The Government has just published a draft Deregulation Bill as a further step in its Red Tape Challenge to remove the overall burden of regulation on business, civil society, individuals, public sector bodies and the taxpayer. The Bill makes a large number of repeals, revocations and other amendments to a wide variety of legislation.
Some provisions of the Bill to note relating to general corporate affairs include:
Auditors ceasing to hold office (clause 10 and Schedule 4)
This clause amends Chapter 4 of Part 16 of the Companies Act 2006 and will reduce the regulatory burden of the notification requirements which apply when an auditor resigns or is removed from office, or in some cases when the auditor is not reappointed. There are new definitions of "listed company", "non-listed company" and "exempt reasons".
The auditor of a non-listed company who is ceasing to hold office must send to the company a statement of its reasons for leaving unless it is the expiry of a term of office or the reasons for leaving come within the new list of "exempt reasons" and there is no information that the auditor thinks should be brought to the attention of the company's shareholders or creditors. The auditor must disclose any information that the auditor thinks should be brought to the attention of the company's shareholders or creditors in its statement, even if its reasons for leaving are exempt.
An auditor of a listed company must always send to the company a statement of its reasons for ceasing to hold office.
There are some new exemptions to the requirement to notify the appropriate audit authority. In some cases, the company must provide its own statement of reasons for the auditor's departure.
Disqualification of unfit directors of insolvent companies (Part 4 of Schedule 5)
This amends section 7(4) of the Company Directors Disqualification Act 1986 to enable the Secretary of State or the official receiver to request information, books or papers relevant to a person's conduct as a director of an insolvent company directly from any person, including the officers of the company. This should avoid delays caused by the current position where such a request may only be made to a liquidator, administrator or administrative receiver.
Proxies on a poll vote (Part 8 of Schedule 5)
This provision corrects drafting errors in sections 327(2) and 330(6) of the Companies Act 2006 in relation to the notice provisions for appointing a proxy or terminating a proxy's authority. The amendments provide that, in the case of a poll vote to be taken within 48 hours of being demanded, the requisite notice may be given at any time up until the poll vote is carried out. Any provision of a company's articles that specify otherwise are void.
Audit of charitable companies (Part 1 of Schedule 16)
Unnecessary transitional provisions contained in section 1175 and Schedule 9 of the Companies Act 2006 relating to the audit of charitable companies are repealed since they are no longer needed.
The draft Bill will be scrutinised by a joint committee of MPs and peers and legislation will be brought forward when parliamentary time allows. Further measures will be introduced by the end of 2013. There is currently no estimated date of when the Bill will be enacted or when certain parts will come into force. A second phase of the Red Tape Challenge will start in summer 2013.
To view the draft Bill click here: