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COMPANIES ACT 2006: IMPLEMENTATION |
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1 October 2009 implementation The remaining provisions of the new Companies Act come into force on 1 October 2009, along with a whole raft of related statutory instruments (the latest of which to be published are outlined below). This final implementation phase is the subject of this issue’s Focus on… Details of how the law will change, the new references and related legislation can be found on a topic-by-topic basis throughout CLM 2009, with new material and changes that have been made since publication covered in updates to the relevant paragraphs. New regulations published Consequential amendments, transitional provisions and savings A final version of the Companies Act 2006 (Consequential Amendments, Transitional Provisions and Savings) Order 2009 has been published (SI 2009/1941). It mainly sets out amendments that need to be made to other legislation as a result of the new Companies Act. Most of the transitional provisions and savings relating to the implementation of the new Act can be found in the relevant Commencement Order, but there is a handful in this new Order. The Order also makes some minor amendments to the new Companies Act itself. The most significant provisions address (for details, see the CLM updates to the relevant paragraphs noted below): » what happens when a company changes its name after 1 October 2009 but the name clause from its memorandum is deemed to have been imported to its articles (under s 28 CA 2006) (CLM ¶273, ¶374); » when the change in the nature of an unpaid call takes effect, in terms of which limitation period applies at which point (CLM ¶1217); » the repeal of directors’ and managers’ unlimited liability where the company’s memorandum contains the appropriate clause (CLM ¶2181, ¶7864); » updates to CDDA 1986, most significantly to the factors to take into account when considering an application for disqualification of a director on the ground of unfitness, to take the new Companies Act into account (CLM ¶3023); and » Companies House filing under the Insolvency Act. The Order adds a new power to IA 1986, allowing a creditor or shareholder to enforce a company’s filing obligations (CLM ¶7748, ¶8826, ¶9261, ¶9532). A further set of regulations has been published amending the 8th Commencement Order (SI 2009/2476). This makes some last-minute changes to a handful of provisions that come into force on 1 October 2009: » it adds a saving so that names suggesting a connection with the Welsh Assembly still require the consent of the secretary of state (this will only operate until the new Companies Act is amended accordingly) (CLM ¶254); » it postpones the implementation of s 22(2) CA 2006, which enables companies to include entrenchment provisions in their articles on incorporation or by a unanimous shareholder decision. The Government wishes to consult on the effect of this provision on class rights (CLM ¶450). The same postponement has been made in relation to LLPs; and » it adds a new transitional provision dealing with when the longer deadline relating to the Crowns’ right to disclaim bona vacantia property applies (s 1013 CA 2006; CLM ¶7492). Types of business and corporate structures New regulations have been published under s 1043 CA 2006 to apply (as modified) the relevant parts of the new Companies Act to unregistered companies (The Unregistered Companies Regulations 2009, SI 2009/2436). Unregistered companies are rare: they are not formed or registered under the Companies Acts or any other public Act; they are formed under private Acts of Parliament or another form of specific authority, such as a royal charter. The parts of the new Companies Act applied to them include provisions regarding the constitution, trading disclosures, the registers of directors and their residential addresses and accounts. Regulations have also been published setting out how these companies and those registered under general Acts of Parliament other than the Companies Acts can register under the new Companies Act (s 1040 CA 2006; The Companies (Companies Authorised to Register) Regulations 2009, SI 2009/2437). These new regulations tackle the usual registration issues, and the effects of registering under the new Act. The Registrar of Companies (Fees) (Amendment) Regulations 2009 (SI 2009/2439) add the fee for registering such a company to the main fees regulations (The Registrar of Companies (Fees) (Companies, Overseas Companies and Limited Liability Partnerships) Regulations 2009, below). The fee will be £20. Company names See CLM ¶240+ New regulations amend the Company and Business Names (Miscellaneous Provisions) Regulations 2009 (SI 2009/1085) as of 1 October 2009. The Company, Limited Liability Partnership and Business Names (Miscellaneous Provisions) (Amendment) Regulations 