Companies Act 2006, section 16

Effect of registration

Part 2 Company formation

(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 [F27, registered email addressF27] 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 [F28unless ineligible for appointment to that office by virtue of any enactmentF28] .

Read section 16 in the full Act → Definitions (7) Cases (3)

Definitions used in section 16

company

“company” means a company formed and registered under this Act, that is—

(a)

a company so formed and registered after the commencement of this Part, or

(b)

a company that immediately before the commencement of this Part—

(i)

was formed and registered under the Companies Act 1985 (c. 6) or the Companies (Northern Ireland) Order 1986 (S.I. 1986/1032 (N.I. 6)), or

(ii)

was an existing company for the purposes of that Act or that Order,

(which is to be treated on commencement as if formed and registered under this Act).

Defined in s.1(1) · see it in the full Act

(4) In this section and that Schedule “company” includes any body corporate.

Defined in s.1159(4) · see it in the full Act
member

(2) In sub-paragraph (1) “member” has the same meaning as it has by virtue of section 7(1) of that Act .

Defined in Sch.2 Pt.1 · see it in the full Act
body corporate

“body corporate” and “corporation” include a body incorporated outside the United Kingdom, but do not include—

(a)

a corporation sole, or

(b)

a partnership that, whether or not a legal person, is not regarded as a body corporate under the law by which it is governed;

Defined in s.1173(1) · see it in the full Act
share

(1) In the Companies Acts “share”, in relation to a company, means share in the company's share capital.

Defined in s.540(1) · see it in the full Act
officer

“officer”, in relation to a body corporate, includes a director, manager or secretary;

Defined in s.1173(1) · see it in the full Act
director

In the Companies Acts “director” includes any person occupying the position of director, by whatever name called.

Defined in s.250 · see it in the full Act
enactment

In this Act, unless the context otherwise requires, “enactment” includes—

(a)an enactment contained in subordinate legislation within the meaning of the Interpretation Act 1978 (c. 30),

(aa)an enactment contained in, or in an instrument made under, a Measure or Act of the National Assembly for Wales,

(b)an enactment contained in, or in an instrument made under, an Act of the Scottish Parliament, and

(c)an enactment contained in, or in an instrument made under, Northern Ireland legislation within the meaning of the Interpretation Act 1978.

Defined in s.1293 · see it in the full Act

Cases considering section 16 (3)

Zavarco Plc v Ranjeet Singh Sidhu

[2022] EWCA Civ 1040 · 22 July 2022Interprets

A subscriber becomes the holder of the shares specified in the statement of capital and initial shareholdings automatically on registration. That automatic acquisition means that subscriber shares are not allotted by the company (see paras [82]-[83]; [94]-[96]).

Rossendale Borough Council v Hurstwood Properties (A) Ltd & Ors

[2019] EWCA Civ 364 · 7 March 2019

Applies the effect of registration: members become a body corporate under the company name, capable of exercising the functions of an incorporated company. The provision supported the conclusion that the SPVs had separate legal personality. (see para [25])

Moorwand Ltd v Gareth Anthony Hamblin & Ors

[2026] EWCA Civ 942 · 21 July 2026

The court used the provision’s effect of registration, together with the statutory membership provisions, to explain why fraudulent registration did not make the identity-theft victim a member of the company (see para [84]).

What each judgment says about section 16 is in the case-law panel in the full Act.

Explanatory note

61.This section replaces section 13(3) to (5) of the 1985 Act. It provides, amongst other things, that the subscribers to the memorandum, together with such other persons as may from time to time become members of a company, are a body corporate by the name stated in the certificate of incorporation and, in the case of a company having a share capital, that the subscribers to the memorandum become holders of the shares specified in the statement of capital and initial shareholdings. This means that on registration a company becomes a legal person in its own right, which is distinct from the people who own it (the members) and the people who manage it (the directors).

All the explanatory notes for the Act

Amendments and notes

3 notes from legislation.gov.uk

Amendments

  1. F27Words in s. 16(4) inserted (26.10.2023 for specified purposes, 4.3.2024 in so far as not already in force) by Economic Crime and Corporate Transparency Act 2023 (c. 56), ss. 29(3), 219(1)(2)(b); S.I. 2024/269, reg. 2(w)
  2. F28Words in s. 16(6) inserted (26.10.2023 but only so far as it confers a power to make regulations or relates to the exercise of the power, otherwise prosp.) by Economic Crime and Corporate Transparency Act 2023 (c. 56), ss. 5(3), 219(1)(2)(b) text inserted prospectively or the amendment may be in effect for limited purposes, see the commentary.

Modifications

  1. C45S. 16 excluded by The European Public Limited-Liability Company Regulations 2004 (S.I. 2004/2326), Sch. 4 para. 6 (as amended (1.10.2009) by The European Public Limited-Liability Company (Amendment) Regulations 2009 (S.I. 2009/2400), reg. {40(6)})