Legal/Finance
with Peter Billyard, of Charles Lucas & Marshall
Peter Billyard of Charles Lucas & Marshall explains what it means for your company, following the phasing in of the Companies Act 2006
The Companies Act 2006 (the Act) is the principal piece of legislation which affects how companies run themselves. The Act was introduced in November 2006 but its complexity and sheer size meant it had to be phased in over a three-year period which ended last October.
One of the Act’s key aims was to simplify the administrative and procedural life of private companies and clearly distinguish between those measures which only affect either smaller (mostly) private companies or larger (mostly) public companies.
It also sought to provide companies with a more ‘permissive’ framework in which to operate.
Consequently, a considerable number of beneficial changes available under the Act require positive action to be taken by companies.
So what have been some of the main changes for private limited companies?
n A director is now able to register a service address rather than his residential address with Companies House.
A director’s address is ‘protected information’ under the Act and can only be disclosed by the company and Companies House in certain limited circumstances.
n It is no longer necessary to have a company secretary. However, if a company decides not to have one, it will still need to designate a director to carry out the duties previously carried out by the secretary.
Note that a sole director can also be appointed as a secretary.
n Existing companies with only one class of shares can now give directors the power to issue shares without the need for further shareholder approval. This can be done by passing an ordinary resolution.
n It is no longer a statutory requirement to hold an annual general meeting.
n The deadline for filing a company’s accounts with Companies House has been reduced by a month to nine months after its year end.
Also, a company is no longer required to lay accounts at a general meeting.
n Resolutions can now be circulated by email or on a website. Ordinary and special resolutions by shareholders can also be passed as written resolutions by the same majority of all the shareholders as would be required to pass the resolution at a (physical) general meeting. Previously, written resolutions required unanimity.
n At least one director of a company must be what is termed a ‘natural person’.
Existing companies with single corporate directors have been given a grace period until
October 1, 2010 to comply with this requirement.
n A single director is now able to execute a deed on behalf of the company provided that the signature is witnessed.
This is in addition to the previous methods available, namely the use of a company seal, the signature of two directors or a director and the company secretary.
For further information contact Peter Billyard on (01635) 521212 or peter.billyard@clmlaw.co.uk
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