It will be possible to form all companies with only one member including public companies that previously required two members. A new set of Company Forms has been designed for use from 1 October 2009 onwards. New forms are available from the Companies House website. New forms include CA2006 information requirements, have new numbers and guidance notes and detail applicable fees. Company events before 1 October 2009 need old forms but company events on or after 1 October 2009 require new forms to be used. Companies House have indicated that incorrectly used forms will be rejected on all occasions.

 

New forms can be filed on or after 1 October 2009 using the existing Companies House web-filing service.

 

 

The memorandum of association will have a shorter format and become more of a historical record than a key constitutional document. A key point for new companies is that they will be presumed to have unrestricted objects. New companies that wish to restrict their objects will do this by way of limitation provisions in their articles of association. The concept of authorised share capital is also removed by CA 2006. The new form memorandum essentially contains just the names of subscribers and authentication that those named agreed to become members. The prescribed form for the new memorandum is in the Companies (Registration) Regulations 2008 S.I. 2008/3014.

 

Existing companies should consider reviewing their current memorandum and articles. Unless steps are taken to remove restrictions such as the objects clause or the statement of authorised share capital those restrictions will continue to apply. A special resolution to remove the objects clause or adopt a new set of articles (which can also serve to remove the authorised share capital statement) is required. This special resolution can be passed prior to 1 October 2009 to take effect from that date onwards. Amendments to articles must be filed at Companies House within 15 days, penalties apply for default.

 

 

Private limited companies have ordinarily used Table A in whole or as a starting point in creating their own bespoke articles. Different tables exist for different company forms but for the purpose of this briefing the focus will be on private limited companies. Table A has been replaced by the new model articles. 

 

The new model articles reflect updated Company Law, avoid archaic and unnecessary legal-ese and avoid repeating procedural regulations e.g. relating to meetings and resolutions. Post 1 October 2009 we expect that companies will use the new model articles as a starting point and create their own bespoke articles as appropriate on a case by case basis.

 

 

Another new development is that unless the articles of association provide otherwise, directors of private limited companies that have one class of share only will have no restrictions on their authority to allot shares. The pre-emption rights and the procedure to disapply them are not amended by CA2006 in any material way.

 

Existing companies will see their pre-emption authorities continue until their natural expiry date. Therefore existing authorities will need to be renewed, if required, at the point of expiry. The new provisions for private limited companies that just have one class of share only apply to existing companies if an ordinary resolution is passed to specifically take advantage of this relaxation. Public companies will see no real change in this area.

 

 

Directors will need to supply two addresses: (1) residential and (2) address for service which the company and Companies House will keep in two separate registers. The address for service can be the Registered Office. The residential address details will not be available to the general public.

 

Existing company director address details will not be purged from Companies House records and will still be visible as a historical record. The benefits of this change therefore only kick-in over time and as company directors move house. The procedure for company directors who can demonstrate that they may be at risk of harm due to their professional activities remains unchanged and for such individuals details of their home address can be completely removed from the public file.

 

 

Instead of requiring a special resolution, from 1 October 2009 companies may specify a simpler alternative route for name change. This may be either by board resolution or shareholder resolution with a lower level of approval, for example by simple majority, than the 75% required for a special resolution.

 

 

The 1 October 2009 implementation is the final part of the stepped implementation of the CA2006. 

Details of the earlier changes introduced are available through Langleys briefings issued at the time which can be obtained by request or viewed on the Langleys website.

 

 

For further information or assistance in relation to the contents of this briefing or any aspect of commercial law please contact Andy Kay on 07841 995 229 or andy.kay@langelys.com.