Companies Act 2006 - Slaughter and May - Home slaughter and may This document summarises and...

Companies Act 2006Company Secretary Help Kit – Shareholder Meetings and Members’ Rights

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Contents

1. Ordinary and Special Resolutions 1

2. Written Resolutions 3

3. General Meetings – calling meetings and notices 6

4. General Meetings – procedure 9

5. Annual General Meetings (requirements in addition to those above for general meetings) 11

6. Proxies 13

7. Poll Requirements (listed companies only) 16

8. Exercise of Members’ Rights 19

9. Information Rights and Nominated Persons 21

10. Inspection of Records 25

11. Company Names and Trading Disclosures 28

12. Electronic Communication 31

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This document summarises and comments on certain provisions of the Companies Act 2006 (“CA 2006”). Some of the provisions described below are not yet in force and, in certain cases, the position will still be subject to confirmation when final regulations are produced. This document should only be read as at 13 June 2007.

Unless otherwise indicated below, all sections of CA 2006 listed here are due to be implemented on 1 October 2007. Specifically, the provisions described below in section 10 (Inspection of Records) are due to be implemented on 1 October 2008 and the provisions described in section 11 (Company Names and Trading Disclosures) and section 12 (Electronic Communication) are already in force.

1. Ordinary and Special Resolutions

Legislative area Change/Practical difference Old legislation New legislation Action

Extraordinary and special resolutions

Extraordinary resolutions have been abolished.

Special resolutions still require a 75% majority but, like ordinary resolutions, will require 14 days’ notice (subject to any additional requirements in a company’s articles) rather than the current 21 days.

The DTI has also confirmed that a transitional provision may be introduced to prescribe how references in articles or private contracts to “extraordinary resolutions” will be treated. Alternatively, this will be left to the courts to determine.

s.378 CA 1985 s.283 CA 2006 Remove references to extraordinary resolutions from articles where necessary, depending on DTI transitional provisions.

Amend notice procedures for special resolutions to ensure 14 day notice period possible.

Unspecified resolutions Where CA 2006 does not specify the type of resolution to be passed, the default position is that an ordinary resolution is required unless the articles of the company specify a higher majority or unanimity.

N/A s.281 CA 2006 Consider amending articles to provide for higher majorities in cases where a type of resolution is not specified and a special resolution is considered appropriate.

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Prescribed ordinary resolutions

The DTI’s explanatory notes suggest that, where a provision of CA 2006 specifies that an ordinary resolution is required (e.g. removal of a director), the articles will not be able to specify a higher majority. This provision does not, however, appear anywhere in CA 2006 and we understand that the DTI believe it to be a general principle that is implicit in the schema of CA 2006.

N/A DTI explanatory note on s.281 CA 2006

Providing entrenched protection in the articles in these areas will not be possible.

1. Ordinary and Special Resolutions (cont.)

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2. Written Resolutions


Passing written resolutions by private companies

Under CA 1985, a written resolution could be passed only if all members consented to the resolution. Under CA 2006, a written resolution may be passed by the relevant majority of members entitled to vote. Hence, for example, a special resolution may be passed as a written resolution if members holding at least 75% of the voting shares sign the written resolution.

s.381A CA 1985 ss.282, 283 and 288–300 CA 2006

Awareness of the new written resolution procedure.

Relationship between articles and written resolution provisions

A provision in the articles of a private company is void in so far as it provides that a resolution required or otherwise provided for by CA 2006 cannot be passed as a written resolution. The written resolution regime therefore becomes compulsory instead of opt-in, and companies will not be able to opt out of it going forward.

N/A s.300 CA 2006 Check articles for provisions preventing use of written resolutions.

Members’ request for circulation of written resolutions

In a similar way to the provisions of CA 1985 relating to the requisitioning of resolutions at shareholder meetings, members may require circulation of a written resolution if they hold at least 5% (or any lower percentage specified in the articles) of the total voting rights of all members entitled to vote on the written resolution, unless the resolution would be ineffective if passed, is defamatory or is frivolous or vexatious.

