legal updates

Sunday, 13 Sep 2009

the final instalment of the “new” Companies Act

On 1 October 2009, the final tranche of provisions of the Companies Act 2006 come into force. This marks the end of the long transition period from the old system to the new, and the Act is generally seen to achieve its primary aims of consolidating and simplifying much of company law in the UK.

A large number of provisions come into force this week and a summary of some of the more notable changes for private companies are set out below:

1. Constitution

  • companies will be able to have unrestricted objects
  • the memorandum of association will become an incorporation document and its other provisions will be assumed into the articles of association
  • new model articles will be introduced to replace Table A

2. Shares

  • the authorised share capital will no longer need to be extended or limited
  • directors of new companies with only one class of shares will be automatically authorised to issue new shares unless expressly restricted
  • simpler procedures are being introduced for sub-division of shares, share buybacks and other changes to share structures

3. Officers' addresses and company registers

  • new directors and secretaries will be able to provide service addresses and keep their home addresses confidential (Companies House will keep two separate registers)
  • existing directors and secretaries will be able request that their home addresses are removed from the register (for a fee)
  • companies will be required to keep a confidential register of the directors' and secretaries' home addresses as well as a register with service addresses open for public inspection
  • the register of members will be subject to new inspection requirements

4. Company Names

  • Companies House will be more stringent when considering new company names which are the same as existing companies and will ignore small differences such as the words "GB", "services" and ".com"

5. New Companies House forms and procedures

  • new Companies House forms must be used for all filings relating to events on or after 1 October 2009 (old style forms will be rejected)
  • there will be a new offence of filing documents with Companies House which are false, deceptive or misleading “in a material particular”
  • when even small changes are made to the articles of association, a complete set of revised articles must be lodged with Companies House within 15 days or a fine of £200 may be imposed (this had not been effectively enforced in the past)

Some recommendations

  • review existing memorandum and articles of association to identify where changes should be made in light of the new provisions - changes need to be made to take advantage of the new “regime”
  • take extra care when preparing returns to Companies House
  • update company registers and inspection procedures

Watch out for further updates from us setting out a “route map” to make the changes to take advantage of the new regime and the efficiencies it brings.

If you would like any further information or advice on these issues please contact David Wylie or Pamela Abbott in our Corporate Team.

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