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Company Law Reform Bill [HL]


Company Law Reform Bill [HL]
Part 21 — Transfer of securities

296

 

598     

Time limit for claims arising from entry in register

(1)   

Liability incurred by a company—

(a)   

from the making or deletion of an entry in the register of debenture

holders, or

(b)   

from a failure to make or delete any such entry,

5

   

is not enforceable more than ten years after the date on which the entry was

made or deleted or, as the case may be, the failure first occurred.

(2)   

This is without prejudice to any lesser period of limitation (and, in Scotland, to

any rule that the obligation giving rise to the liability prescribes before the

expiry of that period).

10

599     

Right of debenture holder to copy of deed

(1)   

Any holder of debentures of a company is entitled, on request and on payment

of such fee as may be prescribed, to be provided with a copy of any trust deed

for securing the debentures.

(2)   

If default is made in complying with this section, an offence is committed by

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every officer of the company who is in default.

(3)   

A person guilty of an offence under this section is liable on summary

conviction to a fine not exceeding level 3 on the standard scale and, for

continued contravention, a daily default fine not exceeding one-tenth of level

3 on the standard scale.

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(4)   

In the case of any such default the court may direct that the copy required be

sent to the person requiring it.

Part 21

Transfer of securities

600     

Transfer of securities: power to make regulations

25

(1)   

The power to make regulations under section 207 of the Companies Act 1989

(c. 40) (regulations enabling title to securities to be evidenced and transferred

without a written instrument) is exercisable by the Treasury and the Secretary

of State, either jointly or concurrently.

(2)   

The references in that section to the Secretary of State, which by virtue of the

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Transfer of Functions (Financial Services) Order 1992 (S.I. 1992/1315) are to be

read as references to the Treasury, shall accordingly be read as references to

both or either of them, as the case may require.

601     

Transfer of securities: extension of powers

(1)   

Regulations under section 207 of the Companies Act 1989 may make

35

provision—

(a)   

enabling the members of a company or of any designated class of

companies to adopt, by ordinary resolution, arrangements under

which title to securities is required to be evidenced and transferred

without a written instrument; or

40

(b)   

requiring companies, or any designated class of companies, to adopt

such arrangements.

 
 

Company Law Reform Bill [HL]
Part 21 — Transfer of securities

297

 

(2)   

The regulations may make such provision—

(a)   

in respect of all securities issued by a company, or

(b)   

in respect of all securities of a specified description.

(3)   

The arrangements provided for by regulations making such provision as is

mentioned in subsection (1) must not be such that a person who, but for the

5

arrangements would be entitled—

(a)   

to have his name entered in the company’s register of members, or

(b)   

to give instructions in respect of any securities,

   

ceases to be so entitled.

(4)   

The regulations may—

10

(a)   

prohibit the issue of any certificate by the company in respect of the

issue or transfer of securities,

(b)   

require the provision by the company to holders of securities of

statements (at specified intervals or on specified occasions) of the

securities held in their name, and

15

(c)   

make provision as to the matters of which any such certificate or

statement is, or is not, evidence.

   

This is without prejudice to the generality of the power conferred by section

207 of the Companies Act 1989 (c. 40).

(5)   

In this section—

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(a)   

references to a designated class of companies are to a class designated

in the regulations or by order under section 602;

(b)   

“specified” means specified in the regulations; and

(c)   

expressions that are also used in section 207 of the Companies Act 1989

have the same meaning as in that section.

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602     

Transfer of securities: order-making power

(1)   

The Treasury or the Secretary of State may by order designate classes of

companies for the purposes of section 601.

(2)   

The Treasury or the Secretary of State may by order provide that, in relation to

securities of a specified description—

30

(a)   

in a designated class of companies, or

(b)   

in a specified company,

   

specified provisions of the regulations either do not apply or apply subject to

specified modifications.

(3)   

In this section—

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(a)   

“specified” means specified in the order, and

(b)   

“the regulations” means regulations made under section 207 of the

Companies Act 1989 by virtue of section 601.

(4)   

An order under this section is subject to negative resolution procedure.

603     

Transfer of securities: supplementary provisions

40

(1)   

Before making regulations under section 207 of the Companies Act 1989, or any

order under section 602, the Treasury or the Secretary of State must carry out

such consultation as appears to them to be appropriate.

 
 

Company Law Reform Bill [HL]
Part 22 — Information about interests in company’s shares

298

 

(2)   

In section 207 of the Companies Act 1989 (c. 40)—

(a)   

the requirement in the second sentence of subsection (4) (rights and

obligations under regulations to correspond with those that would

arise apart from the regulations) shall cease to have effect, and

(b)   

in subsection (7) for “the purposes mentioned above” substitute “the

5

purposes of this section and section 601 of the Company Law Reform

Act 2006”.

Part 22

Information about interests in company’s shares

Introductory

10

604     

Companies to which this Part applies

   

This Part applies only to public companies.

605     

Shares to which this Part applies

(1)   

References in this Part to a company’s shares are to the company’s issued

shares of a class carrying rights to vote in all circumstances at general meetings

15

of the company (including any shares held as treasury shares).

(2)   

The temporary suspension of voting rights in respect of any shares does not

affect the application of this Part in relation to interests in those or any other

shares.

