legal updates
Tuesday, 27 Nov 2007
delay in implementation of the companies act 2006
On 7 November the Government announced a surprise change to the implementation timetable for the Companies Act 2006. The final implementation date will be delayed by one year to 1 October 2009 in light of concerns that Companies House will not be ready to fully implement the Act by 2008.
The following changes, due in April 2008, should still take place as planned:
- abolition of the requirement on private companies to have a company secretary;
- new signatory regime for companies executing documents; and
- all of the provisions relating to accounts and reports, audits and distributions.
Pushed back to October 2009 are the Act’s provisions relating to:
- company formation and constitution;
- company capacity;
- some of the provisions relating to company names;
- provisions relating to annual returns, company charges, dissolution of companies and business names;and
- provisions relating to share capital.
It is still possible that some of the key changes which do not impose significant burdens on Companies House may be commenced on schedule next October. These include the abolition of the restrictions on financial assistance for private companies and the new rules on conflicts of interest for directors. These changes could have a significant impact for all companies when they come into force. In particular, the financial assistance provisions will be of interest to those who may be looking at making acquisitions in the relatively near future.
On the face of it, there seems no reason to delay implementation of these provisions as they will not impact on procedures at Companies House; on the other hand, the Government initially said that they would bring in all provisions of the Act which require changes to a company’s constitutional documents together so that companies do not have to make any necessary changes in a piecemeal fashion. In any case it will be important for all companies to be alert to exactly when each of the new provisions comes in to force.