Regulations for Human Rights Protection, Self-Regulatory Act and Stock Transfer upon formation of United Kingdom Company

21 Oct

To get an insight about the formation of companies in United Kingdom, one may visit company formation agents UK, however it should be kept in mind that for a better understanding of the formation of company, one should go through the default laws and the additional rulings for the working of a company. A company’s law may get influenced by enactments apart from the Companies Act, Articles of Association or Memorandum of Association. There may be independent acts introduced by the government that may affect the rules observed by companies. Such regulations have been discussed in this article. Although some of these acts may not be a legal obligation on the companies, yet they succeed to have an influence on the regular matters of the company. The European Law also successfully determines the conduct of UK companies, as UK is still a part of European Union.

Regulations for the Protection of Human Rights

Although UK has endorsed the European Convention on rights of human beings since 1950, but, the rulings provided by this convention were not adopted by the UK until it signed the Human Rights Act 1998. Until the implementation of Human Rights Act 1998, a little number of cases that had application of Company Law were brought into the European court of human rights. However, companies are more aware about these rules and regulations. At present human rights must be observed more cautiously by any England company register.

Introduction of Self-Regulatory Acts

Many acts have been introduced by the government that provide self-regulation of different disciplines of business. Some of these acts have made a great mark in the process of reformation of self-regulatory laws. Hence, it may be a new information for someone who wants to set up a new company UK that there is an existence of self-regulation initiatives as well for the governance of a company.

City Code on Takeovers and Mergers

Amongst these, the most impactful acts include the City Code on Takeovers and Mergers. However, most of the work of this initiative is now taken as statutory basis. Current version has been subjected to different changes. However, the past code and the panel for the governance of mergers and takeovers was selected by the Bank of England and the agents belonging to different monetary and professional frame. Moreover, the legislation did not provide any support to this selection. For many years, a public function for the governance of takeover and mergers’ conduct was provided by this code and panel.

UK Corporate Governance Code and Financial Reporting Council 

UK Corporate Governance Code is a collection of regulations related to the rules of Stock Exchange. The date of issuance for the present edition of UK Corporate Governance Code is September of 2012. It was issued by the Financial Reporting Council (FRC). FRC is a regulatory body that has been assigned the responsibility to promote assurance of the corporate reporting and administration. The current version is a revised version of the 2010 UK Corporate Governance Code. The 2010 version traces back to 1998 version which was arranged by a committee set for corporate governance. This committee was chaired by Sir Ronald Hampel. Now this 1998 version had its basis on the work done by the Cadbury Committee in 1992. The code has no support from the legislative. Hence it is a soft law, and it is not legally compulsory to get obeyed by the companies. However, practically for listed companies, it is a virtual obligation. Two factors of the UK Corporate Governance Code are distinguishable from the legislation. The first factor is that it is not formed after undergoing a parliamentary procedure. Rather committees that represent interest of business and finance constitute the formation of this code. The second factor that makes this code different from the legislation is that it is implementable on companies mentioned in the list. The latest review of this code and its predecessors was given in “Developments in Corporate Governance 2011: the impact and implementation of the UK Corporate Governance and Stewardship Codes”. The drawbacks, failures and successful points of the code till the present date have been analysed in this review. It also mentions the changes that can be brought in future. Various facets of the formation of board are addressed by the UK Corporate Governance Code. Moreover, the administration of internal matters is also addressed by this code. Hence, it will be a wise decision to go through this code before the formation of United Kingdom company. 

Financial Markets Law Committee

Any one new to the market or intending to set up a new company UK must get some kind of protection from the risky and fluctuating trends of markets. Hence this why the committee has been created for. The Financial markets law committee is an independent body and gets its sponsorship from the Bank of England. The role of this committee is to recognise the points of uncertainties that may be present in past or in present structure of wholesale finance markets. Such uncertainties may lead to risks that are materialistic. The committee also has to find solutions for dealing with these uncertainties. The committee also helps the judiciary to provide updated information about the trends of financial markets to the courts of UK.

Stock Transfer Act 1963

An Act that is related to the transfer of stock as well as brokers transfer is mentioned under this section. The main idea is to set out rules that are apart from the Companies Act, yet have an impact on the laws governing the companies. It is an act that amends the law that deals with the transfer of securities. Stock transfer basically refers to the transfer of ownership of any stock that may be owned by any shareholder and has to be transferred to any other master shareholder.

