Forming a company
The formation and administration of companies will soon become simpler. The company memorandum will become a formal document recording the details of the company at the time of registration. Going forward the articles alone will be the continuing constitutional document, containing the minimum key rules on the internal workings of the company. Private companies will have separate, simple model articles that will better reflect the way that they operate.
The company secretary
The requirement for a private company to have a company secretary is abolished, although it may continue to appoint one if it wishes.
| Comment The potential impact of this change has been somewhat lessened, as initial proposals intended to decrease the filing deadline for private limited companies to seven months. It is worth remembering that there are automatic penalties if your company’s accounts are filed late. These range from £100 to £1,000 for private companies and from £500 to £5,000 for public companies, dependent upon how late the accounts are filed. |
Public companies will continue to require a company secretary.
Other simplifications
The existing rules regarding capital maintenance and share capital provisions are complex and the Act simplifies these by removing unnecessary and burdensome requirements for private companies. In addition, private companies will not be prohibited from giving financial assistance for the purchase of their own shares, provided they are not subsidiaries of public companies.
The requirement to have an authorised share capital is removed for both public and private companies.
Finally, while the Companies Bill disappointingly did not propose a consolidating Act, the government had a change of heart. The 2006 Act repeals and replaces virtually all of the existing Companies Acts.