New
proposals to cut red tape and save business around £170m a year have been
unveiled in a new White Paper Modernising Company Law.
Acknowledged
as the most fundamental review of company law in 150 years, the White Paper is
the first part of the Government’s response to the Company Law Review completed
last year.
Among
the key proposals to be announced are new rules relating to the duties of
directors in respect of company audits.
For
the first time, auditors will have a statutory right to ask for company
information from employees and certain contractors, and directors will be
obliged to volunteer information to auditors.
Other
key proposals include:
–
directors’ duties will be set out clearly in statute for the first time, with
clear guidance provided for all directors on their obligations under the law;
–
corporate directors will be prohibited;
–
private companies will no longer have to appoint company secretaries;
–
private companies will not have to hold Annual General Meetings unless members
want them; and
–
companies will be able to exploit the internet and e-mail to take decisions –
instead of holding expensive meetings.
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Competition
Minister Melanie Johnson said the suggested changes are needed to make the law
clearer and accessible. She said: "This will produce savings of nearly
£170m for small companies, freeing them from unnecessary red tape. This is
about intelligent regulation that promotes enterprise and responsible business,
improving competitiveness and building markets in which all of us, whether
investors, consumers, creditors or employees, can have confidence."