Members may also request the company to circulate a statement (not exceeding 1000 words) on the subject matter of the resolution.

N/A s.292 CA 2006 Review any resolutions received to ensure that they may properly be moved.

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Procedure for circulation of written resolutions

Copies of the resolution (and any accompanying statement) are to be sent to every eligible member within 21 days of the request to circulate, either as separate copies or one copy distributed amongst all members.

Copies of the resolution must be accompanied by guidance on how to signify agreement to it under s.296 CA 2006 and the date by which the resolution must be passed before it lapses (broadly, this will be 28 days after circulation or any deadline specified in the articles).

N/A ss.293, 295, 296 and 297 CA 2006

Review circulation procedure for written resolutions.

Amend articles to specify date upon which a written resolution will lapse.

Cost of circulation As with the current provisions, members are to meet the costs of circulation unless the company resolves otherwise.

If members are to meet these costs, the company is not bound to circulate the resolution unless funds are provided which are reasonably sufficient to meet the costs of circulation.

N/A s.294 CA 2006 Factor in possible expenses of circulating written resolutions.

Court application not to circulate accompanying statements

A court can order that a company is not required to circulate a members’ statement accompanying the written resolution if the court is satisfied that the rights under s.292 CA 2006 are being abused. Applications to the court can be made by the company or any other person who claims to be aggrieved.

N/A s.295 CA 2006 Awareness of scope to prevent circulation of statements regarding the written resolution.

2. Written Resolutions (cont.)

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Requirement to notify auditors

The requirement to notify a company’s auditors of a proposed written resolution at or before it is sent to members has been abolished. However, a copy of the written resolution will still need to be sent to the company's auditors. The auditors are entitled to receive any communications relating to the written resolution as are required to be sent to members under s.288 to 300 CA 2006 and so the auditors would also need to be sent any statement which accompanies the resolution.

s.381B CA 1985 s.502 CA 2006

2. Written Resolutions (cont.)

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3. General Meetings – calling meetings and notices


Extraordinary General Meeting (“EGM”)

The concept of an EGM has been abolished. The new provisions refer simply to a general meeting, regardless of the resolutions being passed.

N/A N/A Review wording of articles, notices and documentation in relation to general meetings.

Shareholders calling general meetings – private companies

For private companies, members representing 5% of total voting rights may request the directors to hold a general meeting if more than 12 months have elapsed since the last general meeting requisitioned by members. The drafting of s.303(3) CA 2006 means that accessing this right might prove difficult in practice.

In all other cases (including public companies), the required percentage remains at 10% of total voting rights.

s.368 CA 1985 s.303 CA 2006

Shareholders’ request for general meeting

A request by members for a general meeting may include the text of a resolution unless it would be ineffective if passed, is defamatory or is frivolous or vexatious.

N/A s.303 CA 2006 Review any resolutions received to ensure that they may properly be moved.

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Notice of general meeting called by shareholders

If the request for a general meeting includes the text of the resolution, then the notice of meeting must include notice of the resolution.

If a special resolution is proposed by members, the notice of meeting will have to comply with s.283 CA 2006 formalities for special resolutions i.e. full text of the resolution to be included in the notice.

s.368 CA 1985 ss.283 and 304 CA 2006

Review notice procedures.

Notice periods Unless articles provide for a longer period, the notice period for all meetings (other than public company AGMs) is 14 days. Public company AGMs require 21 days’ notice (and under the Combined Code continue to require 20 working days).

For private companies, meetings may be held on short notice if members holding 90% of total voting rights agree. The requirement for public companies is still 95%, or 100% for AGMs.

s.369 CA 1985 ss.307 and 337(2) CA 2006

Consider amending articles to remove any requirement for 21 days’ notice of a special resolution.

Resolutions requiring special notice

The notice period for resolutions requiring special notice (e.g. removal of directors or auditors) is still 28 days to the company.

