Do you need to act on new company law?

Barr Ellison Solicitors are offering companies a free review of their Articles of Association in order to help them take advantage of the Companies Act 2006.

It’s five months since the final provisions of the Companies Act 2006 were brought into effect. One of the aims of the Act was to make the operation of smaller private companies simpler and less expensive, but is it achieving this objective? Barr Ellison partner and company/commercial law specialist, Alison Barr, takes us through the pros and cons.

If you’ve set up a new company since October last year the Companies Act can only be good news. Many of the hoops that smaller businesses previously had to jump through have disappeared, but existing companies may have to take active steps, including changing their articles of association, to take advantage of the Act. In most cases, though, this will be very worthwhile.

Cost savings can be made by companies no longer needing to employ a company secretary – the responsibilities can be carried out by a director – nor to hold an AGM. Things have also been made simpler by the provision that written resolutions need no longer be passed unanimously and now just need 50+% agreement for an ordinary resolution and 75% for a special resolution. Running a business should also be made simpler by the fact that only one director (plus a witness) is now needed for the execution of deeds and directors’ duties are now codified, making them more accessible.

The Act also allows loans to be made to directors so long as shareholder permission has been granted and companies can now give financial assistance to purchase their own shares without complying with complex procedures, although directors still need to consider whether giving such assistance is likely to promote the success of the company.

The Act does appear to have been successful in simplifying procedures for small companies and many companies are particularly pleased they no longer need to go to the expense of holding AGMs.

If you would like to take advantage of this offer or think the Act could help your business and want to know what actions you may need to take, please contact Alison Barr on 01223 417200.

The information given in this article is of a general nature only and should not be considered as advice applicable to any particular situation for which specific request should be made to us.

"Barr Ellison Solicitors have made it a point to get to know our organisation and to work with us to help achieve our goals. They are proactive, efficient and always accessible by phone and email."
Graham Butland, CEO, East Anglia's Children's Hospices

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