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.
