S.C.C.
NOTICES OF AMENDMENTS
given up to and including
Friday 14th March 2003
New Amendments handed in are marked thus *
STANDING COMMITTEE C
CO-OPERATIVES AND COMMUNITY BENEFIT SOCIETIES BILL
Mr Mark Todd
1
Page 1, line 1, leave out Clause 1.
Mr Mark Todd
2
Page 2, line 32, leave out Clause 2.
Mr Mark Todd
3
Page 3, line 20, leave out Clause 3.
Mr Mark Todd
4
Clause 5, page 4, line 1, leave out subsection (2).
Mr Mark Todd
5
Clause 5, page 4, line 2, at end insert—
'(2A) Section (Execution of deeds and other documents)(8) extends to England and Wales only.'.
Mr Gareth Thomas
7
*Clause 5, page 4, line 3, leave out 'does not extend' and insert 'extends'.
NEW CLAUSES
Community Benefit Societies: power to restrict use of assets
Mr Mark Todd
NC1
To move the following Clause:—
'(1) The Treasury may by regulations make provision for enabling any community benefit society, or any community benefit society of a prescribed kind, to ensure that—
| (a) | assets of the society of a prescribed kind, |
| (b) | assets of the society specified by it in accordance with the regulations, or |
| (c) | all of the society's assets, |
cannot be used or dealt with except in a case mentioned in subsection (2).
(2) The cases are—
| (a) | where the use or dealing is, directly or indirectly, for a purpose that is for the benefit of the community and is of a prescribed kind or, if no kinds of purpose are prescribed under this paragraph, for any purpose that is for the benefit of the community; or |
| (b) | where the circumstances are such as may be prescribed. |
(3) Where under the regulations a society has ensured as mentioned in subsection (1) as respects any of its assets, the assets concerned are "dedicated assets" for the purposes of this section.
(4) Regulations under this section may, in particular—
| (a) | provide for the procedure by which a society may ensure as mentioned in subsection (1); |
| (b) | provide for such of a society's rules as are of a prescribed kind to be unalterable, or for them to be alterable only in prescribed circumstances or in circumstances specified in rules of a prescribed kind; |
| (c) | provide that, in any circumstances prescribed under subsection (2)(b), dedicated assets must be dealt with in a prescribed way; |
| (d) | make provision for ensuring that any society, company or other person to whom any dedicated assets are transferred in prescribed circumstances cannot use or deal with those assets except in a case mentioned in subsection (2); |
| (e) | provide for members of a society who lose property rights as a result of the society's ensuring as mentioned in subsection (1) to be compensated for that loss (whether by payment of a prescribed amount or of an amount determined in a prescribed way or otherwise), subject to such exceptions as may be prescribed; |
| (f) | provide for the enforcement of provisions designed to ensure as mentioned in subsection (1); |
| (g) | make provision for the carrying out of investigations by persons appointed by a prescribed person; |
| (h) | confer power on a prescribed person to require persons of a prescribed description to provide him with information in order to enable him to perform his functions under the regulations; |
| (i) | provide for restrictions on the use and disclosure of information obtained by any person in the performance of any function under the regulations. |
(5) Regulations under this section may—
| (a) | impose criminal liability; |
| (b) | confer functions on a prescribed person; |
| (c) | confer jurisdiction on any court; |
| (d) | authorise a prescribed person to make rules binding on persons of a prescribed description and make provision as to the making, publication and enforcement of such rules; |
| (e) | provide for a prescribed person to charge fees sufficient to meet the costs of carrying out any of his functions under the regulations; |
| (f) | modify, exclude or apply (with or without modifications) any enactment or rule of law; |
| (g) | contain such incidental, consequential and supplemental provision as the Treasury consider appropriate; |
| (h) | make different provision for different cases. |
(6) The power to make regulations under this section is exercisable by statutory instrument.
(7) No regulations may be made under this section unless a draft of the regulations has been laid before Parliament and approved by a resolution of each House.
(8) In this section—
"community benefit society" means a society registered (or deemed to be registered) under the 1965 Act which fulfils the condition in section 1(2)(b) of that Act;"enactment" includes an enactment comprised in—
| (a) | an Act of the Scottish Parliament |
| (b) | subordinate legislation, whether made under an Act or an Act of the Scottish Parliament; and |
"prescribed" means prescribed by regulations under this section.'.
