sc1902007.605-611

House of Commons

Session 2005 - 06
Internet Publications
Other Bills before Parliament

S.C.D.  Standing Committee Proceedings: 20th July 2006
605

Company Law Reform Bill–[ [], continued

(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).

(3)
In relation to an offence committed before the commencement of section 154(1)

of the Criminal Justice Act 2003 (c. 44), for “twelve months” in subsection

(2)(b)(i) substitute “six months”.’.

Personal liability for debts of company

Margaret Hodge

Added  nc428

To move the following Clause:—

‘(1)
The Secretary of State may provide by regulations that a person who, at a time

when he is subject to foreign restrictions—

(a)
is a director of a UK company, or

(b)
is involved in the management of a UK company,


is personally responsible for all debts and other liabilities of the company

incurred during that time.

(2)
A person who is personally responsible by virtue of this section for debts and

other liabilities of a company is jointly and severally liable in respect of those

debts and liabilities with—

(a)
the company, and

(b)
any other person who (whether by virtue of this section or otherwise) is

so liable.

(3)
For the purposes of this section a person is involved in the management of a

company if he is concerned, whether directly or indirectly, or takes part, in the

management of the company.

(4)
The regulations may make different provision for different cases and may in

particular distinguish between cases by reference to—

(a)
the conduct on the basis of which the person became subject to foreign

restrictions;

(b)
the nature of the foreign restrictions;

(c)
the country or territory under whose law the foreign restrictions were

imposed.

(5)
Regulations under this section are subject to affirmative resolution procedure.’.

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

Statements from persons subject to foreign restrictions

Margaret Hodge

Added  nc429

To move the following Clause:—

‘(1)
The Secretary of State may make provision by regulations requiring a person

who—

(a)
is subject to foreign restrictions, and

(b)
is not disqualified under this Part,


to send a statement to the registrar if he does anything that, if done by a person

disqualified under this Part, would be in breach of the disqualification.

(2)
The statement must include such information as may be specified in the

regulations relating to—

(a)
the person’s activities in relation to UK companies, and

(b)
the foreign restrictions to which the person is subject.

(3)
The statement must be sent to the registrar within such period as may be specified

in the regulations.

(4)
The regulations may make different provision for different cases and may in

particular distinguish between cases by reference to—

(a)
the conduct on the basis of which the person became subject to foreign

restrictions;

(b)
the nature of the foreign restrictions;

(c)
the country or territory under whose law the foreign restrictions were

imposed.

(5)
Regulations under this section are subject to affirmative resolution procedure.’.

Statements from persons disqualified

Margaret Hodge

Added  NC430

To move the following Clause:—

‘(1)
The Secretary of State may make provision by regulations requiring a statement

or notice sent to the registrar of companies under any of the provisions listed

below that relates (wholly or partly) to a person who—

(a)
is a person disqualified under this Part, or

(b)
is subject to a disqualification order or disqualification undertaking under

the Company Directors Disqualification Act 1986 (c. 46) or the

Company Directors Disqualification (Northern Ireland) Order 2002

(S.I. 2002/3150 (N.I. 4)),


to be accompanied by an additional statement.

(2)
The provisions referred to above are—

(a)
section 12 (statement of a company’s proposed officers),

(b)
section 152(2) (notice of person having become director),

(c)
section 259 (notice of a person having become secretary or one of joint

secretaries), and

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

(d)
section (Duty to notify registrar of changes)(2) (notice of a person having

been appointed an authorised signatory under Part (Authorised

signatories).

(3)
The additional statement is a statement that the person has obtained permission

from a court, on an application under section (Disqualification of persons subject

to foreign restrictions)(5) or (as the case may be) for the purposes of section

1(1)(a) of the Company Directors Disqualification Act 1986 (c. 46) or Article

3(1) of the Company Directors Disqualification (Northern Ireland) Order 2002

(S.I. 2002/3150 (N.I. 4)), to act in the capacity in question.

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

Statements: whether to be made public

Margaret Hodge

Added  nc431

To move the following Clause:—

‘(1)
Regulations under section (Statements from persons subject to foreign

restrictions) or (Statements from persons disqualified) may provide that a

statement sent to the registrar of companies under the regulations is to be treated

as a record relating to a company for the purposes of section 733 (the companies

register).

