---

Companies Act 2006

As my predecessor announced by written statement on 13 December 2007, Official Report, column 45WS, the Companies Act 2006 is being commenced in tranches between Royal Assent on 8 November 2006 and 1 October 2009. I have today laid before Parliament the eighth commencement order, which commences the final provisions with effect from 1 October 2009. There are two minor sets of provisions in the Act that we are not proposing to commence. When a suitable opportunity arises, the Government will propose to Parliament the repeal of these provisions. The first set are sections 327(2)(c) and 330(6)(c). Sections 324 to 331 deal with the use of proxies, whereby shareholders who do not attend company meetings can delegate their vote to someone who will attend. This can be a vote on a show of hands, or on a poll, where the number of shares of each person voting is taken into account. The 2006 Act restated the rules on proxies contained in the Companies Act 1985 and its Northern Ireland equivalent, the Companies (Northern Ireland) Order 1986, with a number of changes, including making it easier for a member to appoint more than one proxy. Companies' articles generally provide a deadline by which documents appointing proxies need to be received before a meeting. Section 327 prevents this deadline being set at more than 48 hours before the meeting. If a poll is called for at a meeting and if it is to be taken more than 48 hours later, then subsection 327(2)(b) provides that the deadline for appointing proxies will be not more than 24 hours before the poll. The intention behind subsection 327(2)(c) was to provide, that where a poll is taken within 48 hours of its being called at a meeting, the deadline would be 48 hours before the meeting, as for proxy voting at the meeting. As drafted, however, subsection 327(c) would have the unintended effect that the deadline would be the time at which the poll was called for. That is why the subsection has not been commenced so far, and why the Government believe that it should not be commenced, and that subsection 330(6)(c) which makes similar provision for withdrawing authority from a proxy should not be commenced. The second set of provisions that are not being commenced are section 1175 so far as it relates to Northern Ireland and the associated part 2 of schedule 9. Part 16 of the Act replaces the rules on audit requirements from the Companies Act 1985 with a number of changes, including that there are no longer special rules for the audit of companies that are charities. This is because in future special rules for charities, whether companies or not, are to be included in charities legislation. As it seemed likely that charity law in England and Wales would be amended to replace these rules before the commencement of part 16 of the Companies Act 2006, schedule 9 included provisions to amend the Companies Act 1985 to remove the special rules for audit of charitable companies. In the event, the Charities Act 2006 (Charitable Companies Audit and Group Accounts Provisions) Order 2008 (SI 2008/527) came into force on 1 April 2008, and so part 1 of schedule 9 was commenced on that date by the Sixth Companies Act 2006 Commencement Order. Part 1 of the schedule covers England and Wales, and also Scotland where their charities legislation was also ready to take over. Similar provisions to amend the Companies (Northern Ireland) Order 1986 were included in part 2 of schedule 9 to the Companies Act 2006, but at the time part 16 was commenced there were no provisions in Northern Ireland charity law to apply audit requirements to smaller charitable companies. The sixth Commencement Order therefore saved the existing rules on the audit of smaller charitable companies in the 1986 Order, and there will never be any need to commence section 1175 in relation to Northern Ireland, or part 2 of schedule 9.