Forming a company
The formation and administration of companies will soon become simpler. The company memorandum will become a formal document recording the details of the company at the time of registration. Going forward the articles alone will be the continuing constitutional document, containing the minimum key rules on the internal workings of the company. Private companies will have separate, simple model articles that will better reflect the way that they operate.
The company secretary
The requirement for a private company to have a company secretary is abolished, although it may continue to appoint one if it wishes.
| Comment While the office of company secretary will not be mandatory, many of the responsibilities previously carried out by the secretary will continue to exist. The requirement will be abolished with effect from April 2008. |
Public companies will continue to require a company secretary.
Other simplifications
The existing rules regarding capital maintenance and share capital provisions are complex and the Act simplifies these by removing unnecessary and burdensome requirements for private companies. In addition, private companies will not be prohibited from giving financial assistance for the purchase of their own shares, provided they are not subsidiaries of public companies.
The requirement to have an authorised share capital is removed for both public and private companies.
Finally, while the Companies Bill disappointingly did not propose a consolidating Act, the government had a change of heart. The 2006 Act repeals and replaces virtually all of the existing Companies Acts.