(2)
The regulations may make provision as to the circumstances in which such a

statement is to be, or may be—

(a)
withheld from public inspection, or

(b)
removed from the register.

(3)
The regulations may, in particular, provide that a statement is not to be withheld

from public inspection or removed from the register unless the person to whom it

relates provides such information, and satisfies such other conditions, as may be

specified.

(4)
The regulations may provide that section 751 (note of removal of material from

the register) does not apply, or applies with such modifications as may be

specified, in the case of material removed from the register under the regulations.

(5)
In this section “specified” means specified in the regulatons.’.

Offences

Margaret Hodge

Added  nc432

To move the following Clause:—

‘(1)
Regulations under section (Statements from persons subject to foreign

restrictions) or (Statements from persons disqualified) may provide that it is an

offence for a person—

(a)
to fail to comply with a requirement under the regulations to send a

statement to the registrar;

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

(b)
knowingly or recklessly to send a statement under the regulations to the

registrar that is misleading, false or deceptive in a material particular.

(2)
The regulations may provide that a person guilty of such an offence is liable—

(a)
on conviction on indictment, to imprisonment for a term not exceeding

two 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).

(3)
In relation to an offence committed before the commencement of section 154(1)

of the Criminal Justice Act 2003 (c. 44), for “twelve months” in subsection

(2)(b)(i) substitute “six months”.’.

Power to require information about exercise of voting rights

Margaret Hodge

Added  nc433

To move the following Clause:—

‘(1)
The Treasury or the Secretary of State may make provision by regulations

requiring institutions to which this section applies to provide information about

the exercise of voting rights attached to shares to which this section applies.

(2)
This power is exercisable in accordance with—

section (Institutions to which information provisions apply) (institutions to

which information provisions apply),

section (Shares to which information provisions apply) (shares to which

information provisions apply), and

section (Obligations with respect to provision of information) (obligations

with respect to provision of information).

(3)
In this section and the sections mentioned above—

(a)
references to a person acting on behalf of an institution include—

(i)
any person to whom authority has been delegated by the

institution to take decisions as to any matter relevant to the

subject matter of the regulations, and

(ii)
such other persons as may be specified; and

(b)
“specified” means specified in the regulations.

(4)
The obligation imposed by regulations under this section is enforceable by civil

proceedings brought by—

(a)
any person to whom the information should have been provided, or

(b)
a specified regulatory authority.

(5)
Regulations under this section may make different provision for different

descriptions of institution, different descriptions of shares and for other different

circumstances.

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

(6)
Regulations under this section are subject to affirmative resolution procedure.’.

Institutions to which information provisions apply

Margaret Hodge

Added  nc434

To move the following Clause:—

‘(1)
The institutions to which section (Power to require information about exercise of

voting rights) applies are—

(a)
unit trust schemes within the meaning of the Financial Services and

Markets Act 2000 (c. 8) in respect of which an order is in force under

section 243 of that Act;

(b)
open-ended investment companies incorporated by virtue of regulations

under section 262 of that Act;

(c)
companies approved for the purposes of section 842 of the Income and

Corporation Taxes Act 1988 (c. 1) (investment trusts);

(d)
pension schemes as defined in section 1(5) of the Pension Schemes Act

1993 (c. 48) or the Pension Schemes (Northern Ireland) Act 1993 (c. 49);

(e)
undertakings authorised under the Financial Services and Markets Act

2000 (c. 8) to carry on long-term insurance business (that is, the activity

of effecting or carrying out contracts of long term insurance within the

meaning of the Financial Services and Markets (Regulated Activities)

Order 2001);

(f)
collective investment schemes that are recognised by virtue of section

270 of that Act (schemes authorised in designated countries or

territories).

(2)
Regulations under that section may—

(a)
provide that the section applies to other descriptions of institution;

(b)
provide that the section does not apply to a specified description of

institution.

(3)
The regulations must specify by whom, in the case of any description of

institution, the duty imposed by the regulations is to be fulfilled.’.

