1 October 2009 saw the implementation of the final parts of the new Companies Act 2006 (the "Act") which has been brought into force in tranches since it was enacted. The Act and related regulations are of wide-ranging implication for companies generally and give effect to a number of amendments affecting finance transactions.
Perhaps the most obvious change is the introduction of new forms for the registration of security documents at Companies House. Scottish companies will now submit form MG01s in place of form 410 and the form 419a which was filed when a charge was satisfied is replaced by forms MG02s and MG03s. For companies registered in England and Wales, forms 395 and 403a are replaced by forms MG01 and MG02 respectively. The content of the forms has not changed substantially however.
Another change to registration requirements came in the form of the Overseas Companies (Execution of Documents and Registration of Charges) Regulations 2009, which were made under the Act. These provide that charges created by overseas companies will not have to be registered at all unless the company in question is registered in the UK. Accordingly, the Slavenburg Register, which was previously held by Companies House to archive charges created by overseas companies who had not registered in the UK is rendered obsolete.
The Act provides that companies incorporated under it have a short-form memorandum which will not be of significance in the operation of the company going forward. This is in contrast to the previous style of memorandum which contained the objects of the company. Full-form memoranda, where they appear in the constitution of companies incorporated prior to the implementation of the Act, shall now be deemed to form part of the articles of the company (though the company may choose to delete them). The effect of this is that a company may no longer be said to be acting ultra vires in relation to its powers to act as set out in its objects. In short, establishing whether a company has express power to take certain actions will not impact on the validity of such an act (unless there is bad faith). This said, however, it is still recommended that such enquiries be made to avoid disputes in the future.
A further effect of the changes to memoranda is that, for companies incorporated prior to 1 October 2009, the statement of limited liability currently contained in the company's memorandum will be deemed to be contained in its articles of association. The articles of companies incorporated under the Act will have to be checked to ensure that they include express provision limiting the liability of the members.
Companies incorporated under the Act and using the new model articles will benefit from more relaxed rules on decision making by directors as the model articles allow a "unanimous decision" to take the place of a board meeting. This means that a decision is made where all eligible directors “indicate to each other by any means that they share a common view on a matter” and thus paves the way for written resolution documents, or even emails or text messages, to replace the need for board meetings. It should be noted, however, that for reasons of evidence and certainty, approval of financing arrangements should continue to be evidenced by written board resolutions.