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Companies (Single Member Private Limited Companies) Regulations 1992

As Enacted Cited authorities 15 Cited in Related
Vincent
Year1992

1992 No. 1699

COMPANIES

The Companies (Single Member Private Limited Companies) Regulations 1992

Made 14th July 1992

Coming into force 15th July 1992

Whereas a draft of these Regulations has been approved by resolution of each House of Parliament in pursuance of paragraph 2(2) of Schedule 2 to the European Communities Act 19721.

Now, therefore, the Secretary of State, being a Minister designated for the purposes of section 2(2) of that Act in relation to measures relating to single member private companies limited by shares or by guarantee2, in exercise of the powers conferred by that section hereby makes the following Regulations:

S-1 Citation and commencement

Citation and commencement

1. These Regulations may be cited as the Companies (Single Member Private Limited Companies) Regulations 1992 and shall come into force on the day after the day on which they were made.

S-2 Single member private companies limited by shares or by guarantee

Single member private companies limited by shares or by guarantee

2.—(1) Notwithstanding any enactment or rule of law to the contrary, a private company limited by shares or by guarantee within the meaning of section 1 of the Companies Act 19853may be formed by one person (in so far as permitted by that section as amended by these Regulations) and may have one member; and accordingly—

(a)

(a) any enactment or rule of law which applies in relation to a private company limited by shares or by guarantee shall, in the absence of any express provision to the contrary, apply with such modification as may be necessary in relation to such a company which is formed by one person or which has only one person as a member as it does in relation to such a company which is formed by two or more persons or which has two or more persons as members; and

(b)

(b) without prejudice to the generality of the foregoing, the Companies Act 1985 and the Insolvency Act 19864shall have effect with the amendments specified in the Schedule to these Regulations.

(2) In this regulation “enactment” shall include an enactment comprised in subordinate legislation and “subordinate legislation” shall have the same meaning as in section 21(1) of the Interpretation Act 19785.

S-3 Transitional provision

Transitional provision

3. A person who, before the coming into force of these Regulations, is liable by virtue of section 24 of the Companies Act 1985 for the payment of the debts of a private company limited by shares or by guarantee, shall not be so liable for the payment of the company’s debts contracted on or after the day on which these Regulations come into force.

N. Hamilton

Parliamentary Under Secretary of State for Corporate Affairs,

Department of Trade and Industry

14th July 1992

SCHEDULE

Regulation 2

AMENDMENTS TO THE COMPANIES ACT 1985 AND THE INSOLVENCY ACT 1986

SCH-1.1

1. Formation

In section 1 of the Companies Act 1985 (mode of forming incorporated company), after subsection (3) insert—

SCH-1.3A

“3A Notwithstanding subsection (1), one person may, for a lawful purpose, by subscribing his name to a memorandum of association and otherwise complying with the requirements of this Act in respect of registration, form an incorporated company being a private company limited by shares or by guarantee.”.

SCH-1.2

2. Minimum membership for carrying on business

In section 24 of the Companies Act 1985 (minimum membership for carrying on business), after “company” where it first occurs insert “, other than a private company limited by shares or by guarantee,”.

SCH-1.3

3. Contracts with sole members

(1) In Part X of the Companies Act 1985, after section 322A6insert—

SCH-1.322B

“Contracts with sole members who are directors

322B.—(1) Subject to subsection (2), where a private company limited by shares or by guarantee having only one member enters into a contract with the sole member of the company and the sole member is also a director of the company, the company shall, unless the contract is in writing, ensure that the terms of the contract are either set out in a written memorandum or are recorded in the minutes of the first meeting of the directors of the company following the making of the contract.

(2) Subsection (1) shall not apply to contracts entered into in the ordinary course of the company’s business.

(3) For the purposes of this section a sole member who is a shadow director is treated as a director.

(4) If a company fails to comply with subsection (1), the company and every officer of it who is in default is liable to a fine.

(5) Subject to subsection (6), nothing in this section shall be construed as excluding the operation of any other enactment or rule of law applying to contracts between a company and a director of that company.

(6) Failure to comply with subsection (1) with respect to a contract shall not affect the validity of that contract.”.

(2) In section 741 of the Companies Act 1985 (“director” and “shadow director”), in subsection (3) after “sections 320 to 322 (substantial property transactions involving directors),” delete “and” and insert “section 322B (contracts with sole members who are directors), and”.

(3) In Schedule 24 to the Companies Act 1985 (punishment of offences), after the entry relating to section 318(8) insert—

“322B(4)

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