If you require detailed advice on the implications of the new Act and your Company then please contact this office and speak with Charlotte Parry-Jones.
A Company's Members - Sections 116-119
The Register is to remain available for inspection by any person on payment of such fee as may be prescribed, or, a copy of the Register is to be provided upon request. You are required to provide this copy within 5 working days (previously 10 working days) of request.
If you believe that the request for a copy of the Register is not for a proper purpose then you may apply to the Court for relief, this application is required to be made within 5 working days of the request.
The person making the request must state the purpose for which the information is to be used and whether the information will be supplied to a third party. It is a criminal offence to knowingly or recklessly make a statement that is misleading, false or deceptive in this respect.
Exercise of Members rights - Sections 145-153
All quoted Companies are now deemed to have within their articles provision to enable Members to nominate another person(s) as entitled to receive and enjoy and exercise all or any of the specified rights of the member in relation to the Company.
A Company's Directors - Sections 154, 160,161, 168-174, 178-179, 188-239, 248-259
A private Company must have at least one Director and a public Company at least two Directors.
Unless a resolution has been passed unanimously to permit block voting, Directors of a public Company must be voted individually.
Directors Duties are now set out in the Act and apply to Shadow Directors :
- Directors Duties are Owed to the Company
- Directors must act within their powers and in accordance with the Company's constitution
- Directors must act in good faith and in a way likely to promote the success of the Company for the benefit of all of it's Members but if the Company is about to go insolvent then the Directors are duty bound to have regard to the interests of the Company's creditors.
- Directors must exercise independent judgement
- Directors must exercise reasonable care, skill and diligence.
Directors Service Contracts over 2 years (previously 5 years) require the consent of the Members. If such consent has not, or is not obtained, then the notice provision in the Service Contract is void and only reasonable notice is required to be given. This will not affect any current Service Contracts, so long as the previous 5 year provision has not been breached.
Directors contracts, letters of appointment and service contracts are required to be made available for inspection at the company's registered office and copies are to be provided to member's on request and payment of a prescribed fee.
New limits have been imposed in respect of Property Transactions; Loans and Credit Transactions; Payments for loss of office made to Directors and anything over these limits will require the consent of all Members.
Any provision in either a Company's Articles or Director's service contract which exempts a Director from liability is void. However this does not prevent Directors and Officers Insurance.
A Company, can by ordinary resolution ratify any act of the Directors. However, the resolution must be passed without Members with a personal interest in the ratification being entitled to vote.
All minutes of Directors meeting are now required to be retained for 10 years from the date of the meeting and once signed by the chairman are evidence of the decisions made at that meeting.
The definition of connected persons extends to civil partners and other persons of the same or different sex, with whom the Director lives in "an enduring family relationship".
Derivative Claims and Proceedings by Members - Sections 260-269
The Act has introduced a new procedure for bringing an action against a Director or a former Director for breach of duty.
Resolutions and Meetings - Sections 281-361 (excluding Sections 327(2)(c) and 330 (6)(c).
Private Companies are no longer required to hold an annual general meeting and decisions that were made at annual general meetings are capable of being passed by written resolution. Written resolutions can also be passed by way of e-mail. BUT private companies can not remove a Director or an auditor by way of written resolution.
The Members eligible to vote in a written resolution are those who were Members when the resolution was first circulated.
You can not prevent decisions being made by written resolution with provisions in your Articles.
There are no longer extraordinary meetings, however, general meetings can be called by Members with 10% of the voting rights and where it is a private Company and there has not been a general meeting in the previous 12 months, then Members with 5% of the voting rights are entitled to call such a meeting.
The same notice periods apply for the calling of a general meeting, although if short notice is to be given then only 90% (previously 95%) of voting rights are required to agree (private companies only).
Notice regarding a general meeting can also now be given in electronic form and by posting on a website, although, notification of the notice on the website is required to be given to all Members. You can limit the persons on whom notice is required to be given in your articles.
Requirements as to the content of the notice are now set out in the Act along with the right to appoint one or more proxies.
Public Companies must hold an annual general meeting within 6 months of their accounting reference date.
Records of all resolutions and proceedings at meetings must be retained for a period of 10 years.
Control of Political Donations and Expenditure - Sections 362-379 (excluding provisions relating to independent election candidates). Companies are not permitted to make donations to a political party, over £5000.00 within any 12 months period unless the approval of all Members is obtained and such approval must be granted for donations to be made over a period of no more than 4 years.
Accounts and Reports - Sections 417 and 463.
For 'Small Companies' (defined in sections 381-384) there is no longer a requirement to have a Directors report containing a business review.
Audit - Sections 485-488
An auditors term of office will run from the end of 28 days following the circulation of the accounts, until the end of the corresponding period the following year.
Also an auditor shall be deemed reappointed unless the Company decides otherwise, or one of the four prescribed instances apply.
Contact Charlotte Parry-Jones on 020 8300 9321 or cparry-jones@wmk-law.com alternatively Contact Us
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