Other Governance Related Changes under the Companies Act 2014

• An LTD is permitted to have only one director by section 128 (PLCs, DACs,CLGs and unlimited companies must have at least 2 directors by virtue of sections 1088, 985, 1194  and 1257 respectively);
• All company directors and secretaries must be at least 18 years of age – section 131;
• A company secretary of an LTD, DAC, CLG or an unlimited company must possess the necessary skills and resources to fulfil his/her role in accordance with section 129.  Section 1112 places further qualification requirements on the company secretary of a PLC;
• One third of the directors of a CLG (section 1196) and of a PLC (section 1090) are required to retire at each annual general meeting.  This rotation of directors, which was previously included in Table A of the Companies Act 1963, is not required for an LTD, DAC or an unlimited company.
• Section 155 permits the board of directors of an LTD, DAC and unlimited company to determine the remuneration of the directors.  The remuneration of the directors of a PLC and CLG must be determined by the members in general meeting, unless the company constitution determines otherwise, by virtue of sections 1092 and 1197 respectively.
• Members holding more that 50% of the voting rights of a LTD, DAC or PLC may themselves convene an extraordinary general meeting (“EGM”) of the company under section 178.  Previous company law only facilitated such a majority of members requesting the directors of the company to convene an EGM.   This section is disapplied to CLGs by section 1203.
• The extension of the duties of directors to shadow directors and de facto directors – for further information refer to sections 221 and 222;
• Changes in relation to the rules around disclosure of directors’ interests in company contracts  - for further information refer to section 231 and see Section 8 of Technical Release 02/2015;
• Changes in relation to the rules around the disclosure of directors’ and secretary’s interests in shares – for further information refer to sections 260-266;
• New evidential provisions in relation to loans to and from company directors.   The terms of any loans to a director must be evidenced in writing or default terms will be applied in accordance with section 236.  Where a director provides a loan to a company of which he is a director the loan must be evidenced in writing or it will be presumed not to have been made as set out in section 237.  Section 237 provides for further presumptions to be made about a loan between the company and a director the terms of which are ambiguous.