September 2009 - Important update for Directors

All SMEs need to be aware that the new Companies Act has made some changes as to who directors are and registration requirements. Most of these will be in force by 1st October 2009.

Who is a director?

A director is anyone who has either been formally appointed as a director (by the shareholders or board as set out in the company’s Articles), occupies the position of director (even if they are called something else) or someone whose directions or instructions are generally followed by the board (called a ‘shadow director’).

In practice, this means that anyone who makes decisions concerning the running of a company, as well as anyone appointed as a director, could be considered a director. They will then have to understand and comply with company directors’ duties and can be held liable if there are any breaches of their duties. Read Understanding your Duties and Responsibilities as a Director for more details.

All private companies must have at least one director who is a human being (as opposed to another company). This is a requirement now for all new companies but companies already in existence before the Companies Act 2006 do not need to appoint a human being until 1st October 2010 at the latest. All human directors must be at least 16 years old.

Registration of Directors

Directors’ details must be registered in two places: in the company’s own register of directors and in the register kept at Companies House.

Although a director’s home address must be included in the company’s register, and notified to Companies House, directors can opt to use a ‘service address’ instead of their home address to be made public. The service address can be the company’s place of business.

Directors no longer need to register details of other directorships at Companies House. They must however now give details of all other names they are or have been known by whilst in business, including a married woman’s maiden name.

For advice on your duties as a director plus any queries on whether your role is covered by this legislation contact Gary Cousins by email or on 0121 778 3212.

Essential advice for property owners and developers

Developers and commercial property owners need to be very clear on their full rights in relation to any land or property they purchase or occupy, and one of the most commonly misunderstood aspects is the issue of easements – or the rights enjoyed over a piece of land.

Here are just a few examples of where the wording of easements has given rise to possibly unintended consequences:

• A landowner can install speed bumps on an access road without the consent of those who enjoy a right of way over that road;
• A right to use a water pipe does not automatically include a right to lay a replacement pipe if the original pipe falls into disrepair;
• A right of way over land does not entitle you to park on that land;
• Someone with the benefit of a right of way can insist on exercising that right over the exact route specified when it was originally granted even if you provide an alternative route which is just as convenient. This can frequently prevent the construction of an extension if a right is enjoyed over land immediately to the rear of a property.

Developers of course should not just be concerned about the rights the development site enjoys. It’s also essential to check what rights others may have over the site. These may be spelt out in the deeds but many rights can be acquired by long use.

For full details read Easements – know your rights on the Cousins Business Law website or call Steve Petty, Commercial Property Solicitor, for advice on 01926 629 005.

Disputes over contracts can happen for many reasons, but so often they blow up because those involved have a different opinion on what was agreed. You know the situation – you’ve had some work done or purchased a piece of equipment and you’re not happy with what you’ve received. You scrabble around for the paperwork but…:

1. There is no paperwork, or
2. The paperwork does not record what you thought had been agreed, or
3. There is a reference to standard terms and conditions that you have never seen.

It is commercial reality that everyone is so busy clinching the deal that they fail to keep the paperwork in order. Businesses regularly fail to record the pre contract negotiations and fail to record the full terms of the agreement reached.

So what is the position where the written agreement/contract says one thing, but you believe that you agreed something different?

Read the full Avoiding Contract Disputes article on the Cousins Business Law website to understand the importance of recording everything, being fair and getting the paperwork right.

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