James Tarling, a Principal in the Commercial team, considers aspects of the changes made by the Companies Act 2006 which may be of interest to American companies who are, or are thinking of becoming, involved with companies in the UK.
Since 1 October 2009, the Companies Act 2006 (“the Act”) has been fully in force in the UK. The Act has made changes to company law, which are aimed at simplifying this area and providing a cost effective, efficient regime across the whole of the UK. Other aims of the Act include avoiding unnecessary burdens on companies and meeting companies’ operating needs.
A change which has been welcomed by many is that a company director or secretary is no longer required to have his or her home address appear on the public record, including the Annual Return. Instead, a director or secretary can provide a service address which will be available to the public. The Act sets out details of the requirements of a service address, which can be the registered office of the company. A separate, private, register of directors’ residential addresses must be kept by the company.
The Act has also imposed restrictions on access to the details of shareholders of a company. Before allowing inspection of the register of its shareholders by members of the public or another shareholder of the company, a company is now obliged to obtain details from that person before allowing an inspection. This includes ascertaining the proposed purpose for the information and details of any third party who the information will be disclosed to. The company will have to decide whether the request for a shareholder’s information is for a ‘proper purpose’ and is entitled to reject a request. Provisions which set out when a shareholder’s address details will be included on an Annual Return are also set out in the Act.
Administrative burdens for private companies have been reduced by the Act, which may be beneficial to an individual based abroad who is involved in a UK company. For example, there is no longer a requirement for a private company to hold an annual general meeting, unless it chooses to. In addition, private companies are no longer required to have a company secretary. However, if a company wishes to take advantage of this, and the Articles of Association of the company still refer specifically to there being a company secretary (as opposed to a reference to a secretary’s duties), then the company must amend its Articles. In doing so, the changes in the Act which relate to Articles of Association should be noted, as some of these changes override existing provisions in a company’s existing Articles. (For more detailed consideration of this issue, please see our article entitled ‘Companies Act 2006: Do we need to change our Articles of Association?’)
If you require advice on any of the issues raised in this article or in respect of any changes made by the Act, please do not hesitate to contact James Tarling by telephone on 01603 598000 or alternatively by email to jtarling@steeleslaw.co.uk.