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Companies Act update

28 September 2007

Introduction

Welcome to the first in depth edition of our Companies Act update. Since the Act received royal assent last year, a number of measures have already been implemented. The next phase of changes will take effect on 1 October 2007.

In this update, we look at the key changes to be implemented in the next phase and also look ahead to the changes due to be implemented next year. I hope that you will find these articles topical.

Should you require any further information on any of the issues or events in this edition, please feel free to contact us. We would also be very pleased to hear from you with any views you have in relation to the update generally.

In this issue

Resolutions and meetings

Company meetings and resolutions will be streamlined thus reducing the need for physical shareholder meetings, making written resolutions easier to pass and standardising notice periods. Read more

Directors duties

Some of the new provisions on directors duties will be brought into force, including the new and widely debated duty to promote the success of the company. Read more

Business review

Section 417 will come into force, requiring the directors report of all companies (other than those subject to the small companies regime) to contain a business review. This must contain a review of the companys business and a description of the principal risks and uncertainties facing the company. The Act requires a balanced and comprehensive analysis of the development and performance of the companys business during the year and the position at the year end, consistent with the size and complexity of the business.

Transactions with directors

The rules on transactions between a company and its directors have been relaxed and made more consistent. For example, the current restrictions on loans to directors will be abolished and it will be possible for companies to make loans of any amount to its directors, subject to shareholder approval.

Timetable for remaining changes

After October 1st 2007, the next key date for implementation is 6 April 2008 when a number of provisions, most notably those relating to audit and accounts, will take effect. A further update will follow shortly before that time. All of the Act will be in force by 1 October 2008.

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The content on this page is provided for the purposes of general interest and information. It contains only brief summaries of aspects of the subject matter and does not provide comprehensive statements of the law. It does not constitute legal advice and does not provide a substitute for it.

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