Shortly before Christmas, the Government announced that a number of those proposed changes were to be postponed for a further year, until 1 October 2009. The delay was said to be due to concerns over the effectiveness of the new systems and processes which Companies House would have to adopt to permit the new measures to operate as planned.
The following significant changes to company law are still to take effect on 1 October 2008:
- Abolition of the prohibition against financial assistance by private companies for the acquisition of their own shares or shares of a private holding company
- Power of private companies to reduce capital by special resolution supported by directors' solvency statement, without court approval, and treatment of reserve arising from reduction of capital as undistributable
- Requirement for every company to have at least one human director and bar on directors aged under 16 years
- Statutory duties relating to disclosure of directors' interests, conflicts of interest and bar on acceptance of benefits from third parties by directors
- New rights to object to company names adopted to exploit another person's established goodwill
- Powers to require the disclosure of company names and other details in specified places
- Provisions governing political donations to independent election candidates
The most significant changes deferred until 1 October 2009 include:
- Provisions relating to the incorporation and re-registration of companies
- Provisions relating to company constitutions (including new model articles of association) and the powers of companies to enter into transactions
- Changes to the rules in relation to share capital, including abolition of the concept of authorised capital and removal of restrictions on companies acquiring their own shares or issuing redeemable shares
- Provisions allowing directors to provide service addresses, rather than home addresses, on public registers
We consider the action you should take in the light of this rather unsatisfactory delay.
For most companies, the only action required will be to continue to work closely with their legal advisers to ensure they fully understand the timing and implications of the various changes.
In particular, the extended statutory duties in relation to directors' interests and conflicts must be taken into account in relation to relevant board decisions from next October (or potentially much earlier if a company is engaged in any longer term project where directors may have relevant or conflicting interests and which may run until October or beyond).
Companies may wish to review their articles of association in good time to make any required changes, including any authority for directors of public companies to waive or approve conflicts involving other directors (or in a private company, any restriction on the general right of independent directors to waive or approve such conflicts).