Company Law Reform: publication of Bill

As previously reported, on 3 November 2005 the Company Law Reform Bill was published, along with a regulatory impact assessment and revised summary for small business. Areas in which changes have been made to the proposals previously published for consultation include: (1) amendments to the statutory statement of directors' duties; (2) true and fair accounts - a new clause has been included providing that directors must not approve annual accounts unless they are satisfied that they give a true and fair view, and that the auditor must have regard to that duty of directors of in carrying out his functions; (3) accounts and reports - a new Part 15 has been inserted, the clauses of which were not released for public consultation; (4) resolutions and meetings - the current minimum notice periods for general meetings have been retained, and the proposal to grant shareholders of quoted companies a right within a 15-day holding period after the accounts become available to propose a resolution to be moved at the general meeting has been dropped; and (5) offences - the proposed extension of offences to "senior executives" and "responsible delegates" has been abandoned, and the Government has not pursued proposals to increase the maximum penalty for the offence of directors approving defective accounts to seven years' imprisonment or to introduce the same maximum penalty for the new offence for auditors who knowingly or recklessly issue an incorrect audit report.


 

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