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Company Law Reform Bill [HL]


Company Law Reform Bill [HL]
Part 32 — Companies: interpretation

394

 

811     

The former Companies Acts

   

In the Companies Acts—

“the former Companies Acts” means—

(a)   

the Joint Stock Companies Acts, the Companies Act 1862 (c. 89),

the Companies (Consolidation) Act 1908 (c. 69), the Companies

5

Act 1929 (c. 23), the Companies Act (Northern Ireland) 1932 (c. 7

(N.I.)), the Companies Acts 1948 to 1983, the Companies Act

(Northern Ireland) 1960 (c. 22 (N.I.)), the Companies (Northern

Ireland) Order 1986 (S.I. 1986/1032 (N.I. 6)) and the Companies

Consolidation (Consequential Provisions) (Northern Ireland)

10

Order 1986 (S.I. 1986/1035 (N.I. 9)), and

(b)   

the provisions of the Companies Act 1985 (c. 6) and the

Companies Consolidation (Consequential Provisions) Act 1985

(c. 9) that are no longer in force;

“the Joint Stock Companies Acts” means the Joint Stock Companies Act

15

1856 (c. 47), the Joint Stock Companies Acts 1856, 1857 (20 & 21 Vict.

c. 14), the Joint Stock Banking Companies Act 1857 (c. 49), and the Act

to enable Joint Stock Banking Companies to be formed on the principle

of limited liability (1858 c. 91), but does not include the Joint Stock

Companies Act 1844 (c. 110).

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General

812     

References to requirements of this Act

References in the company law provisions of this Act to the requirements of

this Act include the requirements of regulations and orders made under it.

813     

Minor definitions: general

25

(1)   

In the Companies Acts—

“body corporate” and “corporation” include a body incorporated outside

the United Kingdom, but do not include—

(a)   

a corporation sole, or

(b)   

a partnership that is not regarded as a legal person under the

30

law by which it is governed;

“credit institution” means a credit institution as defined in article 1(1)(a)

of Directive 2000/12/EC of the European Parliament and of the

Council of 20 March 2000 relating to the taking up and pursuit of the

business of credit institutions, that is to say an undertaking whose

35

business is to receive deposits or other repayable funds from the public

and to grant credits for its own account;

“financial institution” means a financial institution within the meaning of

Article 1(1) of the Council Directive on the obligations of branches

established in a Member State of credit and financial institutions having

40

their head offices outside that Member State regarding the publication

of annual accounting documents (the Bank Branches Directive, 89/

117/EEC);

“firm” means any entity, whether or not a legal person, that is not an

individual and includes a body corporate, a corporation sole and a

45

partnership or other unincorporated association;

“the Gazette” means—

 
 

Company Law Reform Bill [HL]
Part 33 — Companies: minor amendments

395

 

(a)   

as respects companies registered in England and Wales, the

London Gazette,

(b)   

as respects companies registered in Scotland, the Edinburgh

Gazette, and

(c)   

as respects companies registered in Northern Ireland, the

5

Belfast Gazette;

“parent company” means a company that is a parent undertaking (see

section 806 and Schedule 8);

“regulated market” has the same meaning as in Directive 2004/39/EC of

the European Parliament and of the Council on markets in financial

10

instruments (see Article 4.1(14));

“working day”, in relation to a company, means a day that is not a

Saturday or Sunday, Christmas Day, Good Friday or any day that is a

bank holiday in the part of the United Kingdom where the company is

registered.

15

(2)   

Until such date as may be appointed by order under section 925(2) for the

definition in subsection (1) of “regulated market” to come into force, the

following definition has effect for the purposes of the Companies Acts—

“regulated market” has the same meaning as it has in Council Directive

93/22/EEC on investment services in the securities field.

20

814     

Index of defined expressions

(1)   

Schedule 9 contains an index of provisions defining or otherwise explaining

expressions used in the Companies Acts.

(2)   

For section 744A of the Companies Act 1985 (c. 6) substitute—    

“744A   

    Index of defined expressions

25

   

For an index which includes entries for provisions defining or

otherwise explaining expressions used in this Act, see Schedule 9 to the

Company Law Reform Act 2006.”.

