The Companies Act 2006 is a wide ranging piece of legislation which attempts to bring company law together under one Act of Parliament. The provisions of the Act are being brought into force gradually, with the consequence that until fully enacted two sets of legislation need to be consulted.
The result is a complex and technical body of law which affects the day-to-day running of all companies, from small family owned limited companies through to large multi-national PLCs. Failure to comply with company law legislation can expose your business to financial risks, possible fines and even criminal prosecutions.
Our business law solicitors combine detailed technical expertise, knowledge and experience of company law with an understanding of your business and objectives. This enables our lawyers to provide realistic solutions tailored to your business.
Our business law team can assist with:
In addition to preparing the legal documents required to form a company, such as form IN01 and registering the company at Companies House, there are other issues that need to be addressed when forming a company, which are often overlooked. These include, company names and the Memorandum and Articles of Association. Our business lawyers will advise you on these and any other matters necessary to ensure your company is all set from the word go.
Memorandum and Articles of Association
These documents regulate a company, particularly directors’ powers and decision making procedures. Often standard Articles, known as Table A Articles, are used but they are not suitable in every instance. Failure to adhere to the Memorandum and Articles can lead to contracts being set aside, fines being imposed and even criminal sanctions. If your company has grown or restructured the original Articles may need updating. Our business lawyers know and understand your business. They can provide advice specific to your company to ensure Articles of Association are fit for purpose and that your company is abiding by them.
Generally the amount of shares held, and the type of shares, regulates a shareholder’s right to have a say in running the company. These rights include calling general meetings, putting resolutions forward and voting. Many shareholders do not utilise the rights deriving from their share ownership as they do not understand them. In addition shareholders can enter into a shareholders agreement. This is a document which regulates the relationship between the shareholders themselves. Shareholder Agreements can deal with voting and other issues such as a right of first refusal when shareholders want to sell their shares.
Shareholders should seek advice from a specialist business lawyer to ensure they understand their rights. A Shareholder Agreement is a complex legal document and a business lawyer will always be needed to draw one up. A shareholder should not sign a Shareholder Agreement without first taking legal advice otherwise they may prejudice their position. Our business law solicitors have experience in advising shareholders on their rights and drawing up shareholders agreements
Directors duties underwent a huge upheaval under the Companies Act 2006. The Act clarified the responsibilities directors owe to the company, shareholders and creditors. Any director who does not fully understand their duties risks exposing the company to financial penalties and themselves to expensive claims or even criminal sanctions. Directors of companies should consult a specialist business lawyer on a regular basis to ensure their decision making processes are lawful and do not expose themselves or the company to any unnecessary risks. Our business law solicitors can provide up to date, specialist advice on the duties of directors.
Company procedure and corporate governance issues
Many ordinary activities a company may undertake (buying back shares, helping shareholders acquire more shares and directors helping the company to acquire property to name but a few) require a complex process of shareholder resolutions, meetings and filing documents at Companies House. Failure to follow procedure to the letter can lead to transactions and contracts being set aside and fines for directors and the company. Our business law solicitors can advise on all aspects of company procedure and corporate governance. Often specialist legal documentation and Companies House forms need to be completed. We can advise what procedures need to be followed, draw up all documentation and complete any other formalities.