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

612

 

Company Law Reform Bill[ [], continued

 
 

(3)    

Where, on an application made by a company under this section, the Secretary of

 

State is satisfied that the availability for inspection by members of the public of

 

the particulars of that company’s members’ usual residential addresses creates or

 

(if an order is not made under this section) is likely to create a serious risk that a

 

member, or a person who lives with him, or an employee of his will be subjected

 

to violence, intimidation or criminal activity, he shall make an order under this

 

section (“a company member’s confidentiality order”) in relation to the company.

 

(4)    

Where the Secretary of State is not satisfied under subsection (3) he shall dismiss

 

the application.

 

(5)    

At any time when a company member’s confidentiality order is in force in

 

relation to a company, the name and address of any individual in the register of

 

members of the company that is the subject of the confidentiality order, shall not

 

be disclosed to any person who may request either company or Companies House

 

disclosure of such names and addresses save in prescribed circumstances.

 

(6)    

The Secretary of State shall give the applicant notice of his decision under

 

subsection (3) or (4); and a notice under this subsection shall be given within such

 

period and shall contain such information as may be prescribed.

 

(7)    

The Secretary of State may at any time revoke a company members

 

confidentiality order if he is satisfied that such conditions as may be prescribed

 

are satisfied.’.

 


 

Names and addresses of members of companies: individual application

 

Mr Jonathan Djanogly

 

Mr Crispin Blunt

 

James Brokenshire

 

Not called  NC3

 

To move the following Clause:—

 

‘(1)    

Subject to the provisions of this section, an individual 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 individual—

 

(a)    

is or proposes to become a member of a relevant company; and

 

(b)    

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

 

particulars of his name and usual residential or business address creates,

 

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

 

risk that he or a person who lives with him or an employee of his will be

 

subjected to violence, intimidation or criminal activity (“a serious risk”).

 

(3)    

Where, on an application made by an individual under this section, the Secretary

 

of State is satisified that the availability for inspection by members of the public

 

of the particulars of the individual’s usual residential address creates or (if an

 

order is not made under this section) is likely to create a serious risk that the

 

individual, or a person who lives with him, or an employee of his will be

 

subjected to violence, intimidation or criminal activity, he shall make an order

 

under this section (“an individual member’s confidentiality order”) in relation to

 

him.

 

(4)    

Where the Secretary of State is not satisfied under subsection (3) he shall dismiss

 

the application.

 

(5)    

At any time when an individual member’s confidentiality order is in force in

 

relation to an individual the name and address of the individual in the register of


 
 

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

613

 

Company Law Reform Bill[ [], continued

 
 

members of the company which is the subject of the confidentiality order shall

 

not be disclosed to any person who may request either company or Companies

 

House disclosure of such name and address save in prescribed circumstances.

 

(6)    

The Secretary of State shall give the applicant notice of his decision under

 

subsection (3) or (4); and a notice under this subsection shall be given within such

 

period and shall contain such information as may be prescribed.

 

(7)    

The Secretary of State may at any time revoke an individual member’s

 

condidentiality order if he is satisfied that such conditions as may be prescribed

 

are satisfied.’.

 


 

Entries relating to former members

 

Mr Jonathan Djanogly

 

Mr Crispin Blunt

 

James Brokenshire

 

Not selected  NC4

 

To move the following Clause:—

 

‘The provisions of this Chapter apply to the separate register as they apply to the

 

register, with any necessary modifications.’.

 


 

Auditors’ report on business reviews

 

David Howarth

 

Lorely Burt

 

Mark Hunter

 

Not called  NC21

 

To move the following Clause:—

 

‘(1)    

A business review must—

 

(a)    

state whether it has been prepared in accordance with relevant reporting

 

standards, and

 

(b)    

contain particulars of, and reasons for, any departure from such

 

standards.

 

(2)    

The auditors must state in their report—

 

(a)    

whether in their opinion the information given in the business review for

 

the financial year for which the annual accounts are prepared is consistent

 

with those accounts; and

 

(b)    

whether any matters have come to their attention, in the performance of

 

their functions as auditors of the company, which in their opinion are

 

inconsistent with the information given in the operating and financial

 

review.

 

(3)    

In this section, “reporting standards” means statements of standard reporting

 

practice which—

 

(a)    

relate to business reviews, and


 
 

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

614

 

Company Law Reform Bill[ [], continued

 
 

(b)    

are issued by a body or bodies specified in an order made by the Secretary

 

of State.

 

(4)    

References in this section to relevant reporting standards, in relation to a

 

company’s business review, are to such standards as are, in accordance with their

 

terms, applicable to the company’s circumstances and to the review.

 

(5)    

Where or the extent that the directors of a company have complied with a

 

reporting standard, they are presumed (unless the contrary is proved) to have

 

complied with the corresponding requirements of this Part relating to the contents

 

of a business review.’.

