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The Companies (Corporate Governance, Enforcement and Regulatory Provisions) Act 2024 (the Act) was signed into law on 12 November 2024. We now know that certain provisions will commence on 3 December 2024 by virtue of a Commencement Order signed on 20 November 2024. The Act makes a number of amendments to the Companies Act 2014 (the 2014 Act).
Key changes commencing on 3 December 2024 include:
Hybrid and virtual general meetings
The Act reproduces the popular provisions first introduced by the Companies (Miscellaneous Provisions) (Covid-19) Act 2020 (the 2020 Act), which allow companies to hold annual general meetings (AGMs) and extraordinary general meetings (EGMs) "wholly or partly by the use of electronic communications technology". The corresponding sections of the 2020 Act are repealed as of 3 December 2024.
While broadly similar, there are some subtle differences between the provisions of the 2020 Act and the new provisions, so it is important for companies to review their procedures. One key difference is that the provisions of the Act apply "save to the extent that the company's constitution provides otherwise". This means that the Act does not override what is set down in a company's constitution. So, any companies that have been relying on the 2020 Act to hold hybrid or virtual AGMs over the last four years, but that did not update their constitutions, may need to amend their constitutions in order to continue to conduct hybrid and/or virtual general meetings.
Counterpart execution
The flexibility for companies to execute documents under seal in different parts, which was introduced under the 2020 Act, has been reinstated.
Domestic mergers
The Act remedies an anomaly in the 2014 Act that has long caused difficulties. From 3 December 2024, designated activity companies (DACs) will be permitted to carry out domestic mergers in the same way as private limited companies. Prior to this, a DAC had to convert into a private company in order to merge.
The Act also amends the 2014 Act such that, in the case of a merger by absorption, a group of subsidiary companies, wholly owned by the same parent company, may be merged in one transaction rather than requiring several transactions.
More grounds of involuntary strike off
The grounds for striking a company off the Register are extended to include grounds of: (i) failure to provide confirmation of registered office, (ii) failure to appoint a company secretary, and (iii) failure to comply with registration of beneficial ownership information requirements.
Receivership and liquidation
A number of changes have been made to the powers and duties of receivers and liquidators, including changes to notification and filing procedures. A new mandatory obligation obliges liquidators to apply for the restriction of directors of insolvent companies. Amendments have also been made to the Rescue Process for Small and Micro Companies (SCARP).
Corporate Enforcement Authority (CEA)
The Act grants the CEA additional rights and powers around the receipt of information (such as access to court orders of restriction and disqualification of directors, and information from auditors on suspected offences). The Act also permits the CEA to share information with and receive information from other competent authorities.
A new offence of obstructing or interfering with an officer of the CEA in the performance of their functions under the 2014 Act has also been introduced.
Among the provisions awaiting a commencement date are the following:
We expect to see the rest of the Act commenced in the coming months, but this substantial commencement is very welcome to enable companies to plan for 2025.
