Small Business, Enterprise and Employment Bill (HC Bill 117)

Statements of capital etc

91 Contents of statements of capital

Schedule 6 amends the Companies Act 2006 to alter the content of statements
of capital required under various provisions of that Act.

92 5Public companies: information about aggregate amount paid up on shares

(1) The Companies Act 2006 is amended as follows.

(2) In section 94 (application for re-registration as a public company), in
subsection (2)—

(a) omit the “and” at the end of paragraph (c), and

(b) 10after paragraph (d) insert “; and

(e) a statement of the aggregate amount paid up on the
shares of the company on account of their nominal
value.”

(3) In section 762 (procedure for a public company to obtain a trading certificate),
15in subsection (1)—

(a) omit the “and” at the end of paragraph (c), and

(b) after paragraph (d), insert “, and

(e) be accompanied by a statement of the aggregate amount
paid up on the shares of the company on account of their
20nominal value.”

(4) In section 1078 (documents subject to Directive disclosure requirements)—

(a) in subsection (3), under the heading “Share capital”, after the entry
numbered 11 insert—

• “12 Any statement delivered under section 762(1)(e) (statement of the
  25aggregate amount paid up on shares on account of their nominal
  value).”, and

(b) after subsection (3) insert—

“(3A) In the case of a private company which applies to re-register as
a public company, the statement delivered under section
3094(2)(e) (statement of the aggregate amount paid up on shares
on account of their nominal value).”

Registered office disputes

93 Address of company registered office

(1) After section 1097 of the Companies Act 2006 insert—

“1097A 35 Rectification of register relating to company registered office

(1) The Secretary of State may make provision by regulations requiring the
registrar, on application, to change the address of a company’s
registered office if the registrar is satisfied that the company is not
authorised to use the address.

(2) The applicant and the company must provide such information as the
registrar may require for the purposes of determining such an
application.

(3) The regulations may make provision as to—

(a) 5who may make an application,

(b) the information to be included in and documents to accompany
an application,

(c) the notice to be given of an application and of its outcome,

(d) the period in which objections to an application may be made,

(e) 10how an application is to be determined, including in particular
the evidence, or descriptions of evidence, which the registrar
may without further enquiry rely on to be satisfied that the
company is authorised to use the address,

(f) the referral of the application, or any question relating to the
15application, by the registrar for determination by the court,

(g) the registrar requiring a company to provide an address to be
the company’s registered office,

(h) the nomination by the registrar of an address (a “default
address”) to be the company’s registered office,

(i) 20the effect of the registration of any change.

(4)
Subject to further provision which may be made by virtue of subsection
(3)(i), the change takes effect upon it being registered by the registrar,
but until the end of the period of 14 days beginning with the date on
which it is registered a person may validly serve any document on the
25company at the address previously registered.

(5) Provision made by virtue of subsection (3)(i) may in particular include
provision, in relation to the registration of a default address—

(a) for the suspension, for up to 28 days beginning with the date on
which it is registered, of duties of the company under this Act
30relating to the inspection of company records or to the
provision, disclosure or display of information,

(b) that the default address may not be used for the purpose of
keeping the company’s registers, indexes or other documents,

(c) for there to be no requirement that documents delivered to the
35default address for the company must be opened,

(d) for the collection of such documents by the company, or the
forwarding of such documents to the company,

(e) for the circumstances in which, and the period of time after
which, such documents may be destroyed,

(f) 40about evidence, or descriptions of evidence, that the registrar
may require a company to provide if giving notice to the
registrar to change the address of its registered office from a
default address.

(6) The applicant or the company may appeal the outcome of an
45application under this section to the court.

(7) On an appeal, the court must direct the registrar to register such
address as the registered office of the company as the court considers
appropriate in all the circumstances of the case.

(8) The regulations may make further provision about an appeal and in
particular—

(a) provision about the time within which an appeal must be
brought and the grounds on which an appeal may be brought,

(b) 5provision for the suspension, pending the outcome of an
appeal, of duties of the company under this Act relating to the
inspection of company records or to the provision, disclosure or
display of information,

(c) further provision about directions by virtue of subsection (7).

(9) 10The regulations may include such provision applying (including
applying with modifications), amending or repealing an enactment
contained in this Act as the Secretary of State considers necessary or
expedient in consequence of any provision made by the regulations.

(10) Regulations under this section are subject to affirmative resolution
15procedure.”

(2) In section 1087(1) of that Act (material not available for public inspection), after
paragraph (g) insert—

“(ga) any application or other document delivered to the registrar
under section 1097A (rectification of company registered office)
20other than an order or direction of the court;”.

Director disputes

94 Company filing requirements: consent to act as director or secretary

(1) The Companies Act 2006 is amended as follows.

