Our view - September 2008
Our recent survey of professionals and advisers revealed some interesting and contradictory views.
81% of advisers believe that directors are not aware of the new director's duties provisions in the Companies Act 2006, with only 7% of advisers reporting that directors were aware of the new duties and that they were affecting how those directors make major decisions. [link to section A below on underlined words]
Interestingly, more than 75% of the directors that we surveyed said that they were aware of the new directors' duties which have already been introduced and almost half of those surveyed admitted to being cautious when taking major business decisions as a result of these new duties.
Whether you are an adviser or a director, another raft of directors' duties relating to conflicts of interest come into effect on 1 October 2008 and have practical implications for most companies. Read our summary of the new provisions to see what you should be doing about them.
BERR has confirmed that there will be no changes to Table A in October 2008, so the current version will see us through until October 2009, when the new 'model' articles will replace them. This doesn’t mean that you can relax though – there may be something in the main body of your articles, rather than Table A, that needs changing.
Now is an excellent time to review your articles to get them into shape with all the changes introduced by the Companies Act 2006. I'm doing this with all of my group companies at the moment – all 35 of them. If this is on your 'to-do' list too, then don't forget that we can help. Take a look at our articles review service.
These changes to directors duties, and the related provisions which allow shareholders to bring actions against directors, have encouraged many directors to review their insurance cover. If you need Directors and Officers Insurance then we can recommend Lockton, please email ben.waterton@uk.lockton.com if you would like more details on this service.
I know that many companies are waiting for the new reduction of share capital procedure to take effect. The current court procedure can be both expensive and time consuming, and this is a very useful and welcome procedure. Our documents for this procedure are currently with Counsel, so more information on this new service will follow in next month's update. [If you want to be notified when this is available, please contact Helen Goose.
Finally, remember that from 1 October 2008 private companies will not be required to file their members' addresses at Companies House on the annual return. There is a new form 363 which must be used for annual returns made up to a date on or after 1 October 2008 – the form will be available on our forms on the web facility from 1 October 2008 and a specimen copy can be found on the Companies House website The current form 363 must be used for returns made up to a date prior to 1 October 2008, irrespective of when it is filed. Read our commentary for more information.
Group Chief Solicitor
Jordans