Simplification of Transferring the Securities

Section 1 of the Stock Transfer Act 1963 provides a simplified version of method of transfer of securities. It states that:

  • The securities that have undergone the registration process can be transferred via the rules set out in Schedule 1 of this act. These rules should be executed by the transferor only. Moreover, the details describing the nature and amount of securities should be mentioned. The complete name and address of the transferee should also be mentioned in this act.
  • There is no requirement for attesting the implementation of stock transfer. If any transfer has been made for the transaction of stock exchange, the details about the transferee can be mentioned in the transfer or if it is a requirement by the situation, the particulars can be mentioned in an instrument as outlined by the Schedule 2 of this Act. The details should include identification data of the stock transfer to which the instrument relates, and the necessary specifications of the securities related to the instrument.
  • This Section should not be interpreted as questioning or impacting any instrument’s authenticity that may be found impactful to transfer securities and does not relate to this section. If any instrument that was in practice before the implementation of this act or was given the authority and was not related to this section, it would be considered enough even if it is not in accordance with the form outlined by this section. However, it should be brought in to conformity with the requirements of stock transfer’s execution.
  • The section may be found applicable to all the securities that are fully paid and registered as well. This may include securities that are provided under Companies Act 1985. However, securities issued by a company that has a limited guarantee or an unlimited company may not be included.

Some more provisions related to simplification of transfer method

Section 2 of this Act states that:

  • Section 1 may have an impact on any kind of securities’ transfer, upon which the section is applicable. In spite of the existence of any act that may contradict the Section 1, section will remain effective. However, in the following two situations, the rulings given by Section 1 of this act become ineffective:
  • The right is given to reject the registration of a person as the one who holds the security, and this may be done upon any basis except for the form that is to be adopted to transfer the securities to him.
  • The section is inapplicable to any act or agreement that governs the document’s execution. The rules of law may include articles of association or any other instrument for the regulation of implementation of these documents provided by any company or any corporate structure.
  • The Section states regarding the securities’ shifting that may be done via a stock or a brokers transfer that:
  • If any act or instrument is referred for the distribution or lodging of an instrument used for transfer, then it may be elaborated as a distribution or lodging of either stock transfer or broker’s transfer. These enactments may include section 183(1) and 183(2) of the 1985 Companies Act as well as the Section 56(4) of the Finance Act 1946.
  • If any date on which the instrument of transfer may get delivered or lodged is referred, its reference will be interpreted as the date when the delivery or lodging of transfers has been made.

Transfer Forms and its Regulations

Section 3 of the Stock Transfer Act discusses about the provisions regarding transfer forms:

  • The amendment of the schedules is possible by the order of treasury. The forms may be altered or replaced by different forms. Also the forms may be added as alternatives to other forms. However, any reference given for the forms that are outlined by schedules in this act may be interpreted accordingly.
  • If the order is given to replace the forms with different forms, the part 3 of Section 1 must be followed. However, any important changes may be made before application.
  • If the treasury orders anything related to this Section, the order should be made via statutory instrument. Any variation in the order or abolishment of the order may be done by another order. The annulment of any order made under this section may be done via any House of Parliament’s resolution.
  • If any order that is made under the subsection 2 of Section 3, has to fulfil the following requirements:
  • It should submit forms with the mention of particulars. Some of the particulars required by subsection 1 of section 1 may not be mentioned.
  • It should make that section effective in case of the forms that may be either ordered specifically or are mentioned in the preceding paragraph to be subjected to changes as mentioned.
  • All the provisions of the order or some of them may be made effective in cases that are mentioned by that order.

Section 4 of this provides the interpretation of different terms used in this act whereas Section 6 states that the name of the act would be Stock Transfer Act 1963.


The Stock Transfer Act 1963 includes provisions on the transfer of stock. These provisions act as additional rules to the rulings (if any) provided by the Companies Act 2006 or Articles of Association or the memorandum of any company regarding the stock transfer. Some other rules that may be provided by separate acts may relate to human rights as mentioned in this article. Hence any England company register is subjected to a number of rulings and may have to remain careful regarding any decision that it takes. In fact, it should consider all the Acts related to the discipline from which the decision has to be made.

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