Company Law Reform Bill [HL]

House of Commons

Session 2005 - 06
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Other Bills before Parliament

Company Law Reform Bill [HL]

Company Law Reform Bill [HL]
Part 12 — Company secretaries
118

255
Direction requiring public company to appoint secretary
(1)
If it appears to the Secretary of State that a public company is in breach of
section 254 (requirement to have secretary), the Secretary of State may give the
company a direction under this section.
(2)
The direction must state that the company appears to be in breach of that
5
section and specify—
(a)
what the company must do in order to comply with the direction, and
(b)
the period within which it must do so.

That period must be not less than one month or more than three months after
the date on which the direction is given.
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(3)
The direction must also inform the company of the consequences of failing to
comply.
(4)
Where the company is in breach of section 254 it must comply with the
direction by—
(a)
making the necessary appointment, and
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(b)
giving notice of it under section 259,

before the end of the period specified in the direction.
(5)
If the company has already made the necessary appointment, it must comply
with the direction by giving notice of it under section 259 before the end of the
period specified in the direction.
20
(6)
If a company fails to comply with a direction under this section, an offence is
committed by—
(a)
the company, and
(b)
every officer of the company who is in default.

For this purpose a shadow director is treated as an officer of the company.
25
(7)
A person guilty of an offence under this section is liable on summary
conviction to a fine not exceeding level 5 on the standard scale and, for
continued contravention, a daily default fine not exceeding one-tenth of level
5 on the standard scale.
Provisions applying to secretaries of public companies
30
256
Qualifications of secretaries of public companies
(1)
It is the duty of the directors of a public company to take all reasonable steps
to secure that the secretary (or each joint secretary) of the company—
(a)
is a person who appears to them to have the requisite knowledge and
experience to discharge the functions of secretary of the company, and
35
(b)
has one or more of the following qualifications.
(2)
The qualifications are—
(a)
that he has held the office of secretary of a public company for at least
three of the five years immediately preceding his appointment as
secretary;
40
(b)
that he is a member of any of the bodies specified in subsection (3);
(c)
that he is a barrister, advocate or solicitor called or admitted in any part
of the United Kingdom;

Company Law Reform Bill [HL]
Part 12 — Company secretaries
119

(d)
that he is a person who, by virtue of his holding or having held any
other position or his being a member of any other body, appears to the
directors to be capable of discharging the functions of secretary of the
company.
(3)
The bodies referred to in subsection (2)(b) are—
5
(a)
the Institute of Chartered Accountants in England and Wales;
(b)
the Institute of Chartered Accountants of Scotland;
(c)
the Association of Chartered Certified Accountants;
(d)
the Institute of Chartered Accountants in Ireland;
(e)
the Institute of Chartered Secretaries and Administrators;
10
(f)
the Chartered Institute of Management Accountants;
(g)
the Chartered Institute of Public Finance and Accountancy.
257
Discharge of functions where office vacant or secretary unable to act

Where in the case of a public company the office of secretary is vacant, or there
is for any other reason no secretary capable of acting, anything required or
15
authorised to be done by or to the secretary may be done—
(a)
by or to an assistant or deputy secretary (if any), or
(b)
if there is no assistant or deputy secretary or none capable of acting, by
or to any person authorised generally or specially in that behalf by the
directors.
20
258
Duty to keep register of secretaries
(1)
A public company must keep a register of its secretaries.
(2)
The register—
(a)
must contain the required particulars (see sections 260 to 262) of the
person who is, or persons who are, the secretary or joint secretaries of
25
the company, and
(b)
must be kept available for inspection at the company’s registered office.
(3)
The register must be open to the inspection—
(a)
of any member of the company without charge, and
(b)
of any other person on payment of such fee as may be prescribed.
30
(4)
If default is made in complying with subsection (1) or (2), or if an inspection
required under this section is refused, an offence is committed by—
(a)
the company, and
(b)
every officer of the company who is in default.

For this purpose a shadow director is treated as an officer of the company.
35
(5)
A person guilty of an offence under this section is liable on summary
conviction to a fine not exceeding level 5 on the standard scale and, for
continued contravention, a daily default fine not exceeding one-tenth of level
5 on the standard scale.
(6)
In the case of a refusal of inspection of the register, the court may by order
40
compel an immediate inspection of it.