If it is impracticable to provide notice of the resolution with the notice of meeting, then the notice of resolution may be circulated to members at least 14 days (a change from 21 days in CA 1985) before the meeting by an advertisement in a newspaper with appropriate circulation or as specified in the articles.

s.379 CA 1985 s.312 CA 2006 Review notice procedures for resolutions requiring special notice.

3. General Meetings – calling meetings and notices (cont.)

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Request for circulation of members’ statements

A company will be required to circulate a statement (not exceeding 1000 words) regarding resolutions or other business to be considered at a meeting if requested by:

members representing 5% of total voting rights of all members with the right to vote on the resolution or business; or

100 members, holding an average of £100 of paid-up share capital each, with rights to vote on the resolution or business.

s.376 CA 1985 s.314 CA 2006 Review members’ statement procedures.

Cost of circulating members’ statements

Unless the meeting is an AGM and the requests are received prior to the end of the financial year (see section 6), members bear the circulation costs unless the company resolves otherwise.

s.377 CA 1985 s.316 CA 2006 Factor in possible costs of circulating members’ statement.

Court application not to circulate members’ statements

A court can order that a company is not required to circulate a members’ statement if it is satisfied that the rights under s.314 CA 2006 are being abused (previously, abuse was restricted to securing needless publicity for defamatory matters).

Applications to the court can be made by the company or any other person who claims to be aggrieved.

s.377 CA 1985 s.317 CA 2006 Awareness of wider scope to prevent circulation of members’ statements.

3. General Meetings – calling meetings and notices (cont.)

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4. General Meetings – procedure


Quorum – single member companies

Quorum for meetings of single member companies is one “qualifying person”. A “qualifying person” is:

a member of the company;

a person authorised under s.323 CA 2006 to act as a representative of a corporate member; or

a proxy of a member.

ss.370 and 370A CA 1985

s.318 CA 2006

Quorum – other companies

Quorum for meetings is two members of the company. Multiple corporate representatives or proxies of the same member will not alone comprise a quorum.

ss.370 and 370A CA 1985

s.318 CA 2006 Ensure there are at least two members present or represented at each general meeting.

Right to demand poll The prescribed thresholds of voting rights necessary to demand a poll are maintained (5 or more members or 10%), but in calculating the thresholds CA 2006 refers to the rights to vote on the resolution, not rights to vote at the meeting generally.

s.373 CA 1985 s.321 CA 2006

Representation of corporations at meetings

CA 2006 sets out the rights of multiple representatives appointed by corporate members.

When multiple representatives purport to exercise their votes or powers in different ways, the corporate member is deemed to have abstained from exercising its vote or power.

s.375 CA 1985 s.323 CA 2006 Corporate members should appoint proxies if they wish to appoint people with different voting intentions or to vote independently in respect of different classes or blocks of shares.

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Voting disclosure Under s.1277 CA 06 (in force from January 2007) the Government has reserved the power to make regulations requiring certain institutional shareholders to disclose information regarding the exercise of voting rights attached to their shares. Institutional shareholders for this purpose include: unit trust schemes; open-ended investment companies; investment trusts; pension schemes; undertakings authorised to carry on long-term insurance business; collective investment schemes; and such “other descriptions of institution” as may be specified in the regulations.

The Government has said it would prefer an industry-led solution and it is not currently expected that regulations will be introduced.

N/A s.1277 CA 2006

Records of resolutions and minutes

Copies of all resolutions passed otherwise than at general meetings, minutes of all general meetings and decisions of sole member companies no longer have to be kept indefinitely - for CA 2006 purposes they need only be kept for at least 10 years from the date of the resolution, meeting or decision.

ss.382, 382A and 382B CA 1985

s.355 CA 2006 Review record keeping procedures.

