Amendments proposed to the Companies (Audit, Investigations and Community Enterprise) Bill [Lords] - continued House of Commons

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Mr Andrew Mitchell
Mr Peter Atkinson
Mrs Gillian Shephard
Mr Ian Taylor

40

*Clause     39,     page     36,     line     42,     after 'appears' insert 'on reasonable grounds'.


   

Mr Andrew Mitchell
Mr Peter Atkinson
Mrs Gillian Shephard
Mr Ian Taylor

38

Schedule     7,     page     70,     line     14,     after 'may', insert 'if it appears reasonably necessary for the purposes of the investigation'.

   

Mr Andrew Mitchell
Mr Peter Atkinson
Mrs Gillian Shephard
Mr Ian Taylor

39

Schedule     7,     page     70,     line     19,     at end insert—

    '(1A)   The investigator of a community interest company must give reasons in writing for any requirement imposed under sub-paragraph (1) above, such reasons to be given to the company or other person to whom the requirement is directed.'.


   

Jacqui Smith

2

Schedule     8     ,     page     72,     line     21,     column     2,     at end insert—

'In section 310, in subsection (1) the words "any officer of the company or", and in subsection (3) the words "officer or" (in both places) and the words from "section 144(3)" to "nominee) or".'.


   

Jacqui Smith

1

Clause     65,     page     50,     line     18,     leave out subsection (2).


REMAINING NEW CLAUSES

Funding of director's expenditure on defending proceedings

   

Jacqui Smith

NC2

To move the following Clause:—

    'After section 337 of the Companies Act 1985 (c.6) insert—

    "337A   Funding of director's expenditure on defending proceedings

    (1)   A company is not prohibited by section 330 from doing anything to provide a director with funds to meet expenditure incurred or to be incurred by him—

      (a) in defending any criminal or civil proceedings, or

      (b) in connection with any application under any of the provisions mentioned in subsection (2).

    (2)   The provisions are—

                  section 144(3) and (4) (acquisition of shares by innocent nominee), and

                  section 727 (general power to grant relief in case of honest and reasonable conduct).

    (3)   Nor does section 330 prohibit a company from doing anything to enable a director to avoid incurring such expenditure.

    (4)   Subsections (1) and (3) only apply to a loan or other thing done as mentioned in those subsections if the terms on which it is made or done will result in the loan falling to be repaid, or any liability of the company under any transaction connected with the thing in question falling to be discharged, not later than—

      (a) in the event of the director being convicted in the proceedings, the date when the conviction becomes final,

      (b) in the event of judgment being given against him in the proceedings, the date when the judgment becomes final, or

      (c) in the event of the court refusing to grant him relief on the application, the date when the refusal of relief becomes final.

    (5)   For the purposes of subsection (4) a conviction, judgment or refusal of relief becomes final—

      (a) if not appealed against, at the end of the period for bringing an appeal, or

      (b) if appealed against, at the time when the appeal (or any further appeal) is disposed of.

    (6)   An appeal is disposed of—

      (a) if it is determined and the period for bringing any further appeal has ended, or

      (b) if it is abandoned or otherwise ceases to have effect.".'.


Amendment of Companies Act 1985: limit on auditor's liability (No. 2)

   

Mr Andrew Mitchell
Mr Peter Atkinson
Mrs Gillian Shephard
Mr Ian Taylor

NC4

To move the following Clause:—

    '(1)   Section 310 of the Companies Act 1985 (c 6) (provisions exempting officers and auditors from liability) is amended as follows.

    (2)   In subsection (2) delete "subsection" and insert "subsections".

    (3)   After subsection (3) insert—

    "(4)   A company may, in pursuance of such a provision, enter a contract with any such auditor to limit any liability which by virtue of any rule of law would otherwise attach to him in respect of any such negligence, default or breach of duty to an amount equal to twenty times the fees paid in respect of the audit of the company, provided such contract is approved by members in general meeting.

    (5)   Where an act of negligence, default or breach of duty arises in two or more consecutive periods of account, the liability under subsection (5) shall be restricted to twenty times the average of the audit fee for the company for those periods of account.".'.


Amendments of Companies Act 1985: limit on auditor's liability (No. 3)

   

Mr Andrew Mitchell
Mr Peter Atkinson
Mrs Gillian Shephard
Mr Ian Taylor

NC5

To move the following Clause:—

    '(1)   Section 310 of the Companies Act 1985 (c 6) (provisions exempting officers and auditors from liability) is amended as follows.

