January 2007

COMPANIES ACT 2006

Company law has been substantially rewritten to make it easier to understand and more flexible – especially for small businesses.

The first measures to be introduced will include provisions on company communications to shareholders. These are proposed to be introduced in January 2007.

All parts of the Act will be in force by October 2008.

The Act includes measures that:

 give an option for directors and shareholders to file a service address rather than a private address
 give greater clarity on directors’ duties, including making clear that they have to act in the interests of shareholders, but in doing so have to pay regard to the longer term interests of employees, suppliers, consumers and the environment

The Act allows shareholders to agree to limit the auditors’ liability to the company to what is fair and reasonable.

The Act includes measures to benefit private companies including:

 new model articles;
 no need to have a company secretary unless the company wants one; and
 no need to have an AGM unless the company wants one.