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Written Statement 13 December 2007

WRITTEN STATEMENT (13 DECEMBER 2007)

COMPANIES ACT 2006

The Minister for Competitiveness (Stephen Timms):

I announced to the House on 7 November 2007 that the Government had decided to delay final implementation of the Companies Act 2006 until October 2009, in the light of advice from the Registrar of Companies that he can not be absolutely confident of implementing the necessary changes to Companies House systems and processes by October 2008. I also explained that we would consult key stakeholders about the commencement date for provisions due to be commenced in October 2008 which do not necessitate changes to Companies House systems and processes.

In the light of our discussions and meetings with key stakeholders, the Government has decided that the following provisions, listed in my earlier Statement, should be commenced with effect from 1 October 2008:

• sections 69 to 74: objection to company names;
• sections 82 to 85: trading disclosures;
• sections 155 to 159: provisions relating to corporate directors and under-age directors;
• sections 175 to 177: general duties of directors in respect of conflicts of interest;
• sections 182 to 187: declaration by a director of an interest in an existing transaction or arrangement;
• repeal of the restrictions under the Companies Act 1985 on financial assistance for acquisition of shares in private companies, including the "whitewash" procedure.

In view of the strength of business representations and of further advice from the Registrar of Companies, the Government has decided in addition to commence with effect from 1 October 2008:

• the new procedure for private companies to make capital reductions supported by a solvency statement instead of by a court order.

Stakeholders highlighted the major benefit to business of implementation in 2008 of this new procedure. The Government had originally not proposed this, because it would require some changes to Companies House systems and processes. We have looked at this again in the light of the points made by business, and I am pleased to say that the Registrar of Companies believes that the necessary changes can be made by October 2008.

There are also two sets of provisions which we have decided to commence with effect from 6 April 2008:

• sections 121 and 128 (register of members: removal of entries relating to former members);
• sections 811(4), 812 and 814: inspection of register of interests in a company’s shares.

I aim to make before Christmas a commencement order in respect of all provisions to be commenced in 2008, other than those relating to capital reduction supported by a solvency statement and the removal of special provisions about accounts and audit for charitable companies. The capital reduction provisions (including section 654 on distributions of reserves arising from a capital reduction) will be commenced through a separate commencement order to be laid in draft in 2008. There will also be a separate commencement order on the audit of small charitable companies.