Company Law Reform Bill [HL]

This clause limits the duration of liability limitation agreements to the audit of the accounts to only one financial year. I note that Clause 518 requires the shareholders to approve any agreement and Clause 523 gives members of the company power to terminate any agreement. Clause 521 provides for disclosure. Given those safeguards and the fair and reasonable override in Clause 520, it is unclear why such an absolute limitation is imposed on shareholders. This will be particularly onerous for private companies who are seeking to limit annual administration tasks. Shareholders themselves should be able to decide the appropriate duration of any limitation agreement.