4. General Meetings – procedure (cont.)


5. Annual General Meetings (requirements in addition to those above for general meetings)


Requirement for public companies to hold an annual general meeting (“AGM”)

Public companies are required to hold an AGM within 6 months of the end of the company’s financial year.

s.366 CA 1985 s.336 CA 2006 Review dates of future AGMs.

Private companies and AGMs

Private companies are no longer required to hold an AGM, so there is no longer any need to pass an elective resolution to dispense with the requirement.

Those that choose to hold an AGM will be subject to the general provisions relating to general meetings held by private companies (see section 3).

The DTI have confirmed that if a private company has express provision for holding AGMs in its articles the effect of this will be preserved. However, indirect references to AGMs will be ignored, so where directors or other officers are to retire by rotation at the AGM, their appointments will continue until they are terminated in accordance with CA 2006 or other provisions in the articles.

ss.366 and 366A CA 1985

s.336 CA 2006 Review whether holding an AGM is necessary. If not, amend articles of private companies to remove AGM requirements.



Circulation of members’ resolutions for AGMs

Members may require the circulation of notice of resolution(s) to those members entitled to receive an AGM notice unless the resolution would be ineffective if passed, is defamatory or is frivolous or vexatious. The request must be made not later than 6 weeks before the AGM or, if later, the date of the AGM notice.

Thresholds for the number of members necessary to request circulation of resolutions remain largely unchanged (5% or 100 members with an average of £100 paid-up capital each).

s.376 CA 1985 s.338 CA 2006 Review resolutions to ensure that they may properly be moved.

Cost of circulating members’ resolutions or members’ statements for AGM

Members are no longer required to meet the costs of circulating a members’ statement or notice of members’ resolution(s) if the request to circulate is received before the company’s financial year end or if the company resolves to meet costs.

s.377 CA 1985 ss. 316 and 340 CA 2006

Factor in possible costs of circulation of notices when preparing for AGM.

Notice of AGM Notice of AGM must be given at least 21 days before meeting (NB – Combined Code requires 20 working days)

s.369 CA 1985 s.307 CA 2006

5. Annual General Meetings (requirements in addition to those above for general meetings) (cont.)


6. Proxies


Rights to appoint proxies A member will be able to appoint more than one proxy in respect of its registered shareholding provided that each proxy is appointed to exercise rights attaching to different shares.

Proxies will be entitled to exercise all of the members’ rights to attend, speak or vote at a meeting on a show of hands or on a poll.

s.372 CA 1985 s.324 CA 2006

Voting rights of proxies Unless the articles provide otherwise, every proxy duly appointed has one vote on a show of hands. This means that multiple proxies appointed by a member will together have multiple votes on a show of hands, subject to the articles. Any provision in the articles giving a member’s proxies fewer votes on a show of hands than the member would have enjoyed (i.e. less than one vote) is deemed void.

N/A s.285 CA 2006 It is technically possible for companies to scale back the collective entitlement of proxies to that number of votes the member would have on a show of hands if he attended personally. An alternative solution is to move to poll voting on all matters to avoid this imbalance.



Notice of meeting The notice of meeting must inform members of their rights under s.324 CA 2006 to appoint proxies and of any more extensive rights conferred by the company’s articles. Failure to do so will not invalidate the meeting but will attract other penalties. Separately, s.149 CA 2006 requires notices to nominated persons to include a statement of the potential rights to appoint a proxy or give voting instructions that persons nominated to enjoy information rights might have under arrangements with the registered member. Finally, s.149 CA 2006 requires the main notification to members of their rights under s.325 CA 2006 to state that those rights do not apply to nominated persons.

s.372 CA 1985 s.325 CA 2006, s.149 CA 2006

Notice procedures and legends on notices of meetings will need updating for this.

Notice of appointment of proxy

Deadlines for proxy forms must not be earlier than 48 hours before the relevant meeting. Unlike CA 1985, weekends and bank holidays need not be counted in calculating this period. This means that a general meeting scheduled for 9:30 am on a Monday cannot have a proxy deadline earlier than 9:30 am on the previous Thursday. Articles may provide for a later deadline.

