Companies (Audit, Investigations and Community Enterprise) Bill [HL]

House of Commons

Session 2002 - 03
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Companies (Audit, Investigations and Community Enterprise) Bill [HL]

Companies (Audit, Investigations and Community Enterprise) Bill [HL]
Schedule 3 — Regulator of Community Interest Companies
65

4
The Chief Charity Commissioner may make available to the Regulator, to
assist in the exercise of the Regulator’s functions, any officer or employee
appointed under paragraph 2(1) of Schedule 1 to the Charities Act 1993
(c. 10).
Delegation of functions
5
5
Anything which the Regulator is authorised or required to do may be done
by a member of the Regulator’s staff if authorised by the Regulator
(generally or specifically) for that purpose.
Finance
6
The Secretary of State may make payments to the Regulator.
10
Reports and other information
7     (1)
The Regulator must, in respect of each financial year, prepare a report on the
exercise of the Regulator’s functions during the financial year.
      (2)
The Regulator must prepare accounts in respect of a financial year if the
Secretary of State so directs.
15
      (3)
The Regulator must send a copy of the accounts to the Comptroller and
Auditor General.
      (4)
The Comptroller and Auditor General must examine, certify and report on
the accounts and send a copy of the report to the Regulator.
      (5)
The Regulator must include the accounts and the Comptroller and Auditor
20
General’s report on them in the report prepared by the Regulator in respect
of the financial year to which the accounts relate.
      (6)
The Regulator must prepare that report as soon as possible after the end of
the financial year to which it relates.
      (7)
The Regulator must send to the Secretary of State a copy of—
25
(a)
each report prepared by the Regulator under sub-paragraph (1), and
(b)
each report prepared by the Official Property Holder under
paragraph 6 of Schedule 5.
      (8)
The Secretary of State must lay before each House of Parliament a copy of
each of those reports.
30
      (9)
The Regulator must supply the Secretary of State with such other reports
and information relating to the exercise of the Regulator’s functions as the
Secretary of State may require.
     (10)
“Financial year” means—
(a)
the period beginning with the date on which a person is first
35
appointed as the Regulator and ending with the next 31st March, and
(b)
each successive period of 12 months beginning with 1st April.
Amendments
8
In Schedule 2 to the Parliamentary Commissioner Act 1967 (c. 13)
(departments and authorities subject to investigation), insert at the
40
appropriate place—

“Office of the Regulator of Community Interest Companies.”

Companies (Audit, Investigations and Community Enterprise) Bill [HL]
Schedule 4 — Appeal Officer for Community Interest Companies
66

9
In Part 3 of Schedule 1 to the House of Commons Disqualification Act 1975
(c. 24) (disqualifying offices), insert at the appropriate place—

“Regulator of Community Interest Companies.”
Schedule 4
Section 26

Appeal Officer for Community Interest Companies
5
Appeal Officer’s terms of appointment
1     (1)
The Appeal Officer holds office for the period determined by the Secretary
of State on appointment (or re-appointment).
      (2)
But—
(a)
the Appeal Officer may at any time resign the office by giving notice
10
in writing to the Secretary of State, and
(b)
the Secretary of State may at any time remove the Appeal Officer on
the ground of incapacity or misbehaviour.
      (3)
Subject to that, the Appeal Officer holds and vacates office on the terms
determined by the Secretary of State.
15
Remuneration and pensions
2     (1)
The Secretary of State may pay remuneration and travelling and other
allowances to the Appeal Officer.
      (2)
The Secretary of State may—
(a)
pay a pension, allowance or gratuity to or in respect of a person who
20
is or has been the Appeal Officer, or
(b)
make contributions or payments towards provision for a pension,
allowance or gratuity for or in respect of such a person.
Finance
3
The Secretary of State may make payments to the Appeal Officer.
25
Procedure
4     (1)
Regulations may make provision about the practice and procedure to be
followed by the Appeal Officer.
      (2)
Regulations under this paragraph may in particular impose time limits for
bringing appeals.
30
Amendments
5
In Schedule 2 to the Parliamentary Commissioner Act 1967 (c. 13)
(departments and authorities subject to investigation), insert at the
appropriate place—

“Appeal Officer for Community Interest Companies.”
35
6
In Part 3 of Schedule 1 to the House of Commons Disqualification Act 1975

Companies (Audit, Investigations and Community Enterprise) Bill [HL]
Schedule 5 — Official Property Holder for Community Interest Companies
67

