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Companies Act 2006

Volume 687: debated on Monday 18 December 2006

My right honourable friend the Minister of State for Industry and the Regions (Margaret Hodge) has made the following Written Ministerial Statement.

The Companies Act 2006, which received Royal Assent on 8 November 2006, will bring major benefits to business by modernising and simplifying company law. The noble Lord, Lord Sainsbury, made a Statement to the House of Lords on 2 November 2006 in which he explained that it is our intention to commence all parts of the Act by October 2008. As part of our implementation of the Act, I intend to commence some provisions early next year.

With effect from 1 January 2007, I intend to commence provisions in the Act relating to changes to the first company law directive. These changes are in large part designed to ensure increased facilities for e-communications with the national registrar of companies. With effect from 20 January 2007, I intend to commence the following provisions linked to implementation of the transparency obligations directive:

the provisions on company communications to shareholders and others, which include provisions facilitating electronic communication;

provisions concerning a public company's right to investigate who has an interest in its shares; and

Section 463, which sets out a statutory basis of directors' liability to the company in relation to the directors’ report (including the business review) and the directors’ remuneration report.

I also intend to commence all powers to make orders or regulations by statutory instrument with effect from 20 January 2007. I intend to commence some self-contained provisions of the Act from 6 April 2007, including:

the provisions in Part 28 of the Act implementing the takeovers directive;

provisions extending the community interest company regime to Northern Ireland; and

Section 1281, which amends Part 9 of the Enterprise Act 2002 to enable public authorities, in certain circumstances, to disclose information where the information is to be used in civil proceedings or otherwise for the purpose of establishing, enforcing or defending legal rights.

I also intend to repeal the following free-standing provisions of the Companies Act 1985 with effect from 6 April 2007:

Section 41 (authentication of documents);

Sections 293 and 294 (provisions relating to directors aged 70 and over in public companies or private companies which are subsidiaries of public companies);

provisions in Part 10 of, and Schedule 13 to, the Companies Act 1985 relating to the disclosure of share dealings by directors and their families;

Section 311 (prohibition on tax-free payments to directors);

Sections 323 and 327 (prohibition on directors’ dealing in share options);

Sections 343 and 344 (special procedure for disclosure of dealings in favour of directors by banks);

Section 358 (a power for companies to close the register of members);

Section 438 (a power for the Secretary of State to bring civil proceedings on a company's behalf);

Section 720 (a requirement for certain companies, including insurance companies, to publish periodical statements); and

Section 729 (a requirement that the Secretary of State shall prepare an annual report to Parliament of matters within the Companies Acts).

I also intend to commence the provisions about fees payable to Companies House under the new Act. The provisions about fees under the old Act will still remain in force until all the repeals of provisions in that Act have been brought into force.

The Government consulted in August on the application of the Companies Act 2006 to existing companies. The consultation focused on a number of difficult transitional issues affecting company constitutions, which will arise for existing companies when the Act is commenced. I am today publishing a summary of the responses and the Government's conclusions, together with the individual responses where respondents have given their consent for their full response to be made public. We will consult in February 2007 on the policy issues related to secondary legislation which will need to be made under the Act, and on further transitional issues.