General
In principle the Companies Act 2006 attempts to simplify and clarify the way in which companies operate, with a specific focus on small private companies. The items below are some of the more recently introduced changes and it is not intended as a comprehensive description of all provisions that have already been commenced, or will be commenced by 1 October 2009, the final date of implementation of the new Act.

Annual general meetings (effective date 1 October 2007).
There will no longer be any requirement to hold an annual general meeting, or indeed any other meeting at which shareholders are physically present, except in respect of resolutions to remove a company director, or the company auditors.

Written shareholders Resolutions (effective date 1 October 2007).
Most resolutions to be considered by shareholders will be able to be passed by written resolution. Written resolutions will require the approval of a simple majority (ordinary) resolution, or 75% (special resolutions), of those eligible to vote.

Directors Duties (effective date 1 October 2007).
The duties of directors which have built up over the years via case law have now been clarified and expanded and will be codified as statutory obligations. There are 7 general duties which are set out in a statutory statement, these are:-
1) Must only act within appropriate authority, i.e. in accordance with the Company's Articles of Association and decisions taken by the company's members.
2) Must exercise independent judgement.
3) Must also exercise reasonable care, skill and diligence.
4) Conflicts of interest should be avoided (effective 1 October 2008).
5) Personal benefits should not be accepted from third parties.
6) Personal interests in proposed transactions, or arrangements with the company, must be declared to the company's other directors.
7) Must consider the long - term consequences of any decision. This includes the interests of the company's employees, the impact of the company's operations on the environment and community, the need to act fairly as between members, the need to maintain high standards of business conduct, the interests of creditors and the need to foster business relations with suppliers, customers and others.

It may now be prudent for directors to run through all the above factors, when making any major decisions and record this fact in appropriate company Board minutes.

The act also eases the procedures for action to be taken for breaches of the above duties.

One relaxation, however, is that the previous prohibition on loans to directors, is removed, provided such loans are approved by shareholders. This relaxation does not extend to the adverse tax implications of loans to directors, which continue to apply unchanged.

Accounting records (effective date 1 October 2007).
The requirement under the Companies Act 1985 to keep proper accounting records, is replaced with a requirement for to keep "adequate" accounting records. A duty is also imposed for directors to approve only accounts that give a true and fair view of the company's assets, liabilities, financial position and profit and loss.

Group Accounts (effective date 1 October 2007).
The previous exemption for medium sized companies from the requirement to produce group accounts, is abolished and all companies, except those which are small, will have to include a business review as part of the directors' report.


Accounts filing deadline (effective date 6 April 2008).
The accounts for private companies will need to be filed at Companies House within 9 months (previously 10 months), of the balance sheet date. This reflects the increased use of technology. From February 2009 accounts filed late, will attract higher late filing penalties than at present.

Company secretary (effective date 6 April 2008).
There will no longer be a requirement for a company secretary for private companies. although the position may be retained if so desired. If the company decides it no longer need a company secretary, they must inform Companies House on the standard 288b form.

Company Constitutional Matters (effective date 1 October 2008).
The ability of private companies to repay issued share capital will be simplified and involve a statutory solvency declaration by the directors, rather than court approval.

Also, the requirement for an auditor's report for providing certain types of financial assistance, will also be removed.

Both new and existing companies will only be able to appoint directors age 16 or over and will have to have at least one natural (i.e. living) person as a director, so it will no longer be possible to avoid directors responsibilities through sole corporate appointments, or the appointment of minors. There will be transitional arrangements until October 2010 for existing appointments.

Company Constitutional Matters (effective date originally 1 October 2008 but now 1 October 2009).
Companies will be incorporated under the 2006 Act with effect from 1 October 2009. Such companies will not need to have a Memorandum of Association in the current sense. The need for Authorised Share Capital will disappear and new simplified model "articles" will be available. Existing companies can adopt the new structure should they so desire.