The latest round of changes
resulting from the Companies Act came into effect on 1 October
2008. The most important of these are as follows:
Every company must have at least one director who is a ‘natural
person’. This means that companies where the directors
are exclusively other companies (as is not uncommon for subsidiaries)
will have to appoint at least one individual as a director.
There is, however, a concession which allows companies that
did not have a natural person as a director on the date on
which the Act received Royal Assent (8 November 2006) to delay
compliance until 1 October 2010;
The restrictions on providing financial assistance for the
acquisition of a company’s own shares are repealed (Part
18). This will make it easier for smaller companies to widen
the base of their shareholdings. There are other changes in
the rules governing reductions in share capital (Part 17);
Substantial changes are made relating to a director’s
duties with regard to avoidance of conflicts of interest.
An objection to a company name may be made if it is sufficiently
similar to another name that is owned by the objector and compromises
their goodwill (Part 5); and
New regulations requiring companies to display specified
information at their trading premises and on documents or communications.
Failure to comply with any of the new requirements may leave
the company and/or its directors liable to a fine. The final
round of changes is due to come into effect in October 2009. View
implementation timetable.
We can help you make sure your company complies with the Companies
Act and other applicable legislation and can advise directors
on their rights and responsibilities.
