Co-operative and Community Benefit Societies Bill (HC Bill 181)

Prosecution of offences

132 Prosecution of offences: persons who may bring proceedings and time for
bringing them

(1) This section applies to proceedings for—

(a) 5an offence under this Act that is punishable with a fine, or

(b) an offence under a registered society’s rules (see section 20).

(2) The proceedings may be brought by the following—

(a) in the case of proceedings in respect of an offence under a society’s
rules, the society;

(b) 10in the case of proceedings by virtue of section 127 in respect of neglect
or a failure to do any act, or provide any information, required by the
PRA—

(i) the FCA (after notifying the PRA), or

(ii) the PRA (after notifying the FCA);

(c) 15in the case of proceedings by virtue of any of section 130(1) to (3)—

(i) the registered society in question,

(ii) any member of that society authorised by the society, the
society’s committee or the FCA, or

(iii) the FCA (except in Scotland);

(d) 20in any other case, any person aggrieved or (except in Scotland) the FCA.

(3) Except in Scotland, no other person may bring proceedings.

(4) The FCA, the PRA or the Lord Advocate (“the prosecutor”)—

(a) may (despite any limitation on the time for bringing proceedings
contained in any Act) bring proceedings for the offence at any time
25within one year of the discovery of the offence by the prosecutor, but

(b) may not bring proceedings more than 3 years after the commission of
the offence.

133 Prosecution of societies: service of summons etc

(1) This section applies to proceedings taken against a registered society for an
30offence under this Act that is punishable with a fine.

(2) The summons or other process is sufficiently served—

(a) by leaving a true copy of it at the society’s registered office, or

(b) if that office is closed, by posting that copy on the outer door of the
office.

35Part 11 Miscellaneous and general

Application of company law etc

134 Power to amend this Act to assimilate to company law

(1) This section applies where, on any modification of the enactments in force
40relating to companies, it appears to the Treasury to be expedient to modify the

relevant provisions of this Act for the purpose of assimilating the law relating
to companies and the law relating to registered societies.

(2) The Treasury may by order make such modifications of the relevant provisions
of this Act as they consider appropriate for that purpose.

(3) 5The “relevant provisions” of this Act are the provisions of this Act for the time
being in force except—

(a) this section;

(b) section 2(1), (2)(a), (c) and (d), (3) and (4);

(c) sections 5 to 9;

(d) 10section 16(1) and (2);

(e) section 17;

(f) section 29;

(g) sections 36 to 40;

(h) sections 109 to 122;

(i) 15section 126;

(j) sections 135 and 136;

(k) paragraphs 2, 10 and 15 of Schedule 3.

(4) An order under this section may modify the relevant provisions of this Act so
as to—

(a) 20confer power to make orders, regulations, rules or other subordinate
legislation;

(b) create criminal offences;

(c) provide for the charging of fees, but not any charge in the nature of
taxation.

(5) 25An order under this section may—

(a) make consequential amendments of, or repeals in, the provisions listed
in subsection (3);

(b) make such transitional or saving provisions as appear to the Treasury
to be necessary or expedient.

(6) 30In this section “modification” includes any additions.

(7) The reference in subsection (1) to modifications of the enactments relating to
companies includes any modification whether effected by—

(a) an Act passed after the passing of the Industrial and Provident Societies
Act 2002, or

(b) 35an instrument made after the passing of that Act, under an Act
whenever passed.

135 Power to apply company law provisions on investigations, names and
dissolution etc

(1) The Treasury may by regulations—

(a) 40make provision applying any provision mentioned in subsection (2) to
registered societies, or

(b) make provision for registered societies corresponding to any such
provision,

in either case, with such modifications as appear to the Treasury to be
45appropriate.

(2) The provisions are—

(a) Parts 14 and 15 of the Companies Act 1985 (investigations);

(b) Part 5 of the Companies Act 2006 (company names);

(c) Part 31 of that Act (dissolution and restoration to the register).

(3) 5Regulations made by virtue of subsection (2)(a) may amend or repeal any of
sections 105 to 107 (inspections, information powers etc).

