October 1st saw a raft of new laws that came into force across the UK. The following are a selection of the new laws concerning changes of regimes for running a business.

1. Minimum age for appointment as director

Section 157 of The Companies Act

With just a few exceptions, all directorships held by a person who is under the age of 16 will automatically end on 1st October 2008. The need to inform the Registrar of Companies will no longer be required although company records should be amended.

If, as a result of the change, the company is left without a suitable director, then at least one new director will need to be appointed to address the position.

2. Limited companies as sole directors

Section 155 of The Companies Act

From October 1st, limited companies are required to have at least one human director. This new rule is designed to restrict a limited company from acting as the sole director for another limited company.

There is, however, a grace period (up to 1st October, 2010) for companies who had a sole corporate director in place on 8th November 2006 to comply.

3. Financial assistance for private companies

Chapter 2 of the Companies Act

From October 1st, privately owned companies can use financial assistance in order to acquire their own shares. This process effectively removes the need for a private company to undertake the ‘whitewash’ procedure (which required a directors’ statutory declaration of solvency, an auditors’ report and a special resolution of the company). However, where the private company has a public company subsidiary, the public company will not be afforded the benefit of this rule.

4. Disclosure in annual returns for private and non-traded public companies

The Companies Act 1985 (Annual Return) and Companies (Principal Business Activities) (Amendment) Regulations 2008

Businesses whose annual returns have a ‘made up date’ on or after 1st October 2008 are no longer required to disclose the addresses of the shareholders of private and non-traded public companies.

Importantly, any company including the address of shareholders where this isn’t necessary will have its annual return rejected by Companies House. The addresses of shareholders in publicly-traded companies who hold at least 5% of any share class will, however, still need to be provided.

5. Directors’ duties: duty to avoid conflicts of interest

Section 175 of the Companies Act

With effect from October 1st, company directors will be under an express duty to avoid conflicts of interest. This new rule will let companies put provisions into their constitutions to allow for the prior approval of conflicts (or potential conflicts). If a director complies with any such provisions then they will be free themselves of any liability for breach of the duty.

Additionally, the duty extends to not accepting benefits from third parties where any possibility of a conflict of interest may arise.

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