Podcast transcript

Pod-cast October 2007 Implementations

Welcome to the third pod-cast in the Companies Act 2006 series.

The 1st October 2007 saw the next phase of the Companies Act changes come into force covering:

• The restriction of access to the register of members
• The Business Review and Directors Report
• Tables A and C
• Resolutions part 13
• Elective Resolutions
• and Directors Duties

To best advise on how these changes may affect you, the following will comprise of a number of questions and answers on each of the areas.

Implementation regarding the restriction of access to the register of members

What is the Register of Members?
It is the details of a company’s shareholders and is maintained by the company at a specified address.

Who does this restriction apply to?
It applies to all external requests from outside of the company.

If a company receives a request to see the Register of Members what information can the company ask for?
The company can ask for the requester’s name and address, or, if an organisation, an individual’s name, plus the purpose of the request and whether the information will be shared with anyone else and if so, to whom and for what purpose.

It is an offence for the person making the request for access to give a false statement when providing these details.

What options do companies have with regards to disclosure of the
Register information?
The company must comply with the request within 5 working days.  If it is not happy to do so, it can apply to the courts to restrict access on this occasion.

It is then for a court to determine if an application is for proper purpose and whether or not a company should comply with such a request.

Does the restriction apply to information held on Companies House records?
No, it only applies to requests made to the company’s register of members, not information held on Companies House records.

Implementation regarding the Business Review and Director’s Report

What is a Business Review?
A Business Review is a fair review of the company’s business within the reporting
period.  It must be a balanced and comprehensive analysis of the development
and performance of the company, including a description of the principal risks.

Section 417 of the Companies Act 2006 outlines the specific content of a business review.

Who does this apply to?
All companies who file a Director’s Report as part of their accounts, will now need to include a Business review within the report.  All companies who file small company accounts, are exempt from having to file a Director’s report and Business Review.

When does this come into force?
The Business Review will apply to all accounts with reporting periods beginning
on or after 1st October 2007.

Implementation of New Tables A and C

What is Table A?
All companies are required to adopt articles of association when they incorporate. Tables A to F of the Companies Regulations 1985 are more commonly know as Table A and they set out standardised articles, which companies can use as the basis for their own articles. If companies do not register their own articles of association, Table A applies by default.

Table A is the standard default articles for private companies limited by shares, while Table C is the standard default articles for private companies limited by guarantee.

Why has Table A been amended?
Table A and C have been amended where the existing tables were in conflict with new provisions that came into force on 1st October 2007.  The amendments will enable new companies formed on or after 1 October 2007 to take advantage of the new Table A regulations, such as the introduction of directors’ duties and changes to the requirements for company’s to hold meetings and pass resolutions.

What has changed?
The specific changes are set out in the Companies (Tables A to F) (Amendment) Regulations which are available from the OPSI website and set out in a statement on the BERR website.

Who does the new Table A apply to?
The new Table A came into force on 1st October 2007, so will apply to those companies incorporated on or after this date which do not register their own articles upon incorporation. Companies are not obliged to use Table A, and can write articles of their own or base them on Table A. If companies do not register their own articles of association, Table A applies by default.

If I was to incorporate a new company – how does this affect me?
The changes made to Table A have ensured that the default articles which apply when a company does not register its own articles, are consistent with company law in force from 1st October 2007.

How do these changes affect an existing company?
New Table A does not affect existing companies unless they to adopt it. Existing companies can choose to amend their current articles of association, by special resolution, to bring them in line with changes in the law as expressed in the revised Table A.

More information on the specific impacts the amending regulations have on existing companies is available on the Companies Act pages of this website.

How do these changes relate to the new draft model articles that come into effect on 1 October 2009?
The changes to Table A have no impact on the model articles or the timing of their introduction. When the model articles come into force in 2009, they will replace Table A as default articles; but a company which already has the revised Table A as its articles will not be affected by the model articles unless it chooses to switch to them.

Where can I find a copy of Table A and C?
The latest version of Table A and C are available on the Companies House website

Implementation of Changes to Resolutions and Meetings

What are the changes?

The changes to resolutions and meetings are as a direct result of the introduction of Part 13 of the Companies Act 2006.

Part 13 changes the requirements on how private limited companies hold meetings and pass resolutions, including changes to the voting majority, the need to hold and AGM and the circulation of proposed resolutions amongst its members.

When did Part 13 into force?

Part 13 of the Companies Act 2006 which relates to resolutions and meetings came into force on 1st October 2007.

Do written resolutions need to be signed by each of the individuals named on the resolution?

Written resolutions passed on or after 1 October 2007 fall under the requirements of the Companies Act 2006 and only require one signature (but may have more).

Under section 296 an ‘authenticated document’ can be used as a members’ agreement to the resolution. Members can either sign a paper copy of the resolution or signify agreement to an electronic version. Hence the use of the term authenticated rather than signed.

What is the required majority needed for resolutions?

The required majority will be similar to that for shareholders’ meetings, which is a simple majority of eligible voting shares for ordinary resolutions, or 75% for special resolutions.

Has the wording changed on special resolutions for a company change of name?

The special and written resolution formats were both updated on 1st October 2007 and are available on the Companies House website. The online version of the Companies Act 2006 is available on the OPSI website and Chapter 5 sections 77 to 81 refer to change of name.

Does my company still need to hold annual general meetings?

A private company does not need to hold an AGM if there is no obligation to do so in their articles.  An existing company must continue to hold one unless the company changes its articles to remove this requirement.  Public companies must still hold an AGM.

What is the notice period for shareholders meetings?

Shareholder meetings for private companies can now all be on a 14-day notice period, unless different arrangements are specified in a company’s articles.

Implementation of Changes to elective Resolutions

Under the Companies Act 2006 have elective resolutions been repealed?

As of the 1st October 2007, four of the five elective resolution types have been repealed.
The resolution to allot securities is still valid.

What are the four elective resolution types that no longer have to be filed for private companies?

Those no longer required to be filed relate to:

- Dispensing with the laying of accounts and reports before a general meeting
- Dispensing with the holding of annual general meetings
- Dispensing with the annual appointment of auditors
- and Reduction of the majority required to authorise a meeting at short notice

If a company has already passed elective resolutions are these still effective?

If a company has already filed elective resolutions they will remain in force and the company will not need to amend its articles.

Elective resolutions circulated before 1 October 2007 will still be valid and acceptable for filing.

As elective resolutions have been repealed, does a company still have to present accounts to certain people?

The responsibility to provide accounts remains.  Every company must send a copy of its annual accounts and reports to:

• every member of the company
• every holder of the company's debentures, and
• every person who is entitled to receive notice of general meetings

Implementation of changes relating to Directors Duties

What are the changes to directors duties?

Directors’ duties to their companies are, for the first time, comprehensively set out in the Companies Act 2006. The duties have been developed and included within the new Act, as until now they were previously set-out in case law. 

What Directors Duties have been implemented?

Chapter 2 of Part 10 of the Companies Act 2006 was implemented on 1st October 2007, but this excludes ‘Conflicts of Interest duties’.

Further guidance on directors’ duties is available on the BERR website.

This concludes the Companies House pod-cast.

Thank you for listening.