Company Law Reform Bill [HL]
Part 12 — Company secretaries
120

259
Duty to notify registrar of changes
(1)
A public company must, within the period of 14 days from the occurrence of—
(a)
any change in its secretary, or
(b)
any change in the particulars contained in its register of secretaries,

give notice to the registrar of the change and of the date on which it occurred.
5
(2)
Notice of a person having become secretary, or one of joint secretaries, of the
company must be accompanied by a consent by that person to act in the
relevant capacity.
(3)
If default is made in complying with this section, an offence is committed by
every officer of the company who is in default.
10

For this purpose a shadow director is treated as an officer of the company.
(4)
A person guilty of an offence under this section is liable on summary
conviction to a fine not exceeding level 5 on the standard scale and, for
continued contravention, a daily default fine not exceeding one-tenth of level
5 on the standard scale.
15
Supplementary
260
Particulars of secretaries to be registered: individuals
(1)
A public company’s register of secretaries must contain the following
particulars in the case of an individual—
(a)
name and any former name;
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(b)
address.
(2)
For the purposes of this section “name” means a person’s Christian name (or
other forename) and surname, except that in the case of—
(a)
a peer, or
(b)
an individual usually known by a title,
25

the title may be stated instead of his Christian name (or other forename) and
surname or in addition to either or both of them.
(3)
For the purposes of this section a “former name” means a name by which the
individual was formerly known for business purposes.

Where a person is or was formerly known by more than one such name, each
30
of them must be stated.
(4)
It is not necessary for the register to contain particulars of a former name in the
following cases—
(a)
in the case of a peer or an individual normally known by a British title,
where the name is one by which the person was known previous to the
35
adoption of or succession to the title;
(b)
in the case of any person, where the former name—
(i)
was changed or disused before the person attained the age of 18
years, or
(ii)
has been changed or disused for 20 years or more.
40
(5)
The address required to be stated in the register is a service address.

This may be stated to be “The company’s registered office”.

Company Law Reform Bill [HL]
Part 13 — Resolutions and meetings
Chapter 1 — General provisions about resolutions
121

261
Particulars of secretaries to be registered: corporate secretaries and firms
(1)
A public company’s register of secretaries must contain the following
particulars in the case of a body corporate, or a firm that is a legal person under
the law by which it is governed—
(a)
corporate or firm name;
5
(b)
registered or principal office;
(c)
in the case of an EEA company to which the First Company Law
Directive applies, particulars of—
(i)
the register in which the company file mentioned in Article 3 of
that Directive is kept (including details of the relevant state),
10
and
(ii)
the registration number in that register;
(d)
in any other case, particulars of—
(i)
the legal form of the company or firm and the law by which it is
governed, and
15
(ii)
if applicable, the register in which it is entered (including details
of the state) and its registration number in that register.
(2)
If all the partners in a firm are joint secretaries it is sufficient to state the
particulars that would be required if the firm were a legal person and the firm
had been appointed secretary.
20
262
Particulars of secretaries to be registered: power to make regulations
(1)
The Secretary of State may make provision by regulations amending—
section 260 (particulars of secretaries to be registered: individuals), or
section 261 (particulars of secretaries to be registered: corporate
secretaries and firms),
25

so as to add to or remove items from the particulars required to be contained
in a public company’s register of secretaries.
(2)
Regulations under this section are subject to affirmative resolution procedure.
263
Acts done by person in dual capacity

In the case of a public company, a provision requiring or authorising a thing to
30
be done by or to a director and the secretary of a company is not satisfied by its
being done by or to the same person acting both as director and as, or in place
of, the secretary.
Part 13
Resolutions and meetings
35
Chapter 1
General provisions about resolutions
264
Resolutions
(1)
A resolution of the members (or of a class of members) of a private company
must be passed—
40
(a)
as a written resolution in accordance with Chapter 2 of this Part, or

Company Law Reform Bill [HL]
Part 13 — Resolutions and meetings
Chapter 1 — General provisions about resolutions
122

(b)
at a meeting of the members (to which the provisions of Chapter 3 of
this Part apply).
(2)
A resolution of the members (or of a class of members) of a public company
must be passed at a meeting of the members (to which the provisions of
Chapter 3 and, where relevant, Chapter 4 of this Part apply).
5
(3)
Nothing in this Part affects any enactment or rule of law as to—
(a)
things done otherwise than by passing a resolution,
(b)
circumstances in which a resolution is or is not treated as having been
passed, or
(c)
cases in which a person is precluded from alleging that a resolution has
10
not been duly passed.
265
Ordinary resolutions
(1)
An ordinary resolution of the members (or of a class of members) of a company
means a resolution that is passed by a simple majority.
(2)
A written resolution is passed by a simple majority if it is passed by members
15
representing a simple majority of the total voting rights of eligible members
(see Chapter 2).
(3)
A resolution passed at a meeting on a show of hands is passed by a simple
majority if it is passed by a simple majority of—
(a)
the members who, being entitled to do so, vote in person on the
20
resolution, and
(b)
the persons who vote on the resolution as duly appointed proxies of
members entitled to vote on it.
(4)
A resolution passed on a poll taken at a meeting is passed by a simple majority
if it is passed by members representing a simple majority of the total voting
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rights of members who (being entitled to do so) vote in person or by proxy on
the resolution.
(5)
Anything that may be done by ordinary resolution may also be done by special
resolution.
266
Special resolutions
30
(1)
A special resolution of the members (or of a class of members) of a company
means a resolution passed by a majority of not less than 75%.
(2)
A written resolution is passed by a majority of not less than 75% if it is passed
by members representing not less than 75% of the total voting rights of eligible
members (see Chapter 2).
35
(3)
Where a resolution of a private company is passed as a written resolution—
(a)
the resolution is not a special resolution unless it stated that it was
proposed as a special resolution, and
(b)
if the resolution so stated, it may only be passed as a special resolution.
(4)
A resolution passed at a meeting on a show of hands is passed by a majority of
40
not less than 75% if it is passed by not less than 75% of—
(a)
the members who, being entitled to do so, vote in person on the
resolution, and

