Companies Act 2006: 10 top tips

The Companies Act 2006 is the first major overhaul of company law for 20 years. The Act is being implemented in stages and will be fully in force by October 2009. Here are 10 hot tips for surviving the changes so far and getting ready for further changes in October 2008.

1. 1. E-communications: You need to get your shareholders' consent to communicate with them electronically.
2. 2. AGMs: Private companies no longer need to hold annual general meetings. If your company's articles require you to hold an AGM you will have to continue to do so unless you passed an elective resolution to dispense with holding AGMs. You can change your articles to remove this requirement.
3. 3. Written resolutions: If your shareholders take decisions by written resolutions instead of in meetings, there is a new procedure in the Act that must be followed. This includes sending out an explanatory statement with the resolution.
4. 4. Notice of meetings: A private company only needs to give 14 days' notice of a general meeting. Take care – your company's articles may require a longer period of notice to be given if a special resolution is being considered. Failure to give the correct period of notice could invalidate any decision taken at the meeting.
5. 5. Re-appointment of auditors: Auditors will be deemed to be re-appointed unless they are removed at the end of their period of office.
6. 6. Company secretary: Private companies no longer need to appoint a company secretary. Beware – all the jobs that the secretary used to do now become the responsibility of the directors.
7. 7. Executing documents: A company can now execute deeds and documents by one director signing in the presence of a witness.
8. 8. Using the seal: If you have a sole director and no company secretary you may find that you have to change your articles to allow that sole director to sign against the seal.
9. 9. Late filing penalties: The penalties for late filing of company accounts increase in February 2009. Get your late accounts in before February 2009 to avoid paying more.

10. 10. Corporate directors: From 1 October 2008 you will need to appoint an individual to your board if you only have corporate directors. If you had only corporate directors on your board on 8 November 2006, you have until 1 October 2010 to appoint an individual.
    

    
    
    

Confused? There have been lots of changes and the devil is in the detail. To cut through the confusion visit www.companiesact.co.uk for more information.