COMPANY LAW REFORM BILL

KEY MEASURES

• Reform of company law following extensive Independent Company Law Review which made 150 recommendations based around:

- 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.

• New power to reform or restate company law in future by means of a super-affirmative procedure
• Provides clarity and makes it easier to do business by means of electronic communications
• Provides clarity on 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)
• Measures to maintain UK as major centre for incorporation of companies
• Implementation of the EU Takeovers directive, putting the current regime within a statutory framework for the first time
• Total estimated saving of £250m p.a. to business.

TERRITORIAL EXTENT

The Bill will generally cover Great Britain.  For some aspects coverage will include Northern Ireland.

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, which included draft clauses on some (but not all) the proposed measures. Consultation closes on 10 June.