Despite its length (1,300 sections no less), one of the main aims of the new Companies Act, which became law in November, is to streamline the rules and procedures involved in setting up and running a business.
The Government estimates that the Act will lead to savings for the small-business sector totalling £100m. This will be down to efficiencies created by changes such as:
- the removal of the requirement for companies to appoint a company secretary or to hold AGMs
- the introduction of new model articles for companies that better reflect the way modern businesses operate
- easing the financial rules for companies purchasing their own shares.
You should note, however, that the Act also introduces some new obligations, particularly for company directors. While the key duty of the directors to act in the shareholders’ interest is restated, the Act notes that attention should also be paid to the interests of employees, suppliers, consumers and the environment.
In addition, the Act introduces a new criminal offence of knowingly including false or misleading details in an audit report.
The Act’s provisions will be introduced gradually, but all will be in effect by October 2008.
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