Stop Press - The following major provisions of the Companies Act 2006 came into force on 1 October 2007

The statutory code of duties for directors (save for the parts relating to conflicts of interest).  These include the new duty to ‘promote the success of a company for the benefit of its members’ and in doing so, amongst other matters, to have regard to its employees, business relationships and its impact on the wider community.

New derivative claims procedure for shareholders to bring claims against directors for negligence, default, breach of duty or breach of trust.

Relaxed regulatory regime for private companies:

  • No longer required to hold AGMs (unless the articles of association require it to do so).
  • Written resolutions no longer require unanimity to be passed (merely the appropriate majority required to pass the resolution as if it had been put before a meeting).
  • Notice period for general meetings is reduced from 21 to 14 days.
  • General meetings may be called on short notice by 90% (rather than 95%) of members.

New rules to allow indirect investors to exercise governance rights.  Members of any company may nominate an indirect investor to exercise all or some of the rights of membership, and members of traded companies may nominate another to enjoy information rights of membership.  The latter nominations will be effective from 1 January 2008.

New rules for nominee shareholders to split the exercise of voting rights attaching to shares, according to the respective beneficiaries’ wishes.

New improved rights for proxies to speak, demand a poll and vote on a show of hands at meetings.  Shareholders will also be able to appoint multiple proxies and corporate representatives, in respect of specific shares.

Clarification of the rules on political donations by companies.

Expanded disclosures by quoted companies ** will be required in the company’s business review.

*New right for members of quoted companies. * To demand an independent report on a poll vote.

*New right for members of public companies. * To call a meeting at the company’s expense.

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