|
| |
|
(a) | must make provision requiring community interest company reports to |
| |
include information about the remuneration of directors, |
| |
(b) | may make provision as to the form of, and other information to be |
| |
included in, community interest company reports, and |
| |
(c) | may apply provisions of the Companies Act 1985 relating to directors’ |
| 5 |
reports to community interest company reports (with any appropriate |
| |
| |
(4) | The registrar of companies must forward to the Regulator a copy of each |
| |
community interest company report delivered to the registrar by virtue of this |
| |
| 10 |
35 | Community interest test and excluded companies |
| |
(1) | This section has effect for the purposes of this Part. |
| |
(2) | A company satisfies the community interest test if a reasonable person might |
| |
consider that its activities are being carried on for the benefit of the community. |
| |
(3) | An object stated in the memorandum of a company is a community interest |
| 15 |
object of the company if a reasonable person might consider that the carrying |
| |
on of activities by the company in furtherance of the object is for the benefit of |
| |
| |
(4) | Regulations may provide that activities of a description prescribed by the |
| |
regulations are to be treated as being, or as not being, activities which a |
| 20 |
reasonable person might consider are activities carried on for the benefit of the |
| |
| |
(5) | “Community” includes a section of the community (whether in Great Britain or |
| |
anywhere else); and regulations may make provision about what does, does |
| |
not or may constitute a section of the community. |
| 25 |
(6) | A company is an excluded company if it is a company of a description |
| |
prescribed by regulations. |
| |
Becoming a community interest company |
| |
| |
(1) | If a company is to be formed as a community interest company, the documents |
| 30 |
delivered to the registrar of companies under section 10 of the Companies Act |
| |
1985 (c. 6) (memorandum, articles and statement of names and particulars of |
| |
directors and secretary) must be accompanied by the prescribed formation |
| |
| |
(2) | “The prescribed formation documents” means such statutory declarations or |
| 35 |
other declarations or statements as are required by regulations to accompany |
| |
the documents delivered under that section, in such form as may be approved |
| |
in accordance with the regulations. |
| |
(3) | On receiving the documents delivered under that section and the prescribed |
| |
formation documents the registrar of companies must (instead of registering |
| 40 |
the memorandum and articles)— |
| |
(a) | forward a copy of each of the documents to the Regulator, and |
| |
(b) | retain the documents pending the Regulator’s decision. |
| |
|
| |
|
| |
|
(4) | The Regulator must decide whether the company is eligible to be formed as a |
| |
community interest company. |
| |
(5) | A company is eligible to be formed as a community interest company if— |
| |
(a) | the memorandum and articles comply with the requirements imposed |
| |
by and by virtue of section 32 and the company’s name complies with |
| 5 |
| |
(b) | the Regulator, having regard to the documents delivered under section |
| |
10 of the Companies Act 1985, the prescribed formation documents and |
| |
any other relevant considerations, considers that the company will |
| |
satisfy the community interest test and is not an excluded company. |
| 10 |
(6) | The Regulator must give notice of the decision to the registrar of companies |
| |
(but the registrar is not required to record it). |
| |
(7) | If the Regulator gives notice of a decision that the company is eligible to be |
| |
formed as a community interest company, section 12 of the Companies Act |
| |
1985 (registration of memorandum and articles) applies; and if the registrar |
| 15 |
registers the memorandum and articles he must also retain and record the |
| |
prescribed formation documents. |
| |
(8) | The certificate of incorporation under section 13 of the Companies Act 1985 |
| |
(c. 6) (effect of registration) is to contain a statement that the company is a |
| |
community interest company. |
| 20 |
(9) | The fact that the certificate of incorporation contains such a statement is |
| |
conclusive evidence that the company is a community interest company. |
| |
(10) | If the Regulator decides that the company is not eligible to be formed as a |
| |
community interest company, any subscriber to the memorandum may appeal |
| |
to the Appeal Officer against the decision. |
| 25 |
37 | Existing companies: requirements |
| |
(1) | If a company is to become a community interest company, the company |
| |
| |
(a) | by special resolution alter its memorandum to state that it is to be a |
| |
community interest company, |
| 30 |
