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Bevan Brittan

Companies Act 2006: Certain sections now in force, implementation of further sections now delayed

November 2008

A number of provisions of the Companies Act 2006 came into force on 1 October 2007. An update dealing with these new provisions can be found through this link.

Lenders can be reassured that the provisions now in force are unlikely to have a significant impact on bank documents or transactions but some differences might be noticed and these are summarised below:

  Finance Documents. Not much is expected to change but until the Companies Act 2006 is fully in force on 1 October 2009 there might be references in finance documents to both the Companies Act 2006 and the Companies Act 1985;
  Board minutes. The provisions now in force introduce new directors duties and the drafting of board minutes approving finance documents may change. The phrase that directors are acting “in the best interests of the company” may be replaced by a statement that the directors “have complied with section 172 of the Companies Act 2006”
  Written Resolutions. Prior to 1 October 2007 a written resolution could only be passed if signed by all members of the Company. The written resolution regime now mirrors the regime for passing resolutions in general meeting so an ordinary resolution can be passed as a written resolution by at least 50% of members eligible to vote and a special resolution can be passed as a written resolution by 75% of members eligible to vote
  The rules relating to loans to directors and substantial property transactions have changed and both can be approved by shareholders. This should be taken into consideration in structuring transactions and in relation to due diligence.
  General meetings can now be called on 14 days notice. A general meeting can be held on short notice if at least 90% of members agree (a company’s constitutional documents can specify a higher percentage up to a maximum of 95%)


The provisions of the Companies Act 2006 moving liquidation expenses ahead of floating charge claims on a liquidation are still expected to come into force on 6 April 2008 but the provisions relating to relaxation of financial assistance for private companies are not now expected to come into force until 1 October 2009.

Ian Ilersic
Associate
ian.ilersic@bevanbrittan.com

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This update is intended to give general information about legal topics and is not intended to apply to specific circumstances. Its contents should not, therefore, be regarded as constituting legal advice and should not be relied on as such. In relation to any particular problem that you may have you are advised to seek specific legal advice.

Bevan Brittan LLP is a limited liability partnership registered in England and Wales: Number OC309219. Registered office: Kings Orchard, 1 Queen Street, Bristol, BS2 0HQ. A list of members is available from our principal offices. Offices in London, Bristol and Birmingham. Regulated by the Solicitors Regulation Authority. Any reference to a partner in relation to Bevan Brittan LLP means a member, consultant or employee of Bevan Brittan LLP.

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