DTI sets dates for company law shake up

Article

02 April, 2007

The hotly anticipated implementation timetable for the Companies Act 2006, the biggest Act in English legal history, has just been published. In November 2006 the Act received royal assent after years of reviews, reports and white papers.

The responsible minister at the DTI has recently stated "We want to introduce benefits for business as quickly as possible. It is important, for example that private companies can benefit from the deregulatory measures introduced by the Act (such as those on resolutions and meetings)".

Some changes were implemented in January 2007. The bulk of the Act will come into force in four stages:

April 2007

  • Varied powers for the takeover panel affecting listed company dealings
  • First few changes affecting all company directors (including abolition of the obligation to keep a register of directors' interests in shares) and removal of some prohibitions on directors dealing in share options.

October 2007

  • Over 100 sections relating to directors
  • Directors' duties on new statutory statement of general duties and matters to consider
  • Company loans to directors legalised (subject to approval process)
  • Exercise of Members Rights
  • Resolutions and Meetings (including written resolutions passed by majority)
  • Protection of Members against Unfair Prejudice
  • Derivative Claims (i.e. new procedure for claims against directors by shareholders)
  • Much wider offence of fraudulent trading

April 2008

  • Company Secretaries are no longer required in private companies
  • Rules on debentures
  • Rules on distributions (i.e. dividends)

October 2008

  • Company formation
  • Company Constitution
  • Company Directors
  • Company Share Capital
  • Company Charges
  • All other provisions of the Act

All companies will be affected by this legislation whether existing now or formed after the new Act takes effect. The Government has tried to help small and medium sized companies with this legislation so most of the changes will affect them. It will be more important than ever for company directors and shareholders to be aware of their responsibility and the changing rules applicable to their companies.

The Company Commercial team at Forbes Solicitors will be holding a series of seminars to explain and advise companies on the changes and how they will affect their business. Wednesday 23rd May 2007 at Stanley House, Mellor held in conjunction with Chamber of Commerce East Lancashire and Wednesday 6th June 2007 at the Marriott Hotel, Preston held in conjunction with Chamber of Commerce North & Western Lancashire.

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