Company Law Reform Bill [HL]
Part 13 — Resolutions and meetings
Chapter 1 — General provisions about resolutions
123

(b)
the persons who vote on the resolution as duly appointed proxies of
members entitled to vote on it.
(5)
A resolution passed on a poll taken at a meeting is passed by a majority of not
less than 75% if it is passed by members representing not less than 75% of the
total voting rights of the members who (being entitled to do so) vote in person
5
or by proxy on the resolution.
(6)
Where a resolution is passed at a meeting—
(a)
the resolution is not a special resolution unless the notice of the meeting
included the text of the resolution and specified the intention to
propose the resolution as a special resolution, and
10
(b)
if the notice of the meeting so specified, the resolution may only be
passed as a special resolution.
267
Votes: general rules
(1)
On a vote on a written resolution—
(a)
in the case of a company having a share capital, every member has one
15
vote in respect of each share or each £10 of stock held by him, and
(b)
in any other case, every member has one vote.
(2)
On a vote on a resolution on a show of hands at a meeting—
(a)
every member present in person has one vote, and
(b)
every proxy present who has been duly appointed by a member
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entitled to vote on the resolution has one vote.
(3)
On a vote on a resolution on a poll taken at a meeting—
(a)
in the case of a company having a share capital, every member has one
vote in respect of each share or each £10 of stock held by him, and
(b)
in any other case, every member has one vote.
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(4)
The provisions of this section have effect subject to any provision of the
company’s articles.
268
Votes: specific requirements
(1)
Where a member entitled to vote on a resolution has appointed one proxy only,
and the company’s articles provide that the proxy has fewer votes in a vote on
30
a resolution on a show of hands taken at a meeting than the member would
have if he were present in person—
(a)
the provision about how many votes the proxy has on a show of hands
is void, and
(b)
the proxy has the same number of votes on a show of hands as the
35
member who appointed him would have if he were present at the
meeting.
(2)
Where a member entitled to vote on a resolution has appointed more than one
proxy, subsection (1) applies as if the references to the proxy were references
to the proxies taken together.
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(3)
In relation to a resolution required or authorised by an enactment, if a private
company’s articles provide that a member has a different number of votes in
relation to a resolution when it is passed as a written resolution and when it is
passed on a poll taken at a meeting—

Company Law Reform Bill [HL]
Part 13 — Resolutions and meetings
Chapter 2 — Written resolutions
124

(a)
the provision about how many votes a member has in relation to the
resolution passed on a poll is void, and
(b)
a member has the same number of votes in relation to the resolution
when it is passed on a poll as he has when it is passed as a written
resolution.
5
269
Votes of joint holders of shares
(1)
In the case of joint holders of shares of a company, only the vote of the senior
holder who votes (and any proxies duly authorised by him) may be counted by
the company.
(2)
For the purposes of this section, the senior holder of a share is determined by
10
the order in which the names of the joint holders appear in the register of
members.
(3)
Subsections (1) and (2) have effect subject to any provision of the company’s
articles.
270
Effect of provision in company’s articles as to admissibility of votes
15
(1)
This section applies where—
(a)
a person votes on a resolution of a company,
(b)
that person was not entitled to vote as he did, and
(c)
the company’s articles provide that an objection to a person’s
entitlement to vote must be made in accordance with a procedure
20
specified in the articles.
(2)
The person is deemed to have been entitled to vote as he did if—
(a)
no objection to his entitlement to vote is made in accordance with the
procedure, or
(b)
at least one objection to his entitlement to vote is made in accordance
25
with the procedure, and each such objection is rejected in accordance
with it.
Chapter 2
Written resolutions
General provisions about written resolutions
30
271
Written resolutions of private companies
(1)
In the Companies Acts a “written resolution” means a resolution of a private
company proposed and passed in accordance with this Chapter.
(2)
The following may not be passed as a written resolution—
(a)
a resolution under section 154 removing a director before the expiration
35
of his period of office;
(b)
a resolution under section 500 removing an auditor before the
expiration of his term of office.
(3)
A resolution may be proposed as a written resolution—
(a)
by the directors of a private company (see section 274), or
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