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On 28 February Margaret Hodge announced the implementation
timetable for the bulk of the Companies Act 2006 (just in
time - the government had promised, back in December of
last year, to issue this in February 2007!)
So what do you need to know?
- Much of the Act is coming into force in October
2007 (i.e. a whole year earlier than the government's
back-stop date of October 2008 announced in December
last year). This includes the newly codified directors'
duties, provisions for the new statutory derivative
claim (whereby a shareholder can bring a claim on behalf
of the company against a director for breach of duty),
provisions for the newly enhanced business review, Part
13 relating to resolutions and meetings, and Part 9
relating to the rights of indirect investors.
- Yet more will be coming into force in April 2007.
- The parts not coming into force until October
2008 include the removal of the prohibition
on financial assistance for private companies, provisions
relating to formation of a company and a company's constitution,
provisions relating to a company’s share capital,
and the provisions relating to directors' conflict of
interest duties (the timescale for the latter giving
companies the opportunity to change their articles of
association before commencement of those provisions).
Draft regulations will be placed on the
DTI website for comment as they become available.
The DTI is preparing checklists for different
categories of persons affected by the Act. The first of
these, for small private companies, has now been published
and can be found here.
This provides a very useful brief summary of the main impact
of the Act on private companies, such as its effect on how
decisions will be made, directors’ conflicts of interests
and so on. The DTI has also published a set of frequently
asked questions which have now been updated and can be found
here.
The detailed implementation timetable can be found here.
Meanwhile, by way of reminder, the following
will be occurring on 6 April of this year:
- Part 28 of the Act implementing the Takeovers Directive
will be coming into force;
- Various sections of the Companies Act 1985 will be
repealed from 6 April 2007, including the age limit
on directors (70), provisions in Part X relating to
the disclosure of share dealings by directors and their
families, and the Section 311 prohibition on directors
dealing in share options, and the Sections 323 and 327
prohibitions on directors dealing in share options.
If you need any detailed guidance on the
Act, please do get in touch with your usual contact at Davenport
Lyons.
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