Company Law Reform Bill [HL]

House of Commons

Session 2005 - 06
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Other Bills before Parliament

Company Law Reform Bill [HL]

458
Company Law Reform Bill [HL]
Schedule 1 — Connected persons: references to an interest in shares or debentures

Schedules
Schedule 1
Sections 237 and 238

Connected persons: references to an interest in shares or debentures
Introduction
1     (1)
The provisions of this Schedule have effect for the interpretation of
5
references in sections 237 and 238 (directors connected with or controlling a
body corporate) to an interest in shares or debentures.
      (2)
The provisions are expressed in relation to shares but apply to debentures as
they apply to shares.
General provisions
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2     (1)
A reference to an interest in shares includes any interest of any kind
whatsoever in shares.
      (2)
Any restraints or restrictions to which the exercise of any right attached to
the interest is or may be subject shall be disregarded.
      (3)
It is immaterial that the shares in which a person has an interest are not
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identifiable.
      (4)
Persons having a joint interest in shares are deemed each of them to have
that interest.
Rights to acquire shares
3     (1)
A person is taken to have an interest in shares if he enters into a contract to
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acquire them.
      (2)
A person is taken to have an interest in shares if—
(a)
he has a right to call for delivery of the shares to himself or to his
order, or
(b)
he has a right to acquire an interest in shares or is under an obligation
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to take an interest in shares,

whether the right or obligation is conditional or absolute.
      (3)
Rights or obligations to subscribe for shares are not to be taken for the
purposes of sub-paragraph (2) to be rights to acquire or obligations to take
an interest in shares.
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      (4)
A person ceases to have an interest in shares by virtue of this paragraph—
(a)
on the shares being delivered to another person at his order—
(i)
in fulfilment of a contract for their acquisition by him, or
(ii)
in satisfaction of a right of his to call for their delivery;

Company Law Reform Bill [HL]
Schedule 1 — Connected persons: references to an interest in shares or debentures
459

(b)
on a failure to deliver the shares in accordance with the terms of such
a contract or on which such a right falls to be satisfied;
(c)
on the lapse of his right to call for the delivery of shares.
Right to exercise or control exercise of rights
4     (1)
A person is taken to have an interest in shares if, not being the registered
5
holder, he is entitled—
(a)
to exercise any right conferred by the holding of the shares, or
(b)
to control the exercise of any such right.
      (2)
For this purpose a person is taken to be entitled to exercise or control the
exercise of a right conferred by the holding of shares if he—
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(a)
has a right (whether subject to conditions or not) the exercise of
which would make him so entitled, or
(b)
is under an obligation (whether or not so subject) the fulfilment of
which would make him so entitled.
      (3)
A person is not by virtue of this paragraph taken to be interested in shares
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by reason only that—
(a)
he has been appointed a proxy to exercise any of the rights attached
to the shares, or
(b)
he has been appointed by a body corporate to act as its representative
at any meeting of a company or of any class of its members.
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Bodies corporate
5     (1)
A person is taken to be interested in shares if a body corporate is interested
in them and—
(a)
the body corporate or its directors are accustomed to act in
accordance with his directions or instructions, or
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(b)
he is entitled to exercise or control the exercise of more than one-half
of the voting power at general meetings of the body corporate.
      (2)
For the purposes of sub-paragraph (1)(b) where—
(a)
a person is entitled to exercise or control the exercise of more than
one-half of the voting power at general meetings of a body corporate,
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and
(b)
that body corporate is entitled to exercise or control the exercise of
any of the voting power at general meetings of another body
corporate,

the voting power mentioned in paragraph (b) above is taken to be
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exercisable by that person.
Trusts
6     (1)
Where an interest in shares is comprised in property held on trust, every
beneficiary of the trust is taken to have an interest in shares, subject as
follows.
40
      (2)
So long as a person is entitled to receive, during the lifetime of himself or
another, income from trust property comprising shares, an interest in the
shares in reversion or remainder or (as regards Scotland) in fee shall be
disregarded.

