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Company Law Reform Bill [HL]


Company Law Reform Bill [HL]
Part 35 — Statutory Auditors
Chapter 6 — Supplementary and general

431

 

886     

Jurisdiction and procedure in respect of offences

(1)   

Summary proceedings for an offence under this Part may, without prejudice to

any jurisdiction exercisable apart from this section, be taken—

(a)   

against a body corporate or unincorporated association at any place at

which it has a place of business, and

5

(b)   

against an individual at any place where he is for the time being.

(2)   

Proceedings for an offence alleged to have been committed under this Part by

an unincorporated association must be brought in the name of the association

(and not in that of any of its members), and for the purposes of any such

proceedings any rules of court relating to the service of documents apply as in

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relation to a body corporate.

(3)   

Section 33 of the Criminal Justice Act 1925 (c. 86) and Schedule 3 to the

Magistrates’ Courts Act 1980 (c. 43) (procedure on charge of offence against a

corporation) apply in a case in which an unincorporated association is charged

in England and Wales with an offence under this Part as they apply in the case

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of a corporation.

(4)   

Section 18 of the Criminal Justice Act (Northern Ireland) 1945 (c. 15 (N.I.)) and

Article 166 and Schedule 4 to the Magistrates’ Courts (Northern Ireland) Order

1981 (S.I. 1981/1675 (N.I. 26)) (procedure on charge of offence against a

corporation) apply in a case in which an unincorporated association is charged

20

in Northern Ireland with an offence under this Part as they apply in the case of

a corporation.

(5)   

In relation to proceedings on indictment in Scotland for an offence alleged to

have been committed under this Part by an unincorporated association, section

70 of the Criminal Procedure (Scotland) Act 1995 (proceedings on indictment

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against bodies corporate) applies as if the association were a body corporate.

(6)   

A fine imposed on an unincorporated association on its conviction of such an

offence must be paid out of the funds of the association.

Notices etc

887     

Service of notices

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(1)   

This section has effect in relation to any notice, direction or other document

required or authorised by or by virtue of this Part to be given to or served on

any person other than the Secretary of State.

(2)   

Any such document may be given to or served on the person in question—

(a)   

by delivering it to him,

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(b)   

by leaving it at his proper address, or

(c)   

by sending it by post to him at that address.

(3)   

Any such document may—

(a)   

in the case of a body corporate, be given to or served on an officer of

that body;

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(b)   

in the case of a partnership, be given to or served on any partner;

(c)   

in the case of an unincorporated association other than a partnership,

be given to or served on any member of the governing body of that

association.

 
 

Company Law Reform Bill [HL]
Part 35 — Statutory Auditors
Chapter 6 — Supplementary and general

432

 

(4)   

For the purposes of this section and section 7 of the Interpretation Act 1978

(c. 30) (service of documents by post) in its application to this section, the

proper address of any person is his last known address (whether of his

residence or of a place where he carries on business or is employed) and also—

(a)   

in the case of a person who is eligible under the rules of a recognised

5

supervisory body for appointment as a statutory auditor and who does

not have a place of business in the United Kingdom, the address of that

body;

(b)   

in the case of a body corporate or an officer of that body, the address of

the registered or principal office of that body in the United Kingdom;

10

(c)   

in the case of an unincorporated association other than a partnership or

a member of its governing body, its principal office in the United

Kingdom.

888     

Documents in electronic form

(1)   

This section applies where—

15

(a)   

section 887 authorises the giving or sending of a notice, direction or

other document by its delivery to a particular person (“the recipient”),

and

(b)   

the notice, direction or other document is transmitted to the recipient—

(i)   

by means of an electronic communications network, or

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(ii)   

by other means but in a form that requires the use of apparatus

by the recipient to render it intelligible.

(2)   

The transmission has effect for the purposes of this Part as a delivery of the

notice, direction or other document to the recipient, but only if the recipient has

indicated to the person making the transmission his willingness to receive the

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notice, direction or other document in the form and manner used.

(3)   

An indication to a person for the purposes of subsection (2)—

(a)   

must be given to the person in such manner as he may require,

(b)   

may be a general indication or an indication that is limited to notices,

directions or other documents of a particular description,

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(c)   

must state the address to be used,

(d)   

must be accompanied by such other information as the person requires

for the making of the transmission, and

(e)   

may be modified or withdrawn at any time by a notice given to the

person in such manner as he may require.

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(4)   

In this section “electronic communications network” has the same meaning as

in the Communications Act 2003 (c. 21).

Interpretation

889     

Meaning of “associate”

(1)   

In this Part “associate”, in relation to a person, is to be construed as follows.

40

(2)   

In relation to an individual, “associate” means—

(a)   

that individual’s spouse, civil partner or minor child or step-child,

(b)   

any body corporate of which that individual is a director, and

(c)   

any employee or partner of that individual.