 


 

Optional regime for membership register

 

David Howarth

 

Lorely Burt

 

Mark Hunter

 

Not called  NC22

 

To move the following Clause:—

 

‘(1)    

A company may by special resolution exempt itself from any obligation under

 

sections 115 to 117 to allow the inspection of its membership register or to supply

 

a copy of the register or any part of it as long as it undertakes to pass on to all of

 

its members any lawful message or documentation that a member of the company

 

or a member of the public wishes to send to the company’s members.

 

(2)    

The company may charge a reasonable fee for sending a message or

 

documentation under subsection (1).

 

(3)    

Where the company has made an undertaking under subsection (1) and has failed

 

to carry it out, an offence is committed by—

 

(a)    

the company, and

 

(b)    

every officer of the company who is in default.

 

(4)    

A person guilty of an offence under this section is liable on summary conviction

 

to a fine not exceeding level 3 on the standard scale and, for continued

 

contravention, a daily default fine not exceeding one-tenth of level 3 on the

 

standard scale.

 

(5)    

In the case of any such refusal or default the court may by order compel an

 

immediate inspection of the register or, as the case may be, direct that a copy of

 

the register be sent to the person to whom the undertaking was made.’.

 


 

Guidance on interpretation of directors’ duties

 

Jim Cousins

 

Patrick Hall

 

Not called  NC27

 

To move the following Clause:—

 

‘(1)    

The Secretary of State shall from time to time publish binding statutory guidance

 

as to the interpretation of the duties imposed on directors by section 158.


 
 

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

615

 

Company Law Reform Bill[ [], continued

 
 

(2)    

Before publishing the guidance referred to in subsection (1), the Secretary of

 

State shall consult such persons or bodies as he considers relevant.’.

 


 

Annual general meeting of private company

 

Mr Jonathan Djanogly

 

Mr Crispin Blunt

 

James Brokenshire

 

Not called  NC31

 

To move the following Clause:—

 

‘A private company is not required to hold an annual general meeting but section

 

312 shall apply to a private company if it decides to call an annual general

 

meeting.’.

 


 

Rectification of the register without court order

 

Mr Jonathan Djanogly

 

Mr Crispin Blunt

 

James Brokenshire

 

Not selected  nc32

 

To move the following Clause:—

 

‘(1)    

The Secretary of State may by regulations make provision for the registrar, on

 

application, to remove from the register any material that derives either from

 

anything done without the authority of the company or from something that is

 

forged.

 

(2)    

Regulations under this section are subject to the affirmative resolution

 

procedure.’.

 


 

Guidance on content of the business review

 

Mr Keith Vaz

 

Not called  NC33

 

To move the following Clause:—

 

‘(1)    

The Secretary of State shall from time to time publish binding, statutory guidance

 

as to the information of each kind mentioned in section 399(4A) to be included in

 

the business review.


 
 

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

616

 

Company Law Reform Bill[ [], continued

 
 

(2)    

Before publishing the guidance referred to in subsection (1), the Secretary of

 

State shall consult such persons or bodies as he considers relevant.’.

 


 

Civil actions and foreign subsidiaries

 

Mr Keith Vaz

 

Not called  NC34

 

To move the following Clause:—

 

‘(1)    

For this purposes of this section—

 

“parent jurisdiction” means the jurisdiction within the United Kingdom in

 

which the parent company is incorporated or (as the case may be)

 

registered;

 

“relevant claim” means any claim by any natural person against a relevant

 

subsidiary in respect of personal injury suffered by the claimant outside

 

the United Kingdom;

 

“relevant person” means any body corporate incorporated in the United

 

Kingdom or incorporated outside the United Kingdom but required to

 

register a branch or place of business in the United Kingdom;

 

“relevant subsidiary” means a subsidiary of a relevant parent which is

 

incorporated outside of the United Kingdom.

 

(2)    

The courts of the parent jurisdiction shall have jurisdiction to determine whether

 

a parent company and its relevant subsidiary shall be jointly and severally liable

 

in respect of any relevant claim pursuant to subsection (3) below.

 

(3)    

In the event that any relevant subsidiary is held liable (whether under this section

 

or otherwise and whether in the courts of the United Kingdom or otherwise) in

 

respect of any relevant claim, any parent company will be jointly and severally

 

liable and that relevant subsidiary in respect of that claim if—

 

(a)    

the parent company—

 

(i)    

was aware or ought reasonably to have been aware of the conduct

 

by the relevant subsidiary which gave rise to the relevant claim;

 

(ii)    

could reasonably foresee that such conduct would give rise to the

 

type of damage which is the subject matter of that claim; and

 

(iii)    

except where a relevant subsidiary is held strictly liable for the

 

consequences of any escape or emission (in which case this

 

paragraph shall not apply), had sufficient opportunity and time in

 

which to take reasonable steps to prevent the loss or injury which

 

is the subject of the relevant claim, but failed to do so; and

 

(b)    

the conduct of the relevant subsidiary which gave rise to the relevant

 

claim would have given rise to some liability (of any kind) on the part of

 

the parent company to that claimant if the parent company had

 

undertaken that conduct itself.’.