Company Law Reform Bill [HL]
Schedule 2 — Specified persons, descriptions of disclosures etc for the purposes of section 648
Part 1 — Specified persons
460

      (3)
A person is treated as not interested in shares if and so long as he holds
them—
(a)
under the law in force in any part of the United Kingdom, as a bare
trustee or as a custodian trustee, or
(b)
under the law in force in Scotland, as a simple trustee.
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      (4)
There shall be disregarded any interest of a person subsisting by virtue of—
(a)
an authorised unit trust scheme (within the meaning of section 237
of the Financial Services and Markets Act 2000 (c. 8));
(b)
a scheme made under section 22 or 22A of the Charities Act 1960
(c. 58), section 25 of the Charities Act (Northern Ireland) 1964 (c. 33
10
(N.I.)) or section 24 or 25 of the Charities Act 1993 (c. 10), section 11
of the Trustee Investments Act 1961 (c. 62) or section 42 of the
Administration of Justice Act 1982 (c. 53); or
(c)
the scheme set out in the Schedule to the Church Funds Investment
Measure 1958 (1958 No. 1).
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      (5)
There shall be disregarded any interest—
(a)
of the Church of Scotland General Trustees or of the Church of
Scotland Trust in shares held by them;
(b)
of any other person in shares held by those Trustees or that Trust
otherwise than as simple trustees.
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“The Church of Scotland General Trustees” are the body incorporated by the
order confirmed by the Church of Scotland (General Trustees) Order
Confirmation Act 1921 (1921 c. xxv), and “the Church of Scotland Trust” is
the body incorporated by the order confirmed by the Church of Scotland
Trust Order Confirmation Act 1932 (1932 c. xxi).
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Schedule 2
Section 648

Specified persons, descriptions of disclosures etc for the purposes of section 648
Part 1
Specified persons
1
The Secretary of State.
30
2
The Department of Enterprise, Trade and Investment for Northern Ireland.
3
The Treasury.
4
The Bank of England.
5
The Financial Services Authority.
6
The Commissioners for Her Majesty’s Revenue and Customs.
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7
The Lord Advocate.
8
The Director of Public Prosecutions.
9
The Director of Public Prosecutions for Northern Ireland.
10
A constable.

Company Law Reform Bill [HL]
Schedule 2 — Specified persons, descriptions of disclosures etc for the purposes of section 648
Part 2 — Specified descriptions of disclosures
461

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A procurator fiscal.
12
The Scottish Ministers.
Part 2
Specified descriptions of disclosures
13
A disclosure for the purpose of enabling or assisting a person authorised
5
under section 441 of this Act (persons authorised to apply to court) to
exercise his functions.

Until the coming into force of section 441, the reference to that section is to
be read as a reference to section 245C of the Companies Act 1985 (c. 6).
14
A disclosure for the purpose of enabling or assisting an inspector appointed
10
under Part 14 of the Companies Act 1985 (investigation of companies and
their affairs, etc) to exercise his functions.
15
A disclosure for the purpose of enabling or assisting a person authorised
under section 447 of the Companies Act 1985 (power to require production
of documents) or section 84 of the Companies Act 1989 (c. 40) (exercise of
15
powers by officer etc) to exercise his functions.
16
A disclosure for the purpose of enabling or assisting a person appointed
under section 167 of the Financial Services and Markets Act 2000 (c. 8)
(general investigations) to conduct an investigation to exercise his functions.
17
A disclosure for the purpose of enabling or assisting a person appointed
20
under section 168 of the Financial Services and Markets Act 2000
(investigations in particular cases) to conduct an investigation to exercise his
functions.
18
A disclosure for the purpose of enabling or assisting a person appointed
under section 169(1)(b) of the Financial Services and Markets Act 2000
25
(investigation in support of overseas regulator) to conduct an investigation
to exercise his functions.
19
A disclosure for the purpose of enabling or assisting the body corporate
responsible for administering the scheme referred to in section 225 of the
Financial Services and Markets Act 2000 (the ombudsman scheme) to
30
exercise its functions.
20
A disclosure for the purpose of enabling or assisting a person appointed
under paragraph 4 (the panel of ombudsmen) or 5 (the Chief Ombudsman)
of Schedule 17 to the Financial Services and Markets Act 2000 to exercise his
functions.
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21
A disclosure for the purpose of enabling or assisting a person appointed
under regulations made under section 262(1) and (2)(k) of the Financial
Services and Markets Act 2000 (investigations into open-ended investment
companies) to conduct an investigation to exercise his functions.
22
A disclosure for the purpose of enabling or assisting a person appointed
40
under section 284 of the Financial Services and Markets Act 2000
(investigations into affairs of certain collective investment schemes) to
conduct an investigation to exercise his functions.
23
A disclosure for the purpose of enabling or assisting the investigator
appointed under paragraph 7 of Schedule 1 to the Financial Services and
45

