Office of the Leader of the House of Commons

Companies Act

Key Benefits Reform of company law following extensive Independent Company Law Review . The changes sit within four key themes: Better regulation and a "Think Small First" approach. Encouraging shareholder engagement and a long-term investment culture. Making it easier to set up a company. Providing flexibility for the future. The Bill is primarily deregulatory with specific changes including: Making it easier to do business by means of electronic communications. Clarifying the duties of company directors by bringing them into statute law for the first time. Streamlining decision-making requirements for small companies (eg. Opt in to AGMs rather than opt out). Introducing a new power to reform or restate company law in future by means of a super-affirmative procedure. Making company law UK-wide. Implementing the EU Takeovers directive, putting the current regime within a statutory framework for the first time. The Aim is to maintain the UK as major centre for incorporation of companies. Total estimated saving of £250m p.a. to business.

Act of Parliament

Explanatory Notes

Regulatory Impact assessment

Comments

If you have any comments on the proposals you can email them to:

charles.phillips@dti.gsi.gov.uk

Additional Information

DTI set up the Company Law Review (CLR), an independent group of experts, practitioners and business people in 1998. Their aim was to review the law and advise on how company law could be brought up to date. The CLR presented their Final Report on 26 July 2001.

The Bill will implement most of the CLR's recommendations, as set out in the Government's White Paper "Company Law Reform" of 17 March 2005, and further draft clauses published on the DTI web site in July, September and October.

The Bill was introduced in the House of Lords on 1 November 2005 and published on 3 November.





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