House of Commons - Amendments
Company Law Reform Bill [Lords] - continued          House of Commons

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Circumstances in which application not to be made: activities of company

Margaret Hodge

NC380

    To move the following Clause:—

      ‘(1) An application under section (Striking off on application by company) on behalf of a company must not be made if, at any time in the previous three months, the company has—

        (a) changed its name,

        (b) traded or otherwise carried on business,

        (c) made a disposal for value of property or rights that, immediately before ceasing to trade or otherwise carry on business, it held for the purpose of disposal for gain in the normal course of trading or otherwise carrying on business, or

        (d) engaged in any other activity, except one which is—

          (i) necessary or expedient for the purpose of making an application under that section, or deciding whether to do so,

          (ii) necessary or expedient for the purpose of concluding the affairs of the company,

          (iii) necessary or expedient for the purpose of complying with any statutory requirement, or

          (iv) specified by the Secretary of State by order for the purposes of this sub-paragraph.

      (2) For the purposes of this section, a company is not to be treated as trading or otherwise carrying on business by virtue only of the fact that it makes a payment in respect of a liability incurred in the course of trading or otherwise carrying on business.

      (3) The Secretary of State may by order amend subsection (1) for the purpose of altering the period in relation to which the doing of the things mentioned in paragraphs (a) to (d) of that subsection is relevant.

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

      (5) It is an offence for a person to make an application in contravention of this section.

      (6) In proceedings for such an offence it is a defence for the accused to prove that he did not know, and could not reasonably have known, of the existence of the facts that led to the contravention.

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

        (a) on conviction on indictment, to a fine;

        (b) on summary conviction, to a fine not exceeding the statutory maximum.’.


Circumstances in which application not to be made: other proceedings not concluded

Margaret Hodge

NC381

    To move the following Clause:—

      ‘(1) An application under section (Striking off on application by company) on behalf of a company must not be made at a time when—

        (a) an application to the court under Part (Arrangements and reconstructions) has been made on behalf of the company for the sanctioning of a compromise or arrangement and the matter has not been finally concluded;

        (b) a voluntary arrangement in relation to the company has been proposed under Part 1 of the Insolvency Act 1986 (c. 45) or Part 2 of the Insolvency (Northern Ireland) Order 1989 (S.I. 1989/2405 (N.I. 19)) and the matter has not been finally concluded;

        (c) the company is in administration under Part 2 of that Act or Part 3 of that Order;

        (d) paragraph 44 of Schedule B1 to that Act or paragraph 45 of Schedule B1 to that Order applies (interim moratorium on proceedings where application to the court for an administration order has been made or notice of intention to appoint administrator has been filed);

        (e) the company is being wound up under Part 4 of that Act or Part 5 of that Order, whether voluntarily or by the court, or a petition under that Part for winding up of the company by the court has been presented and not finally dealt with or withdrawn;

        (f) there is a receiver or manager of the company’s property;

        (g) the company’s estate is being administered by a judicial factor.

      (2) For the purposes of subsection (1)(a), the matter is finally concluded if—

        (a) the application has been withdrawn,

        (b) the application has been finally dealt with without a compromise or arrangement being sanctioned by the court, or

        (c) a compromise or arrangement has been sanctioned by the court and has, together with anything required to be done under any provision made in relation to the matter by order of the court, been fully carried out.

      (3) For the purposes of subsection (1)(b), the matter is finally concluded if—

        (a) no meetings are to be summoned under section 3 of the Insolvency Act 1986 (c. 45) or Article 16 of the Insolvency (Northern Ireland) Order 1989 (S.I. 1989/2405 (N.I. 19)),

        (b) meetings summoned under that section or Article fail to approve the arrangement with no, or the same, modifications,

        (c) an arrangement approved by meetings summoned under that section, or in consequence of a direction under section 6(4)(b) of that Act or Article 19(4)(b) of that Order, has been fully implemented, or

        (d) the court makes an order under section 6(5) of that Act or Article 19(5) of that Order revoking approval given at previous meetings and, if the court gives any directions under section 6(6) of that Act or Article 19(6) of that Order, the company has done whatever it is required to do under those directions.