When a poll is taken more than 48 hours after it is demanded, then the company cannot specify a deadline earlier than 24 hours before the scheduled time for the poll.

When a poll is taken less than 48 hours before it is demanded, notice must be received at the time the poll is demanded.

s.372 CA 1985 s.327 CA 2006 Consider amending articles (which may provide for a straight 48 hour period in line with CA 1985) to take advantage of the ability under CA 2006 to set potentially earlier proxy deadlines.

6. Proxies (cont.)



Termination of proxy authority

Companies are bound to recognise withdrawals of proxy authority if they receive notice before the commencement of the meeting. Articles may move the deadline back to no earlier than the time that is 48 hours (again, counting only working days) before the commencement of the meeting.

Article 63 Table A s.330 CA 2006 Consider amending articles to provide for earlier deadline for receipt of termination of proxy authorities.

6. Proxies (cont.)


7. Poll Requirements (listed companies only)


Publication of poll results on website

When a poll is taken at any general meeting (including an AGM), the following information must be published on a website:

date of meeting;

text of resolution or other subject matter of poll; and

votes cast in favour and against.

This information must be made available on a website as soon as reasonably practicable following the meeting and remain available on the website for two years. Failure to do so will not affect the validity of poll or the subject matter voted on, but will attract other penalties.

N/A ss.341 and 353 CA 2006

Ensure that poll results are published on the company’s website as soon as practicable after the poll vote has been taken.

The website can be the company’s own or one operated by a website service provided it identifies the company.

Members’ power to require an independent report on poll

Members representing 5% of total voting rights of all members or 100 members each holding an average of £100 of paid-up shares who are entitled to vote on the matter to which the poll relates, may request an independent report to be obtained on any poll taken in a general meeting. These thresholds must be met for every poll investigated.

The request must identify the polls to which the report should relate, must be authenticated by those making the report and must be received by the company no later than a week after the poll is taken.

N/A s.342 CA 2006 Be aware that members may request this independent report.

Plan procedures for obtaining report and appointment of independent assessor.



Contents of independent assessor’s report

As a minimum, the independent report must contain the name of the assessor and his opinion on whether:

the procedures adopted in connection with the poll or polls were adequate;

the votes cast (including proxy votes) were fairly and accurately recorded and counted;

the validity of members’ appointments of proxies was fairly assessed;

the notice of meeting contained the required statement of rights to appoint proxies; and

the rules regarding company-sponsored invitations to appoint proxies were complied with.

The report must also give the assessor’s reasons for the opinions stated and, if he is unable to form an opinion on any of the matters, record that fact and state the reasons.

N/A s.347 CA 2006 Ensure report requirements are fulfilled.

7. Poll Requirements (listed companies only) (cont.)



Rights of independent assessor

The independent assessor is entitled to attend the meeting at which the poll is taken (if appointed before the poll) and any subsequent proceedings in connection with the poll, as well as receive copies of any communications or notices sent to members regarding the meeting.

The independent assessor may also access the company’s records relating to any poll on which he is to report or the meeting at which the poll or polls may be, or were, taken. He may also require information from employees, agents (including bankers, solicitors and auditors), officers and members of the company.

N/A ss.348 and 349 CA 2006

Information in relation to independent assessor’s report to be made available on website

The independent assessor’s name, a description of the subject matter of the poll and a copy of his report must be made available on a website “as soon as reasonably practicable” and remain available on the website for two years.

N/A ss.351 and 353 CA 2006

Ensure timely publication of required information.

As above, the website can be the company’s own or one operated by a website service provided it identifies the company.

7. Poll Requirements (listed companies only) (cont.)


8. Exercise of Members’ Rights


Nomination of persons to enjoy members’ rights

The articles of a company may enable a member to nominate another person or persons to enjoy or exercise all or specific rights of the member in relation to the company.

