Companies Act 2006 - changes in 2008

01/09/2008

By James Herbert, Partner and Head of Corporate & Commercial. Featured in Kent Messenger Group.

A number of changes have come into force in 2008 and others apply from October 2008.

From 6 April 2008

Executing documents: A single director is able to bind the company by executing any document on behalf of the company in the presence of a witness. A person dealing with the company in good faith can rely on a document signed this way. Documents can also still be executed as before.

Company secretary: Private companies are no longer required to have a company secretary, subject to any provision to the contrary in the company's articles. Public companies must continue to have a secretary.

Register of members: The period for which past members must remain on the register of members and the time limit for bringing claims arising from entries in the register of members has been reduced from 20 years to 10.

Register of interests: The register of interests remains open to inspection but a request to see the register must now include information about the person requesting access and the purpose for which the information will be used.

Filing of accounts: The filing periods for company accounts have been reduced to 9 months for private companies and 6 months for public companies.

Provisions affecting auditors: Various provisions affecting audits and auditors are in force. Notably, auditor liability limitation agreements are permitted, subject to the approval of shareholders by ordinary resolution.

Expenses of the liquidation of a company: Floating charge property can be used to fund general winding-up expenses in priority to floating charge-holders and preferential creditors.

From 1 October 2008

Objecting to company names: A new system for objecting to the name of another company will become operative. Any person claiming that the name is the same as or similar to a name already used can object.

Directors: A company must have at least one director who is a natural person and every company director must be at least 16 years old.

Directors' duties: The directors' duties relating to conflicts of interest will come into force. The duties are to avoid conflicts of interest, not to accept benefits from third parties and to declare any interest in proposed and existing transactions or arrangements with the company.

Financial assistance for the purchase of a company's shares: this will no longer be illegal, although financial assistance given by a company can still be illegal under other rules of company law.

Comment

If private companies have not already done so, they should consider undertaking a full review of their articles of association to ensure that they can take advantage of the simplification of the administrative regime for private companies.

For example, references to AGMs should be removed and companies who no longer wish to retain a company secretary must also remove references to the secretary from the articles.

In addition, directors must make sure that they understand the scope of their statutory duties.