Company Law Forum - Explaining Companies Act 2006 - Companies Act 2006

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Companies Act 2006 - Information Rights

Written by Susan Henderson

Tuesday, 13 November 2007

Information Rights - What does the Act say?

New rights given to underlying beneficial shareholders under s145 and 146

Registered shareholder may nominate another to receive information rights (ie to receive a copy of all communications the Company sends to its members generally, including Annual Report and Accounts)

Person being nominated must first request the shareholder to make the nomination and provide an address. Otherwise company can supply documents by means of website.

S 148 gives company right to enquire on an annual basis if nominated person wishes to continue the receive information rights.

These sections came into effect on 1 October 2007 and nominees are being given until the end of the year to develop their lists of nominated persons, presumably in time for next year’s AGM season.

THE PRACTICAL IMPLICATIONS

How many copies will be required for “nominated persons” in future?

Companies need sufficient notice from nominee shareholders in order to print enough copies and organise distribution. How long is reasonable notice?

Will nominees send multiple nomination to companies or will they send one notification in a convenient spreadsheet covering all the underlying beneficiaries requiring copy documents?

Need a mechanism for maintaining “list” of “nominated persons” presumably via the registrars.

Need to consider timing and logistics for managing this list and removing those who no longer require shareholder information

What Prudential is Doing

S 150 (4) states that if a company’s articles specifies an entitlement date to receive documents or information, (eg a record date) then the company needs not send documents or information to persons whose nomination is received after that date. We shall take advantage of this section.

We are working with our registrars to specify the format in which we expect to receive nominations from our nominees. The registrars are working together to develop a consistent format across the industry.

We shall work with nominees to determine in advance of printing how many additional copies might be needed. Preliminary indications are that relatively few nominees and their underlying beneficiaries will take advantage of these sections, but it is still an “unknown”.

We will develop a process to ensure that these lists are actively managed and cleansed on a regular basis, so that we only send hard copies to those who really want them.