(disqualifying offices), insert at the appropriate place—

“Appeal Officer for Community Interest Companies.”
Schedule 5
Section 27

Official Property Holder for Community Interest Companies
Status
5
1     (1)
The Official Property Holder is a corporation sole.
      (2)
A document purporting to be—
(a)
duly executed under the seal of the Official Property Holder, or
(b)
signed on behalf of the Official Property Holder,

shall be received in evidence and shall, unless the contrary is proved, be
10
taken to be so executed or signed.
Relationship with Regulator
2
The Regulator must make available to the Official Property Holder such
members of the Regulator’s staff as the Official Property Holder may require
in order to exercise the functions of the office.
15
Effect of vacancy
3
The Regulator must appoint a member of the Regulator’s staff who is to act
as Official Property Holder—
(a)
during any vacancy in the office, or
(b)
if the Official Property Holder is absent, subject to suspension or
20
unable to act.
Property
4     (1)
The Official Property Holder holds property vested in or transferred to him
as a trustee.
      (2)
The Official Property Holder may release or deal with the property—
25
(a)
to give effect to any interest in or right over the property of any
person (other than the community interest company by which, or in
trust for which, the property was held before it was vested or
transferred), or
(b)
at the request of a person appointed to act as administrative receiver,
30
administrator, provisional liquidator or liquidator of the company.
      (3)
Subject to sub-paragraph (2), the Official Property Holder may not release or
deal with the property except in accordance with directions given by the
Regulator.
Finance
35
5     (1)
The Official Property Holder may recover his expenses in respect of
property held by him from the property or from the community interest

Companies (Audit, Investigations and Community Enterprise) Bill [HL]
Schedule 6 — Community interest companies: names
68

company by which, or in trust for which, the property was held before it was
vested in or transferred to the Official Property Holder.
      (2)
Any expenses of the Official Property Holder not recovered under sub-
paragraph (1) are to be met by the Regulator.
Reports
5
6     (1)
As soon as possible after the end of each financial year, the Official Property
Holder must prepare a report on the exercise of the Official Property
Holder’s functions during the financial year.
      (2)
The Official Property Holder must send a copy of the report to the Regulator.
      (3)
“Financial year” means—
10
(a)
the period beginning with the date on which a person is first
appointed as the Official Property Holder and ending with the next
31st March, and
(b)
each successive period of 12 months beginning with 1st April.
Schedule 6
15
Section 31

Community interest companies: names
Companies Act 1985 (c. 6)
1
The Companies Act 1985 has effect subject to the following amendments.
2     (1)
Section 26 (prohibition on registration of certain names) is amended as
follows.
20
      (2)
In subsection (1)(a)—
(a)
for “or “public limited company”” substitute “, “public limited
company”, “community interest company” or “community interest
public limited company””, and
(b)
for “and “cwmni cyfyngedig cyhoeddus”” substitute “, “cwmni
25
cyfyngedig cyhoeddus”, “cwmni buddiant cymunedol” and “cwmni
buddiant cymunedol cyhoeddus cyfyngedig””.
      (3)
In subsection (3)(b), after the entry relating to “public limited company” or
its Welsh equivalent insert—

““community interest company” or its Welsh equivalent
30
(“cwmni buddiant cymunedol”);

“community interest public limited company” or its Welsh
equivalent (“cwmni buddiant cymunedol cyhoeddus
cyfyngedig”);”.
3
In section 27(4) (alternatives of statutory designations), after paragraph (d)
35
insert—
“(e)
the alternative of “community interest company” is “c.i.c.”;
(f)
the alternative of “cwmni buddiant cymunedol” is “c.b.c.”;
(g)
the alternative of “community interest public limited
company” is “community interest p.l.c.”; and
40
(h)
the alternative of “cwmni buddiant cymunedol cyhoeddus
cyfyngedig” is “cwmni buddiant cymunedol c.c.c.”.”

Companies (Audit, Investigations and Community Enterprise) Bill [HL]
Schedule 6 — Community interest companies: names
69

4
In section 30(7) (further exemptions for company exempt from using
“limited” as part of its name), after “which” insert “under this section”.
5
In section 33(1) (person who is not a public company prohibited from
trading under a name ending with the words “public limited company” or
their equivalent in Welsh), insert at the end “; and a community interest
5
company which is not a public company is guilty of an offence if it does so
under a name which includes, as its last part, the words “cwmni buddiant
cymunedol cyhoeddus cyfyngedig”.”
6
After section 34 insert—
“34A
Penalty for improper use of “community interest company” etc.
10
(1)
A company which is not a community interest company is guilty of
an offence if it carries on any trade, profession or business under a
name which includes any of the expressions specified in subsection
(3).
(2)
A person other than a company is guilty of an offence if it carries on
15
any trade, profession or business under a name which includes any
of those expressions (or any contraction of them) as its last part.
(3)
The expressions are—
(a)
“community interest company” or its Welsh equivalent
(“cwmni buddiant cymunedol”), and
20
(b)
“community interest public limited company” or its Welsh
equivalent (“cwmni buddiant cymunedol cyhoeddus
cyfyngedig”).
(4)
Subsections (1) and (2) do not apply—
(a)
to a person who was carrying on a trade, profession or
25
business under the name in question at any time during the
period beginning with 1st September 2003 and ending with
4th December 2003, or
(b)
if the name in question was on 4th December 2003 a
registered trade mark or Community trade mark (within the
30
meaning of the Trade Marks Act 1994 (c. 26)), to a person who
was on that date a proprietor or licensee of that trade mark.
(5)
A person guilty of an offence under subsection (1) or (2) and, if that
person is a company, any officer of the company who is in default, is
liable to a fine and, for continued contravention, to a daily default
35
fine.”
7
In section 43(2)(b) (re-registration of private company as public: alteration of
name), after “section 25(1)” insert “, or section 31 of the Companies (Audit,
Investigations and Community Enterprise) Act 2004,”.
8
In section 351(1)(d) (particulars in correspondence to indicate that a
40
company exempt from obligation to use “limited” as part of name is limited
company), after “name” insert “under section 30 or a community interest
company which is not a public company”.
9     (1)
Schedule 24 (punishment of offences) is amended as follows.
      (2)
In the second column of the entry relating to section 33, after “equivalent”
45
insert “etc.”.

