Companies Act 2006
Companies House yet again is being affected by government legislation, in this case the new Companies Act 2006. The employees at Companies House are bracing themselves for the second implementation of the act, which already has the distinction of being the longest in British Parliamentary history with nearly 700 pages.
Changes are on the way for directors and shareholders with the third implementation this year of part of the Companies Act 2006. As of 1st October 2007 this further stage of the Act will be introduced, with all aspects of the new legislation coming into force in October 2008.
All companies registered at Companies House are affected by the Companies Act legislation, and while some of the changes in the new Companies Act 2006 will affect larger companies primarily, there are parts of the new legislation small private companies will be interested in.
Some of the areas covered by this stage coming into affect on the 1st October include:
- Restriction of access to the Register of Members
- The Business Review and Directors report
- Table A
- Resolutions Part 13
- Form 318
One of the main objectives of the new Companies Act was the change of the rights of minority shareholders and to make directors more accountable to the shareholders they represent. The introduction of enhanced rights for shareholders now means that they can take definite action against directors if they fail in their duties.
The Act sees the introduction of general duties imposed on directors, and as breaching these duties can now result in significant penalties on the director, all directors will want to be aware and ensure compliance with the new legislation. The current version of Table A will be amended to include the new directors’ duties and changes to resolutions and meetings.
Companies House has been key organisation in ensuring compliance to the legislation outlined in the Companies Act 1985 and will continue to do so with the introduction of the new act in full next year.