(b) | by special resolutions under the Companies Act 1985 make such |
| |
alterations of its memorandum and articles as it considers necessary to |
| |
comply with requirements imposed by and by virtue of section 32 or |
| |
otherwise appropriate in connection with becoming a community |
| |
| 35 |
(c) | by special resolution change its name to comply with section 33. |
| |
(2) | Section 380(1) of the Companies Act 1985 (forwarding of copies of special |
| |
resolutions to registrar of companies) must be complied with in relation to each |
| |
of the special resolutions at the same time. |
| |
(3) | If the special resolutions include one under section 4 or 17 of the Companies |
| 40 |
Act 1985 (alterations of memorandum)— |
| |
(a) | copies of the special resolutions must not be forwarded to the registrar |
| |
of companies before the relevant date, and |
| |
(b) | section 380(1) has effect in relation to them as if it referred to 15 days |
| |
| 45 |
|
| |
|
| |
|
(4) | If an application is made under section 5 of the Companies Act 1985 (objection |
| |
to alteration of memorandum under section 4 or 17), the relevant date is— |
| |
(a) | the date on which the court determines the application (or, if there is |
| |
more than one application, the date on which the last to be determined |
| |
by the court is determined), or |
| 5 |
(b) | such later date as the court may order. |
| |
(5) | If there is no application under section 5 of that Act, the relevant date is the end |
| |
of the period for making such an application. |
| |
(6) | The copies of the special resolutions forwarded to the registrar of companies |
| |
| 10 |
(a) | a copy of the memorandum and articles of the company as altered by |
| |
the special resolutions, and |
| |
(b) | the prescribed conversion documents. |
| |
(7) | “The prescribed conversion documents” means such statutory declarations or |
| |
other declarations or statements as are required by regulations to accompany |
| 15 |
the copies of the special resolutions, in such form as may be approved in |
| |
accordance with the regulations. |
| |
38 | Existing companies: decisions etc. |
| |
(1) | On receiving under section 37 the copies of the special resolutions, the |
| |
memorandum and articles as altered by the special resolutions and the |
| 20 |
prescribed conversion documents, the registrar of companies must (instead of |
| |
recording the special resolutions and entering a new name on the register)— |
| |
(a) | forward a copy of each of the documents to the Regulator, and |
| |
(b) | retain the documents pending the Regulator’s decision. |
| |
(2) | The alterations of the memorandum and articles made by the special |
| 25 |
resolutions are to take effect only as provided by this section. |
| |
(3) | The Regulator must decide whether the company is eligible to become a |
| |
community interest company. |
| |
(4) | A company is eligible to become a community interest company if— |
| |
(a) | the memorandum and articles as altered by the special resolutions |
| 30 |
comply with the requirements imposed by and by virtue of section 32 |
| |
and the company’s name as so altered complies with section 33, and |
| |
(b) | the Regulator, having regard to the special resolutions, the |
| |
memorandum and articles as altered, the prescribed conversion |
| |
documents and any other relevant considerations, considers that the |
| 35 |
company will satisfy the community interest test and is not an excluded |
| |
| |
(5) | The Regulator must give notice of the decision to the registrar of companies |
| |
(but the registrar is not required to record it). |
| |
(6) | If the Regulator gives notice of a decision that the company is eligible to |
| 40 |
become a community interest company, section 28(6) of the Companies Act |
| |
1985 (c. 6) (registration of new name) applies; and if the registrar of companies |
| |
enters the new name of the company on the register the registrar must also |
| |
retain and record the special resolutions and the prescribed conversion |
| |
| 45 |
|
| |
|
| |
|
(7) | On the special resolutions being recorded, the alterations to the company’s |
| |
articles and memorandum made by the special resolutions take effect. |
| |
(8) | The certificate of incorporation under section 28(6) of the Companies Act 1985 |
| |
is to contain a statement that the company is a community interest company. |
| |
(9) | The fact that the certificate of incorporation contains such a statement is |
| 5 |
conclusive evidence that the company is a community interest company. |
| |
(10) | If the Regulator decides that the company is not eligible to become a |
| |
community interest company, the company may appeal to the Appeal Officer |
| |
| |
39 | Existing companies: charities |
| 10 |
(1) | A charitable company may not by special resolution change its name to comply |
