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should personally contribute to the assets of acompany if at some time before thecommencement of the winding up he knew orought to have concluded that there was noreasonable prospect that the company wouldavoid going into insolvent liquidation, and hefailed to take every step with a view tominimising the potential loss to the company’screditors. This legislation is contained in theInsolvency Act 1986 and the courts appearwilling to exercise their powers to order adirector to make such contributions. Inaddition, the court can order directors to bedisqualified from becoming directors of othercompanies. For further information see“Directors’ Responsibilities”, another CharlesRussell publication.Other important changes made by the 2006Act are:• The 70 year age limit for directors ofpublic companies, or private companieswhich are subsidiaries of publiccompanies, was repealed and there isnow a minimum age limit of 16 years fordirectors of all companies.• Companies must have at least onedirector who is a natural person.• Companies are required to keep aregister of the usual residentialaddresses of directors who areindividuals, although this register will notbe open to public inspection. A serviceaddress, other than a residentialaddress, will have to be included on thecompany's register of directors. Thisrequirement also applies to LLPmembers.• There is no residence requirement fordirectors, nor any need to hold meetingsin England and Wales. A company musthowever have a registered office inEngland and Wales. A Welsh companymay pass a special resolution to changeits registered office from Wales toEngland and Wales.3. MeetingsThe concept of an ‘extraordinary generalmeeting’ was abolished by the 2006 Act whichrefers only to ‘general meetings’ or ‘annualgeneral meetings’ (“AGM”). Under the 2006Act, only public companies must hold an AGM.Private companies may continue to do so ifthey wish, subject to their Articles.5. The choiceLegal, commercial and tax considerations willeach play a part in deciding whether to carryon business as a sole trader, a partnership, anLLP or a company in England and Wales. Asexplained, a company in England and Walesmay give the benefit of limited liability, to somedegree at least, but it is often thought desirableto commence business as a sole trader or inpartnership because this structure is moreflexible. Also, currently it is usually easier andmore advantageous from a tax point of view totransfer a business from a sole trader/partnership to a company than from acompany to a sole trader/partnership.6. Overseas companies inEngland and Wales1. General ConsiderationsA company incorporated outside England andWales may trade in England and Wales eitherthrough a subsidiary in England and Wales orthrough a branch office. The branch in Englandand Wales may sign contracts which arebinding on the overseas company.The decision whether to establish a branch inEngland and Wales or to incorporate asubsidiary in England and Wales must betaken separately in each case, but is normallybased on the following considerations:• Commercial. A subsidiary is oftenpreferable because some UK companieswould prefer to do business only withother companies incorporated in Englandand Wales. Grants, loans and otherfinance may also be easier for acompany in England and Wales toarrange.• Taxation. The relevant considerationsare normally the tax system in which theoverseas company does business, theterms of any double tax agreement withEngland and Wales and the expectedtrading results in England and Wales.Sometimes it is more advantageous tostart with one structure and then totransfer the business in England andWales to the other structure. Forexample, the start up costs and initialtrading losses of a branch may bedeductible from taxable profits of theoverseas company in its home countrybut this advantage will be lost when thebranch in England and Wales becomesPAGE 7