Final tranche of reforms imminent
The most broad-ranging reform of company law in over 20 years is almost complete. The implementation of the final tranche of legislative changes takes effect from 1st October 2009. Such changes include:
- For any company incorporated after 1st October 2009, all of its constitutional rules must be contained in its articles of association.
- Companies incorporated after 1st October 2009 will have unlimited objects unless restrictions are set out in the articles
- If it is a public company or a private company limited by shares or by guarantee, a new set of model articles will apply by default if it does not provide its own.
- The only purpose of the memorandum of association will be to show each subscriber’s intention to form and be a member of the company and, if the company is to have share capital on formation, to take at least one share.
- Existing companies will be able to alter or update provisions in their constitution which are currently set out in their memorandum by amending their articles by a special resolution of the Company’s members.
Authorised share capital
Under the 2006 Act a company no longer needs to have an authorised share capital. If a company incorporated after 1st October 2009 wishes to restrict the number of shares it is able to issue, it must make provision in its articles of association either on incorporation or by subsequent amendment to its articles by special resolution.
For companies incorporated before 1st October 2009, the authorised share capital will continue to operate as a restriction in the company’s articles. Shareholders, however, may remove the deemed restriction from the articles by ordinary resolution.
Company and business names
Rather then having to pass a special resolution to change its name, a company will now be able to change its name by any means provided for in the company’s articles (for example by board resolution).
Directors’ service address
Companies must now file a service address for each director to Companies House as well as providing a director’s usual residential address. The service address may be the same as a company’s registered office address.
The director’s residential address will not, however, be made available to the public. Companies will need to keep a register of the usual residential addresses of directors but this register will not be open to public inspection.
Where a company was incorporated before 1st October 2009, the existing address of a director or secretary will be treated as the service address, unless changed.
For detailed and comprehensive advice on the changes taking effect on 1st October and to ensure your business is compliant, please contact our commercial team at firstname.lastname@example.org.