      (4) It is an offence for a person to make an application in contravention of this section.

      (5) In proceedings for such an offence it is a defence for the accused to prove that he did not know, and could not reasonably have known, of the existence of the facts that led to the contravention.

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

        (a) on conviction on indictment, to a fine;

        (b) on summary conviction, to a fine not exceeding the statutory maximum.’.


Copy of application to be given to members, employees, etc

Margaret Hodge

NC382

    To move the following Clause:—

      ‘(1) A person who makes an application under section (Striking off on application by company) on behalf of a company must secure that, within seven days from the day on which the application is made, a copy of it is given to every person who at any time on that day is—

        (a) a member of the company,

        (b) an employee of the company,

        (c) a creditor of the company,

        (d) a director of the company,

        (e) a manager or trustee of any pension fund established for the benefit of employees of the company, or

        (f) a person of a description specified for the purposes of this paragraph by regulations made by the Secretary of State.

      Regulations under paragraph (f) are subject to negative resolution procedure.

      (2) Subsection (1) does not require a copy of the application to be given to a director who is a party to the application.

      (3) The duty imposed by this section ceases to apply if the application is withdrawn before the end of the period for giving the copy application.

      (4) A person who fails to perform the duty imposed on him by this section commits an offence.

      If he does so with the intention of concealing the making of the application from the person concerned, he commits an aggravated offence.

      (5) In proceedings for an offence under this section it is a defence for the accused to prove that he took all reasonable steps to perform the duty.

      (6) A person guilty of an offence under this section (other than an aggravated offence) is liable—

        (a) on conviction on indictment, to a fine;

        (b) on summary conviction, to a fine not exceeding the statutory maximum.

      (7) A person guilty of an aggravated offence under this section is liable—

        (a) on conviction on indictment, to imprisonment for a term not exceeding seven years or a fine (or both);

        (b) on summary conviction—

          (i) in England and Wales, to imprisonment for a term not 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).’.


Copy of application to be given to new members, employees, etc

Margaret Hodge

NC383

    To move the following Clause:—

      ‘(1) This section applies in relation to any time after the day on which a company makes an application under section (Striking off on application by company) (application for voluntary striking off) and before the day on which the application is finally dealt with or withdrawn.

      (2) A person who is a director of the company at the end of a day on which a person (other than himself) becomes—

        (a) a member of the company,

        (b) an employee of the company,

        (c) a creditor of the company,

        (d) a director of the company,

        (e) a manager or trustee of any pension fund established for the benefit of employees of the company, or

        (f) a person of a description specified for the purposes of this paragraph by regulations made by the Secretary of State,

      must secure that a copy of the application is given to that person within seven days from that day.

      Regulations under paragraph (f) are subject to negative resolution procedure.

      (3) The duty imposed by this section ceases to apply if the application is finally dealt with or withdrawn before the end of the period for giving the copy application.

      (4) A person who fails to perform the duty imposed on him by this section commits an offence.

      If he does so with the intention of concealing the making of the application from the person concerned, he commits an aggravated offence.

      (5) In proceedings for an offence under this section it is a defence for the accused to prove—

        (a) that at the time of the failure he was not aware of the fact that the company had made an application under section (Striking off on application by company), or

        (b) that he took all reasonable steps to perform the duty.

      (6) A person guilty of an offence under this section (other than an aggravated offence) is liable—

        (a) on conviction on indictment, to a fine;

        (b) on summary conviction, to a fine not exceeding the statutory maximum.

      (7) A person guilty of an aggravated offence under this section is liable—

        (a) on conviction on indictment, to imprisonment for a term not exceeding seven years or a fine (or both);

        (b) on summary conviction—

          (i) in England and Wales, to imprisonment for a term not 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).’.


