sc1902007.591-597

House of Commons

Session 2005 - 06
Internet Publications
Other Bills before Parliament

S.C.D.  Standing Committee Proceedings: 20th July 2006
591

Company Law Reform Bill–[ [], continued

Decision on application for restoration by the court

Margaret Hodge

Added  nc407

To move the following Clause:—

‘(1)
On an application under section (Application to court for restoration to the

register) the court may order the restoration of the company to the register—

(a)
if the company was struck off the register under section (Power to strike

off company not carrying on business or in operation) or (Duty to act in

case of company being wound up) (power of registrar to strike off defunct

companies) and the company was, at the time of the striking off, carrying

on business or in operation;

(b)
if the company was struck off the register under section (Striking off on

application by company) (voluntary striking off) and any of the

requirements of section (Circumstances in which application not to be

made: activities of company) to (Circumstances in which application to

be withdrawn) was not complied with;

(c)
if in any other case the court considers it just to do so.

(2)
If the court orders restoration of the company to the register, the restoration takes

effect on a copy of the court’s order being delivered to the registrar.

(3)
The registrar must cause to be published in the Gazette notice of the restoration

of the company to the register.

(4)
The notice must state—

(a)
the name of the company or, if the company is restored to the register

under a different name, that name and its former name,

(b)
the company’s registered number, and

(c)
the date on which the restoration took effect.’.

Effect of court order for restoration to the register

Margaret Hodge

Added  nc408

To move the following Clause:—

‘(1)
The general effect of an order by the court for restoration to the register is that the

company is deemed to have continued in existence as if it had not been dissolved

or struck off the register.

(2)
The company is not liable to a penalty under section 458 or any corresponding

earlier provision (civil penalty for failure to deliver accounts) for a financial year

in relation to which the period for filing accounts and reports ended—

(a)
after the date of dissolution or striking off, and

(b)
before the restoration of the company to the register.

(3)
The court may give such directions and make such provision as seems just for

placing the company and all other persons in the same position (as nearly as may

be) as if the company had not been dissolved or struck off the register.

(4)
The court may also give directions as to—

(a)
the delivery to the registrar of such documents relating to the company as

are necessary to bring up to date the records kept by the registrar,

S.C.D.  Standing Committee Proceedings: 20th July 2006
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Company Law Reform Bill–[ [], continued

(b)
the payment of the costs (in Scotland, expenses) of the registrar in

connection with the proceedings for the restoration of the company to the

register,

(c)
where any property or right previously vested in or held on trust for the

company has vested as bona vacantia, the payment of the costs (in

Scotland, expenses) of the Crown representative—

(i)
in dealing with the property during the period of dissolution, or

(ii)
in connection with the proceedings on the application.

(5)
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.’.

Company’s name on restoration

Margaret Hodge

Added  nc409

To move the following Clause:—

‘(1)
A company is restored to the register with the name it had before it was dissolved

or struck off the register, subject to the following provisions.

(2)
If at the date of restoration the company could not be registered under its former

name without contravening section 67 (name not to be the same as another in the

registrar’s index of company names), it must be restored to the register—

(a)
under another name specified—

(i)
in the case of administrative restoration, in the application to the

registrar, or

(ii)
in the case of restoration under a court order, in the court’s order,

or

(b)
as if its registered number was also its name.


References to a company’s being registered in a name and to registration, in that

context, shall be read as including the company’s being restored to the register.

(3)
If a company is restored to the register under a name specified in the application

to the registrar, the provisions of—

section 80 (change of name: registration and issue of new certificate of

incorporation), and

section 81 (change of name: effect),


apply as if the application to the registrar were notice of a change of name.

(4)
If a company is restored to the register under a name specified in the court’s order,

the provisions of—

section 80 (change of name: registration and issue of new certificate of

incorporation), and

section 81 (change of name: effect),

S.C.D.  Standing Committee Proceedings: 20th July 2006
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Company Law Reform Bill–[ [], continued


apply as if the copy of the court order delivered to the registrar were notice of a

change a name.

(5)
If the company is restored to the register as if its registered number was also its

name—

(a)
the company must change its name within 14 days after the date of the

restoration,

(b)
the change may be made by resolution of the directors (without prejudice

to any other method of changing the company’s name),

(c)
the company must give notice to the registrar of the change, and

(d)
sections 80 and 81 apply as regards the registration and effect of the

change.