(3)   

At the end of section 63(2) of the Companies (Audit, Investigations and

Community Enterprise) Act 2004 (c. 27) (interpretation) insert—

30

   

“For an index which includes entries for provisions defining or

otherwise explaining expressions used in that Act, see Schedule 9 to the

Company Law Reform Act 2006.”.

Part 33

Companies: minor amendments

35

815     

Power of Secretary of State to bring civil proceedings on company’s behalf

(1)   

Section 438 of the Companies Act 1985 (power of Secretary of State to bring

civil proceedings on company’s behalf) shall cease to have effect.

(2)   

In section 439 of that Act (expenses of investigating company’s affairs)—

(a)   

in subsection (2) omit “, or is ordered to pay the whole or any part of the

40

costs of proceedings brought under section 438”;

(b)   

omit subsections (3) and (7) (which relate to section 438);

(c)   

in subsection (8)—

 
 

Company Law Reform Bill [HL]
Part 33 — Companies: minor amendments

396

 

(i)   

for “subsections (2) and (3)” substitute “subsection (2)”, and

(ii)   

omit “; and any such liability imposed by subsection (2) is

(subject as mentioned above) a liability also to indemnify all

persons against liability under subsection (3)”.

(3)   

In section 453(1A) of that Act (investigation of overseas companies: provisions

5

not applicable), omit paragraph (b) (which relates to section 438).

(4)   

Nothing in this section affects proceedings brought under section 438 before

the commencement of this section.

816     

Repeal of certain provisions about company directors

The following provisions of Part 10 of the Companies Act 1985 shall cease to

10

have effect—

section 311 (prohibition on tax-free payments to directors);

sections 323 and 327 (prohibition on directors dealing in share options);

sections 324 to 326 and 328 to 329, and Parts 2 to 4 of Schedule 13 (register

of directors’ interests);

15

sections 343 and 344 (special procedure for disclosure by banks).

817     

Repeal of requirement that certain companies publish periodical statement

The following provisions shall cease to have effect—

section 720 of the Companies Act 1985 (c. 6) (certain companies to publish

periodical statement), and

20

Schedule 23 to that Act (form of statement under section 720).

818     

Repeal of requirement that Secretary of State prepare annual report

Section 729 of the Companies Act 1985 (annual report to Parliament by

Secretary of State on matters within the Companies Acts) shall cease to have

effect.

25

819     

Repeal of certain provisions about company charges

Part 4 of the Companies Act 1989 (c. 40) (registration of company charges),

which has not been brought into force, is repealed.

820     

Access to constitutional documents of RTE and RTM companies

(1)   

The Secretary of State may by order—

30

(a)   

amend Chapter 1 of Part 1 of the Leasehold Reform, Housing and

Urban Development Act 1993 (c. 28) for the purpose of facilitating

access to the provisions of the articles or any other constitutional

document of RTE companies;

(b)   

amend Chapter 1 of Part 2 of the Commonhold and Leasehold Reform

35

Act 2002 (c. 15) (leasehold reform) for the purpose of facilitating access

to the provisions of the articles or any other constitutional document of

RTM companies.

(2)   

References in subsection (1) to provisions of a company’s articles or any other

constitutional document include any provisions included in those documents

40

by virtue of any enactment.

 
 

Company Law Reform Bill [HL]
Part 34 — Business names
Chapter 1 — Restricted or prohibited names

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(3)   

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

(4)   

In this section—

“RTE companies” has the same meaning as in Chapter 1 of Part 1 of the

Leasehold Reform, Housing and Urban Development Act 1993 (c. 28);

“RTM companies” has the same meaning as in Chapter 1 of Part 2 of the

5

Commonhold and Leasehold Reform Act 2002 (c. 15).

Part 34

Business names

Chapter 1

Restricted or prohibited names

10

Introductory

821     

Application of this Chapter

(1)   

This Chapter applies to any person carrying on business in the United

Kingdom.

(2)   

The provisions of this Chapter do not prevent—

15

(a)   

an individual carrying on business under a name consisting of his

surname without any addition other than a permitted addition, or

(b)   

individuals carrying on business in partnership under a name

consisting of the surnames of all the partners without any addition

other than a permitted addition.

20

(3)   

The following are the permitted additions—

(a)   

in the case of an individual, his forename or initial;

(b)   

in the case of a partnership—

(i)   

the forenames of individual partners or the initials of those

forenames, or

25

(ii)   

where two or more individual partners have the same surname,

the addition of “s” at the end of that surname;

(c)   

in either case, an addition merely indicating that the business is carried

on in succession to a former owner of the business.

