The following significant parts of the Companies Act 2006 take effect on 6 April 2008:
- Removal of the requirement for private companies to have a company secretary
- Any company will be able to execute any document by having it signed by a single director in the presence of a witness (not necessarily another director or the company secretary, or even a person connected with the company) who also signs
Provisions relating to company accounts and audit, including:
- Reduction of periods for filing accounts (six months for public companies, nine months for private companies)
- Requirement for quoted companies to publish report and accounts on websites
- Provisions permitting limitation of auditor liability in certain circumstances
Provisions relating to private and public companies, including:
- Private companies offering shares to the public may be required to reregister as public companies or be wound up
- Public companies to be able to satisfy the £50,000 minimum share capital requirement in an equivalent Euro amount (proposed to be €75,000)
- Rules on distributions, including confirmation of the effects of distributions in kind made at book values
Provisions for arrangements and reconstructions
- Rules on mergers and divisions of public companies
- Regulations covering the exercise of rights to inspect the register of members, including reduction from 20 to ten years of period for which details of former members must be kept on the register and during which claims in relation to entries in the register may be brought
We consider the action you should take in the light of these imminent changes.
For most companies, the only action required will be to continue to work closely with legal advisers to ensure full understanding of the timing and implications of the various changes.
In particular, companies should note that third parties will be able to enforce against companies any documents duly signed by a single director and witnessed (even if the company has internal rules and procedures requiring additional signatures, e.g. for higher value transactions).
Companies may wish to consider if breach of any internal signing rules should be made a specific and serious disciplinary matter; this may require changes to directors' employment contracts.