Companies Act: Enhancing Transparency and Accountability

In a move aimed at promoting transparency and accountability in corporate governance, the Companies Act has introduced new regulations regarding mandatory proxy solicitation, financial disclosure, and corporate records.

Mandatory Proxy Solicitation

Section 142 of the Act prohibits companies from soliciting proxies without written consent. This provision aims to prevent companies from influencing shareholder decisions through unsolicited or coercive means.

Financial Disclosure

The Act requires companies to file:

• Annual financial returns (149)
• Comparative financial statements (152)

Additionally, directors must:

• Approve the financial statements (152)
• Ensure that shareholders receive copies of relevant documents (153)

Corporate Records

The Act places a duty on companies to maintain accurate records, including:

• Registers of directors and secretaries (178)
• Substantial shareholders (184)
• Trusts (186)
• Minutes, accounts, and other records (187) in a designated form (188)

Auditor Appointment and Removal

The Act sets out procedures for:

• Appointing auditors (158)
• Removing auditors (165)
• Filling auditor vacancies (166)

Auditors have the right to:

• Notice (168)
• Attend meetings (169)
• Request access to company records (172)
• Comment on financial statements (170)

Remedial Powers

In cases of non-compliance, the Registrar has the power to:

• Restrict orders (148)
• Impose fines

The Court may also:

• Appoint an auditor
• Remove a director in certain circumstances

Conclusion

The new regulations are aimed at promoting transparency and accountability in corporate governance. Companies that fail to comply with these provisions risk facing serious consequences.

For more information on the Companies Act, please consult the relevant legislation or contact your local regulatory authority.