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This week:
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New restrictions on filing documents at Companies House will now not come into effect before November 2027
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The court allows a derivative claim against a director to process notwithstanding that the company had not yet suffered any loss
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The FCA announces the relaxation of restrictions on the publication of connected analyst research on an IPO
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The London Stock Exchange implements its proposed changes to the AIM Rules
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The FCA implements certain clarificatory changes to its Prospectus Rules
Companies House filing reforms postponed to late 2027 at the earliest
Companies House has updated its outline transition plan for the implementation of company law reforms under the Economic Crime and Corporate Transparency Act 2026.
The updated plan notes that the new restrictions on filing documents at Companies House will now come into effect no earlier than November 2027. Companies House has stated that it will give at least six months’ notice before the new requirements come into effect.
Broadly speaking, under the new restrictions, a company or other firm will be able to file documents at Companies House only through an ID-verified officer or employee or by using an authorised corporate service provider (ACSP). These new restrictions are designed to minimise fraudulent filings, combat economic crime and enhance the quality of the public register.
The updated plan also notes that, as previously announced in a ministerial statement, forthcoming reforms to the way companies and other entities file their accounts will come into effect in April 2028. You can read more about the forthcoming reforms to company accounts in our previous Corporate Law Update.
Actual loss was not a prerequisite to making a derivative claim
The High Court has held that a shareholder did not need to establish that a company had in fact suffered loss to bring a derivative claim on that company’s behalf against one of its directors.
What happened?
De Menezes v Alves and ors [2026] EWHC 1906 (Ch) concerned a furniture design, manufacturing and retail company (OIL) owned by two individuals – Mr De Menezes and Mr Alves – who were its only shareholders and directors.
Mr Alves subsequently set up a separate company (Cobogó), of which he was the sole director, to sell contemporary furniture, but he also remained a director of OIL.
The two men initially entered negotiations to set out the parameters of Cobogó’s business and avoid direct competition between the two companies. The negotiations did not end with a formal agreement. Mr De Menezes then offered to acquire Mr Alves’ stake in OIL, but this did not happen.
Finally, Mr De Menezes applied to bring a derivative claim against Mr Alves on behalf of OIL. He claimed that Mr Alves had breached his duty to OIL under section 175 by occupying a directorship in both OIL and a direct competitor, Cobogó.
What did the court say?
The decision for the court at this stage was whether Mr De Menezes had a sufficiently clear prima facie case to warrant granting permission to bring the derivative claim. Three interesting points arose.
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Mr Alves claimed that, according to a previous case (McGaughey), a derivative claim was possible only where the company in question had already suffered loss.
The court rejected this approach, refusing such an overly literal interpretation of previous case law and noting that the Companies Act 2006 explicitly contemplates a derivative claim in relation to a proposed action that amounts to a breach of director’s duty.
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Mr Alves also claimed that, in reality, Mr De Menezes’ claim was a proxy for removing Mr Alves from OIL, which he had already attempted by his offer to buy Mr Alves out. He argued that this was more properly the subject of a petition for unfair prejudice under section 994 of the Companies Act 2006, and that the court should therefore bar the derivative claim under section 263(3)(f) of the Companies Act 2006 because Mr De Menezes had an alternative cause of action.
Again, the court rejected this argument, noting that a section 994 case involves a shareholder being prejudiced unfairly in their rights and interests as a shareholder. In this instance, however, any harm would be committed directly against the company, and not the shareholders. (Any loss the shareholders may suffer would be merely reflective loss.)
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Mr Alves made a similar argument that attempting to use a derivative claim to resolve what was essentially a shareholder dispute amounted to an abuse of process, and that the claim should not be permitted to process.
Again, the court rejected this argument, noting that the presence of a shareholder dispute that could be resolved by other means did not preclude the possibility that Mr Alves was in breach of duty to OIL. Indeed, the court noted that it was a result of the parties’ inability to deal with the issue that Mr Alves continued to be a director of OIL and occupied a position of conflict.
What does this mean for me?
The judgment features a good examination of the hurdles a shareholder needs to clear before being able to bring a derivative claim on behalf of a company against a director.
Importantly, the decision shows that derivative claims remain open as a means to head off a potential breach of duty before it happens (and not just a remedy for past breaches).
The judgment also emphasises the distinct nature of petitions for unfair prejudice under section 994 and a derivative claim under Part 11 of the Companies Act 2006.
Both types of action can rest fundamentally on mismanagement of a company. However, an unfair prejudice petition is founded on the prejudice an individual suffers personally in their capacity as a shareholder, whereas a derivative claim is aimed squarely at addressing wayward conduct by individual directors that harms the company.
FCA rolls back rules on connected and unconnected IPO research
The Financial Conduct Authority (FCA) has published Policy Statement PS26/16, confirming that it has proceeded with changes to its rules regarding connected and unconnected analyst research on an initial public offering (IPO) of equity securities.
The FCA consulted on the changes in April 2026 in Consultation Paper CP26/14. The Policy Statement notes that almost all respondents supported the proposed changes.