(6)
If the company fails to comply with subsection (5)(a) or (c) an offence is

committed by—

(a)
the company, and

(b)
every officer of the company who is in default.

(7)
A person guilty of an offence under subsection (6) is liable on summary

conviction to a fine not exceeding level 5 on the standard scale and, for continued

contravention, to a daily default fine not exceeding one-tenth of level 5 on the

standard scale.’.

Effect of restoration to the register where property has vested as bona vacantia

Margaret Hodge

Added  nc410

To move the following Clause:—

‘(1)
The person in whom any property or right is vested by section (Property of

dissolved company to be bona vacantia) (property of dissolved company to be

bona vacantia) may dispose of, or of an interest in, that property or right despite

the fact that the company may be restored to the register under this Chapter.

(2)
If the company is restored to the register—

(a)
the restoration does not affect the disposition (but without prejudice to its

effect in relation to any other property or right previously vested in or

held on trust for the company), and

(b)
the Crown or, as the case may be, the Duke of Cornwall shall pay to the

company an amount equal to—

(i)
the amount of any consideration received for the property or

right or, as the case may be, the interest in it, or

(ii)
the value of any such consideration at the time of the disposition,


or, if no consideration was received an amount equal to the value of the

property, right or interest disposed of, as at the date of the disposition.

(3)
There may be deducted from the amount payable under subsection (2)(b) the

reasonable costs of the Crown representative in connection with the disposition

(to the extent that they have not been paid as a condition of administrative

restoration or pursuant to a court order for restoration).

(4)
Where a liability accrues under subsection (2) in respect of any property or right

which before the restoration of the company to the register had accrued as bona

vacantia to the Duchy of Lancaster, the Attorney General of that Duchy shall

represent Her Majesty in any proceedings arising in connection with that liability.

S.C.D.  Standing Committee Proceedings: 20th July 2006
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Company Law Reform Bill–[ [], continued

(5)
Where a liability accrues under subsection (2) in respect of any property or right

which before the restoration of the company to the register had accrued as bona

vacantia to the Duchy of Cornwall, such persons as the Duke of Cornwall (or

other possessor for the time being of the Duchy) may appoint shall represent the

Duke (or other possessor) in any proceedings arising out of that liability.

(6)
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.’.

Production and inspection of documents where offence suspected

Margaret Hodge

Added  nc411

To move the following Clause:—

‘(1)
An application under this section may be made—

(a)
in England and Wales, to a judge of the High Court by the Director of

Public Prosecutions, the Secretary of State or a chief officer of police;

(b)
in Scotland, to one of the Lords Commissioners of Justiciary by the Lord

Advocate;

(c)
in Northern Ireland, to the High Court by the Director of Public

Prosecutions for Northern Ireland, the Department of Enterprise, Trade

and Investment or a chief superintendent of the Police Service of

Northern Ireland.

(2)
If on an application under this section there is shown to be reasonable cause to

believe—

(a)
that any person has, while an officer of a company, committed an offence

in connection with the management of the company’s affairs, and

(b)
that evidence of the commission of the offence is to be found in any

documents in the possession or control of the company,


an order under this section may be made.

(3)
The order may—

(a)
authorise any person named in it to inspect the documents in question, or

any of them, for the purpose of investigating and obtaining evidence of

the offence, or

(b)
require the secretary of the company, or such other officer of it as may be

named in the order, to produce the documents (or any of them) to a person

named in the order at a place so named.

(4)
This section applies also in relation to documents in the possession or control of

a person carrying on the business of banking, so far as they relate to the

company’s affairs, as it applies to documents in the possession or control of the

company, except that no such order as is referred to in subsection (3)(b) may be

made by virtue of this subsection.

S.C.D.  Standing Committee Proceedings: 20th July 2006
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Company Law Reform Bill–[ [], continued

(5)
The decision under this section of a judge of the High Court, any of the Lords

Commissioners of Justiciary or the High Court is not appealable.

(6)
In this section “document” includes information recorded in any form.’.

