November 2005

Dramatic Changes to Company Law

Under present law, in almost all circumstances, it is not possible for a shareholder to bring an action on behalf of the company against present or former directors. This will probably change soon. The Company Law Reform Bill gives all shareholders the statutory right to bring such an action, known as a derivative action, against present and former directors claiming negligence and breach of duty. It is very controversial and there are fears that it may make some good people reluctant to serve as directors, especially non-executive directors. There are also fears that directors' liability insurance will become more expensive.

Roger Mason has carefully monitored the progress of the proposed changes to Company Law since March 1998 when the DTI launched a long-term fundamental review. This was led by an independent Steering Group whose aim was to develop a simple, modern, efficient and cost effective framework for carrying out business activity in Britain for the twenty-first century. Roger has held a number of senior positions and was for 20 years a Financial Director and Company Secretary. He will soon be commencing a series of presentations which will help people understand fully the impact of The Company Law Reform Bill. He receives acclaim for his approach which is supremely practical and easy to understand.

The Bill will lead to the biggest shake up to company law for decades. It will pave the way for hundreds of changes affecting companies, their shareholders, their auditors, their directors, their company secretaries and their employees. The other changes include:

  • more than 99% of companies will be able to choose to not have a company secretary;
  • a statement of directors' duties will be incorporated into statutory law;
  • AGMs in more than 99% of companies will be optional and probably very much the exception;
  • accounts will have to be delivered to Companies House much more quickly;
  • no company will need to have an objects clause in its constitution;
  • no company need be limited by its authorised share capital;
  • auditors may agree proportionate liability with the companies that they audit; and
  • the model sets of articles (Table A and Table C) will be replaced with new model articles which will make many changes.

For details of seminars that Roger is presenting please go to www.uktraining.info/roger.

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