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The Companies Act 2006 – How it Affects Your Business

What’s new? What’s the effect? What you should do
1 New director’s duties They are imposed on all existing directors automatically. Comply with them! No AGMs for private companies (and notice is now 14 days in all cases) Be aware what they are and don’t infringe them, or it could cost you money!
2 No AGMs for private companies (and notice is now 14 days in all cases) Easier to run your company, but if your articles require an AGM you still have to have one. Remove the requirement to have an AGM from the articles (or adopt the new model articles – see below)
3 No AGMs for private companies (and notice is now 14 days in all cases) Some of the benefits are automatic. The consent needed to pass a resolution in writing or electronically is no longer unanimity but is the same % as for face-to-face shareholder meetings. Amend articles to make sure you are making best use of the new provisions, or adopt the new model articles (see below)
4 New simpler model articles (much easier to use than the old Table A). Nothing directly for an existing company, but it is advisable to use the new articles, as they are shorter and written in simple English. Pass a special resolution to adopt the new articles. You may need to add some minor provisions for the specific requirements of your company.
5 Memorandum – the objects clause, and some other matters, are automatically part of the articles as of 1st October The objects clause now only operates as an internal restriction inside the company and does not concern outsiders. Remove the objects clause, as it is now in effect redundant, by passing a special resolution of the shareholders.
6 No objects clause needed for new companies A simpler process for new companies formed after 1st October No action needed, just be grateful for lower lawyer’s bills.
7 No authority to allot shares is needed for a private company with one class of shares Makes running a company simpler, but just check that there is nothing in the articles which prevents use of this power. Check your articles, and better still, use the new model articles.
8 Authorised share capital has gone from the memorandum The authorised share capital clause is now in the articles, so still applies for existing companies but won’t exist at all for companies formed after 1st October. Remove the authorised share capital clause from the articles as it is an unnecessary complication (by passing a special resolution).
9 New Companies House forms (and the numbers have all changed). Be aware of the new forms and destroy any old blank forms, as they will be rejected by Companies House. Use electronic filing, or failing that, make sure you use the new forms on the Companies House website.
10 Financial assistance for purchase of own shares has gone. Makes life simpler. The old prohibition was repealed by the new Companies Act. It makes it a lot easier to restructure private company groups. Just be sure you are not running into other legal problems, like substantial property transactions between the company and its directors.

The final part of the Companies Act 2006 was implemented on 1st October 2009. It makes running a company a lot simpler, if you take advantage of the new provisions. It also imposes a raft of statutory duties on directors of companies, both large and small.

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