Commercial Alerts

Commercial Alert – for all limited liability companies

20 August 2009

The final stages of the implementation of the Companies Act 2006 (2006 Act) will be complete by 1 October 2009. The model Articles of Association, which will replace Tables A – F of the Companies Act 1985 (1985 Act), have already been published.

The provisions of the 2006 Act contain a number of changes relating to articles of association. In many cases it will be easier for a company to make changes before 1 October, rather than waiting to make retrospective changes. We would advise that companies review their articles before the 1st October to ascertain where they stand and to consider any changes they might want to make.

The 2006 Act, generally, relaxes the regulation of companies and your company might be able to take of advantage of these relaxations. There are a number of reasons why you might want to change your articles:

•To take advantage of the new provisions of the 2006 Act.
•To ensure that the implementation of the 2006 Act, does not affect the operation or validity of any existing provisions of your articles.
•To remove redundant provisions and out of date references to the 1985 Act.
•To remove any unnecessary restrictions and obligations.

If, like most companies, your company’s articles are based on Table A of the 1985 Act (or perhaps even older versions!), some of the provisions may conflict with the 2006 Act.

By following your current articles, you may open the company to liability for civil or even criminal actions and as a director, you may be personally liable for decisions if they are not taken in accordance with the 2006 Act.

Your company’s articles may have been set up many years ago since which time your company has no doubt gone through a great deal of change. Have your articles been changed to reflect the developments in your company? If not, now might be an ideal time to address the change in your company and the changes in the law at the same time.

If you are interested in either of these products please contact Carl Selby (carl.selby@rpj.uk.com or 01494 525941).