While this provision may be less useful, and indeed positively impractical, for listed companies due to the technical difficulties of divorcing rights from registered ownership of shares, it may be more useful for private companies or in structured finance transactions where the ability to pass on certain members’ rights in this way would be beneficial.

N/A s.145 CA 2006 Consider amending articles to provide for nomination of persons to enjoy members’ rights.

Exercise of rights where shares held on behalf of others

Where a member holds shares on behalf of more than one person, rights attaching to those shares (or exercisable by virtue of holding those shares) need not all be exercised. If they are exercised, they do not need to be exercised the same way.

To the extent that these rights are being exercised in part or in different ways, this will need to be disclosed to the company.

N/A s.152 CA 2006 Ensure voting and other corporate procedures accommodate such two-way action.



Exercise of rights where shares are held on behalf of others – members’ requests

Nominated persons (see section 9) may count towards the statutory thresholds for the following member requisitions:

the power to require the circulation of a statement to members (s.314);

the power to require the circulation of an AGM resolution for a public company (s.338);

the power to require an independent report on a poll (s.342); and

the power to require website publication of audit concerns (s.527).

The necessary request must be made by at least 100 persons, with an average of £100 of paid up share capital each, authenticated by those persons and accompanied by a statement from members or the indirect investors making the request setting out the basis on which shares are being held by them/for them (as appropriate).

There are some surprising omissions from this list, such as the power to require the directors of a company to call a general meeting (s.303 CA 2006).

N/A s.153 CA 2006 Establish procedures to ensure any such requests from nominated persons are treated correctly.

8. Exercise of Members’ Rights (cont.)


9. Information Rights and Nominated Persons


Nomination of persons to enjoy member’s rights

See section 8. N/A s.145 CA 2006 Consider amending articles to provide for nomination of persons to enjoy member’s rights.

Information rights – listed companies

Members of companies with shares admitted to trading on a regulated market may nominate another person to enjoy “information rights”, which are rights to receive:

all communications from the company to its members;

copies of the company’s accounts and reports;

hard copies of documents sent in other forms, i.e. electronically (s.1145).

A company may refrain from acting on nominations that only relate to certain information rights (i.e. nomination must be all or nothing).

N/A s.146 CA 2006 Consider creating a standard nomination form to be used by members. Such forms may be made available on the company’s website.

Create a separate register of nominated persons.



Information rights – form of documents

A nominated person will be deemed to have agreed to receive information by means of publication on a website, unless the company is notified by the nominating member that the nominated person wants to receive documents in hard copy and an address is provided for delivery. Such notification must be given before the nomination is made.

Any deemed agreement to website publication may be revoked and does not prevent the nominated person from requesting hard copies of documents under s.1145 CA 2006.

This provision is subject to any more general steps taken by the company to provide for electronic communications to members (see section 12).

N/A s.147 CA 2006 Ensure company has facilities to publish documents on website.

Consider existing electronic communication arrangements with members.

9. Information Rights and Nominated Persons (cont.)



Information rights - termination or suspension of nomination

Nomination may be terminated by the member or nominated person. Nomination will also cease if the member/nominated person dies or becomes bankrupt or, in the case of a corporate body, is wound up.

Nomination is suspended if there are more nominated persons than the member has shares in the company.

If a company asks a nominated person whether they would like to retain information rights, the nomination will terminate if there is no response within 28 days. Such enquiries can only be made once in any 12-month period.

Any termination does not prevent the company from continuing to act on the nomination.

N/A s.148 CA 2006 Yearly enquiries as to retention of information rights may be despatched with annual reports and accounts to ensure register of nominated persons is up to date.

Information rights – notice of meetings

Notices of general meetings will need to include a statement that the nominated person may have rights under any agreement with the member by whom he was appointed to have a proxy appointed or to give voting instructions.

N/A s.149 CA 2006 Amend wording of notices of general meetings.




Information rights – status of rights

Rights conferred by nomination may be enforced against the company by the member as if the rights were conferred by the articles. It would appear that the nominated person has no direct action against the company.

