UK: Companies Act 2006 – An Update

The next tranche of the Companies Act 2006 ("the Act") comes into force at the end of this week. As of 6^th April 2007, the following changes apply:-

• The prohibition on public companies (or private company subsidiaries of public companies) appointing directors over the age of 70 is repealed.
• The 1985 Act provision providing that a document which requires authentication by the company is sufficiently authenticated for the purposes of the Law of England and Wales by the signature of a director, secretary or authorised officer is repealed. This is not re-enacted in the 2006 Act.

• The 1985 Act provision giving the Secretary of State the power to bring civil proceedings in the public interest against companies ceases to have effect.
• A number of provisions in the 1985 Act relating to directors are repealed namely:-

• the prohibition on companies paying remuneration to directors free of income tax or calculated by reference to, or varying with, the amount of income tax;
• the prohibition on a director of a listed company dealing in options over its shares;
• a director’s duty to notify interests in shareholdings to his or her company and the company’s obligation to record those interests in a register – there will no longer be an obligation to maintain a register of directors’ interests; and

• a banking company’s obligation to keep a register of copies of certain transactions (for example loans) with its directors and to make details of those transactions available in statement form to shareholders.

• Financial service companies will no longer be obliged to publish a periodical statement relating to their share capital and liabilities every February and August.

• The 1985 Act provision requiring the Secretary of State to cause a general annual report of matters within the Companies Acts to be prepared and laid before both Houses of Parliament is repealed.

• An amendment is made to Part 9 of the Enterprise Act 2002 enabling public authorities in particular circumstances to disclose information where the information is to be used in civil proceedings or otherwise for the purpose of establishing, enforcing or defending legal rights. This amendment is intended to help consumers and holders of intellectual property rights that are being infringed.

The next date scheduled for implementation of the 2006 Act/repeal of certain provisions in the 1985 Act is 1 October 2007.

Existing companies may wish to consider whether any amendments are required to their record keeping or Articles of Association in the meantime.

MacRoberts have prepared a guide to the act in the form of question and answers. To access the guide please click on the link below.
http://www.macroberts.com/view_item.aspx?item_id=4350&open2=false

The material contained in this e-update is of the nature of general comment only and does not give advice on any particular matter. Recipients should not act on the basis of the information in this e-update without taking appropriate professional advice upon their own particular circumstances.

© MacRoberts 2007