Companies Act 2006: Provisions Coming Into Force On 1 October 2008

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Companies Act 2006: Provisions Coming Into Force On 1 October 2008

The Companies Act 2006 (the "2006 Act") effects the

most sweeping and significant alteration of UK companies

legislation for over 20 years. Significant portions of the 2006 Act

were implemented on 1 October 2007 and 6 April 2008, with the

remainder coming into force on 1 October 2008 and 1 October

2009.

MAIN CHANGES

The main provisions of the 2006 Act becoming effective on 1

October 2008 relate to reductions in share capital, the abolition

of the prohibition on financial assistance for private companies

and the introduction of new statutory duties for directors in

connection with conflicts of interest. These changes are discussed

in more detail below.

PROVISIONS TO BE IMPLEMENTED ON 1 OCTOBER

2008

Reductions in Capital (sections 610, 641(a) and (2) to

(6) and 642-4 of the 2006 Act)

A private company will be able to undertake a reduction of its

share capital (including share premium account and capital

redemption reserve) by means of a special resolution supported by a

solvency statement. It will no longer be necessary for a private

company to obtain the ...

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