Too Much Of British Company Law Frustrates, Inhibits, Restricts And Undermines. It Is Over-Cautious, Placing Too High A Premium On Regulation And Avoidance Of Risk. The Company Remains The Choice Of Corporate Vehicle For Over A Million Businesses,...
...is currently undergoing a major reform under the Company Law Review, which seeks mainly to modernise the legal framework in which companies operate. The Company law for nearly 150 years has served our economy well but significant parts are outmoded or have become redundant, and they are enshrined in law that is often unnecessarily complicated and inaccessible.
Therefore, in July 2001 the Company Law Review Steering Group published a Final Report called "Modern Company Law for a Competitive Economy" which aim was to provide a legal framework for all companies which reflect the needs of the modern economy and to ensure that framework can be kept up-to-date in the future. A White Paper, "Modernising Company Law" was presented in July 15th 2002 by the Secretary of the State for Trade and Industry setting out the Government's proposals for simplifying and modernising Company law.
The present framework over UK Company law was not the product of judge-made common law but mostly the result of parliamentary reform mechanisms, of committees and of political and commercial pressure groups. Though, these alterations took place through a series of partial reviews and piecemeal changes, making it a lot complicated. It is written in a way which makes it particularly difficult to identify those provisions which apply to smaller companies.
According to that, the Government followed the path of the Review that a more appropriate way forward is to tailor the core of the Company law to fit the smallest companies which are mostly private and in extent add extra safeguards where necessary for public companies. Having in mind that the law needs to be clearer, more certain and more accessible the government draw up proposals, and examined carefully the scope for simplification of the current law.
The DTI's main objectives as stated in the report of the Steering Group behind...
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