The impact and regulation of the Companies Law Act 2006 Essay

The impact and regulation of the Companies Law Act 2006 - Essay Example 182). This was almost definitely an aspiration of the Company Law Review Steering Group who stated the basis of the Bill to be a â€Å"simple, efficient and cost effective framework for carrying out business activity† (CLRSG Final Report 2001, App. A). It seems that the main aim was to maintain a balance between assigning much wanted freedom to companies while at the same time being able to effectively protect their interests. The task of redefining this intertwined web of principles and legal decisions would be no easy feat, however. Indeed, it could be suggested that to provide freedom for companies whilst ensuring their protection is to reconcile factors at the opposite ends of a scale. It has been suggested that â€Å"flexibility encourages tinkering which increases the complexity facing those setting up and running companies† (Alcock 2006, p. 243). This arguably creates the potential for the need to increase court intervention to ease the complexity and the problem s it can cause. With flexibility follows abstract language and with abstract language follows the need for deliberation. Could it be that the drafters of the Bill were slightly ambitious in their aspirations? The most drastic changes made by the Companies Act 2006 have been in the area of directors’ duties. The Reform Bill (Company Law Reform Bill 2005) recognised that the case law within this area is random and complicated making it difficult for directors to ascertain exactly what their duties entail. Thus the most pressing issue was acknowledged as the need to make duties more comprehensible and consistent, thus reducing the occurrences of fraud. The Bill (CLRB 2005, Ch. 3) recognised that the duties are a fundamental basis of company law and thus that there was a need to codify them. It could ne suggested that this is not the exact outcome of the reform. The need to refrain from imposing â€Å"impractical