| |
with section 33 without the prior written consent of the Charity |
| |
| |
(2) | If a charitable company contravenes subsection (1), the Charity Commissioners |
| |
may apply to the High Court for an order quashing any altered certificate of |
| 15 |
incorporation issued under section 28(6) of the Companies Act 1985 (c. 6). |
| |
(3) | If a charitable company becomes a community interest company, that does not |
| |
affect the application of— |
| |
(a) | any property acquired under any disposition or agreement previously |
| |
made otherwise than for full consideration in money or money’s worth, |
| 20 |
or any property representing property so acquired, |
| |
(b) | any property representing income which has previously accrued, or |
| |
(c) | the income from any such property. |
| |
(4) | “Charitable company” means a company which is a charity, other than one to |
| |
which section 40 applies. |
| 25 |
40 | Existing companies: Scottish charities |
| |
(1) | A Scottish charitable company may not become a community interest |
| |
| |
(2) | If a Scottish charitable company purports by special resolution to change its |
| |
name to comply with section 33, the Commissioners of Inland Revenue may |
| 30 |
apply to the Court of Session for an order quashing any altered certificate of |
| |
incorporation issued under section 28(6) of the Companies Act 1985. |
| |
(3) | Regulations may repeal subsections (1) and (2); and subsections (4) to (7) have |
| |
effect on and after the day on which regulations under this subsection come |
| |
| 35 |
(4) | A Scottish charitable company may not by special resolution change its name |
| |
to comply with section 33 without the prior written consent— |
| |
(a) | if the company’s registered office is situated in Scotland, of the Scottish |
| |
| |
(b) | if the company’s registered office is situated in England and Wales (or |
| 40 |
Wales), of both the Scottish Charity Regulator and the Charity |
| |
| |
|
| |
|
| |
|
(5) | If a Scottish charitable company contravenes subsection (4)(a), the Scottish |
| |
Charity Regulator may apply to the Court of Session for an order quashing any |
| |
altered certificate of incorporation issued under section 28(6) of the Companies |
| |
| |
(6) | If a Scottish charitable company contravenes subsection (4)(b), the Scottish |
| 5 |
Charity Regulator or the Charity Commissioners may apply to the High Court |
| |
| |
(7) | If a Scottish charitable company becomes a community interest company, that |
| |
does not affect the application of— |
| |
(a) | any property acquired under any disposition or agreement previously |
| 10 |
made otherwise than for full consideration in money or money’s worth, |
| |
or any property representing property so acquired, |
| |
(b) | any property representing income which has previously accrued, or |
| |
(c) | the income from any such property. |
| |
(8) | In this section “Scottish charitable company” means a company which— |
| 15 |
(a) | is a Scottish charity, or |
| |
(b) | not being a Scottish charity, is registered in Scotland and established for |
| |
charitable purposes only. |
| |
(9) | Regulations under subsection (3) may define the expression “the Scottish |
| |
Charity Regulator” for the purposes of this section. |
| 20 |
| |
41 | Conditions for exercise of supervisory powers |
| |
(1) | In deciding whether and how to exercise the powers conferred by sections 42 |
| |
to 51 the Regulator must adopt an approach which is based on the principle |
| |
that those powers should be exercised only to the extent necessary to maintain |
| 25 |
confidence in community interest companies. |
| |
(2) | No power conferred on the Regulator by— |
| |
(a) | section 45 (appointment of director), |
| |
(b) | section 46 (removal of director), |
| |
(c) | section 47 (appointment of manager), or |
| 30 |
(d) | section 48 (property), |
| |
| is exercisable in relation to a community interest company unless the company |
| |
default condition is satisfied in relation to the power and the company. |
| |
(3) | The company default condition is satisfied in relation to a power and a |
| |
company if it appears to the Regulator necessary to exercise the power in |
| 35 |
relation to the company because— |
| |
(a) | there has been misconduct or mismanagement in the administration of |
| |
| |
(b) | there is a need to protect the company’s property or to secure the |
| |
proper application of that property, |
| 40 |
(c) | the company is not satisfying the community interest test, or |
| |
(d) | if the company has community interest objects, the company is not |
| |
carrying on any activities in pursuit of those objects. |
| |
|
| |
|
| |
|
(4) | The power conferred on the Regulator by section 49 (transfer of shares etc.) is |
| |
not exercisable in relation to a community interest company unless it appears |
