The Companies Act 2006 (Commencement No. 5, Transitional Provisions and Savings) Order 2007 was made by Parliament on 17 December 2007. It principally deals with those provisions of the Companies Act 2006 which will come into force on 6 April 2008. However, it also deals with certain provisions which are to come into force on 29 June and 1 October 2008. To view our more detailed Companies Act 2006 implementation timetable please click here.
As well as looking ahead to future implementation dates, the Fifth Commencement Order also makes changes to certain provisions implemented on 1 October 2007. These changes included the following, which were brought into force on 31 December 2007 and 14 January 2008 respectively:
- 31 December 2007 - Private company requirement to hold AGMs: section 366 of the Companies Act 1985 required every company to hold an AGM each year. Section 366A, however, allowed private companies to pass an elective resolution to dispense with this requirement. Both of these sections were repealed on 1 October 2007 meaning that private companies are no longer required to hold an AGM unless required to do so by their articles. The Fifth Commencement Order makes clear that a company which had, prior to 1 October 2007, passed an elective resolution to dispense with the requirement to hold an AGM will not be required to hold an AGM, notwithstanding the provisions of its articles.
- 14 January 2008 - Chairman's casting vote: in the past, companies' articles of association frequently gave the chairman a casting vote at shareholders' meetings. The incidental effect of sections 281(3) (resolutions) and 282 (ordinary resolutions) of the Companies Act 2006 brought into force on 1 October 2007 was to abolish the chairman's casting vote (these sections require an ordinary resolution of the members to be passed by simple majority and effectively override any provision in the articles purporting to give the chairman a casting vote). The Fifth Commencement Order provides that any company whose articles afforded the chairman a casting vote immediately prior to 1 October 2007 can retain such a provision, which will continue to have effect notwithstanding sections 281(3) and 282. Where a company removed such a provision from its articles after 1 October 2007 it may reinstate this provision, which will, once reinstated, continue to have effect notwithstanding sections 281(3) and 282.
The full text of the Fifth Commencement Order can be found here.