The last few unimplemented sections of the Companies Act 2006 staggered past the finishing line and came into force on the Ist October this year. Comfort may be taken in the fact that there is now a single piece of consolidating legislation governing the regulation of limited companies.
Although the Act has to a large extent succeeded in the government’s aim to simplify procedures for private companies, steps need to be taken to benefit from this freer regime.
Directors need to consider, among other matters:
- Mem & Arts- whether to remove or vary the objects clause in the memorandum, which now constitutes a restriction on the activities of the company. Consider also whether to adopt new articles based on a model introduced by the Act, which simplifies internal procedures.
- Directors- whether they fully understand the increased duties they now have under the Act, the change in age requirements and the fact that there must be at least one non-corporate director ( ie. a human being!).Decide too whether a secretary is needed, since this is no longer a legal requirement, even in a single director company.
- Meetings- whether to do away with the need for AGMs or to adopt a new regime of written resolutions. Directors should also note the changes in minimum notice periods for resolutions and the lower percentage of votes needed to convene special meetings.
- Share capital-the changes which have taken place with regard to share capital provisions and the abolition of the concept of authorised capital.
- Administration-the raft of changes and new requirements the Act has introduced for company names, trading disclosures, registers, auditors and Company House forms.
Now that we are experiencing the full effect of the Act, it is a good time for your board to review its needs and make the necessary changes to implement what should be a more benign and practical system.
For more detailed information please contact Andrew Fleming on 01473 230033 or email firstname.lastname@example.org