Copy of application: provisions as to service of documents

Margaret Hodge

NC384

    To move the following Clause:—

      ‘(1) The following provisions have effect for the purposes of—

      section (Copy of application to be given to members, employees, etc) (copy of application to be given to members, employees, etc), and

      section (Copy of application to be given to new members, employees, etc) (copy of application to be given to new members, employees, etc).

      (2) A document is treated as given to a person if it is—

        (a) delivered to him, or

        (b) left at his proper address, or

        (c) sent by post to him at that address.

      (3) For the purposes of subsection (2) and section 7 of the Interpretation Act 1978 (c. 30) (service of documents by post) as it applies in relation to that subsection, the proper address of a person is—

        (a) in the case of a firm incorporated or formed in the United Kingdom, its registered or principal office;

        (b) in the case of a firm incorporated or formed outside the United Kingdom—

          (i) if it has a place of business in the United Kingdom, its principal office in the United Kingdom, or

          (ii) if it does not have a place of business in the United Kingdom, its registered or principal office;

        (c) in the case of an individual, his last known address.

      (4) In the case of a creditor of the company a document is treated as given to him if it is left or sent by post to him—

        (a) at the place of business of his with which the company has had dealings by virtue of which he is a creditor of the company, or

        (b) if there is more than one such place of business, at each of them.’.


Circumstances in which application to be withdrawn

Margaret Hodge

NC385

    To move the following Clause:—

      ‘(1) This section applies where, at any time on or after the day on which a company makes an application under section (Striking off on application by company) and before the day on which the application is finally dealt with or withdrawn—

        (a) the company—

          (i) changes its name,

          (ii) trades or otherwise carries on business,

          (iii) makes a disposal for value of any property or rights other than those which it was necessary or expedient for it to hold for the purpose of making, or proceeding with, an application under that section, or

          (iv) engages in any activity, except one to which subsection (3) applies;

        (b) an application is made to the court under Part (Arrangements and reconstructions) on behalf of the company for the sanctioning of a compromise or arrangement;

        (c) a voluntary arrangement in relation to the company is proposed under Part 1 of the Insolvency Act 1986 (c. 45) or Part 2 of the Insolvency (Northern Ireland) Order 1989 (S.I. 1989/2405 (N.I. 19));

        (d) an application to the court for an administration order in respect of the company is made under paragraph 12 of Schedule B1 to that Act or paragraph 13 of Schedule B1 to that Order;

        (e) an administrator is appointed in respect of the company under paragraph 14 or 22 of Schedule B1 to that Act or paragraph 15 or 23 of Schedule B1 to that Order, or a copy of notice of intention to appoint an administrator of the company under any of those provisions is filed with the court;

        (f) there arise any of the circumstances in which, under section 84(1) of that Act or Article 70 of that Order, the company may be voluntarily wound up;

        (g) a petition is presented for the winding up of the company by the court under Part 4 of that Act or Part 5 of that Order;

        (h) a receiver or manager of the company’s property is appointed; or

        (i) a judicial factor is appointed to administer the company’s estate.

      (2) A person who, at the end of a day on which any of the events mentioned in subsection (1) occurs, is a director of the company must secure that the company’s application is withdrawn forthwith.

      (3) For the purposes of subsection (1)(a), a company is not treated as trading or otherwise carrying on business by virtue only of the fact that it makes a payment in respect of a liability incurred in the course of trading or otherwise carrying on business.

      (4) The excepted activities referred to in subsection (1)(a)(iv) are—

        (a) any activity necessary or expedient—

          (i) for the purpose of making, or proceeding with, an application under section (Striking off on application by company), or

          (ii) for the purpose of concluding affairs of the company that are outstanding because of what has been necessary or expedient for the purpose of making, or proceeding with, such an application;

        (b) any activity necessary or expedient for the purpose of complying with any statutory requirement;

        (c) any activity specified by the Secretary of State by order for the purposes of this subsection.

      An order under paragraph (c) is subject to negative resolution procedure.

      (5) A person who fails to perform the duty imposed on him by this section commits an offence.

