Companies Act: Timetable for implementation

In February 2007, Margaret Hodge, Minister for Industry and the Regions, outlined the details of the implementation timetable for the Companies Act2006 and confirmed that those provisions of the Act which are not yet in force will be implemented in four stages, over a period of a year and a half. The staggered timetable is intended to give companies sufficient time to prepare for the new regime under the Act, rather than implement the 1300 sections of the Act on one day.

This announcement only deals with the provisions of the Act not covered by the first and second commencement orders, which brought certain provisions into force in January 2007 and will bring others into force on 6 April 2007. In accordance with the timetable, the DTI plans to have all aspects of the Act fully implemented by 1 October 2008.

With the implementation schedule now published, companies are advised to begin establishing their own timetable for compliance in order to prepare for, and take advantage of, the provisions under the Act particularly those which are to come into force on 1st October 2007.

he timetable for implementation is as follows:

The parts of the Act coming into force on 6 April 2007 will relate primarily to the implementation of the Takeovers Directive. These provisions will place the regulatory authority of the Takeover Panel on a statutory footing and replace the interim regulations enacted last year to implement the Directive.

The parts of the Act being implemented on 1 October 2007 will include those relating to corporate governance and administration, including:

• Exercise of Members' rights
• A company's directors, other than provisions relation to directors' conflict of interest duties, directors' residential addresses and underage and natural directors
• Derivative claims and proceedings by members
• Resolutions and meetings
• Control of political donations and expenditure
• Contents of directors' report: business review
• Fraudulent trading
• Protection of members against unfair prejudice
• Company investigations: amendments

The provisions being implemented on 6 April 2008 will relate to accounting and finance, as well as transactions such as reconstructions, mergers and the divisions of public companies. Other provisions to be implemented on this date will include those relating to:

• Company secretaries
• Accounts and reports
• Audit (most provisions)
• Debentures
• Certification and transfer of securities
• Distributions
• Arrangements and reconstructions
• Mergers and divisions of public companies
• Statutory auditors

The final parts of the Act will be introduced on 1 October 2008. These will include provisions relating to company formation, directors' conflicts of interest, the abolition of the prohibition on financial assistance by private companies and annual returns.

PricewaterhouseCoopers' specialists consulted with regulators on various aspects of the Act, and are well placed to help companies identify and find solutions to any concerns that might emerge as a result of the legislation.