Explanatory note

This Order, which is made under section 1 of the Deregulation and Contracting Out Act 1994 (c. 40), amends certain provisions of the Companies Act 1985 (c. 6) concerning the resolutions of private companies.

Article 2 amends section 379A (elective resolution of private company) by enabling less than 21 days' notice to be given of a meeting at which an elective resolution is to be proposed, provided that all members entitled to attend and vote at that meeting agree to the short notice.

Article 3(1) substitutes a new section 381B (duty to notify auditors of proposed written resolution). The new section imposes a duty on the directors and secretary of a company to send the company’s auditors a copy, or otherwise inform them of the contents, of any written resolution proposed under section 381A (written resolutions of private companies) at or before the time that resolution is supplied to a member for signature. Breach of the duty will result in the commission of a criminal offence (for which the new section provides certain defences), but will not affect the validity of any resolution passed under section 381A. Article 3(2) makes amendments consequential on the substitution of the new section. Article 3(3) provides for the new section to apply to written resolutions first proposed on or after the day on which this Order comes into force.

Article 4 amends section 381C(1) (written resolutions: supplementary provisions) to make clear that the statutory written resolution procedure under sections 381A and 381B may be used notwithstanding any provision in a private company’s memorandum or articles, but does not prejudice any power conferred by any such provision.