Status of charitable societies to appear on correspondence etc
Mr Mark Todd
NC2
To move the following Clause:—
'After section 5 of the 1965 Act insert—
"5A Status of charitable societies to appear on correspondence etc
(1) Where a registered society is a charity and its registered name does not include the word "charity" or the word "charitable", the society must state the fact that it is a charity in legible characters—
| (a) | in all notices, advertisements and other official publications of the society; |
| (b) | in all business letters of the society; |
| (c) | in all bills of exchange, promissory notes, endorsements, cheques and orders for money or goods, purporting to be signed by or on behalf of the society; and |
| (d) | in all bills, invoices, receipts and letters of credit of the society. |
(2) Where a society's registered name includes the words "elusen" or the word "elusennol", subsection (1) of this section shall not apply in relation to any document which is wholly in Welsh.
(3) The statement required by subsection (1) of this section shall be in English, except that, in the case of a document which is otherwise wholly in Welsh, the statement may be in Welsh if it consists of or includes the word "elusen" or the word "elusennol".
(4) Section 62 of this Act does not apply in respect of an offence committed by a registered society under section 61 of this Act where the offence consists of a failure to comply with this section.
(5) Any officer of a registered society, or any other person acting on such a society's behalf, who—
| (a) | issues or authorises the issue of any document such as is mentioned in subsection (1)(a), (b) or (d) of this section; or |
| (b) | signs or authorises to be signed on behalf of the society any document such as is mentioned in subsection (1)(c) of this section, |
in which a statement required by subsection (1) is not made in accordance with this section shall be liable on summary conviction to a fine not exceeding level 3 on the standard scale.
(6) In the case of a conviction by virtue of paragraph (b) of subsection (5) of this section, the officer or other person shall further be personally liable to the holder of any such document as is referred to in that paragraph for the amount specified in the document unless that amount is duly paid by the society.
(7) In this section, "charity"—
| (a) | in relation to a society whose registered office is situated in England or Wales, has the same meaning as in the Charities Act 1993; |
| (b) | in relation to a society whose registered office is situated in Scotland, means a body established for charitable purposes only (that expression having the same meaning as in the Income Tax Acts)."'. |
Capacity of society and power of committee to bind it
Mr Mark Todd
NC3
To move the following Clause:—
'After section 7 of the 1965 Act insert—
"Capacity of society and power of committee to bind it
7A Capacity of society not limited by its rules
(1) The validity of an act done by a registered society shall not be called into question on the ground of lack of capacity by reason of anything in the society's registered rules.
(2) A member of a registered society may bring proceedings to restrain the doing of an act which but for subsection (1) of this section would be beyond the society's capacity; but no such proceedings shall lie in respect of an act to be done in fulfilment of a legal obligation arising from a previous act of the society.
(3) It remains the duty of the members of the committee of a registered society to observe any limitations on their powers flowing from the society's registered rules; and action by the members of the committee which but for subsection (1) of this section would be beyond the society's capacity may only be ratified by the society by special resolution.
(4) A resolution ratifying such action shall not affect any liability incurred by a member of the committee or any other person; relief from any such liability must be agreed to separately by special resolution.
(5) The operation of this section is restricted by section 7D of this Act (application to charitable societies); and section 7E of this Act (transactions with members of the committee and connected persons in excess of powers) has effect notwithstanding this section.
(6) In this section "special resolution" means a resolution passed by not less than 75% of such members of the society as (being entitled to do so) vote in person, or by proxy where the society's rules allow proxies, at a general meeting of which notice, specifying the intention to propose the resolution, has been duly given according to those rules.
(7) A copy of every special resolution for the purposes of this section signed by the chairman of the meeting at which the resolution was passed and countersigned by the secretary of the society shall be sent to the Authority and registered by it; and until that copy is so registered the special resolution shall not take effect.
7B Power of committee to bind society(1) In favour of a person dealing with a registered society in good faith, the power of the committee to bind the society, or authorise others to do so, shall be deemed to be free of any limitation under the society's registered rules.
(2) For this purpose—
| (a) | a person "deals with" a society if he is a party to any transaction or other act to which the society is a party; |
| (b) | a person shall not be regarded as acting in bad faith by reason only of his knowing that an act is beyond the powers of the committee under the society's registered rules; and |
| (c) | a person shall be presumed to have acted in good faith unless the contrary is proved. |
(3) The references above to limitations on the powers of the committee under the society's registered rules include limitations deriving—
| (a) | from a resolution of the society in general meeting or a meeting of any class of members; or |
| (b) | from any agreement between the members of the society or of any class of members. |
(4) Subsection (1) of this section does not affect any right of a member of the society to bring proceedings to restrain the doing of an act which is beyond the powers of the committee; but no such proceedings shall lie in respect of an act to be done in fulfilment of a legal obligation arising from a previous act of the society.
