Companies Act 2006
The Companies Act 2006 (Act) is now fully in force after 3 long years of phased implementation.
So what does it actually mean for you?
Much has been made of certain changes, particularly those relating to the codification of directors' duties (in respect of which some very useful best practice guidance has been published by the GC 100) and to the streamlining of the regulatory regime for private companies, but there are a number of areas which will affect all companies to a greater or lesser extent.
One of the stated aims of the government in bringing about the changes introduced by the Act was to reduce the administration involved in running private companies. The Act was intended to reduce the cost to businesses in complying with the requirements of the old legislation.
To some extent, we think that the Act has achieved this aim. Certainly with regard to companies incorporated after the Act came into force, there has been significant easing of the regulatory regime for private companies. For companies incorporated before the Act came into force the benefits are there, but in many cases companies will need to be pro-active in affording themselves the opportunity to take advantage of those changes.
New model articles for public and private companies are now in place. These model articles are the default articles for new companies and have replaced Table A (the default articles which were in place before 1 October 2009). Companies House also re-issued its suite of forms on 1 October 2009. There are brand new forms, including the statement of capital. It is ironic that legislation which was heralded as a major advance in deregulation is actually causing additional work for companies and lawyers. Some of the changes have caused real headaches, particularly the new statement of capital (a new requirement following the deregulation!). In the February edition of our Corporate Review, we provide an overview of the position in relation to articles of association and share some of our experiences of the new Companies House forms in practice. Now that the Companies Act 2006 is fully in place it is an appropriate time for companies to review their articles and check that their house is in order, particularly as regards filings at Companies House. Further materials to explain some of the changes introduced are below.
Briefings
Auditors' liability -- to limit or not to limit
Directors' duties -- the "Magnificent Seven" and the "Subsidiary Six"
Directors' duties from an insolvency perspective
New Electronic Communications rules for an electronic age
Companies Act 2006 finally receives royal assent