Any changes to articles impacting on communications with a member have a corresponding impact on communications with the nominated person.

N/A s.150 CA 2006 Be aware of impact of article changes and ability of members to enforce nomination rights.



10. Inspection of Records1


Records with statutory right of inspection

CA 2006 retains the statutory right to inspect the same records listed in CA 1985 except the register of directors’ interests (which companies will no longer be required to maintain).

In a change to current provisions, the Company’s register of directors will contain the director’s service address, rather than his or her residential address. Companies will also have to keep a register of residential addresses but this will not be open to inspection.

CA 2006 introduces some restrictions on the basic position under CA 1985 that any person can inspect or request a copy of a company’s register of members. Any person exercising the right to inspect or request a copy of the register must make a request containing the following details:

name and address;

purpose for which the information is sought;

whether the information will be disclosed to any other person and, if so, provide the same level of detail in respect of that person.

s.289 CA 1985

ss.352–362 CA 1985

ss.163–165 CA 2006

ss.113–121 CA 2006

s.1136 CA 2006

Check current locations of records.

Revise arrangements for register of directors’ addresses if appropriate.

Companies will also have to give notice to Companies House, when this part of CA 2006 comes into force (due October 2008), of where their register of members is kept unless it has always been kept at the registered office.

1 ss.112-144 and ss.163-165 are due to be implemented on 1 October 2008.



A company has 5 working days (reduced from 10 working days in CA 1985) to comply with the request or apply to court for relief if it believes the request is without “proper purpose”. If the court agrees, the company does not have to comply with the request. The concept of “proper purpose” is not defined in CA 2006. The lack of a definition of “proper purpose” may cause some difficulty for companies in determining whether to comply with requests for access to, or copies of, the register. Given that companies are processing personal data (for the purposes of the Data Protection Act 1998 (“DPA 98”)) when maintaining their register of members, care will need to be taken to ensure that they are not exposed to potential compensation claims under DPA 98 by acceding to s.116 CA 2006 requests made for an improper purpose.

CA 2006 also introduces a statutory right to inspect copies of any qualifying indemnity provision for directors, and documents relating to redemption or purchase of own shares out of capital by private companies.

10. Inspection of Records1 (cont.)



All company records with a statutory right of inspection must be kept at a company’s registered office for inspection, unless the Secretary of State makes regulations specifying other places where these records may be kept. The regulations may specify a place by reference to the company’s principal place of business, the part of the UK in which the company is registered, the place at which the company keeps any other records for inspection or in any other way. The regulations may also specify more than one place in relation to specific records.

The DTI has confirmed that they consider that a company’s choice regarding the place of inspection for a specific company record should be restricted to a single location. The DTI also propose that disclosure of these places should be made in a company’s annual return, annual report and accounts, on its website and provided immediately to anyone who requests the information.

10. Inspection of Records1 (cont.)


11. Company Names and Trading Disclosures2


Objections to a company’s name

Objections can be made where a company’s registered name is the same as one in which the objector has goodwill or where the name is so similar that it is likely to mislead by suggesting a connection between the objector and the company in question. The objection must be made to a company names adjudicator, a new office established by CA 2006. The adjudicator can require a change of name.

N/A ss.69–74 CA 2006

Awareness of similar company names and a new objections procedure.

Changing a company’s name

The established method of changing a company name by special resolution remains in force. CA 2006 also allows name changes by whatever means are prescribed in the articles of association or by the company names adjudicator if an objection is upheld.

ss.28–31 CA 1985

ss.77–81 CA 2006

Consider amending articles to provide for an alternative to a special resolution to change name. The articles could provide, for example, for the directors to have the authority to change the company’s name.

2 Provisions relating to trading disclosures under the Companies (Registrar, Languages and Trading Disclosures) Regulations 2006 came into force on 1 January 2007.



