Young entrepreneurs given go-ahead
With Watson Burton LLP Law FirmYoung and ambitious bdaily readers may have been encouraged by a recent Court decision that allowed a 14 year old boy to be a company director. Jon Preece, from the Isle of Man, had been combining his school work with work for the family firm for more than two years and has been described by his mother as “becoming a young Bill Gates”. Jon’s position was questioned by a creditor in a hearing before the island’s High Court but the judge dismissed the action after discovering that there was no case law barring minors from becoming company directors. However, any aspiring young Bill Gates in mainland Britain might have to postpone his or her business career a little longer. Under the Company Law Reform Bill which is currently going through Parliament and should become law next year, the minimum age for company directors will be 16. The Company Law Reform Bill will bring in a series of measures to reform UK company law and will affect directors, shareholders, auditors, public and private companies. Planned changes include:• The default Articles of Association for all companies limited by shares, Table A, will be simplified for private companies. • It will be easier to pass written resolutions. • Directors’ duties will be set out in the legislation – at present they are contained in case-law, some of it stretching back to the nineteenth century. • There will be extended statutory rights to sue directors for a broad range of conduct for wrongs done to the company.• It will be possible to limit the liability of auditors to such extent as is fair and reasonable in the circumstances – at present there is unlimited liability for auditors. There will also be a new criminal offence of knowingly or recklessly including materially misleading information in an audit report. • Financial assistance provisions for private companies will be abolished, provided they are not subsidiaries of private companies. • Indirect investors (i.e. beneficial shareholders) will have enhanced rights.• Private companies will no longer be obliged to hold Annual General Meetings, as they currently must do once a year. Public companies will have to hold an AGM within six months of the end of the financial year. Over 90% of Britain’s companies are small, owner-managed firms but company law has been drafted from the perspective of large public companies. These reforms will hopefully introduce a system of company law well-suited for the average British company. If you have a query about the running of your business, whatever your age, contact Tom Randall at firstname.lastname@example.org or telephone him on (0191) 244 4225.
This was posted in Bdaily's Members' News section by Ruth Mitchell .
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