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Companies Act 2006
This Bill is intended to keep the regulatory burden on business to a minimum, particularly small and medium sized enterprises.
It is the government’s rationale that a “modern, flexible and accessible” body of company law is both necessary and beneficial to a successful British economy.
The legislation has its roots in the independent Company Law Review, and is based around four main themes:
- To improve and encourage shareholder engagement and a long-term investment culture;
- To ensure better regulation of business and a “Think Small First” approach;
- To make it easier to set up and run a company, and;
- To provide a level of flexibility for the future business environment.
The Bill contains provisions to limit the liability on auditors and directors. This will be welcome news to the major accountancy firms that have lobbied hard on the issue.
It is estimated that the measures could save business around £250 million per year, including £100 million for SMEs.
Trade and Industry Secretary Alan Johnson said:
"An effective framework of company law and corporate governance will promote enterprise and help stimulate investment in the UK.
He added:
"These measures also represent a significant step forward in ensuring that our company law remains up to date, flexible and accessible for everyone who uses it."
Progress
House of Lords
First reading: November 1 2005 (HL Bill 34)
Second reading: January 11 2006
Grand Committee:
Report stage:
Third reading: May 23 2006
House of Commons
First reading: no date
Second reading: June 6 2006
Standing Committee D:
Remaining stages:
House of Lords
Consideration of Commons amendments: November 2 2006
Royal Assent: November 8 2006
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