 



 
 

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

617

 

Company Law Reform Bill[ [], continued

 
 

Power to extend provisions relating to markets operated by recognised investment

 

exchanges

 

Mr Jonathan Djanogly

 

Mr Crispin Blunt

 

James Brokenshire

 

Not called  NC35

 

To move the following Clause:—

 

‘(1)    

The Secretary of State may by regulations extend the application of the provisions

 

mentioned in subsection (2) to any market (specified by name or description), or

 

to the shares of a company admitted to trading on such market, which—

 

(a)    

is not a market operated by a recognised investment exchange, but

 

(b)    

is a multilateral trading facility (or, assuming compliance with the

 

provisions of Title II of the Directive (authorisation and operating

 

conditions) would be such a facility).

 

(2)    

The provisions mentioned in subsection (1) are—

 

(a)    

section 180 of this Act (exceptions relating to substantial property

 

transactions);

 

(b)    

paragraph 49 of Part 2 of Schedule 2 to this Act (specified descriptions

 

of disclosure by Takeover Panel);

 

(c)    

section 162ZC of the Companies Act 1985 (treatment of shares

 

purchased by a company);

 

(d)    

section 163 of the Companies Act 1985 (definitions of “off-market” and

 

“market” purchase); and

 

(e)    

section 155 of the Companies Act 1989 (default rules in relation to

 

“market contracts”).

 

(3)    

In this section—

 

“the Directive” means Directive 2004/39 of the European Parliament and

 

the Council of 21 April 2004 on markets in financial instruments;

 

“multilateral trading facility” has the same meaning as in Article 4(15) of

 

the Directive;

 

“recognised investment exchange” has the same meaning as in Part 18 of the

 

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

 

the provisions mentioned in subsection (2).

 

(4)    

Regulations under this section may provide for the application of the provisions

 

mentioned in subsection (2) subject to any adaptations appearing to the Secretary

 

of State to be necessary or expedient.

 

(5)    

In subsection (1)(b) the words “(or, assuming compliance with the provisions of

 

Title II of the Directive (authorisation and operating conditions) would be such a

 

facility)” shall cease to have effect on such day as the Secretary of State may by

 

order appoint.

 

(6)    

The power to make regulations or an order under this section is exercisable by

 

statutory instrument.

 

(7)    

A statutory instrument containing—

 

(a)    

regulations under this section, or

 

(b)    

an order under subsection (5),

 

shall be subject to the negative resolution procedure.’.

 



 
 

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

618

 

Company Law Reform Bill[ [], continued

 
 

Distribution out of company share premium account (No. 2)

 

Mr Quentin Davies

 

Not called  NC437

 

To move the following Clause:—

 

‘(1)    

Section 263 of the Companies Act 1985 is amended as follows.

 

(2)    

In subsection (1) after “purpose” insert “except as provided for in section 263(6)”.

 

(3)    

After subsection (5) add—

 

“(6)    

A company may make a distribution out of the company’s share premium

 

account provided that—

 

(a)    

the directors certify that the proposed distribution in its totality

 

amounts to less than the operating cash flow minus depreciation

 

defined as—

 


 

                                       equation: plus[char[S],minus[times[char[C],char[G],char[S]]],minus[lparen[char[G]]],rparen[

char[A]],minus[times[char[N],char[I]]],minus[char[T]],minus[times[char[Delta],char[

W],char[C],char[R]]],minus[char[D]]]

 

    

where—

 

      S is sales,

 

      CGS is the cost of goods sold,

 

      G+A is general and administration expenses,

 

      NI is the net interest charge,

 

      T is the tax charge,

 

      WCR is the working capital requirement, and

 

      D is the depreciation charge of the company in the relevant

 

      year; and

 

(b)    

the directors have made a solvency statement in accordance with

 

section 135B of the Companies Act 1985.”.’.

 


 

Publication of information about exercising of voting rights

 

Mr Jonathan Djanogly

 

Mr Crispin Blunt

 

James Brokenshire

 

Not called  NC438

 

To move the following Clause:—

 

‘Institutions to which section [Power to require information about exercise of

 

voting rights] applies shall publicise, on their website in relation to each

 

opportunity that they have to exercise voting rights attached to shares to which

 

that section applies, whether or not they have exercised such voting rights.’.

 



 
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