Investors who are not the registered shareholders but who hold shares through nominee accounts such as ISAs and PEPs will have greater rights, including the right to receive information available to registered shareholders. This comes into force next month.

Extended rights for indirect investors to participate in company business by, for instance, requiring the directors to call a meeting or appointing a proxy to attend a meeting, will only apply if a company’s articles of association allow for it, and if the registered shareholder nominates the indirect investor to enjoy these rights. It is an opt-in provision for companies.

Indirect investors in listed companies will have greater rights to receive information, such as the company’s annual report and accounts and shareholder notices, irrespective of the relevant company’s articles. The right does, however, depend on the indirect investor having been nominated by the registered shareholder. Indirect investors in listed companies wishing to enjoy such rights should therefore contact their nominee broker to ensure that it will nominate them.

The Companies Act explained

Part 1: the longest piece of legislation ever

Part 2: timetable for introduction

Part 3: directors' duties

Part 4: claims against directors

Part 5: company secretaries

Part 6: auditors' liability

Part 7: greater rights for non-registered shareholders

Part 8: deregulation for small businesses

Part 9: electronic communication with shareholders

Part 10: shareholders' addresses

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