Companies Act 2006 – news on implementation dates

At last we know when the restrictions on private companies granting assistance for the acquisition of their own shares will come into effect under the Companies Act 2006. BERR (or rather, the equally sillily-named “The Minister for Competitiveness”) has announced the revised implementation dates for the parts of the Companies Act 2006 that originally were to come into force in October 2008 but were subsequently (early November 2007) thrown into doubt by a BERR statement that Companies House would not be ready in time to effect necessary changes to its systems. In summary, the provisions relating to financial assistance and to directors’ interests in transactions and to directors’ conflict, will come into effect on 1 October 2008. Provisions relating to the company’s constitution (M&As) and changes to the process of dissolution and restoration to the register will come into effect on 1 October 2009.

The Government has decided that the following provisions should be commenced with effect from 1 October 2008:
• sections 69 to 74: objection to company names
• sections 82 to 85: trading disclosures;
• sections 155 to 159: provisions relating to corporate directors and under-age directors;
• sections 175 to 177: general duties of directors in respect of conflicts of interest;
• sections 182 to 187: declaration by a director of an interest in an existing transaction or arrangement;
• repeal of the restrictions under the Companies Act 1985 on financial assistance for acquisition of shares in private companies, including the “whitewash” procedure. (New sections 658-737)
• the new procedure for private companies to make capital reductions supported by a solvency statement instead of by a court order.

There are also two sets of provisions which will commence with effect from 6 April 2008:
• sections 121 and 128 (register of members: removal of entries relating to former members);
• sections 811(4), 812 and 814: inspection of register of interests in a company’s shares.

A commencement order in respect of all provisions to be commenced in 2008, other than those relating to capital reduction supported by a solvency statement and the removal of special provisions about accounts and audit for charitable companies, is expected before Christmas.

The capital reduction provisions (including section 654 on distributions of reserves arising from a capital reduction) will be commenced through a separate commencement order to be laid in draft in 2008.

There will also be a separate commencement order on the audit of small charitable companies.

The Minister’s “draft” statement is here.

Can you lie to a machine?

A judgment of staggering dullness, unless you ever wanted to understand how car dealership agreements work, has shown that a fraudulent misrepresentation could be made to a machine acting on behalf of a person, rather than to an individual.  This is if the machine were set up to process certain information in a particular way and would not process information about the material transaction if the correct information were given.

The case hasn’t hit BAILII yet, but it is Renault UK Ltd v (1) Fleetpro Technical Services Ltd (2) Russell Thoms [2007] EWHC 2541 (QB) if you need to try to find it.

Companies Act 2006 – loan documentation

The Association of Corporate Treasurers have published a briefing note, “The Impact of the UK Companies Act 2006 on Loan Documentation.”   Bank Law Blogger is being deeply altruistic in telling you about this as she herself has written Issues for Lenders, only last month, but the ACT note goes into a bit more detail on derivative actions (when, I wonder, will we see our first one of these under the new Act from a disaffected shareholder?) and, more importantly, has a useful appendix on what ACT thinks Board procedures should be in relation to the newly codified duties of directors.

Consumer Credit Act consultation opens

HMT and BERR have published a consultation document on proposed changes to the Consumer Credit Act 1974 to prevent the dual regulation of mortgages. The consultation paper, Regulation of Modified Credit Agreements asks for views on a proposed change to the Act to ensure that the regulatory regimes of the Financial Services Authority and the Office of Fair Trading for mortgages remain mutually exclusive. The proposed change is supposed to provide clarity on the regulatory position and reduce the potential burdens associated with dual regulation. The consultation closes on 14 February 2008.