(2) In section 12 (statement of proposed officers), for the first sentence of
25subsection (3) substitute—

• “The statement must also include a statement by the subscribers to
  the memorandum of association that each of the persons named
  as a director, as secretary or as one of the joint secretaries has
  consented to act in the relevant capacity.”

(3) 30In section 95 (statement of proposed secretary), for the first sentence of
subsection (3) substitute—

• “The statement must also include a statement by the company that
  the person named as secretary, or each of the persons named as
  joint secretaries, has consented to act in the relevant capacity.”

(4) 35In section 167 (duty to notify registrar of changes), in subsection (2), for
paragraph (b) substitute—

“(b) be accompanied by a statement by the company that the person
has consented to act in that capacity.”

(5) In section 276 (duty to notify registrar of changes), in subsection (2), for
40“consent by that person” substitute “statement by the company that the person
has consented”.

(6) The amendments made by this section do not apply if the statement of
proposed officers, statement of the company’s proposed secretary or notice
under section 167 or 276 of the Companies Act 2006 was received by the
45registrar before this section comes into force.

95 Registrar’s duty to inform new directors of entry in register

(1) In Part 35 of the Companies Act 2006 (the registrar of companies), after section
1079A insert—

“Notice of receipt of documents about new directors

1079B 5 Duty to notify directors

(1) This section applies whenever the registrar registers either of the
following documents—

(a) the statement of proposed officers required on formation of a
company, or

(b) 10notice under section 167 or 167D of a person having become a
director of a company.

(2) As soon as reasonably practicable after registering the document, the
registrar must notify—

(a) in the case of a statement of proposed officers, the person or
15each person named in the statement as a director of the
company, or

(b) in the case of a notice under section 167 or 167D, the person
named in the document as having become a director of the
company.

(3) 20The notice must—

(a) state that the person is named in the document as a director of
the company, and

(b) include such information relating to the office and duties of a
director (or such details of where information of that sort can be
25found) as the Secretary of State may from time to time direct the
registrar to include.

(4) The notice may be sent in hard copy or electronic form to any address
for the person that the registrar has received from either the subscribers
or the company.”

(2) 30The amendment made by this section does not apply if the statement of
proposed officers or notice under section 167 or 167D of the Companies Act
2006 was received by the registrar before this section comes into force.

96 Removal from register of material about directors

(1) In section 1095 of the Companies Act 2006 (rectification of register on
35application to registrar), after subsection (4) insert—

“(4A) Subsections (4B) and (4C) apply, in place of subsection (4), in a case
where—

(a) the material specified in the application is material naming a
person—

(i) 40in a statement of a company’s proposed officers as a
person who is to be a director of the company, or

(ii) in a notice given by a company under section 167 or
167D as a person who has become a director of the
company, and

(b) the application is made by or on behalf of the person named and
is accompanied by a statement that the person did not consent
to act as director of the company.

(4B) If the company provides the registrar with the necessary evidence
5within the time required by the regulations, the registrar must not
remove the material from the register.

(4C) If the company does not provide the registrar with the necessary
evidence within that time—

(a) the material is conclusively presumed for the purposes of this
10section to be derived from something that is factually
inaccurate, and

(b) the registrar must accept the applicant’s statement as sufficient
evidence that the material should be removed from the register.

(4D) “The necessary evidence” is—

(a) 15evidence sufficient to satisfy the registrar that the person did
consent to act as director of the company, plus

(b) a statement by the company that the evidence provided by it is
true and is not misleading or deceptive in any material
particular.”

(2) 20The amendment made by this section does not apply to material contained in
a statement of proposed officers or notice given under section 167 or 167D of
the Companies Act 2006 if the statement or notice was received by the registrar
before this section comes into force.

Accelerated strike-off

97 25Reduction in notice periods etc for striking off companies

(1) Chapter 1 of Part 31 of the Companies Act 2006 (striking off) is amended as
follows.

(2) In section 1000 (power to strike off company not carrying on business or in
operation)—

(a) 30in subsection (2)—

(i) for “one month of sending” substitute “14 days of sending”,

(ii) for “that month” substitute “that period”, and

(iii) in paragraph (b), for “one month” substitute “14 days”, and

(b) in subsection (3)—

(i) 35in paragraph (b), for “one month” substitute “14 days”, and

(ii) for “three months” substitute “2 months”.

(3) In section 1001 (duty to act in case of company being wound up), in subsection
(1), for “three months” substitute “2 months”.

(4) In section 1003 (striking off on application by company), in subsection (3), for
40“three months” substitute “2 months”.

(5) The amendments made by subsection (2) do not apply in cases where the
communication mentioned in section 1000(1) of the Companies Act 2006 has
already been sent before this section comes into force.

(6) The amendment made by subsection (3) does not apply in cases where the
notice mentioned in section 1001(1) of that Act has already been published in
the Gazette before this section comes into force.

