Could you explain how the 2006 Companies Act will affect the business of our freehold company. We know, for example, that the Act no longer requires companies to hold AGMs, but we are not sure whether our own Mems and Arts still require it.
The FPRA replies:
Your letter raises an interesting point on the changes brought in by the Companies Act 2006. You should bear in mind that, besides those articles contained in the printed document, your Articles of Association also incorporate all “the Regulations contained in Table A in the Schedule to the Companies (Tables A to F) Regulations” as amended, but these did not include any requirement that you hold an AGM, so I would agree that you are no longer under any obligation to hold one.
You are no longer required to lay accounts before an AGM, and no longer have to get an AGM to appoint auditors. As a small company you do not need to have your accounts audited, in the strict sense of the word, unless the members require an audit.
The Companies Act 2006 allows for all of a private company’s resolutions to be passed as written resolutions, i.e. without the need for a meeting, with only two exceptions: these are resolutions to remove a director or an auditor before the normal expiry of his appointment.
The procedure for written resolutions is contained in s288 – 300 of the Companies Act 2006 (which is available on the Internet at http://www.opsi.gov.uk/acts/ ). Commentary on the procedure is to be found in paragraphs 530 to 543 of the Explanatory Notes on the Act, to be found on the same website. You should note that provision is made for a “written resolution” to be effected by e-mail if you wish: it does not have to be in “hard copy” writing.
Although the written resolution procedure may be convenient for Residents’ Management Companies which have a lot of absentee leaseholders, if you have been getting reasonable attendances at AGMs, it seems to me to be a good idea to continue to hold a formal meeting so as to have an opportunity from time to time to discuss matters face to face. You do not have to adopt the written resolution procedure. You could, for example, continue to hold General Meetings (they would not be AGMs, as such), and use the written resolution procedure only in an emergency or if you could not get a quorate GM.