    (4)   In subsection (2) delete "subsection" and insert "subsections".

    (5)   After subsection (3) insert—

          "(4)   A company may, in pursuance of such a provision, enter a contract with any such auditor to limit any liability which by virtue of any rule of law would otherwise attach to him in respect of any such negligence, default or breach of duty to the sum of£75 million.

          (5)   Where the company is a member of a group of companies the sum of £75 million shall be divided between members of the group pro rata to the audit fee charged to each company within the group, provided such contract is approved by members in general meeting.

          (6)   Where an act of negligence, default or breach of duty arises in two or more consecutive periods of account, the liability under subsection (4) shall be restricted to £75 million for those periods of account.".'.


Amendment of Companies Act 1985: limit on auditor's liability (No. 4)

   

Mr Andrew Mitchell
Mr Peter Atkinson
Mrs Gillian Shephard
Mr Ian Taylor

NC6

To move the following Clause:—

                    'Section 310(3) of the Companies Act 1985 (c 6) (provisions exempting officers and auditors from liability) is amended, by adding at the end—

      "(iii) From entering a contract with its auditors to limit their liability in respect of any negligence, default or breach of duty provided such contract is approved by members in general meeting.".'


Limit on auditor's liability (No. 1)

   

Mr Andrew Mitchell
Mr Peter Atkinson
Mrs Gillian Shephard
Mr Ian Taylor

NC7

To move the following Clause:—

       'The liability of an auditor which by virtue of any rule of law would otherwise attach to him in respect of negligence, default or breach of duty shall be limited to an amount equal to the proportion of the total loss or damage suffered which is directly attributable to the negligence, default or breach of duty of the auditor, having regard to the contribution to the loss or damage of any other person.'.


Limit on auditor's liability (No. 2)

   

Mr Andrew Mitchell
Mr Peter Atkinson
Mrs Gillian Shephard
Mr Ian Taylor

NC8

To move the following Clause:—

    '(1)   The liability of an auditor which by virtue of any rule of law would otherwise attach to him in respect of any negligence, default or breach of duty shall be limited to an amount equal to twenty times the fees paid in respect of the audit of the company.

    (2)   Where an act of negligence, default or breach of duty arises in two or more consecutive periods of account, liability under subsection (1) shall be restricted to twenty times the average of the audit fee for the company for those periods of account.'.


Limit on auditor's liability (No. 3)

   

Mr Andrew Mitchell
Mr Peter Atkinson
Mrs Gillian Shephard
Mr Ian Taylor

NC9

To move the following Clause:—

    '(1)   The liability of an auditor in respect of any liability which by virtue of any rule of law would otherwise attach to him in respect of any negligence, default or breach of duty shall be limited to the sum of £75 million.

    (2)   Where the company is a member of a group of companies, the sum of £75 million specified in subsection (1)(b) shall be divided between members of the group pro rata to the audit fee charged to each company within the group.'.


Limit on auditor's liability (No. 4)

   

Mr Andrew Mitchell
Mr Peter Atkinson
Mrs Gillian Shephard
Mr Ian Taylor

NC10

To move the following Clause:—

    '(1)   The liability of an auditor in respect of any liability which by virtue of any rule of law would otherwise attach to him in respect of any negligence, default or breach of duty shall be limited to the lower of—

      (a) an amount equal to the proportion of the total loss or damage suffered which is directly attributable to the negligence, default or breach of duty of the auditor having regard to the contribution to the loss or damage of any other person; and

      (b) the sum of £75 million.

    (2)   Where the company is a member of a group of companies, the sum of £75 million specified in subsection (1)(b) shall be divided between members of the group pro rata to the audit fee charged to each company within the group.'.


Director's Report (Statement of Payment Practice)

   

Brian Cotter
Mr Michael Moore

NC11

*To move the following Clause:—

                    'In Part VI of Schedule 7 to the Companies Act 1985 leave out paragraph 12(3) and insert—

       "The report shall also state the company's payment performance record, in line with a standard format that shall be specified by the Secretary of State in regulation.".'.


   

Jacqui Smith

3

Title,     line     1,     leave out second 'and' and insert ', to the provision that may be made in respect of certain liabilities incurred by a company's officers, and to'.


 
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