(7) The amendment made by subsection (4) does not apply in cases where the
5application under section 1003(1) of that Act has already been made before this
section comes into force.

Part 9 Directors’ disqualification etc

New grounds for disqualification

98 10Convictions abroad

(1) After section 5 of the Company Directors Disqualification Act 1986 insert—

“5A Disqualification for certain convictions abroad

(1) If it appears to the Secretary of State that it is expedient in the public
interest that a disqualification order under this section should be made
15against a person, the Secretary of State may apply to the court for such
an order.

(2) The court may, on an application under subsection (1), make a
disqualification order against a person who has been convicted of a
relevant foreign offence.

(3) 20A “relevant foreign offence” is an offence committed outside Great
Britain—

(a) in connection with—

(i) the promotion, formation, management, liquidation or
striking off of a company (or any similar procedure),

(ii) 25the receivership of a company’s property (or any similar
procedure), or

(iii) a person being an administrative receiver of a company
(or holding a similar position), and

(b) which corresponds to an indictable offence under the law of
30England and Wales or (as the case may be) an indictable offence
under the law of Scotland.

(4) Where it appears to the Secretary of State that, in the case of a person
who has offered to give a disqualification undertaking—

(a) the person has been convicted of a relevant foreign offence, and

(b) 35it is expedient in the public interest that the Secretary of State
should accept the undertaking (instead of applying, or
proceeding with an application, for a disqualification order),

the Secretary of State may accept the undertaking.

(5) In this section—

• 40“company” includes an overseas company;

• “the court” means the High Court or, in Scotland, the Court of
  Session.

(6) The maximum period of disqualification under an order under this
section is 15 years.”

(2) Section 5A(2) and (4) of the Company Directors Disqualification Act 1986, as
inserted by this section, applies in relation to a conviction for a relevant foreign
5offence which occurs on or after the day on which this section comes into force
regardless of whether the act or omission which constituted the offence
occurred before that day.

99 Persons instructing unfit director

After section 8 of the Company Directors Disqualification Act 1986 insert—

“Persons instructing unfit directors

8ZA 10Order disqualifying person instructing unfit director of insolvent
company

(1) The court may make a disqualification order against a person (“P”) if,
on an application under section 8ZB, it is satisfied—

(a) either—

(i) 15that a disqualification order under section 6 has been
made against a person who is or has been a director (but
not a shadow director) of a company, or

(ii) that the Secretary of State has accepted a disqualification
undertaking from such a person under section 7(2A),
20and

(b) that P exercised the requisite amount of influence over the
person.

That person is referred to in this section as “the main transgressor”.

(2) For the purposes of this section, P exercised the requisite amount of
25influence over the main transgressor if any of the conduct—

(a) for which the main transgressor is subject to the order made
under section 6, or

(b) in relation to which the undertaking was accepted from the
main transgressor under section 7(2A),

30was the result of the main transgressor acting in accordance with P’s
directions or instructions.

(3) But P does not exercise the requisite amount of influence over the main
transgressor by reason only that the main transgressor acts on advice
given by P in a professional capacity.

(4) 35Under this section the minimum period of disqualification is 2 years
and the maximum period is 15 years.

(5) In this section and section 8ZB “the court” has the same meaning as in
section 6; and subsection (3B) of section 6 applies in relation to
proceedings mentioned in subsection (6) below as it applies in relation
40to proceedings mentioned in section 6(3B)(a) and (b).

(6) The proceedings are proceedings—

(a) for or in connection with a disqualification order under this
section, or

(b) in connection with a disqualification undertaking accepted
under section 8ZC.

8ZB Application for order under section 8ZA

(1) If it appears to the Secretary of State that it is expedient in the public
5interest that a disqualification order should be made against a person
under section 8ZA, the Secretary of State may—

(a) make an application to the court for such an order, or

(b) in a case where an application for an order under section 6
against the main transgressor has been made by the official
10receiver, direct the official receiver to make such an application.

(2) Except with the leave of the court, an application for a disqualification
order under section 8ZA must not be made after the end of the period
of 3 years beginning with the day on which the company in question
became insolvent (within the meaning given by section 6(2)).

(3) 15Subsection (4) of section 7 applies for the purposes of this section as it
applies for the purposes of that section.

8ZC Disqualification undertaking instead of an order under section 8ZA

(1) If it appears to the Secretary of State that it is expedient in the public
interest to do so, the Secretary of State may accept a disqualification
20undertaking from a person (“P”) if—

(a) any of the following is the case—

(i) a disqualification order under section 6 has been made
against a person who is or has been a director (but not a
shadow director) of a company,

(ii) 25the Secretary of State has accepted a disqualification
undertaking from such a person under section 7(2A), or

(iii) it appears to the Secretary of State that such an
undertaking could be accepted from such a person (if
one were offered), and

(b) 30it appears to the Secretary of State that P exercised the requisite
amount of influence over the person.

