Review of company law puts UK at disadvantageGOVERNMENT PROPOSALS: Society warns against regulations

UK companies could be weighed down by the burden of new regulations arising from the governments review of company law a burden which companies registered...UK companies could be weighed down by the burden of new regulations arising from the governments review of company law a burden which companies registered abroad might avoid the Law Society warned this week.The warning came in the Societys response to the Department of Trade and Industrys consultation on company law reform.

It coincided with a survey by Eversheds, which showed 54% of companies are unaware of the plans and 81% thought they would make the UK less attractive to companies.

Although favouring many proposed reforms, the Societys company law committee urged the government to consider the big picture when increasing burdens on British companies.

Andrew Davison, a partner at Eversheds Newcastle office and chairman of the committee, said the government should fully consider the implications of introducing any legislation that would leave British companies at a competitive disadvantage because of compliance costs which overseas registered companies would avoid.

The committee also said it remained unconvinced of whether it was desirable to codify the law on directors duties to shareholders in a statutory statement.

The flexible approach of the common law was ideally suited to resolving potential conflicts where the companys solvency was in doubt, it said.However, there was strong support for a proposed Companies Commission.

Sue Allen