Application of valuation requirements

Margaret Hodge

Added  Nc412

To move the following Clause:—

‘The provisions of sections (Valuation by qualified independent person) to

(Valuer entitled to full disclosure) apply to the valuation and report required by—

section 93 (re-registration as public company: valuation of recently

transferred non-cash asset);

section (Public company: valuation of non-cash consideration for shares)

(allotment of shares of public company in consideration of non-cash

asset);

section (Public company: agreement for transfer of non-cash asset in initial

period) (transfer of non-cash asset to public company).’.

Valuation by qualified independent person

Margaret Hodge

Added  nc413

To move the following Clause:—

‘(1)
The valuation and report must be made by a person (“the valuer”) who—

(a)
is eligible for appointment as a statutory auditor (see section 841, and

(b)
meets the independence requirement in section (The independence

requirement).

(2)
However, where it appears to the valuer to be reasonable for the valuation of the

consideration, or part of it, to be made by (or for him to accept a valuation made

by) another person who—

(a)
appears to him to have the requisite knowledge and experience to value

the consideration or that part of it, and

(b)
is not an officer or employee of—

(i)
the company, or

(ii)
any other body corporate that is that company’s subsidiary or

holding company or a subsidiary of that company’s holding

company,


or a partner of or employed by any such officer or employee,


he may arrange for or accept such a valuation, together with a report which will

enable him to make his own report under this section.

(3)
The references in subsection (2)(b) to an officer or employee do not include an

auditor.

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Company Law Reform Bill–[ [], continued

(4)
Where the consideration or part of it is valued by a person other than the valuer

himself, the latter’s report must state that fact and shall also—

(a)
state the former’s name and what knowledge and experience he has to

carry out the valuation, and

(b)
describe so much of the consideration as was valued by the other person,

and the method used to value it, and specify the date of that valuation.’.

The independence requirement

Margaret Hodge

Added  nc414

To move the following Clause:—

‘(1)
A person meets the independence requirement for the purposes of section

(Valuation by qualified independent person) only if—

(a)
he is not—

(i)
an officer or employee of the company, or

(ii)
a partner or employee of such a person, or a partnership of which

such a person is a partner;

(b)
he is not—

(i)
an officer or employee of an associated undertaking of the

company, or

(ii)
a partner or employee of such a person, or a partnership of which

such a person is a partner; and

(c)
there does not exist between—

(i)
the person or an associate of his, and

(ii)
the company or an associated undertaking of the company,


a connection of any such description as may be specified by regulations

made by the Secretary of State.

(2)
An auditor of the company is not regarded as an officer or employee of the

company for this purpose.

(3)
In this section—

“associated undertaking” means—

(o)
a parent undertaking or subsidiary undertaking of the company,

or

(p)
a subsidiary undertaking of a parent undertaking of the company;

and

“associate” has the meaning given by section (Meaning of “associate”).

(4)
Regulations under this section are subject to negative resolution procedure.’.

S.C.D.  Standing Committee Proceedings: 20th July 2006
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Company Law Reform Bill–[ [], continued

Meaning of “associate”

Margaret Hodge

Added  nc415

To move the following Clause:—

‘(1)
This section defines “associate” for the purposes of section (The independence

requirement) (valuation: independence requirement).

(2)
In relation to an individual, “associate” means—

(a)
that individual’s spouse or 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.

(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.

(4)
In relation to a partnership that is a legal person under the law by which it is

governed, “associate” means—

(a)
any body corporate of which that partnership is a director,

(b)
any employee of or partner in that partnership, and

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

(5)
In relation to a partnership that is not a legal person under the law by which it is

governed, “associate” means any person who is an associate of any of the

partners.

(6)
In this section, in relation to a limited liability partnership, for “director” read

“member”.’.

Valuer entitled to full disclosure

Margaret Hodge

Added  nc416

To move the following Clause:—

‘(1)
A person carrying out a valuation or making a report with respect to any

consideration proposed to be accepted or given by a company, is entitled to

require from the officers of the company such information and explanation as he

thinks necessary to enable him to—

(a)
carry out the valuation or make the report, and

(b)
provide any note required by section (Non-cash consideration for shares:

requirements as to valuation and report)(3) or (Agreement for transfer of

non-cash asset: requirements as to valution and report)(3) (note required

where valuation carried out by another person).

(2)
A person who knowingly or recklessly makes a statement to which this

subsection applies that is misleading, false or deceptive in a material particular

commits an offence.

(3)
Subsection (2) applies to a statement—