The changes revoke previous rules, put in place in 2018, to address perceived risks of bias arising from the publication of investor research produced by analysts linked to the syndicate banks that provide services to a company in connection with its IPO (connected research).
The effect of the changes is as follows.
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Connected IPO research cannot be published before the new issuer’s prospectus is published.
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Syndicate banks that provide their own research analysts with information to produce connected research are no longer required to provide the same information to a range of unconnected research analysts or hold a joint briefing with the connected and unconnected analysts.
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It is no longer necessary to wait for seven days after providing information to unconnected analysts (or one day after a joint briefing is held) before publishing connected research.
As a result, it is now possible to publish connected research much earlier in the IPO process.
For the time being, it remains impermissible to publish connected research before the IPO prospectus is published. However, the FCA received a large number of responses stating that this prohibition was not beneficial. It is considering the feedback received for future work in this area.
The changes took effect from 5 August 2026.
London Stock Exchange to proceed with changes to AIM Rules
In June 2026, we reported that the London Stock Exchange (the Exchange) was consulting on certain changes to the AIM Rules for Companies (the AIM Rules) and the AIM Rules for Nominated Advisers (as well as certain changes to the AIM Disciplinary Procedures and Appeals Handbook).
The Exchange has now published two further AIM notices, confirming it is proceeding with its proposed changes (with some minor modifications).
By way of reminder, the key changes to the AIM Rules are as follows.
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AIM admission document. This has been simplified by replacing the working capital statement with lighter disclosure obligations, allowing issuers to publish financials using UK GAAP (as an alternative to IFRS) and permitting incorporation of information by reference.
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Fundraisings. AIM companies may now request a “Capital Access Window” from the Exchange to support fundraisings. During the window, the company’s securities will be temporarily suspended from trading so it can manage the fundraising process.
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Substantial acquisitions. The Rules now clarify that a transaction that exceeds 100% under the AIM Rules class tests will not amount to a reverse takeover under AIM Rule 14 unless it also represents a fundamental change in the company’s business, board and/or voting control. (It may still amount to a substantial transaction requiring disclosure under AIM Rule 12.)
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Reverse takeovers. The Rules now clarify that an AIM company’s nomad may request a dispensation from the automatic suspension of the company’s securities where appropriate alternative disclosure of a reverse takeover is feasible.
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Class tests. The “profits test” is now limited to related party transactions, the “gross capital test” will now be pro-rated for investing companies undertaking minority acquisitions in line with their investment policy, and the class test thresholds have been raised from 10% to 25%.
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Market disclosure. AIM Rule 11, which required an AIM company to disclose price-sensitive information immediately, has been deleted in its current form, on the basis that it overlaps with the UK Market Abuse Regulation. A new AIM Rule 11 now emphasises a nomad’s public market experience in understanding the potential market impact of developments.
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Non-standard director remuneration. The Rules now clarify that an AIM company’s nomad does not need to provide a “fair and reasonable opinion” under AIM Rule 13 on non-standard director remuneration if the contractual terms provide reasonable commercial protections for the company. If in doubt, arrangements should be put to a shareholder vote.
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Special voting shares. The Rules now clarify that a company may to seek admission to AIM where it has special shares in issue that allow founders to retain control.
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Corporate governance. AIM Rule 26 no longer requires an AIM company to report against a particular corporate governance code. Instead, a company is required to report on five key areas of its corporate governance: board composition, the role and responsibilities of directors, remuneration and performance, risks and control frameworks, and investor relations.
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International companies. The AIM Designated Market route has been replaced by a new “Express Market” route. This will enable companies from a wider range of jurisdictions to seek an expedited admission to AIM and streamline the process for a simultaneous dual-market admission to AIM and an Express Market. In a modification of the Exchange’s initial proposals, the degree of disclosure a company will need to make under the Express Market route will depend on the markets to which the company’s securities are already admitted.
The changes took effect from 5 August 2026.
FCA implements clarificatory changes to Prospectus Rules
The FCA has published Handbook Notice 143, in which it confirms that it has made various changes to its Prospectus Rules: Admission to Trading on a Regulated Market sourcebook (PRM).
The PRM governs the prospectus an issuer must publish when admitting shares to a regulated market (such as the London Stock Exchange Main Market).
The FCA previously consulted on the changes in its Consultation Paper CP26/8.
In brief, the key changes are as follows.
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PRM 1.4.12R exempts an entity from the requirement to publish a prospectus if the securities are to be offered or allotted to directors or employees. The changes clarify that this exemption does not apply if the issuer’s intention is to use an offer or allotment to a director or employee to place the securities with a third party.
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PRM 9.5.2R requires a prospectus on an initial public offering (IPO) to be published at least three working days before the end of the IPO period. The changes clarify that this requirement applies only to retail offers.
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PRM 8.2.3R requires a prospectus to include a specific accompanying statement where it contains a “protected forward-looking statement” (PFLS). The changes clarify that this accompanying statement does not need to be repeated every time where a specific PFLS is included in multiple places in a prospectus.
The changes came into effect on 31 July 2026.
Read Financial Conduct Authority Handbook Notice 143 (opens PDF)
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