Shares to which information provisions apply

Margaret Hodge

Added  nc435

To move the following Clause:—

‘(1)
The shares to which section (Institutions to which information provisions apply)

applies are shares—

(a)
of a description traded on a specified market, and

(b)
in which the institution has, or is taken to have, an interest.

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


Regulations under that section may provide that the section does not apply to

shares of a specified description.

(2)
For this purpose an institution has an interest in shares if the shares, or a

depositary certificate in respect of them, are held by it, or on its behalf.


A “depositary certificate” means an instrument conferring rights (other than

options)—

(a)
in respect of shares held by another person, and

(b)
the transfer of which may be effected without the consent of that person.

(3)
Where an institution has an interest—

(a)
in a specified description of collective investment scheme (within the

meaning of the Financial Services and Markets Act 2000 (c. 8)), or

(b)
in any other specified description of scheme or collective investment

vehicle,


it is taken to have an interest in any shares in which that scheme or vehicle has or

is taken to have an interest.

(4)
For this purpose a scheme or vehicle is taken to have an interest in shares if it

would be regarded as having such an interest in accordance with subsection (2) if

it was an institution to which section (Institutions to which information provisions

apply) applied.

Obligations with respect to provision of information

Margaret Hodge

Added  nc436

To move the following Clause:—

‘(1)
Regulations under section (Power to require information about exercise of voting

rights) may require the provision of specified information about—

(a)
the exercise or non-exercise of voting rights by the institution or any

person acting on its behalf,

(b)
any instructions given by the institution or any person acting on its behalf

as to the exercise or non-exercise of voting rights, and

(c)
any delegation by the institution or any person acting on its behalf of any

functions in relation to the exercise or non-exercise of voting rights or the

giving of such instructions.

(2)
The regulations may require information to be provided in respect of specified

occasions or specified periods.

(3)
Where instructions are given to act on the recommendations or advice of another

person, the regulations may require the provision of information about what

recommendations or advice were given.

(4)
The regulations may require information to be provided—

(a)
in such manner as may be specified, and

(b)
to such persons as may be specified, or to the public, or both.

(5)
The regulations may provide—

(a)
that an institution may discharge its obligations under the regulations by

referring to information disclosed by a person acting on its behalf, and

(b)
that in such a case it is sufficient, where that other person acts on behalf

of more than one institution, that the reference is to information given in

aggregated form, that is—

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

(i)
relating to the exercise or non-exercise by that person of voting

rights on behalf of more than one institution, or

(ii)
relating to the instructions given by that person in respect of the

exercise or non-exercise of voting rights on behalf of more than

one institution, or

(iii)
relating to the delegation by that person of functions in relation

to the exercise or non-exercise of voting rights, or the giving of

instructions in respect of the exercise or non-exercise of voting

rights, on behalf of more than one institution.

(6)
References in this section to instructions are to instructions of any description,

whether general or specific, whether binding or not and whether or not acted

upon.’.

Directors to have regard to interests of employees

Mr Jonathan Djanogly

Mr Crispin Blunt

James Brokenshire

Not called  NC1

To move the following Clause:—

‘(1)
The matters to which the directors of a company are to have regard in the

performance of their functions include the interests of the company’s employees

in general, as well as the interests of its members.

(2)
Accordingly, the duty imposed by this section on the directors is owed by them

to the company (and the company alone) and is enforceable in the same way as

any other fiduciary duty owed to a company by its directors.

(3)
This section applies to shadow directors as it it does to directors.’.

Names and addresses of members of companies: company application

Mr Jonathan Djanogly

Mr Crispin Blunt

James Brokenshire

Negatived on division  NC2

To move the following Clause:—

‘(1)
Subject to the provisions of this section, a company may make an application

under this section to the Secretary of State where the condition in subsection (2)

is satisfied.

(2)
The condition referred to in subsection (1) above is that the company considers

that the availability for inspection by members of the public of particulars of the

names and usual residential or business addresses of the members of the company

creates, or (if an order is not made under this section) is likely to create, a serious

risk that a member of the company or a person who lives with or is an employee

of a member of the company will be subjected to violence or intimidation (“a

serious risk”).