(4) Regulations made by virtue of subsection (2)(b) may amend or repeal section
10 or 11 (or both) (provisions about a society’s name).

(5) Regulations made by virtue of subsection (2)(c) may amend or repeal—

(a) 10section 5(3)(c) (cancellation of registration: society having ceased to
exist);

(b) section 126 (dissolution etc to occur only after society’s property dealt
with).

(6) Subsections (3) to (5) are not to be read as restricting the power conferred by
15section 136 (power to make consequential amendments).

(7) The regulations may—

(a) confer power to make orders, regulations and other subordinate
legislation;

(b) create criminal offences, but only—

(i) 20in circumstances corresponding to an offence under the
Companies Acts, and

(ii) subject to a maximum penalty no greater than is provided for in
respect of the corresponding offence;

(c) provide for the charging of fees, but not any charge in the nature of
25taxation.

(8) The regulations may contain such supplementary, incidental and transitional
provisions as appear to the Treasury to be necessary or expedient.

(9) Before making any regulations under this section the Treasury must consult
such persons as appear to them to be appropriate.

136 30Section 135: power to make consequential amendments

(1) The Treasury may by regulations make such amendments of enactments as
appear to them to be appropriate in consequence of any provision made by or
under section 135.

(2) This power is exercisable in relation to—

(a) 35this Act (except this section), and

(b) any enactment passed or made before the commencement of the
relevant provision.

(3) In this section “enactment” includes—

(a) an enactment contained in subordinate legislation within the meaning
40of the Interpretation Act 1978,

(b) an enactment contained in, or in an instrument made under, an Act of
the Scottish Parliament,

(c) an enactment contained in, or in an instrument made under, a Measure
or Act of the National Assembly for Wales, and

(d) an enactment contained in, or in an instrument made under, Northern
Ireland legislation within the meaning of the Interpretation Act 1978.

(4) The regulations may contain such supplementary, incidental and transitional
provisions as appear to the Treasury to be necessary or expedient.

5Determination of disputes

137 Determination of disputes in accordance with a society’s rules

(1) If a registered society’s rules give directions as to the way in which relevant
disputes are to be determined, a relevant dispute is to be determined in the way
directed by the rules (subject to the following provisions of this section).

(2) 10“Relevant dispute” means a dispute between a registered society or an officer
of a registered society and—

(a) a member,

(b) a person aggrieved who ceased to be a member not more than 6 months
previously (“a relevant former member”),

(c) 15a person claiming through a member or relevant former member, or

(d) a person claiming under the society’s rules.

(3) Any dispute which would, under the rules, fall to be determined by the FCA
or PRA is to be referred to the county court (or, in Scotland, to the sheriff) for
determination.

(4) 20In England and Wales, any dispute which would, under the rules, be referred
to justices is to be determined by a magistrates’ court (subject to subsection (6)).

(5) In Scotland, any dispute which would, under the rules, be referred to justices,
a justice of the peace court or a court of summary jurisdiction is to be
determined by the sheriff.

(6) 25If the parties to the dispute consent, the dispute may be determined—

(a) in England and Wales, by the county court;

(b) in Scotland, by the sheriff.

(7) Neither subsection (1) nor the society’s rules prevents a person, in accordance
with the Financial Ombudsman scheme, from having a complaint dealt with
30under the scheme before or instead of being determined in the way directed by
the rules.

138 Determination of disputes under section 137: application to the court

(1) This section applies where—

(a) section 137 applies in relation to a relevant dispute,

(b) 35an application is made to the society in question for a reference under
its rules, and

(c) no determination is made within 40 days after the application is made.

(2) A person within a paragraph of section 137(2) who is a party to the dispute may
apply to the appropriate court, which may hear and determine the matter in
40dispute.

(3) The appropriate court is—

(a) in England and Wales, the county court or a magistrates’ court;

(b) in Scotland, the sheriff.

(4) “Relevant dispute” has the same meaning as in section 137.