 
 

Company Law Reform Bill [HL]
Part 35 — Statutory Auditors
Chapter 6 — Supplementary and general

433

 

(3)   

In relation to a body corporate, “associate” means—

(a)   

any body corporate of which that body is a director,

(b)   

any body corporate in the same group as that body, and

(c)   

any employee or partner of that body or of any body corporate in the

same group.

5

(4)   

In relation to a partnership constituted under the law of Scotland, or any other

country or territory in which a partnership is a legal person, “associate”

means—

(a)   

any body corporate of which that partnership is a director,

(b)   

any employee of or partner in that partnership, and

10

(c)   

any person who is an associate of a partner in that partnership.

(5)   

In relation to a partnership constituted under the law of England and Wales or

Northern Ireland, or the law of any other country or territory in which a

partnership is not a legal person, “associate” means any person who is an

associate of any of the partners.

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(6)   

In subsections (2)(b), (3)(a) and (4)(a), in the case of a body corporate which is

a limited liability partnership, “director” is to be read as “member”.

890     

Minor definitions

(1)   

In this Part, unless a contrary intention appears—

“address” means—

20

(a)   

in relation to an individual, his usual residential or business

address;

(b)   

in relation to a firm, its registered or principal office in the

United Kingdom;

“company” means any company or other body the accounts of which

25

must be audited in accordance with Part 16;

“director”, in relation to a body corporate, includes any person occupying

in relation to it the position of a director (by whatever name called) and

any person in accordance with whose directions or instructions (not

being advice given in a professional capacity) the directors of the body

30

are accustomed to act;

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

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

partnership or other unincorporated association;

“group”, in relation to a body corporate, means the body corporate, any

35

other body corporate which is its holding company or subsidiary and

any other body corporate which is a subsidiary of that holding

company;

“holding company” and “subsidiary” are to be read in accordance with

section 736 of the Companies Act 1985 (c. 6);

40

“officer”, in relation to a body corporate, includes a director, a manager, a

secretary or, where the affairs of the body are managed by its members,

a member;

“parent undertaking” and “subsidiary undertaking” are to be read in

accordance with section 806 and Schedule 8.

45

(2)   

For the purposes of this Part a body is to be regarded as “established in the

United Kingdom” if and only if—

 
 

Company Law Reform Bill [HL]
Part 35 — Statutory Auditors
Chapter 6 — Supplementary and general

434

 

(a)   

it is incorporated or formed under the law of the United Kingdom or a

part of the United Kingdom, or

(b)   

its central management and control are exercised in the United

Kingdom;

   

and any reference to a qualification “obtained in the United Kingdom” is to a

5

qualification obtained from such a body.

(3)   

The Secretary of State may by regulations make such modifications of this Part

as appear to him to be necessary or appropriate for the purposes of its

application in relation to any firm, or description of firm, which is not a body

corporate or a partnership.

10

(4)   

Regulations under subsection (3) are subject to negative resolution procedure.

891     

Index of defined expressions

The following Table shows provisions defining or otherwise explaining

expressions used in this Part (other than provisions defining or explaining an

expression used only in the same section)—

15

 

Expression

Provision

 
 

address

section 890(1)

 
 

appropriate qualification

section 848

 
 

associate

section 889

 
 

audited person

section 839(2)

 

20

 

Auditor General

section 855(1)

 
 

company

section 890(1)

 
 

delegation order

section 881(1)

 
 

director (of a body corporate)

section 890(1)

 
 

enactment

section 918

 

25

 

established in the United Kingdom

section 890(2)

 
 

firm

section 890(1)

 
 

group (in relation to a body corporate)

section 890(1)

 
 

holding company

section 890(1)

 
 

main purposes of this Part

section 838

 

30

 

member (of a supervisory body)

section 846(2)

 
 

obtained in the United Kingdom

section 890(2)

 
 

officer

section 890(1)

 
 

parent undertaking

section 890(1)

 
 
 

Company Law Reform Bill [HL]
Part 35 — Statutory Auditors
Chapter 6 — Supplementary and general

435

 
 

Expression

Provision

 
 

qualifying body

section 849(1)

 
 

recognised, in relation to a

section 849(3) and

 
 

professional qualification

Schedule 11

 
 

recognised, in relation to a qualifying

paragraph 1(2) of Schedule

 

5

 

body

11

 
 

recognised, in relation to a

section 846(4) and

 
 

supervisory body

Schedule 10

 
 

registered third country auditor

section 870(1)

 
 

rules of a qualifying body

section 849(2)

 

10

 

rules of a supervisory body

section 846(3)

 
 

statutory auditor, statutory audit and

section 839(1)

 
 

statutory audit work

  
 

subsidiary

section 890(1)

 
 

supervisory body

section 846(1)

 

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subsidiary undertaking

section 890(1)

 
 

third country auditor, third country

section 870(1)

 
 

audit and third country audit work

  
 

Miscellaneous and general

892     

Power to make provision in consequence of changes affecting accountancy

20

bodies

(1)   

The Secretary of State may by regulations make such amendments of

enactments as appear to him to be necessary or expedient in consequence of

any change of name, merger or transfer of engagements affecting—

(a)   

a recognised supervisory body or recognised qualifying body, or

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(b)   

a body of accountants referred to in, or approved, authorised or

otherwise recognised for the purposes of, any other enactment.