Company Law Reform Bill [HL]
Schedule 2 — Specified persons, descriptions of disclosures etc for the purposes of section 648
Part 2 — Specified descriptions of disclosures
462

Markets Act 2000 (arrangements for investigation of complaints) to exercise
his functions.
24
A disclosure for the purpose of enabling or assisting a person appointed by
the Treasury to hold an inquiry into matters relating to financial services
(including an inquiry under section 15 of the Financial Services and Markets
5
Act 2000 (c. 8)) to exercise his functions.
25
A disclosure for the purpose of enabling or assisting the Secretary of State or
the Treasury to exercise any of their functions under any of the following—
(a)
the Companies Acts;
(b)
Part 5 of the Criminal Justice Act 1993 (c. 36) (insider dealing);
10
(c)
the Insolvency Act 1986 (c. 45);
(d)
the Company Directors Disqualification Act 1986 (c. 46);
(e)
Part 35 of this Act (statutory auditors);
(f)
Part 3 (investigations and powers to obtain information) or 7
(financial markets and insolvency) of the Companies Act 1989 (c. 40);
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(g)
the Financial Services and Markets Act 2000.

Until the coming into force of Part 35 of this Act, the reference to it in
paragraph (e) is to be read as a reference to Part 2 of the Companies Act 1989.
26
A disclosure for the purpose of enabling or assisting the Scottish Ministers
to exercise their functions under the enactments relating to insolvency.
20
27
A disclosure for the purpose of enabling or assisting the Department of
Enterprise, Trade and Investment for Northern Ireland to exercise any
powers conferred on it by the enactments relating to companies or
insolvency.
28
A disclosure for the purpose of enabling or assisting a person appointed or
25
authorised by the Department of Enterprise, Trade and Investment for
Northern Ireland under the enactments relating to companies or insolvency
to exercise his functions.
29
A disclosure for the purpose of enabling or assisting the Pensions Regulator
to exercise the functions conferred on it by or by virtue of any of the
30
following—
(a)
the Pension Schemes Act 1993 (c. 48);
(b)
the Pensions Act 1995 (c. 26);
(c)
the Welfare Reform and Pensions Act 1999 (c. 30);
(d)
the Pensions Act 2004 (c. 35);
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(e)
any enactment in force in Northern Ireland corresponding to any of
those enactments.
30
A disclosure for the purpose of enabling or assisting the Board of the
Pension Protection Fund to exercise the functions conferred on it by or by
virtue of Part 2 of the Pensions Act 2004 or any enactment in force in
40
Northern Ireland corresponding to that Part.
31
A disclosure for the purpose of enabling or assisting—
(a)
the Bank of England,
(b)
the European Central Bank, or
(c)
the central bank of any country or territory outside the United
45
Kingdom,

to exercise its functions.

Company Law Reform Bill [HL]
Schedule 2 — Specified persons, descriptions of disclosures etc for the purposes of section 648
Part 2 — Specified descriptions of disclosures
463