139 Determination of disputes otherwise than under a society’s rules

(1) This section applies in relation to a relevant dispute if the registered society’s
5rules contain no directions as to the determination of relevant disputes.

(2) The dispute may be determined—

(a) in England and Wales, by the county court;

(b) in Scotland, by the sheriff.

(3) Alternatively, in England and Wales, a person within a paragraph of section
10137(2) who is a party to the dispute may apply to a magistrates’ court, which
may hear and determine the matter in dispute.

(4) “Relevant dispute” has the same meaning as in section 137.

140 Determination of disputes: supplementary

(1) Where a determination under section 137(1) is made in a dispute—

(a) 15the determination is binding and conclusive on all parties without
appeal;

(b) in England and Wales, the determination is not removable into any
court of law or restrainable by injunction;

(c) an application may be made to the county court (or, in Scotland, the
20sheriff) for enforcement of the determination.

(2) The county court (or, in Scotland, the sheriff) may order the expenses of
determining a dispute under section 137, 138 or 139 to be paid—

(a) out of the society’s funds, or

(b) by such parties to the dispute as the court (in Scotland, the sheriff)
25considers appropriate.

(3) In England and Wales a magistrates’ court may, for the purposes of the hearing
or determination of a dispute under section 137, 138 or 139, grant either party—

(a) such disclosure as to documents and otherwise, and

(b) such inspection of documents,

30as it considers necessary for the just and expeditious disposal of the dispute.

(4) An order under subsection (3) for disclosure to be made on behalf of a society
is to be disclosure by such of its officers as the court may determine.

(5) The court to which a dispute is referred under section 137(3) to (6), 138 or 139
may at the request of either party state a case on any question of law arising in
35the dispute for the opinion of the High Court or the Court of Session (as the
case may be).

Other miscellaneous provisions

141 Recovery of costs and expenses

Any costs or expenses ordered or directed by the FCA or PRA to be paid by any
person under this Act are recoverable summarily (or, in Scotland, are
5recoverable) as a civil debt.

Northern Ireland societies

142 Northern Ireland societies whose rules are recorded by the FCA

(1) This section applies to a Northern Ireland society (“the Northern Ireland
society”) if—

(a) 10copies of its rules, registered under the relevant Northern Ireland law,
are sent to the FCA to be recorded by it, and

(b) the copies have been recorded by the FCA.

(2) For the purposes of the operation of this Act in Great Britain and the Channel
Islands (“the relevant area”)—

(a) 15references in the provisions specified in subsection (3) to a registered
society include the Northern Ireland society (but see subsection (5)),
and

(b) for the purposes of those provisions—

(i) the Northern Ireland society,

(ii) 20the rules mentioned in subsection (1), and

(iii) any amendments to the rules registered and recorded as
mentioned in subsection (1),

are in the relevant area treated as a society, rules and amendments duly
registered under this Act by the FCA.

(3) 25The provisions are—

(a) sections 2(2)(b)(ii), 3(1)(a)(ii) and (3) to (6), 5(3)(b), 11(1) to (4), 13(3), 15,
16(2)(a), 18, 19, 20, 24(2)(a), 26, 27(2)(b), 28, 30(9), 33, 35, 36, 41, 42, 50, 53
to 56, 58, 67, 69, 71 to 74, 108 to 111, 114(3) to (5), 127(1), 128, 130 to 132,
137 to 140, 143 and 146;

(b) 30paragraph 3 of Schedule 3.

(4) In the application of section 108 (general restriction on inspection of books) by
virtue of this section, the reference to this Act is to be read as the relevant
Northern Ireland law.

(5) This section does not confer any power, or impose any obligation or liability,
35with respect to the doing (or not doing) of anything outside the relevant area.

(6) In this section—

• “Northern Ireland society” means a society registered under the relevant
  Northern Ireland law;

• “the relevant Northern Ireland law” means the law for the time being in
  40force in Northern Ireland for purposes corresponding to the purposes
  of this Act.

