might take some time to download.

Would you like to continue?

You have chosen to open the Whole Act

The Whole Act you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.

Would you like to continue?

You have chosen to open the Whole Act without Schedules

The Whole Act without Schedules you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.

Would you like to continue?

You have chosen to open Schedules only

The Schedules you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.

Would you like to continue?

Close

Legislation is available in different versions:

Latest Available (revised):The latest available updated version of the legislation incorporating changes made by subsequent legislation and applied by our editorial team. Changes we have not yet applied to the text, can be found in the ‘Changes to Legislation’ area.

Original (As Enacted or Made): The original version of the legislation as it stood when it was enacted or made. No changes have been applied to the text.

Close

See additional information alongside the content

Geographical Extent: Indicates the geographical area that this provision applies to. For further information see ‘Frequently Asked Questions’.

Show Timeline of Changes: See how this legislation has or could change over time. Turning this feature on will show extra navigation options to go to these specific points in time. Return to the latest available version by using the controls above in the What Version box.

Close

Opening Options

Different options to open legislation in order to view more content on screen at once

Close

Explanatory Notes

Text created by the government department responsible for the subject matter of the Act to explain what the Act sets out to achieve and to make the Act accessible to readers who are not legally qualified. Explanatory Notes were introduced in 1999 and accompany all Public Acts except Appropriation, Consolidated Fund, Finance and Consolidation Acts.

Close

More Resources

Access essential accompanying documents and information for this legislation item from this tab. Dependent on the legislation item being viewed this may include:

  • the original print PDF of the as enacted version that was used for the print copy
  • lists of changes made by and/or affecting this legislation item
  • confers power and blanket amendment details
  • all formats of all associated documents
  • correction slips
  • links to related legislation and further information resources
Close

Timeline of Changes

This timeline shows the different points in time where a change occurred. The dates will coincide with the earliest date on which the change (e.g an insertion, a repeal or a substitution) that was applied came into force. The first date in the timeline will usually be the earliest date when the provision came into force. In some cases the first date is 01/02/1991 (or for Northern Ireland legislation 01/01/2006). This date is our basedate. No versions before this date are available. For further information see the Editorial Practice Guide and Glossary under Help.

Close

More Resources

Use this menu to access essential accompanying documents and information for this legislation item. Dependent on the legislation item being viewed this may include:

  • the original print PDF of the as enacted version that was used for the print copy
  • correction slips

Click 'View More' or select 'More Resources' tab for additional information including:

  • lists of changes made by and/or affecting this legislation item
  • confers power and blanket amendment details
  • all formats of all associated documents
  • links to related legislation and further information resources