2009 (SI 2009/2404) simply correct some minor errors in the original version. Shares and share capital See CLM ¶399, ¶510, ¶664, ¶715, ¶946 An updated version of the regulations setting out the euro equivalent of the authorised minimum allotted share capital for public companies has been published (SI 2009/2425). As of 1 October 2009, the figure is reduced from €65,600 to €57,100. However, in the following cases, the old figure of €65,600 continues to apply as a transitional measure: » where an application for a trading certificate was made before 1 October 2009; » where a private company passed a special resolution to re-register as a public company before 1 October 2009; » where a public company passed a special resolution to reduce its share capital before 1 October 2009 (for the purposes of determining whether the reduction takes the company’s allotted share capital below the authorised minimum); and » where a public company’s obligation to cancel forfeited shares runs from a date before 1 October 2009 (again, in order to determine whether the cancellation takes the allotted share capital below the authorised minimum). Regulations have also been published to amend certain provisions of the new Act on share allotments (SI 2009/2561). The effect of these amendments is to clarify that the statutory pre-emption provisions do not apply: » if shares are allotted pursuant to the exercise of a right to subscribe for, or convert securities into, shares. The provisions will only apply to the granting of that right; or » to an allotment (or the grant of subscription or conversion rights) under an employees’ share scheme. The regulations also clarify that, in these circumstances, directors do not need authority to allot. Companies House fees New regulations set out the fees payable as from 1 October 2009 for various filings at Companies House (The Registrar of Companies (Fees) (Companies, Overseas Companies and Limited Liability Partnerships) Regulations 2009, SI 2009/2101). The regulations revoke previous fees regulations for existing companies and LLPs in GB and Northern Ireland, although the amounts of the fees remain the same. Companies House intends to review the level of the fees in 2010. Separate regulations set out the fees payable by limited partnerships, and other entities (The Registrar of Companies (Fees) (Limited Partnerships and Newspaper Proprietors) Regulations 2009, SI 2009/2392), EEIGs and European Companies (The Registrar of Companies (Fees) (European Economic Interest Grouping and European Public Limited-Liability Company) Regulations 2009, SI 2009/2403). The amounts of these fees also remain the same. Guidance on articles See CLM ¶443, ¶445 New guidance has been published to help companies understand how the new Companies Act affects their articles and what they should consider doing about it. BIS has published draft guidance on the topic, which explains the approach taken by the Government when drafting the new Model Articles and the differences between Table A 1985 and the different sets of Model Articles. More specific guidance has been published by the City of London Law Society (Company Law Committee). This guidance is aimed at public companies, and tackles issues of particular interest to listed companies. It explains the changes that companies should consider making to their articles, and how they can achieve this. Private companies should be aware that some of the suggestions do not apply to them. This guidance also assumes that companies want to take full advantage of the flexibility introduced by the new Act (for example, by removing the need for the articles to authorise an own share purchase or a consolidation or sub-division of share capital). However, the new Act still gives companies the option to control such powers if they wish (for example, by including a provision in their articles prohibiting or restricting their use). Therefore, companies should consider which approach is suitable for their needs. Among the suggested changes are: » adding an alternative method of changing the company's name, for example by board resolution (CLM ¶275); » removing the provisions of the memorandum that will be deemed to be in the articles (CLM ¶399); » removing references to authorised share capital (CLM ¶707); » making suitable alterations regarding redeemable shares, consolidations/sub-divisions of capital and own share purchases (respectively, CLM ¶765, ¶769, ¶1317, ¶1374); » enabling remote participation at shareholder meetings (CLM ¶3255+); and » removing the chairman's casting vote at shareholder meetings (for companies incorporated on or after 1 October 2007 with Table A 1985 articles, this amendment already applies; CLM ¶3839). Copies of these guidance notes can be found at: http://www.berr.gov.uk/files/file52470.pdf; and http://www.citysolicitors.org.uk/FileServer.aspx?oID=641&lID=0. |