(7) Nothing in Article 22 of the Government of Ireland (Companies, Societies, &c.)
Order 1922 (SR & O 1922/184) applies—

(a) in relation to a Northern Ireland society, or

(b) in relation to this Act.

Documents

143 Form of documents etc

(1) 5Every return and other document required for the purposes of this Act—

(a) must be made in such form as the FCA may direct,

(b) must contain such particulars as it may direct, and

(c) must be delivered in such way as it may direct.

(2) The FCA must register and record those documents, together with any
10observations it considers appropriate to make on them.

(3) The FCA must consult the PRA before issuing a direction which relates to a
return or other document a copy of which is required to be sent to the PRA.

144 Form etc of electronic documents sent to FCA or PRA

(1) The FCA or PRA (“the authority”) may impose requirements as to the form,
15authentication and manner of delivery of documents sent electronically to it
under this Act.

(2) As regards authentication, the authority may—

(a) require the document to be authenticated by a particular person or a
person of a particular description;

(b) 20specify the means of authentication;

(c) require the document to contain or be accompanied by the name or
registered number of the society to which it relates (or both).

(3) As regards the manner of delivery, the authority may specify requirements as
to the hardware and software to be used, and technical specifications (for
25example, matters relating to protocol, security, anti-virus protection or
encryption).

(4) The power conferred by this section does not authorise the authority to require
documents to be delivered electronically.

(5) Requirements imposed under this section must not be inconsistent with
30requirements imposed by this Act or any other enactment with respect to the
form, authentication and delivery of the document concerned.

(6) In this section, a document is sent electronically if it is sent by electronic means
or in electronic form.

145 Fees for inspection and copying of documents

35The FCA or PRA may charge a person a reasonable fee before—

(a) allowing the person to inspect a document held by it in connection with
this Act, or

(b) providing the person with a copy of such a document (or a copy of part
of such a document).

146 Certain documents to be received in evidence

(1) This section applies to a document issued, received or created by—

(a) the FCA, or

(b) an inspector under this Act,

5for the purposes of, or in connection with, this Act.

(2) A document bearing the FCA’s seal or stamp is to be received in evidence
without further proof.

(3) A document purporting to have been signed by—

(a) a person authorised to do so on behalf of the FCA, or

(b) 10an inspector under this Act,

is, in the absence of any evidence to the contrary, to be received in evidence
without proof of the signature.

Regulations and orders

147 Regulations and orders

(1) 15Regulations and orders of the Treasury under this Act are to be made by
statutory instrument.

(2) A statutory instrument containing—

(a) regulations under section 29, 135 or 136, or

(b) an order under section 134,

20may not be made unless a draft of the instrument has been laid before and
approved by a resolution of each House of Parliament.

(3) A statutory instrument containing regulations or an order under section 18, 25,
49, 68, 83, 97 or 118 is subject to annulment in pursuance of a resolution of
either House of Parliament.

25Interpretation

148 Meaning of “electronic form”, “by electronic means” etc

(1) The following provisions apply for the purposes of this Act.

(2) A document or information is sent in electronic form if it is sent—

(a) by electronic means (for example, by email or fax), or

(b) 30by any other means while in electronic form (for example, sending a
disk in the post).

References to electronic copy have a corresponding meaning.

(3) A document or information is sent by electronic means if it is—

(a) sent initially and received at its destination by means of electronic
35equipment for the processing (which expression includes digital
compression) or storage of data, and

(b) entirely transmitted, conveyed and received by wire, by radio, by
optical means or by other electromagnetic means.

References to “electronic means” have a corresponding meaning.

(4) A document or information sent in electronic form must be sent in a form, and
by a means, that the sender reasonably considers will enable the recipient—

(a) to read it, and

(b) to retain a copy of it.

(5) 5For the purposes of this section, a document or information can be read only
if—

(a) it can be read with the naked eye, or

(b) to the extent that it consists of images (for example photographs,
pictures, maps, plans or drawings), it can be seen with the naked eye.

(6) 10The provisions of this section apply whether the provision of this Act uses the
word “send” or uses other words (such as “deliver”, “issue”, “produce”,
“provide” or “supply”) to refer to the sending of a document or information.

