This article looks at changes relating to shareholder meetings, highlights new obligations which apply if a company is changing its articles of association, and looks at important changes relating to Companies House.

On 1 October 2009, all the remaining provisions of the Companies Act 2006 ("Act") finally came into force. This article looks at:

  • changes relating to shareholder meetings;
  • a company's obligations if amending articles of association after 1 October 2009;
  • important changes relating to Companies House.

Several changes relating to share capital also came into force on 1 October. Please click here for a separate briefing on share capital.

We also have some practical guidance about whether companies ought to be changing their articles of association now that the Act is fully in force. Click here to read this guidance.

Shareholder meetings

  • It is now possible for shareholders holding just 5% of the voting rights to require the directors to call a general meeting of the company. It used to be 10%.
  • If several shareholders appoint one person as a proxy, the general rule is that that person has one vote on a show of hands. But what if some of the shareholders tell him to vote in one way and others tell him to vote in a different way? The Act now clarifies that in that situation the proxy has two votes on a show of hands: one in favour and one against. (Companies can provide something different to this in their articles of association if they want.)
  • If a corporate shareholder appoints multiple corporate representatives, then as long as they are appointed in respect of different shares, they can vote in different ways on a poll.

Amending articles - new obligations

Readers of our previous bulletin may remember that, from 1 October 2009, provisions in an existing company's memorandum of association will be deemed to be incorporated into its articles of association. These include the company's name, its registered office location, its authorised share capital, its objects clauses, and the statement that the members' liability is limited. Despite this deemed "movement" of provisions into the articles, there is no need for the company to file amended articles of association with Companies House as it would normally do whenever it makes changes to its articles.

However, there is something else for a company to think about if it amends its articles for the first time on or after 1 October 2009. When it files its amended articles with Companies House, the company must remember to include those parts of its memorandum of association which have been deemed to be moved into its articles. It can do this in one of two ways:

  • append a copy of the old-style memorandum to the articles; or
  • send a copy of the old-style memorandum with the articles indicating which provisions are deemed to be provisions of the articles.

The same obligation applies if the change to the articles was made before 1 October but only takes effect on or after that date.

We recommend that a company amending its articles should consider whether, at the same time, to pass resolutions removing those provisions of its memorandum which it no longer needs. Whether this will be appropriate will depend on the company in question. Objects clauses are not required under the new Act and so may be deleted unless the company particularly wishes to retain limitations on its objects. An authorised share capital provision can also be removed although some companies may wish to retain this because it operates as a limit on the directors' powers to allot shares. The company name and registered office reference can be removed as they are not required to be stated in the articles. The only provision that should not be removed is the statement that the members' liability is limited.

If a company amends its articles to remove, add or change objects, then in addition to filing an amended copy of the articles, it must also notify Companies House on a new Form CC04. The change to the objects is not effective until Companies House has entered notice of the change on the register

Companies House - some important changes

Forms

All the forms used to notify Companies House of certain events (e.g. appointment of director, annual return, allotment of shares) have changed and many new ones have been added. Click here to access the forms. What if a notifiable event happened before 1 October 2009 but the company only gets round to notifying Companies House after that date? Companies House has published a table which explains whether the old form or the new form applies.

New additional penalty for failure to file amended articles

It remains a criminal offence if a company does not file an amended copy of its articles with Companies House within 15 days after the amendment takes effect. In addition, Companies House has the power to impose a fine of £200 for failure to file amended articles. Companies House must first notify the company of the failure and give the company 28 days to comply.

No more grace period for improper accounts delivery

The Act requires companies to deliver documents to the Registrar in a legible form. Under the old law, if this was not done, Companies House allowed the company a 14 day grace period to re-file the document in acceptable form. If it still failed to do so, the relevant penalties or other consequences would apply. This grace period was of particular importance with regard to accounts, late filing of which results in hefty penalties as well being a criminal offence.

Companies should note that this grace period was abolished on 1 October 2009. Any documents such as accounts received by the Registrar on or after 1 October 2009 which have to be returned for amendment will no longer receive the 14 day grace period.

Directors' addresses - reminder

Companies and Companies House must now maintain two separate registers relating to directors' addresses. One is a register of directors' residential addresses and this has to be kept confidential. The other is a register of service addresses. This register must be available for inspection. See our previous bulletin for more information on this. Most companies will only hold a residential address for their directors. An action point for all companies is to ask directors whether they would prefer to have a different address registered as their service address. The service address can be the company's registered office.

Companies House is taking the address it currently holds for each director (their home address in most cases) and deeming it to be his service address too. If you want to change the service address, you need to notify Companies House on Form CH01.