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Companies Act 2006: The Final Phase |
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Written by Alastair Dunnett
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Friday, 27 November 2009 16:26 |
Many people will be aware that the Companies Act 2006 is now fully in force, the final phase of the act being implemented on 1 October 2009
As a result of the changes introduced by the new act it is possible for people responsible for running limited companies to make various changes to the company’s Memorandum and Articles of Association. The changes that you are now allowed to make will not necessarily affect how you run the business. However, some of them are designed to reduce the administrative burden of running a limited company.
Many of the onerous obligations on small companies have now been removed. For example, under the new Act it is no longer a requirement for all companies to have a company secretary. Other changes that may prove popular include the removal of the requirement for all companies to hold an Annual General Meeting and the ability for companies to make better use of Written Resolutions when making shareholder decisions
Many of the advantages of the new Act will not apply to existing companies until their Articles are amended. As a result, whilst there is no requirement for existing companies to change their governing documents, now is a good time to consider whether the Articles of Association could be updated.
As well as allowing various changes to be made to a company’s constitution the new act also imposes additional requirements on companies including new trading disclosures. Previously, all companies have had to publish their name, number and registered office on business letters and this requirement has been extended to electronic documents including any company website.
If you have any concerns about how the new Act will affect your business or if you would like a free half hour to discuss whether your company’s constitution needs amending, call Veitch Penny on 01392 278381.
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Risks with Company Contracts |
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Written by Alastair Dunnett
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Monday, 09 November 2009 13:36 |
Each year many companies go into liquidation without any assets of value meaning their creditors often receive nothing. It is a source of much frustration to these creditors that the former directors of the failed company are not held liable for the company debts.
There has however been a recent court of appeal case concerning a Director’s personal liability for company debts and it could allow creditors of solvent or insolvent companies to take action against directors in “deceit”
Previously if a creditor wanted to pursue a Director personally he would usually have to wind up the company and then hope the liquidator would investigate whether the director was responsible for fraudulent or wrongful trading. Liquidators rarely consider this and tend to say that the cost of doing so is too high bearing in mind the lack of assets.
The case of Drouzhba v Wiseman and another [2007] EWCA Civ 1201 involves an action by a creditor against a director who had signed a contract on behalf of a company and, in the circumstances, this was found to have been a representation that the company was solvent and therefore able to pay its debts.
In fact the company was not able to pay and the claimant alleged that they had relied on the director’s signature as a representation of solvency and that without it they would not have entered into the contract. Provided the representation is in writing, then it may be sufficient to allow an action to be brought against that director in deceit.
Clearly not all signatures made by directors qualify as such a representation by that director. However, we have occasionally advised clients to ask a named director of any company they contract with for confirmation of that company’s solvency. Provided they get a response in writing, that director may end up liable for the debt should the company be unable to pay itself and in today’s economic climate where large numbers of companies are facing liquidation, it does seem to go some way to getting round the problem.
There are of course various qualifications to this rule and if you have concerns about company contracts or would like advice on any other areas of Business Law, please call Veitch Penny now for a free half hour chat on 01392 278381.
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Written by Veitch Penny
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Tuesday, 21 April 2009 20:26 |
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Veitch Penny are pleased to announce their charity of the year 2009; Devon Air Ambulance. We hope that over the next 12 months we will be able to raise £2000 for this worthy cause.
Each year a vote is cast by our employees as to which charity should benefit from our many fund-raising activities. This year te Devon Air Ambulance Trust was chosen.
The Devon Air Ambulance Trust is the charitable trust which raises the funds to keep Devon’s two Air Ambulances airborne
It costs £2.2 million each year.
No funding is received from local or central Government nor the National Lottery
This means every single penny needed is raised by the community and businesses and friends of Devon
The charity works alongside 2 other organisations which make up the ‘Devon Air Ambulance’ family
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Last Updated on Thursday, 02 July 2009 14:22 |
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and is bound by their code of conduct.