Company information - are you compliant?

You will already be familiar with the requirement that all companies and LLPs must display certain statutory information on their business letters and order forms.  New regulations have come into force which also require companies and LLPs to display information on electronic letters (including e-mails); order forms; invoices and on their websites.

The information which companies and LLPs are required to display is:

	Full corporate name
	Registered number
	Registered office address
	Place of Registration

 Companies Act 2006

The new Companies Act 2006 was passed in November last year.  The Act is the widest reaching reform of company law for over 20 years.  The key changes in the Act will:

	de-regulate company administration, meetings and resolutions making it easier to set up and run companies
	relax some of the rules on maintenance of share capital
	remove the prohibition on giving financial assistance for certain transactions in shares
	introduce a statutory regime of directors' duties
	give shareholders greater powers to bring actions against directors for breaches of duty.

However, other than some limited provisions on electronic communications (see below), the vast majority of the Act has not yet come into force.  The new Act will replace the existing Companies Act and be implemented in stages in October this year and in April and October 2008.  The main changes coming into force this October will deal with directors and their duties and the procedures for company meetings and resolutions. In the run up to October we will be producing a series of briefings on the implications of the Act with our recommendations for any actions which companies should consider.

Electronic Communications

The new Companies Act has extended the existing powers which enable a company to send notices, annual accounts and other documents and information to its shareholders electronically (e.g. by e-mail) or by posting such documents on a website.

What steps must a company take to allow electronic communications?

Accepting electronic communications from shareholders

In order to accept electronic communications from shareholders a company must include an electronic address for the company on the notices of meeting and the proxy forms it sends out.  The company should also consider whether any form of authentication will be required from the sender and, if so, details of the authentication procedure should be included in the notes to the proxy form. 

Sending electronic communications to shareholders

A company must write to shareholders to obtain individual shareholder consents to electronic communication by the company.  Any consents already given under the current Companies Act can be relied upon for this purpose.

Listed companies (which for this purpose do not include companies listed on AIM) will also need to pass a resolution to approve electronic communication with shareholders.

Communications with shareholders via websites

A company must write to shareholders to obtain individual shareholder consent to the supply of documents and information via a website.  Any consents already given under the current Companies Act can again be relied upon for this purpose.

Unlike electronic communication, if a shareholder fails to respond within 28 days that shareholder will be deemed to have agreed to communication via website.  However, the benefit of this deeming provision is tempered by the fact that companies must inform shareholders when documents or information are placed on a website and, unless the shareholder has consented to electronic communication, the company will need to inform the shareholder in writing.

Listed companies (again, which do not include companies listed on AIM) will also need to pass a  resolution to approve communication with shareholders via a website.

For further information on the items covered in this bulletin please contact Richard Hopkins: email, richard.hopkins@roxburghmilkins.com tel., 0845 241 9504 or your usual contact at Roxburgh Milkins LLP.

May 2007