Sensitive words or expressions

30

822     

Name suggesting connection with government or public authority

(1)   

A person must not, without the approval of the Secretary of State, carry on

business in the United Kingdom under a name that would be likely to give the

impression that the business is connected with—

(a)   

Her Majesty’s Government, any part of the Scottish administration or

35

Her Majesty’s Government in Northern Ireland,

(b)   

any local authority, or

(c)   

any public authority specified for the purposes of this section by

regulations made by the Secretary of State.

 
 

Company Law Reform Bill [HL]
Part 34 — Business names
Chapter 1 — Restricted or prohibited names

398

 

(2)   

For the purposes of this section—

“local authority” means—

(a)   

a local authority within the meaning of the Local Government

Act 1972 (c. 70), the Common Council of the City of London or

the Council of the Isles of Scilly,

5

(b)   

a council constituted under section 2 of the Local Government

etc. (Scotland) Act 1994 (c. 39), or

(c)   

a district council in Northern Ireland;

“public authority” includes any person or body having functions of a

public nature.

10

(3)   

Regulations under this section are subject to affirmative resolution procedure.

(4)   

A person who contravenes this section commits an offence.

(5)   

Where an offence under this section is committed by a body corporate, an

offence is also committed by every officer of the body who is in default.

(6)   

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

15

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.

823     

Other sensitive words or expressions

(1)   

A person must not, without the approval of the Secretary of State, carry on

20

business in the United Kingdom under a name that includes a word or

expression for the time being specified in regulations made by the Secretary of

State under this section.

(2)   

Regulations under this section are subject to approval after being made.

(3)   

A person who contravenes this section commits an offence.

25

(4)   

Where an offence under this section is committed by a body corporate, an

offence is also committed by every officer of the body who is in default.

(5)   

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

30

3 on the standard scale.

824     

Requirement to seek comments of government department or other relevant

body

(1)   

The Secretary of State may by regulations under—

(a)   

section 822 (name suggesting connection with government or public

35

authority), or

(b)   

section 823 (other sensitive words or expressions),

   

require that, in connection with an application for the approval of the Secretary

of State under that section, the applicant must seek the view of a specified

Government department or other body.

40

(2)   

Where such a requirement applies, the applicant must request the specified

department or other body (in writing) to indicate whether (and if so why) it has

any objections to the proposed name.

 
 

Company Law Reform Bill [HL]
Part 34 — Business names
Chapter 1 — Restricted or prohibited names

399

 

(3)   

He must submit to the Secretary of State a statement that such a request has

been made and a copy of any response received from the specified body.

(4)   

If these requirements are not complied with, the Secretary of State may refuse

to consider the application for approval.

825     

Withdrawal of Secretary of State’s approval

5

(1)   

This section applies to approval given for the purposes of—

section 822 (name suggesting connection with government or public

authority), or

section 823 (other sensitive words or expressions).

(2)   

If it appears to the Secretary of State that there are overriding considerations of

10

public policy that require such approval to be withdrawn, the approval may be

withdrawn by notice to the person concerned.

(3)   

The notice must state the date as from which approval is withdrawn.

Misleading names

826     

Name containing inappropriate indication of company type or legal form

15

(1)   

The Secretary of State may make provision by regulations prohibiting a person

from carrying on business in the United Kingdom under a name consisting of

or containing specified words, expressions or other indications—

(a)   

that are associated with a particular type of company or form of

organisation, or

20

(b)   

that are similar to words, expressions or other indications associated

with a particular type of company or form of organisation.

(2)   

The regulations may prohibit the use of words, expressions or other

indications—

(a)   

in a specified part, or otherwise than in a specified part, of a name;

25

(b)   

in conjunction with, or otherwise than in conjunction with, such other

words, expressions or indications as may be specified.

(3)   

In this section “specified” means specified in the regulations.

(4)   

Regulations under this section are subject to negative resolution procedure.

(5)   

A person who uses a name in contravention of regulations under this section

30

commits an offence.

(6)   

Where an offence under this section is committed by a body corporate, an

offence is also committed by every officer of the body who is in default.

(7)   

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

35

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

3 on the standard scale.

 
 

 
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