sc1902007.577-583

House of Commons

Session 2005 - 06
Internet Publications
Other Bills before Parliament

S.C.D.  Standing Committee Proceedings: 20th July 2006
577

Company Law Reform Bill–[ [], continued


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with or withdrawn before the end of the period for giving the copy application.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

Added  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;

S.C.D.  Standing Committee Proceedings: 20th July 2006
578

Company Law Reform Bill–[ [], continued

(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

Added  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;

S.C.D.  Standing Committee Proceedings: 20th July 2006
579

Company Law Reform Bill–[ [], continued

(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

Added  nc386

To move the following Clause:—

‘An application under section (Striking off on application by company) is

withdrawn by notice to the registrar.’.

S.C.D.  Standing Committee Proceedings: 20th July 2006
580

Company Law Reform Bill–[ [], continued

Meaning of “creditor”

Margaret Hodge

Added  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

Added  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

Added  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

S.C.D.  Standing Committee Proceedings: 20th July 2006
581

Company Law Reform Bill–[ [], continued

(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

Added  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.’.

S.C.D.  Standing Committee Proceedings: 20th July 2006
582

Company Law Reform Bill–[ [], continued

General effect of disclaimer (EW and NI)

Margaret Hodge

Added  nc391

To move the following Clause:—

‘(1)
The Crown’s disclaimer operates so as to determine, as from the date of the

disclaimer, the rights, interests and liabilities of the company in or in respect of

the property disclaimed.

(2)
It does not, except so far as is necessary for the purpose of releasing the company

from any liability, affect the rights or liabilities of any other person.’.

Disclaimer of leaseholds (EW and NI)

Margaret Hodge

Added  nc392

To move the following Clause:—

‘(1)
The disclaimer of any property of a leasehold character does not take effect unless

a copy of the disclaimer has been served (so far as the Crown representative is

aware of their addresses) on every person claiming under the company as

underlessee or mortgagee, and either—

(a)
no application under section (Power of court to make vesting order (EW

and NI)) below is made with respect to that property before the end of the

period of 14 days beginning with the day on which the last notice under

this paragraph was served, or

(b)
where such an application has been made, the court directs that the

disclaimer shall take effect.

(2)
Where the court gives a direction under subsection (1)(b) it may also, instead of

or in addition to any order it makes under section (Protection of persons holding

under a lease (EW and NI), make such order as it thinks fit with respect to

fixtures, tenant’s improvements and other matters arising out of the lease.

(3)
In this section the “Crown representative” means—

(a)
in relation to property vested in the Duchy of Lancaster, the Solicitor to

that Duchy;

(b)
in relation to property vested in the Duke of Cornwall, the Solicitor to the

Duchy of Cornwall;

(c)
in relation to property in Scotland, the Queen’s and Lord Treasurer’s

Remembrancer;

(d)
in relation to other property, the Treasury Solicitor.’.

S.C.D.  Standing Committee Proceedings: 20th July 2006
583

Company Law Reform Bill–[ [], continued

Power of court to make vesting order (EW and NI)

Margaret Hodge

Added  nc393

To move the following Clause:—

‘(1)
The court may on application by a person who—

(a)
claims an interest in the disclaimed property, or

(b)
is under a liability in respect of the disclaimed property that is not

discharged by the disclaimer,


make an order under this section in respect of the property.

(2)
An order under this section is an order for the vesting of the disclaimed property

in, or its delivery to—

(a)
a person entitled to it (or a trustee for such a person), or

(b)
a person subject to such a liability as is mentioned in subsection (1)(b) (or

a trustee for such a person).

(3)
An order under subsection (2)(b) may only be made where it appears to the court

that it would be just to do so for the purpose of compensating the person subject

to the liability in respect of the disclaimer.

(4)
An order under this section may be made on such terms as the court thinks fit.

(5)
On a vesting order being made under this section, the property comprised in it

vests in the person named in that behalf in the order without conveyance,

assignment or transfer.’.

Protection of persons holding under a lease (EW and NI)

Margaret Hodge

Added  nc394

To move the following Clause:—

‘(1)
The court must not make an order under section (Power of court to make vesting

order (EW and NI)) vesting property of a leasehold nature in a person claiming

under the company as underlessee or mortgagee except on terms making that

person—

(a)
subject to the same liabilities and obligations as those to which the

company was subject under the lease, or

(b)
if the court thinks fit, subject to the same liabilities and obligations as if

the lease had been assigned to him.

(2)
Where the order relates to only part of the property comprised in the lease,

subsection (1) applies as if the lease had comprised only the property comprised

in the vesting order.

(3)
A person claiming under the company as underlessee or mortgagee who declines

to accept a vesting order on such terms is excluded from all interest in the

property.

(4)
If there is no person claiming under the company who is willing to accept an order

on such terms, the court has power to vest the company’s estate and interest in the

property in any person who is liable (whether personally or in a representative

character, and whether alone or jointly with the company) to perform the lessee’s

covenants in the lease.