Changes to the rights of Directors and Shareholders came into effect on Monday
The new Companies Act is the most substantial overhaul of company law for decades. It introduces far reaching reforms which impact on all private, public and quoted companies. Many of the reforms that affect the rights of Directors and Shareholders came into effect on Monday. They include:
- Codification of directors' general duties
- Remedies for breach of duty
- Duty to act within powers
- Duty to promote the success of the company
- Duty to exercise independent judgment
- Duty to exercise reasonable care, skill and diligence
- Provisions protecting directors from liability
- Derivative claims
- Transactions with directors requiring approval of members
- Persons and body corporates connected to a director
- Directors' long-term service contracts
- Substantial property transactions with a director
- Directors' loans, quasi-loans and credit transactions
- Payments to a director in connection with loss of office
- Declaration of interest by directors
- Minutes of directors' meetings
- Directors' service contracts
- Information to be supplied by directors and company secretaries
- AGMs of public companies
- AGMs of private companies
- Written resolutions
- The term ‘general meeting'
- Notice periods for meetings
- Short notice of meetings
- Accidental failure to give notice of resolution or meeting
- Content of notices of meetings
- Persons entitled to receive notice of meetings
- General point about the passing of resolutions at meetings
- Valid resolutions
- The end of extraordinary resolutions
- Voting at general meetings
- Declaration by chairman on a show of hands
- Independent report on poll (quoted companies only)
- Website publication of poll results (quoted companies only)
- Directors' power to call a general meeting
- Members' power to require directors to call a general meeting
- Members' statements
- End of the elective regime in private companies
- The common law doctrine of informal corporate acts
These are in addition to the following reforms that are already in place.
- Electronic communication between a company and its members by e-mail or fax
- Electronic communication between a company and its members by website
- Impediments to takeovers
- The Takeover Panel
- Information about interests in public companies' shares
- Register of interests disclosed
- Disclosure of statutory details on websites
- Register of directors' interests in shares and debentures
- Abolition of upper age limit for directors
- Directors' liability for the directors' report and the directors' remuneration report
- Offences under the Companies Acts
There are more, and much more to follow on 6th April and 1st October 2008.
The Companies Act 2006 is the longest Act of Parliament ever to have reached the Statute Book in Britain - it may even be the longest piece of legislation ever enacted anywhere in the world. Interestingly one of the aims of the Act is to simplify company law. Clearly it is the biggest shake up to company law for decades. Arguably this Act is more important than the previous two major Companies Acts in 1948 and 1985.
Undoubtedly there are many considerations for the Directors and Secretaries of all companies to concern themselves about. Inevitably for those who do not take heed of the reforms there is the risk of incurring significant penalties.
Do you want to find out more?
All the changes are clearly explained on the seminar, The Definitive Guide to implementing the new Companies Act. People attending the seminar get a free subscription for the period ending 30th September 2008 to The Company Law Resource Centre. The cost of attending the seminar is £195 + VAT per person.
The Company Law Resource Centre provides people with:
- The Essential Guide to Company Law
- The Step by Step Guide to Implementing The Companies Act 2006
- A copy of The Companies Act 2006
- Copies of existing Company Regulations and the new Draft Model Articles
- Copies of all the Companies House Forms
- Vital News
- Important Links
If you do not wish to attend the seminar you can purchase an annual subscription for £99 + VAT per person.
To purchase your subscription please click here .
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