MPs have given their initial approval to new legislation that will cut red tape for British companies.
The government claims that the company law reform bill, debated by the House of Commons yesterday, will make it easier for entrepreneurs to establish small companies.
It will also make it optional for small, unlisted companies to hold annual general meetings and allow businesses to make greater use of electronic communications, ending the requirement for companies to possess paper share certificates.
Publishing the bill earlier this week, trade and industry secretary Alistair Darling claimed the measures to simplify company law would save British companies an estimated £250 million, including a total saving of £100 million for small companies.
During yesterday's second reading of the legislation in the Commons, industry minister Margaret Hodge said the government wanted to establish a modern framework for company law that would strengthen the UK's position as a place to do business.
If accepted by parliament, the measures will represent the biggest reform of company law in decades.
Expressing support for the bill, Conservative trade and industry spokesman Alan Duncan said: "In many areas it does deregulate and it simplifies existing law and for this companies will be grateful."
But he added that his party was concerned about proposals to make it mandatory for directors to consider environmental factors and the interests of consumers, suppliers and employees when making corporate decisions.
The government is also likely to try and reverse two amendments passed by the House of Lords during the passage of the bill through the Commons.
Peers deleted a clause that would have allowed ministers to force institutional investors to disclose their voting behaviour at company meetings.
They also added provisions to the proposed legislation giving investors with shares in nominee accounts the option to receive annual reports and to vote at company meetings – measures the government claims would impose a burden on companies.