Notice requiring information about interests in shares

20

606     

Notice by company requiring information about interests in its shares

(1)   

A public company may give notice under this section to any person whom the

company knows or has reasonable cause to believe—

(a)   

to be interested in the company’s shares, or

(b)   

to have been so interested at any time during the three years

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immediately preceding the date on which the notice is issued.

(2)   

The notice may require the person—

(a)   

to confirm that fact or (as the case may be) to state whether or not it is

the case, and

(b)   

if he holds, or has during that time held, any such interest, to give such

30

further information as may be required in accordance with the

following provisions of this section.

(3)   

The notice may require the person to whom it is addressed to give particulars

of his own present or past interest in the company’s shares (held by him at any

time during the three year period mentioned in subsection (1)(b)).

35

(4)   

The notice may require the person to whom it is addressed, where—

(a)   

his interest is a present interest and another interest in the shares

subsists, or

(b)   

another interest in the shares subsisted during that three year period at

a time when his interest subsisted,

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Company Law Reform Bill [HL]
Part 22 — Information about interests in company’s shares

299

 

   

to give, so far as lies within his knowledge, such particulars with respect to that

other interest as may be required by the notice.

(5)   

The particulars referred to in subsections (3) and (4) include—

(a)   

the identity of persons interested in the shares in question, and

(b)   

whether persons interested in the same shares are or were parties to—

5

(i)   

an agreement to which section 632 applies (certain share

acquisition agreements), or

(ii)   

an agreement or arrangement relating to the exercise of any

rights conferred by the holding of the shares.

(6)   

The notice may require the person to whom it is addressed, where his interest

10

is a past interest, to give (so far as lies within his knowledge) particulars of the

identity of the person who held that interest immediately upon his ceasing to

hold it.

(7)   

The information required by the notice must be given within such reasonable

time as may be specified in the notice.

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607     

Notice requiring information: order imposing restrictions on shares

(1)   

Where—

(a)   

a notice under section 606 (notice requiring information about interests

in company’s shares) is served by a company on a person who is or was

interested in shares in the company, and

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(b)   

that person fails to give the company the information required by the

notice within the time specified in it,

   

the company may apply to the court for an order directing that the shares in

question be subject to the restrictions of Part 15 of the Companies Act 1985

(c. 6).

25

(2)   

If the court is satisfied that such an order may unfairly affect the rights of third

parties in respect of the shares, the court may, for the purpose of protecting

those rights and subject to such terms as it thinks fit, direct that such acts by

such persons or descriptions of persons and for such purposes as may be set

out in the order shall not constitute a breach of the restrictions.

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(3)   

On an application under this section the court may make an interim order.

   

Any such order may be made unconditionally or on such terms as the court

thinks fit.

608     

Notice requiring information: offences

(1)   

A person who—

35

(a)   

fails to comply with a notice under section 606 (notice requiring

information about interests in company’s shares), or

(b)   

in purported compliance with such a notice—

(i)   

makes a statement that he knows to be false in a material

particular, or

40

(ii)   

recklessly makes a statement that is false in a material

particular,

   

commits an offence.

(2)   

A person does not commit an offence under subsection (1)(a) if he proves that

the requirement to give information was frivolous or vexatious.

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Company Law Reform Bill [HL]
Part 22 — Information about interests in company’s shares

300

 

(3)   

A person guilty of an offence under this section is liable—

(a)   

on conviction on indictment, to imprisonment for a term not exceeding

two years or a fine (or both);

(b)   

on summary conviction—

(i)   

in England and Wales, to imprisonment for a term not

5

exceeding twelve months or to a fine not exceeding the

statutory maximum (or both);

(ii)   

in Scotland or Northern Ireland, to imprisonment for a term not

exceeding six months, or to a fine not exceeding the statutory

maximum (or both).

10

609     

Notice requiring information: persons exempted from obligation to comply

(1)   

A person is not obliged to comply with a notice under section 606 (notice

requiring information about interests in company’s shares) if he is for the time

being exempted by the Secretary of State from the operation of that section.

(2)   

The Secretary of State must not grant any such exemption unless—

15

(a)   

he has consulted the Governor of the Bank of England, and

(b)   

he (the Secretary of State) is satisfied that, having regard to any

undertaking given by the person in question with respect to any

interest held or to be held by him in any shares, there are special

reasons why that person should not be subject to the obligations

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imposed by that section.

Power of members to require company to act

610     

Power of members to require company to act

(1)   

The members of a company may require it to exercise its powers under section

606 (notice requiring information about interests in shares).

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(2)   

A company is required to do so once it has received requests (to the same

effect) from members of the company holding at least 10% of such of the paid-

up capital of the company as carries a right to vote at general meetings of the

company (excluding any voting rights attached to any shares in the company

held as treasury shares).

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(3)   

A request—

(a)   

may be in hard copy form or in electronic form,

(b)   

must—

(i)   

state that the company is requested to exercise its powers under

section 606,

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(ii)   

specify the manner in which the company is requested to act,

and

(iii)   

give reasonable grounds for requiring the company to exercise

those powers in the manner specified, and

(c)   

must be authenticated by the person or persons making it.

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Revised 26 May 2006