149 Interpretation of Act

In this Act, except where the context otherwise requires—

• 15“the 1965 Act” has the meaning given by section 1;

• “amendment”, in relation to a registered society’s rules, includes a new
  rule and a resolution rescinding a rule;

• “annual return” has the same meaning as in section 89;

• “the appropriate authority” means—

  (a)

  20in relation to a society that is a PRA-authorised person, the PRA;

  (b)

  in relation to any other society, the FCA;

• “charitable registered society” means a registered society that is a charity;

• “charity” (except in section 10)—

  (a)

  has the meaning given by section 1(1) of the Charities Act 2011
  25(as modified, in the case of a society whose registered office is
  in Scotland, by section 7(2) of that Act);

  (b)

  but in relation to a society whose registered office is in any of
  the Channel Islands, it means a society established for
  charitable purposes only (“charitable purposes” having the
  30meaning given by the law of that Island);

  and similar expressions are to be read accordingly;

• “committee”, in relation to a society, means the society’s management
  committee or other directing body;

• “the Companies Acts” means—

  (a)

  35the Companies Acts as defined in section 2(1) of the Companies
  Act 2006, or

  (b)

  any law for corresponding purposes in force in any of the
  Channel Islands,

  and includes corresponding earlier Acts or laws;

• 40“credit union” means a registered society that is registered as a credit
  union;

• “electronic address” means any number or address used for the purposes
  of sending or receiving documents or information by electronic means;

• “electronic copy”, “electronic form” and “electronic means” have the same
  45meaning as in section 148;

• “enactment” (except in section 136 and Schedule 5) includes—

  Co-operative and Community Benefit Societies BillPage 79

  (a)

  an enactment contained in subordinate legislation within the
  meaning of the Interpretation Act 1978,

  (b)

  an enactment contained in, or in an instrument made under, an
  Act of the Scottish Parliament, and

  (c)

  5an enactment contained in, or in an instrument made under, a
  Measure or Act of the National Assembly for Wales;

• “the FCA” means the Financial Conduct Authority;

• “the Financial Ombudsman scheme” means the scheme established under
  Part 16 of the Financial Services and Markets Act 2000;

• 10“Gazette”, in relation to a registered society, means such one or more of
  the following as apply—

  (a)

  the London Gazette, if the society’s registered office is in
  England, Wales or the Channel Islands or it carries on business
  there;

  (b)

  15the Edinburgh Gazette, if the society’s registered office is in
  Scotland or it carries on business there;

  (c)

  the Belfast Gazette, if the society’s rules are recorded in
  Northern Ireland;

• “heritable security” has the same meaning as in the Conveyancing
  20(Scotland) Act 1924 except that it includes a security constituted by ex
  facie absolute disposition or assignation;

• “meeting”, in relation to a society, includes (where the society’s rules
  allow it) a meeting of delegates appointed by members;

• “officer”, in relation to a registered society—

  (a)

  25includes any treasurer, secretary, member of the committee,
  manager or employee of the society (except an employee
  appointed by the society’s committee), but

  (b)

  does not include an auditor appointed by the society in
  accordance with the requirements of Part 7;

• 30“persons claiming through a member” includes the heirs, executors or
  administrators and assignees of a member and (where nomination is
  allowed) the person’s nominee;

• “the PRA” means the Prudential Regulation Authority;

• “PRA-authorised person” has the meaning given by section 2B of the
  35Financial Services and Markets Act 2000;

• “pre-commencement society” has the meaning given by section 150;

• “registered”, in relation to a society’s name or office, means the name or
  office for the time being registered under this Act in respect of the
  society;

• 40“registered rules”, in relation to a registered society, means the rules
  registered under this Act, as amended by any amendment of the rules
  that has been so registered;

• “registered society” has the meaning given by section 1;

• the FCA’s “seal” means the seal provided for in regulations made under
  45section 109(1)(b) of the Friendly Societies Act 1974 (and any reference
  to a document sealed by the FCA is to be read accordingly).