      (6) In proceedings for an offence under this section it is a defence for the accused to prove—

        (a) that at the time of the failure he was not aware of the fact that the company had made an application under section (Striking off on application by company), or

        (b) that he took all reasonable steps to perform the duty.

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

        (a) on conviction on indictment, to a fine;

        (b) on summary conviction, to a fine not exceeding the statutory maximum.’.


Withdrawal of application

Margaret Hodge

NC386

    To move the following Clause:—

      ‘An application under section (Striking off on application by company) is withdrawn by notice to the registrar.’.


Meaning of creditor

Margaret Hodge

NC387

    To move the following Clause:—

      ‘In this Chapter “creditor” includes a contingent or prospective creditor.’.


Property of dissolved company to be bona vacantia

Margaret Hodge

NC388

    To move the following Clause:—

      ‘(1) When a company is dissolved, all property and rights whatsoever vested in or held on trust for the company immediately before its dissolution (including leasehold property, but not including property held by the company on trust for another person) are deemed to be bona vacantia and—

        (a) accordingly belong to the Crown, or to the Duchy of Lancaster or to the Duke of Cornwall for the time being (as the case may be), and

        (b) vest and may be dealt with in the same manner as other bona vacantia accruing to the Crown, to the Duchy of Lancaster or to the Duke of Cornwall.

      (2) Subsection (1) has effect subject to the possible restoration of the company to the register under Chapter (Restoration to the register) of this Part (see section (Effect of restoration to the register where property has vested as bona vacantia)).’.


Crown disclaimer of property vesting as bona vacantia

Margaret Hodge

NC389

    To move the following Clause:—

      ‘(1) Where property vests in the Crown under section (Property of dissolved company to be bona vacantia), the Crown’s title to it under that section may be disclaimed by a notice signed by the Crown representative, that is to say the Treasury Solicitor, or, in relation to property in Scotland, the Queen’s and Lord Treasurer’s Remembrancer.

      (2) The right to execute a notice of disclaimer under this section may be waived by or on behalf of the Crown either expressly or by taking possession or other act evincing that intention.

      (3) A notice of disclaimer must be executed within three years after—

        (a) the date on which the fact that the property may have vested in the Crown under section (Property of dissolved company to be bona vacantia) first comes to the notice of the Crown representative, or

        (b) if ownership of the property is not established at that date, the end of the period reasonably necessary for the Crown representative to establish the ownership of the property.

      (4) If an application in writing is made to the Crown representative by a person interested in the property requiring him to decide whether he will or will not disclaim, any notice of disclaimer must be executed within twelve months after the making of the application or such further period as may be allowed by the court.

      (5) A notice of disclaimer under this section is of no effect if it is shown to have been executed after the end of the period specified by subsection (3) or (4).

      (6) A notice of disclaimer under this section must be delivered to the registrar and retained and registered by him.

      (7) Copies of it must be published in the Gazette and sent to any persons who have given the Crown representative notice that they claim to be interested in the property.

      (8) This section applies to property vested in the Duchy of Lancaster or the Duke of Cornwall under section (Property of dissolved company to be bona vacantia) as if for references to the Crown and the Crown representative there were respectively substituted references to the Duchy of Lancaster and to the Solicitor to that Duchy, or to the Duke of Cornwall and to the Solicitor to the Duchy of Cornwall, as the case may be.’.


Effect of Crown disclaimer

Margaret Hodge

NC390

    To move the following Clause:—

      ‘(1) Where notice of disclaimer is executed under section (Crown disclaimer of property vesting as bona vacantia) as respects any property, that property is deemed not to have vested in the Crown under section (Property of dissolved company to be bona vacantia).

      (2) The following sections contain provisions as to the effect of the Crown disclaimer—

      sections (General effect of disclaimer (EW and NI)) to (Land subject to rentcharge) apply in relation to property in England and Wales or Northern Ireland;

      sections (General effect of disclaimer (Sc)) to (Protection of persons holding under a lease (Sc)) apply in relation to property in Scotland.’.


 
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Prepared: 18 July 2006