(2)   

Regulations under this section are subject to negative resolution procedure.

893     

Consequential amendments

Schedule 14 contains consequential amendments relating to this Part.

30

 
 

Company Law Reform Bill [HL]
Part 36 — Transparency obligations and related matters

436

 

Part 36

Transparency obligations and related matters

Introductory

894     

The transparency obligations directive

In Part 6 of the Financial Services and Markets Act 2000 (c. 8) (which makes

5

provision about official listing, prospectus requirements for transferable

securities, etc), in section 103(1) (interpretation), at the appropriate place

insert—

““the transparency obligations directive” means Directive 2004/

109/EC of the European Parliament and of the Council relating

10

to the harmonisation of transparency requirements in relation

to information about issuers whose securities are admitted to

trading on a regulated market;”.

Transparency obligations

895     

Transparency rules

15

After section 89 of the Financial Services and Markets Act 2000 insert—

“Transparency obligations

89A     

Transparency rules

(1)   

The competent authority may make rules for the purposes of the

transparency obligations directive.

20

(2)   

The rules may include provision for dealing with any matters arising

out of or related to any provision of the transparency obligations

directive.

(3)   

The rules may include provision requiring—

(a)   

the provision of voteholder information to issuers or others (see

25

section 89B), and

(b)   

the provision of information by issuers to the public or to the

competent authority (see section 89C).

(4)   

The competent authority may also make rules—

(a)   

for the purpose of ensuring that voteholder information in

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respect of voting shares traded on a UK market other than a

regulated market is made public or notified to the competent

authority;

(b)   

providing for persons who hold comparable instruments (see

section 89D(1)(c)) in respect of voting shares to be treated, in the

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circumstances specified in the rules, as holding some or all of

the voting rights in respect of those shares.

(5)   

Without prejudice to subsections (1) to (3), rules under subsection (4)

may, in particular, make provision—

(a)   

specifying how the proportion of—

40

 
 

Company Law Reform Bill [HL]
Part 36 — Transparency obligations and related matters

437

 

(i)   

the total voting rights in respect of shares in an issuer, or

(ii)   

the total voting rights in respect of a particular class of

shares in an issuer,

   

held by a person is to be determined;

(b)   

specifying the circumstances in which, for the purposes of any

5

determination of the voting rights held by a person (“P”) in

respect of voting shares in an issuer, any voting rights held, or

treated by virtue of subsection (4)(b) as held, by another person

in respect of voting shares in the issuer are to be regarded as

held by P;

10

(c)   

specifying the nature of the information which must be

included in any notification;

(d)   

about the form of any notification;

(e)   

requiring any notification to be given within a specified period;

(f)   

specifying the manner in which any information is to be made

15

public and the period within which it must be made public;

(g)   

specifying circumstances in which any of the requirements

imposed by rules under subsection (4) does not apply.

(6)   

Rules under this section are referred to in this Part as “transparency

rules”.

20

89B     

Provision of voteholder information

(1)   

Transparency rules may make provision for voteholder information in

respect of voting shares to be notified, in circumstances specified in the

rules—

(a)   

to the issuer, or

25

(b)   

to the public,

   

or to both.

(2)   

In this Part “voteholder information” in respect of voting shares means

information relating to the proportion of voting rights held by a person

in respect of the shares.

30

(3)   

Transparency rules may require notification of voteholder information

relating to a person—

(a)   

initially, not later than such date as may be specified in the rules

for the purposes of the first indent of Article 30.2 of the

transparency obligations directive, and

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(b)   

subsequently, in accordance with the following provisions.

(4)   

Transparency rules under subsection (3)(b) may require notification of

voteholder information relating to a person only where there is a

notifiable change in the proportion of—

(a)   

the total voting rights in respect of shares in the issuer, or

40

(b)   

the total voting rights in respect of a particular class of share in

the issuer,

   

held by the person.

(5)   

For this purpose there is a “notifiable change” in the proportion of

voting rights held by a person when the proportion changes—

45

(a)   

from being a proportion less than a designated proportion to a

proportion equal to or greater than that designated proportion,

 
 

 
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