1 October 2009 was the final D-Day for changes in Company law under the Companies Act 2006, the largest statute in English legal history.
Although it has been a long time coming many businesses are not properly prepared. These last changes are very important. The key changes are twofold:
(i) to procedural matters, forms and the like and
(ii) changes to fundamental legislative areas such as articles of association and share capital. When a company changes its share capital it now needs to produce a document called a ‘Statement of Capital’ which must be filed. The concept of authorised share capital has been abolished.
The changes are positive. Removing for all companies, old and new, provisions from the Memorandum is sensible modernisation. We have been helping businesses who want to do so to update their Articles, adopting the best of the new regime and now is a good time to do so as the changes are all in effect. The Memorandum which every company in the land has as part of its constitution becomes almost a historical document. The changes to share capital rules are also a welcome development and the new Model Articles for companies incorporated after 1st October are an improvement on Table A.
Many businesses are unaware that the Act has removed the need to hold an annual general meeting and to have a company secretary although many will find their articles of association require this and they want to retain a company secretary in any event. However, thought should be given to what is best for a particular company. It may be wise for many to adopt the new Model Articles of Association and we can help companies keep up-to-date with these changes. Some of the new changes only apply if the existing Articles do not restrict them so now is a good time to revise Articles.