Companies Act 2006: Checklist for Existing Private Companies

By Jaspal Sekhon, Solicitor, Corporate & Commercial Department, Kerman & Co LLP

• Ensure that all directors understand the new statutory statement of directors’ duties set out in the Act and what they mean in practice.

• If the company was incorporated before 1 October 2008, pass an ordinary shareholders’ resolution to allow the board to approve directors’ conflicts of interest. Ensure that all existing conflicts have been properly declared and approved in accordance with the Act.

• Ensure that all companies (particularly within a group) have at least one director who is a natural person. From 1 October 2010, companies will no longer be able to have only corporate directors.

• If a company decides to no longer have a company secretary (which is now permitted under the Act), ensure that someone is made responsible for statutory filings and maintaining company records.

• Carefully consider updating the company’s articles of association (articles), in particular whether to adopt the new model articles under the Act. Although existing Table A articles remain valid, the advantages of replacing them with the new model articles are that they will be fully compliant with the Act and the company will be able to take advantage of a number of useful simplifications.

• Ensure that procedures on company meetings and regulations are updated for the Act, in particular the new procedure for written resolutions.

• The concept of authorised share capital has been abolished under the Act, however, existing companies will still be subject to the authorised share capital stated in the memorandum. Companies should consider removing the existing authorised share capital provisions or alternatively adopt new articles.

• Directors of private companies with only one class of shares are able to allot new shares without the need for further shareholder approval unless they are prohibited from doing so by the articles. Existing companies will, however, need to pass an enabling resolution or amend their articles to take advantage of the new provision.

• All companies are now required to file a statement of capital at Companies House each time there is a change in share capital and with the annual return.

• Review all register and record requirements under the Act as there are some new requirements. 

• Create the following separate registers which are now required under the Act:

• a register of directors (containing each directors’ service address);

• a private (i.e. not open to public inspection) register of directors’ residential addresses; and

• a register of secretaries.

• If directors or the company wish to file service addresses for the directors (instead of residential addresses), ensure that Companies House has been notified as pre-existing residential address details are not automatically removed from the public record.

• Ensure that the company’s statutory details appear on company stationery, emails and websites.

• Ensure that the company secretary or other relevant individuals are familiar with the new Companies House forms and filing procedures.

• Note that private companies must now file their accounts at Companies House within nine months of the end of the relevant accounting reference period (reduced from ten months).

• If companies wish to take advantage of the automatic reappointment of auditors (as opposed to having to be reappointed each year), ensure that a shareholders’ resolution is passed to this effect.

• Review the company’s signing procedures and consider whether to permit a single director to execute deeds (with a witness).