Trading disclosures Regulations will be issued pursuant to s.82 CA 2006 which will require companies to display specified corporate information, particularly the company’s registered name, in locations or on documents specified by the regulations. It is expected that the regulations will largely follow the requirements as set out in ss.348–351 CA 1985, as amended by the Companies (Registrar, Languages and Trading Disclosures) Regulations 2006 (the “Trading Disclosures Regulations”). The Trading Disclosures Regulations currently require disclosure of certain corporate information (full name, number, registered office and the place of registration) on business letters and order forms (including electronic forms of such documents e.g. e-mails) and on company websites.

There is no need to include this information on all web pages; a single reference is sufficient. For example, it could be included in the “About us” section of the website.

The required information can be added as a footer to e-mails sent. The DTI have confirmed that the information can be provided by means of a hypertext link in an e-mail footer leading to a webpage containing all the necessary corporate information, as long as the information relating to the company sending the e-mail can be clearly identified on the webpage.

ss.348–351 CA 1985

Trading Disclosures Regulations amending ss.348–351 CA 1985

ss.82–85 CA 2006

Review company documentation website and e-mail footers and include specified corporate information or hypertext links if necessary.

11. Company Names and Trading Disclosures2 (cont.)



The DTI also propose that companies should include their registered name on all other company documentation, except for communications made pursuant to an agreement made in the previous 12 months between the company and the recipient.

11. Company Names and Trading Disclosures2 (cont.)


12. Electronic Communication3

Notice of general meeting on website

To publish notice of a general meeting on a website the notice must be available on the website throughout the notice period until the conclusion of the meeting.

CA 2006 sets a high test of reliability for websites. Schedule 5 provides that a failure to make information available on a website throughout the relevant period (e.g. the notice period for a shareholders’ meeting) will be disregarded only if the failure is wholly attributable to circumstances which it would not be reasonable for the company to prevent or avoid.

CA 1985 s.369(4)(a)(b)(c)

s.309, schedule 5 (para. 14) CA 2006

Ensure that appropriate security and internal procedures are in place in relation to the website used for CA 2006 communications.

Website communication A company can communicate with members by website if:

(i) its articles provide for website communication or shareholders have approved website communication in general meeting; and

(ii) the individual member agrees, or is deemed to agree (agreement is deemed if shareholders do not opt out of website communication within 28 days of being asked by the company).

Once consent is obtained, companies still need to notify recipients of the presence of the document or information on the website, the web address and how information is accessed.

CA 1985 s.369(4)(a)(b)(c)

ss.1143–1148, schedule 5 (para. 10(2)(9a)) CA 2006

If not already in place, a company will need to amend articles or pass a shareholder resolution to authorise use of a website and, unless a company has obtained individual shareholder consent, it could consider sending a letter to members requesting agreement to website communication. If the company has not heard from the member within 28 days, he or she will be deemed to have agreed.

3 The UKLA’s Disclosure and Transparency Rules and the provisions relating to electronic communications in CA 2006 came into force in January 2007.


Email or fax communication

A company can send documents or information in electronic communication (email or fax) to those members who have individually agreed to receive documents in this way. Individuals have to actively consent to electronic communication and cannot be deemed to have consented.

CA 1985 s.369(4)(a)(b)(c)

ss.1143–1148, schedule 5 CA 2006

Unless a company has obtained individual shareholder consent under CA 1985, it could consider sending a letter to members requesting agreement to electronic communication. The letter should contain a detachable slip which shareholders can use to indicate consent to receiving documents electronically.

CA 2006 does not require shareholder approval for electronic communication but the UKLA’s Disclosure and Transparency Rules (DTR) separately impose this on listed companies.

N/A DTR 6.1.8(1) Listed companies without the necessary permission require shareholder approval to communicate with shareholders by electronic means.

This document is not intended to provide legal advice, which should be sought on particular matters. Please refer to your usual contact at Slaughter and May for further information about the Companies Act 2006.

© Slaughter and May, 2007

12. Electronic Communication3 (cont.)

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