32
A disclosure for the purpose of enabling or assisting the Commissioners for
Her Majesty’s Revenue and Customs to exercise their functions.
33
A disclosure for the purpose of enabling or assisting organs of the Society of
Lloyd’s (being organs constituted by or under the Lloyd’s Act 1982 (c. xiv))
to exercise their functions under or by virtue of the Lloyd’s Acts 1871 to
5
1982.
34
A disclosure for the purpose of enabling or assisting the Office of Fair
Trading to exercise its functions under any of the following—
(a)
the Fair Trading Act 1973 (c. 41);
(b)
the Consumer Credit Act 1974 (c. 39);
10
(c)
the Estate Agents Act 1979 (c. 38);
(d)
the Competition Act 1980 (c. 21);
(e)
the Competition Act 1998 (c. 41);
(f)
the Financial Services and Markets Act 2000 (c. 8);
(g)
the Enterprise Act 2002 (c. 40);
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(h)
the Control of Misleading Advertisements Regulations 1988
(S.I. 1988/915);
(i)
the Unfair Terms in Consumer Contracts Regulations 1999
(S.I. 1999/2083).
35
A disclosure for the purpose of enabling or assisting the Competition
20
Commission to exercise its functions under any of the following—
(a)
the Fair Trading Act 1973;
(b)
the Competition Act 1980;
(c)
the Competition Act 1998;
(d)
the Enterprise Act 2002.
25
36
A disclosure with a view to the institution of, or otherwise for the purposes
of, proceedings before the Competition Appeal Tribunal.
37
A disclosure for the purpose of enabling or assisting an enforcer under Part
8 of the Enterprise Act 2002 (enforcement of consumer legislation) to
exercise its functions under that Part.
30
38
A disclosure for the purpose of enabling or assisting the Charity
Commission to exercise its functions.
39
A disclosure for the purpose of enabling or assisting the Attorney General to
exercise his functions in connection with charities.
40
A disclosure for the purpose of enabling or assisting the National Lottery
35
Commission to exercise its functions under sections 5 to 10 (licensing) and
15 (power of Secretary of State to require information) of the National
Lottery etc. Act 1993 (c. 39).
41
A disclosure by the National Lottery Commission to the National Audit
Office for the purpose of enabling or assisting the Comptroller and Auditor
40
General to carry out an examination under Part 2 of the National Audit Act
1983 (c. 44) into the economy, effectiveness and efficiency with which the
National Lottery Commission has used its resources in discharging its
functions under sections 5 to 10 of the National Lottery etc. Act 1993.

Company Law Reform Bill [HL]
Schedule 2 — Specified persons, descriptions of disclosures etc for the purposes of section 648
Part 2 — Specified descriptions of disclosures
464

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A disclosure for the purpose of enabling or assisting a qualifying body
under the Unfair Terms in Consumer Contracts Regulations 1999 (S.I. 1999/
2083) to exercise its functions under those Regulations.
43
A disclosure for the purpose of enabling or assisting an enforcement
authority under the Consumer Protection (Distance Selling) Regulations
5
2000 (S.I. 2000/2334) to exercise its functions under those Regulations.
44
A disclosure for the purpose of enabling or assisting an enforcement
authority under the Financial Services (Distance Marketing) Regulations
2004 (S.I. 2004/2095) to exercise its functions under those Regulations.
45
A disclosure for the purpose of enabling or assisting a local weights and
10
measures authority in England and Wales to exercise its functions under
section 230(2) of the Enterprise Act 2002 (c. 40) (notice of intention to
prosecute, etc).
46
A disclosure for the purpose of enabling or assisting the Financial Services
Authority to exercise its functions under any of the following—
15
(a)
the legislation relating to friendly societies or to industrial and
provident societies;
(b)
the Building Societies Act 1986 (c. 53);
(c)
Part 7 of the Companies Act 1989 (c. 40) (financial markets and
insolvency);
20
(d)
the Financial Services and Markets Act 2000 (c. 8).
47
A disclosure for the purpose of enabling or assisting the competent authority
for the purposes of Part 6 of the Financial Services and Markets Act 2000
(official listing) to exercise its functions under that Part.
48
A disclosure for the purpose of enabling or assisting a body corporate
25
established in accordance with section 212(1) of the Financial Services and
Markets Act 2000 (compensation scheme manager) to exercise its functions.
49
A disclosure for the purpose of enabling or assisting a recognised
investment exchange or a recognised clearing house to exercise its functions
as such.
30

“Recognised investment exchange” and “recognised clearing house” have
the same meaning as in section 285 of the Financial Services and Markets Act
2000.
50
A disclosure for the purpose of enabling or assisting a person approved
under the Uncertificated Securities Regulations 2001 (S.I. 2001/3755) as an
35
operator of a relevant system (within the meaning of those regulations) to
exercise his functions.
51
A disclosure for the purpose of enabling or assisting a body designated
under section 326(1) of the Financial Services and Markets Act 2000
(designated professional bodies) to exercise its functions in its capacity as a
40
body designated under that section.
52
A disclosure with a view to the institution of, or otherwise for the purposes
of, civil proceedings arising under or by virtue of the Financial Services and
Markets Act 2000.
53
A disclosure for the purpose of enabling or assisting a body designated by
45
order under section 881 of this Act (delegation of functions of Secretary of
State) to exercise its functions under Part 35 of this Act (statutory auditors).