(5) Nor does subsection (1) affect any liability incurred by a member of the committee, or any other person, by reason of the committee's exceeding its powers.
(6) The operation of this section is restricted by section 7D of this Act (application to charitable societies); and section 7E of this Act (transactions with members of the committee and connected persons in excess of powers) has effect notwithstanding this section.
7C No duty to enquire as to capacity of society or authority of committeeA party to a transaction with a registered society is not bound to enquire as to whether it is permitted by the society's registered rules or as to any limitation on the powers of the committee to bind the society or authorise others to do so.
7D Application of sections 7A and 7B to charitable societies(1) Sections 7A and 7B of this Act (capacity of society not limited by its rules and power of committee to bind society) do not apply to the acts of a registered society which is a charity except in favour of a person who—
| (a) | gives full consideration in money or money's worth in relation to the act in question; and |
| (b) | does not know that the act is not permitted by the society's registered rules or, as the case may be, is beyond the powers of the committee, |
or who does not know at the time the act is done that the society is a charity.
(4) Where a registered society is a charity with its registered office situated in England or Wales, the ratification of an act under section 7A(3) of this Act, or the ratification of a transaction to which section 7E of this Act applies, is ineffective without the prior written consent of the Charity Commissioners for England and Wales.
(5) In this section, "charity"—
| (a) | in relation to a society whose registered office is situated in England or Wales, has the same meaning as in the Charities Act 1993; |
| (b) | in relation to a society whose registered office is situated in Scotland, means a body established for charitable purposes only (that expression having the same meaning as in the Income Tax Acts). |
7E Transactions with committee members and other persons in excess of powers(1) This section applies where a registered society enters into a transaction to which the parties include—
| (a) | a member of the committee of the society, or |
| (b) | a person connected with such a member or a company with whom such a member is associated, |
and the committee of the society, in connection with the transaction, exceeds any limitation on its powers under the society's registered rules.
(2) The transaction is voidable at the instance of the society.
(3) Whether or not it is avoided, any such party to the transaction as is mentioned in subsection (1)(a) or (b) of this section, and any member of the committee who authorised the transaction, is liable—
| (a) | to account to the society for any gain which he has made directly or indirectly by the transaction; and |
| (b) | to indemnify the society for any loss or damage resulting from the transaction. |
(4) Nothing in the above provisions shall be construed as excluding the operation of any other enactment or rule of law by virtue of which the transaction may be called in question or any liability to the society may arise.
(5) The transaction ceases to be voidable if—
| (a) | restitution of any money or other asset which was the subject-matter of the transaction is no longer possible; or |
| (b) | the society is indemnified for any loss or damage resulting from the transaction; or |
| (c) | rights acquired bona fide for value and without actual notice of the committee's exceeding its powers by a person who is not party to the transaction would be affected by the avoidance; or |
| (d) | the transaction is ratified by the society in general meeting in such a way as the case may require. |
(6) A person other than a member of the committee is not liable under subsection (3) of this section if he shows that at the time the transaction was entered into he did not know that the committee was exceeding its powers.
(7) This section does not affect the operation of section 7B of this Act in relation to any party to the transaction not within subsection (1)(a) or (b) of this section.
(8) But where a transaction is voidable by virtue of this section and valid by virtue of that section in favour of such a person, the court may, on the application of that person or of the society, make such order affirming, severing or setting aside the transaction, on such terms, as appear to the court to be just.
7F Definitions relating to section 7E(1) In section 7E of this Act "transaction" includes any act; and the reference in subsection (1) of that section to limitations under the society's registered rules includes limitations deriving—
| (a) | from a resolution of the society in general meeting or a meeting of any class of members; or |
| (b) | from any agreement between the members of the society or of any class of members. |
(2) In section 7E(1) of this Act "company" has the same meaning as in the Companies Act 1985.
(3) Section 346(2) to (8) of the Companies Act 1985 shall apply for the purposes of references in section 7E(1) of this Act to a person's being "connected" with a committee member or to a committee member's being "associated with" a company, but shall so apply—
| (a) | as if any reference to a director of a company were a reference to a member of a committee of a registered society; and |
| (b) | subject to such other adaptations and modifications as may be specified by regulations made by the Treasury under this section. |
(4) Any regulations made under this section shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.
(5) In section 7E(4) of this Act "enactment" includes an enactment comprised in—
| (a) | an Act of the Scottish Parliament; |
| (b) | subordinate legislation, whether made under an Act or an Act of the Scottish Parliament. |
(6) In section 7E(8) of this Act "the court", in relation to a registered society, means the court having jurisdiction to wind up the society under the provisions of the Insolvency Act 1986 as applied by section 55 of this Act."'.
