Are you clued up about the Companies Act 2006?
09-05-2007
- It is not necessary to appoint a Company Secretary unless you want to.
- At least one director must be a natural person, aged 16 or over. Directors have a duty to promote the company’s success.
- Private companies are no longer required to hold an AGM.
- Decision making – written resolutions will become easier to use, a simple majority to pass a written ordinary resolution or 75% majority for a written special resolution.
- Electronic communications – subject to members’ consent in general meeting (or a power in the articles), all companies may use electronic communications with members.
- Companies formed under the new act can now choose to have new streamlined default model articles.
- Private companies can give financial assistance for the acquisition of their own shares.
- Private companies must file their annual reports within nine (previously 10) months before year end. The medium-sized group exemption from preparing consolidated accounts has not been removed.
- There is now a simpler solvency based procedure to enable private companies to reduce capital without court approval.
- Shareholders have an extended statutory right to sue directors for a broader range of conduct.
With the new reforms in the Companies Act, the following extra points should also be noted.
Companies should review all business letters, order forms, electronic communications and websites and, if necessary, ad the extra information required by the legislations.
If companies would like to start communicating electronically with their shareholders after 20 January 2007 under the new regime, they may need to amend their articles, seek shareholders approval and request appropriate consents form individual shareholders. They should therefore seek legal advice.
By Martin Huckle