That person is referred to in this section as “the main transgressor”.

(2) For the purposes of this section, P exercised the requisite amount of
influence over the main transgressor if any of the conduct—

(a) 35for which the main transgressor is subject to the disqualification
order made under section 6,

(b) in relation to which the disqualification undertaking was
accepted from the main transgressor under section 7(2A), or

(c) which led the Secretary of State to the conclusion set out in
40subsection (1)(a)(iii),

was the result of the main transgressor acting in accordance with P’s
directions or instructions.

(3) But P does not exercise the requisite amount of influence over the main
transgressor by reason only that the main transgressor acts on advice
45given by P in a professional capacity.

(4) Subsection (4) of section 7 applies for the purposes of this section as it
applies for the purposes of that section.

8ZD Order disqualifying person instructing unfit director: other cases

(1) The court may make a disqualification order against a person (“P”) if,
on an application under this section, it is satisfied—

(a) either—

(i) 5that a disqualification order under section 8 has been
made against a person who is or has been a director (but
not a shadow director) of a company, or

(ii) that the Secretary of State has accepted a disqualification
undertaking from such a person under section 8(2A),
10and

(b) that P exercised the requisite amount of influence over the
person.

That person is referred to in this section as “the main transgressor”.

(2) The Secretary of State may make an application to the court for a
15disqualification order against P under this section if it appears to the
Secretary of State that it is expedient in the public interest for such an
order to be made.

(3) For the purposes of this section, P exercised the requisite amount of
influence over the main transgressor if any of the conduct—

(a) 20for which the main transgressor is subject to the order made
under section 8, or

(b) in relation to which the undertaking was accepted from the
main transgressor under section 8(2A),

was the result of the main transgressor acting in accordance with P’s
25directions or instructions.

(4) But P does not exercise the requisite amount of influence over the main
transgressor by reason only that the main transgressor acts on advice
given by P in a professional capacity.

(5) Under this section the maximum period of disqualification is 15 years.

(6) 30In this section “the court” means the High Court or, in Scotland, the
Court of Session.

8ZE Disqualification undertaking instead of an order under section 8ZD

(1) If it appears to the Secretary of State that it is expedient in the public
interest to do so, the Secretary of State may accept a disqualification
35undertaking from a person (“P”) if—

(a) any of the following is the case—

(i) a disqualification order under section 8 has been made
against a person who is or has been a director (but not a
shadow director) of a company,

(ii) 40the Secretary of State has accepted a disqualification
undertaking from such a person under section 8(2A), or

(iii) it appears to the Secretary of State that such an
undertaking could be accepted from such a person (if
one were offered), and

(b) 45it appears to the Secretary of State that P exercised the requisite
amount of influence over the person.

That person is referred to in this section as “the main transgressor”.

(2) For the purposes of this section, P exercised the requisite amount of
influence over the main transgressor if any of the conduct—

(a) for which the main transgressor is subject to the disqualification
order made under section 8,

(b) 5in relation to which the disqualification undertaking was
accepted from the main transgressor under section 8(2A), or

(c) which led the Secretary of State to the conclusion set out in
subsection (1)(a)(iii),

was the result of the main transgressor acting in accordance with P’s
10directions or instructions.

(3) But P does not exercise the requisite amount of influence over the main
transgressor by reason only that the main transgressor acts on advice
given by P in a professional capacity.”

Determining unfitness

100 15Determining unfitness and disqualifications: matters to be taken into account

(1) The Company Directors Disqualification Act 1986 is amended as follows.

(2) In section 6 (duty of court to disqualify unfit directors of insolvent
companies)—

(a) in subsection (1)(b), for “any other company or companies” substitute
20“one or more other companies or overseas companies”,

(b) after subsection (1) insert—

“(1A) In this section references to a person’s conduct as a director of
any company or overseas company include, where that
company or overseas company has become insolvent,
25references to that person’s conduct in relation to any matter
connected with or arising out of the insolvency.”,

(c) in subsection (2), omit the words from “and references” to the end, and

(d) after subsection (2) insert—

“(2A) For the purposes of this section, an overseas company becomes
30insolvent if the company enters into insolvency proceedings of
any description (including interim proceedings) in any
jurisdiction.”

(3) In section 8 (disqualification where expedient in public interest)—

(a) in subsection (2), after “the company” insert “(either taken alone or
35taken together with his conduct as a director or shadow director of one
or more other companies or overseas companies)”,

(b) in subsection (2A)(a), after “shadow director” insert “(either taken
alone or taken together with his conduct as a director or shadow
director of one or more other companies or overseas companies)”, and

(c) 40after subsection (2A) insert—

“(2B) Subsection (1A) of section 6 applies for the purposes of this
section as it applies for the purposes of that section.”

(4) Omit section 9 (matters for determining unfitness of directors).