| |
to the Regulator that the company is an excluded company. |
| |
| |
| 5 |
(a) | investigate the affairs of a community interest company, or |
| |
(b) | appoint any person (other than a member of the Regulator’s staff) to |
| |
investigate the affairs of a community interest company on behalf of the |
| |
| |
(2) | Subsection (1)(b) is in addition to paragraph 5 of Schedule 3 (powers of |
| 10 |
Regulator exercisable by authorised members of staff) and does not affect the |
| |
application of that paragraph to the Regulator’s power under subsection (1)(a). |
| |
(3) | Schedule 7 (further provision about investigations under this section) has |
| |
| |
| 15 |
| |
the annual accounts of the company to be audited by a qualified auditor |
| |
appointed by the Regulator. |
| |
(2) | A person is a qualified auditor if he is eligible for appointment as a company |
| |
auditor under section 25 of the Companies Act 1989 (c. 40) (eligibility for |
| 20 |
| |
(3) | Sections 389A and 389B of the Companies Act 1985 (c. 6) (auditor’s rights to |
| |
information) apply in relation to an auditor appointed under this section as in |
| |
relation to an auditor appointed under Chapter 5 of Part 11 of that Act. |
| |
(4) | On completion of the audit the auditor must make a report to the Regulator on |
| 25 |
such matters and in such form as the Regulator specifies. |
| |
(5) | The expenses of the audit, including the remuneration of the auditor, are to be |
| |
| |
(6) | An audit under this section is in addition to, and does not affect, any audit |
| |
required by or by virtue of any other enactment. |
| 30 |
| |
| |
community interest company. |
| |
(2) | Before instituting proceedings under this section the Regulator must give |
| |
written notice to the company stating— |
| 35 |
| |
(b) | the remedy sought, and |
| |
(c) | a summary of the facts on which the proceedings are to be based. |
| |
(3) | Any director of the company may apply to the court for an order— |
| |
(a) | that proposed proceedings are not to be instituted under this section, or |
| 40 |
(b) | that proceedings instituted under this section are to be discontinued. |
| |
|
| |
|
| |
|
(4) | On an application under subsection (3) the court may make such order as it |
| |
| |
(5) | In particular the court may (as an alternative to ordering that proposed |
| |
proceedings are not to be instituted under this section or that proceedings |
| |
instituted under this section are to be discontinued) order— |
| 5 |
(a) | that the proposed proceedings may be instituted under this section, or |
| |
the proceedings instituted under this section may be continued, on |
| |
such terms and conditions as the court thinks fit, |
| |
(b) | that any proceedings instituted by the company are to be discontinued, |
| |
| 10 |
(c) | that any proceedings instituted by the company may be continued on |
| |
such terms and conditions as the court thinks fit. |
| |
(6) | The Regulator must indemnify the company against any costs (or expenses) |
| |
incurred by it in connection with proceedings brought under this section. |
| |
(7) | Any costs (or expenses)— |
| 15 |
(a) | awarded to the company in connection with proceedings brought |
| |
| |
(b) | incurred by the company in connection with the proceedings and |
| |
which it is agreed should be paid by a defendant (or defender), |
| |
| are to be paid to the Regulator. |
| 20 |
45 | Appointment of director |
| |
| |
| |
(2) | The person appointed may be anyone whom the Regulator thinks appropriate, |
| |
other than a member of the Regulator’s staff. |
| 25 |
(3) | A person may be appointed as a director of a company under this section— |
| |
(a) | whether or not the person is a member of the company, and |
| |
(b) | irrespective of any provision made by the memorandum or articles of |
| |
the company or a resolution of the company in general meeting. |
| |
(4) | An order appointing a person to be a director of a company under this section |
| 30 |
must specify the terms on which the director is to hold office; and those terms |
| |
have effect as if contained in a contract between the director and the company. |
| |
(5) | The terms specified must include the period for which the director is to hold |
| |
office, and may include terms as to the remuneration of the director by the |
| |
| 35 |
(6) | A director appointed under this section has all the powers of the directors |
| |
appointed by the company (including powers exercisable only by a particular |
| |
director or class of directors). |
| |
(7) | A director appointed under this section may not be removed by the company, |
| |
but may be removed by the Regulator at any time. |
| 40 |
| |
(a) | a person is appointed to be a director of the company under this section, |
| |
| |
(b) | a person so appointed ceases to be a director of the company, |
| |
|
| |
|