Sweeping changes in company law mean that smaller businesses are set to see a welcome reduction in red tape, a Birmingham lawyer has claimed.
The Government recently announced plans for a radical and wide-ranging overhaul of the company law system.
These include scrapping the obsolete role of company secretary, abolishing the need to hold annual general meetings and simplifying the process for passing company resolutions.
And according to James Nicholls, corporate partner at the Birmingham office of national law firm Shoosmiths, the changes will bring relief to a huge number of small and medium-sized enterprises across the UK.
"This is good news for the typical smaller company," he said.
"The changes will see the demise of several current rules which simply aren't necessary - and will also bring potentially huge benefits to the management buy-in and buyout process."
At the moment, every company must hold an AGM to present its accounts, reappoint auditors and, possibly, re-elect directors.
But, for the majority of owner-managed businesses, these meetings are purely a formality, because the shareholders are the same people as the directors.
The new legislation will also abolish the need for an AGM, and provide a voluntary opt-in process, rather than the current cumbersome opt-out process under which companies can avoid holding an AGM by passing "elective resolutions".
"Also hugely welcome is the news that the rules are to be relaxed around businesses giving financial help to people buying their shares," said Mr Nicholls.
"Directors of private companies who have previously been involved in company takeovers, particularly through MBOs and buy-outs, will have experience of the problems which arise when a company seeks to give this sort of financial help.
"The so-called 'whitewash' procedure under the Companies Act currently adds massive complications to many corporate deals, and can easily add substantially to professional costs. Simplifying the rules will make transactions much easier and cheaper."
Also, the Government has just announced that by 2009 it plans to have set up a new body called the Consumer and Trading Standards Agency in a bid to give advice to businesses and cut down on red tape and costs, by combining the work of a number of current regulators in a single organisation.
But Mr Nicholls warned that not all the proposals are good news.
The time limit for filing accounts is to be tightened and private companies will have to have accounts audited and ready for filing within seven months of their year end instead of the current ten.
The potential introduction of rules for the conduct of directors is also likely to be an area of concern. These will require directors to "promote the success of the company for the benefit of its members as a whole", but also to take account of both long- and short-term consequences of their decisions.