Companies (Audit, Investigations and Community Enterprise) Bill [HL]
Schedule 7 — Community interest companies: investigations
70

      (3)
After the entry relating to section 34 insert—

“34A
Trading with improper use of
Summary
Level 3 on the
One-tenth of

“community interest company”

standard scale
level 3 on the

etc.

standard scale.”

Limited Liability Partnerships Act 2000 (c. 12)
5
10
In paragraph 8(2) of the Schedule to the Limited Liability Partnerships Act
2000 (similarity of names), after the entry relating to “public limited
company” insert—

““community interest company”,

“community interest public limited company”,”.
10
Schedule 7
Section 40

Community interest companies: investigations
Power to require documents and information
1     (1)
The investigator of a community interest company may require the
company or any other person—
15
(a)
to produce such documents (or documents of such description) as
the investigator may specify;
(b)
to provide such information (or information of such description) as
the investigator may specify.
      (2)
A person on whom a requirement is imposed under sub-paragraph (1) may
20
require the investigator to produce evidence of his authority.
      (3)
A requirement under sub-paragraph (1) must be complied with at such time
and place as may be specified by the investigator.
      (4)
The production of a document in pursuance of this paragraph does not affect
any lien which a person has on the document.
25
      (5)
The investigator may take copies of or extracts from a document produced
in pursuance of this paragraph.
      (6)
In relation to information recorded otherwise than in legible form, the power
to require production of it includes power to require the production of a
copy of it in legible form or in a form from which it can readily be produced
30
in visible and legible form.
      (7)
In this Schedule—
(a)
“the investigator of a community interest company” means a person
investigating the company’s affairs under section 40, and
(b)
“document” includes information recorded in any form.
35
Privileged information
2     (1)
Nothing in paragraph 1 requires a person to produce a document or provide
information in respect of which a claim could be maintained—
(a)
in an action in the High Court, to legal professional privilege, or

Companies (Audit, Investigations and Community Enterprise) Bill [HL]
Schedule 7 — Community interest companies: investigations
71

(b)
in an action in the Court of Session, to confidentiality of
communications,

but a person who is a lawyer may be required to provide the name and
address of his client.
      (2)
Nothing in paragraph 1 requires a person carrying on the business of
5
banking to produce a document, or provide information, relating to the
affairs of a customer unless a requirement to produce the document, or
provide the information, has been imposed on the customer under that
paragraph.
Use of information as evidence
10
3     (1)
A statement made by a person in compliance with a requirement imposed
under paragraph 1 may be used in evidence against the person.
      (2)
But in criminal proceedings—
(a)
no evidence relating to the statement may be adduced by or on
behalf of the prosecution, and
15
(b)
no question relating to it may be asked by or on behalf of the
prosecution,

unless evidence relating to it is adduced or a question relating to it is asked
in the proceedings by or on behalf of that person.
      (3)
However, sub-paragraph (2) does not apply to proceedings in which a
20
person is charged with an offence under—
(a)
paragraph 5,
(b)
section 5 of the Perjury Act 1911 (c. 6) (false statement made
otherwise than on oath), or
(c)
section 44(2) of the Criminal Law (Consolidation) (Scotland) Act
25
1995 (c. 39) (false statement made otherwise than on oath).
Failure to comply with requirement
4     (1)
This paragraph applies if a person fails to comply with a requirement
imposed under paragraph 1.
      (2)
The investigator may certify that fact in writing to the court.
30
      (3)
If, after hearing—
(a)
any witnesses who may be produced against or on behalf of the
alleged offender, and
(b)
any statement which may be offered in defence,

the court is satisfied that the offender failed without reasonable excuse to
35
comply with the requirement, it may deal with him as if he had been guilty
of contempt of the court.
False information
5     (1)
A person commits an offence if in purported compliance with a requirement
under paragraph 1 to provide information, the person—
40
(a)
provides information which the person knows to be false in a
material particular, or
(b)
recklessly provides information which is false in a material
particular,