Companies Act 2006 (January 2010)

On Thursday 1st October 2009, the final stages of the Companies Act 2006 came into force.

This bulletin highlights the key changes that were introduced and our recommendations for any steps that you should take as a result of these changes.

Articles of Association

All companies incorporated after 1st October 2009 will adopt new Model Articles by default unless they register their own different Articles at the time of incorporation or later.

The new Model Articles will also apply to all companies incorporated since 1st October 2007 by way of replacement of the existing Table A unless companies have registered their own Articles.

It's important that companies review their existing Articles to consider:

• whether their Articles currently include any provisions which are inconsistent with the Companies Act 2006 because, if so, those provisions may be overridden by the new Act;
• whether to update their Articles to take advantage of the flexibility now available under the new Act. Examples of this flexibility include allowing directors to allot shares without shareholder consent, allowing the redemption or purchase of shares out of capital and abolishing the requirement for an authorised share capital.

Directors' Addresses

Currently a director must give his residential address to Companies House and this is then a matter of public record. However, from 1st October 2009, a residential address no longer needs to appear on the public record at Companies House. A director will need to give a service address and a residential address to Companies House when appointed as a director but only the service address will appear on the public record. The residential address will be kept secure and only given to certain people such as the police and credit reference agencies. If no separate service address is given, the director's residential address will be used.

We recommend that directors always give Companies House a separate service address from their residential address, if only to reduce their junk mail!

Accounts

The time for filing annual accounts has been shortened by one month so:-

• private limited companies have 9 months to prepare and file accounts;
• public limited companies have 6 months to prepare and file accounts.

Forms

Most Companies House forms changed on 1st October 2009.

Care should be taken not to file old forms after this date as they will be rejected by Companies House and, in the case of time critical matters, such as a form to register a mortgage or charge, any rejection could have serious implications for the party filing the form.

There are transitional provisions in place for filing forms after 1st October 2009 but in relation to actions which took place before 1st October 2009.

Pre-1st October 2009 changes

Some of the key changes of the Companies Act 2006 came into force on 1st October 2007. Therefore, when reviewing their Articles as a result of the 1st October 2009 changes, companies should also consider whether any further changes should be made to take account of those parts of the 2006 Act which were already in force prior to 1st October 2009.

In particular, we recommend that companies consider amending their Articles to:-

• adopt the Act's regime for email communications with shareholders;
• allow general meetings on 14 not 21 days' notice;
• permit written resolutions with approval of either a simple or 75% majority of shareholders, as appropriate;
• do away with the need for annual general meetings; and
• allow for authorised directors' conflicts of interests.

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