sc1902007.619-621

House of Commons

Session 2005 - 06
Internet Publications
Other Bills before Parliament

S.C.D.  Standing Committee Proceedings: 20th July 2006
619

Company Law Reform Bill–[ [], continued

Margaret Hodge

Added  NS1

To move the following Schedule:—

Meaning of “subsidiary” etc: supplementary provisions

Introduction

1
The provisions of this Part of this Schedule explain expressions used in section

(Meaning of “subsidiary” etc) (meaning of “subsidiary” etc) and otherwise

supplement that section.

Voting rights in a company

2
In section (Meaning of “subsidiary” etc)(1)(a) and (c) the references to the

voting rights in a company are to the rights conferred on shareholders in

respect of their shares or, in the case of a company not having a share capital,

on members, to vote at general meetings of the company on all, or substantially

all, matters.

Right to appoint or remove a majority of the directors

3    (1)
In section (Meaning of “subsidiary” etc)(1)(b) the reference to the right to

appoint or remove a majority of the board of directors is to the right to appoint

or remove directors holding a majority of the voting rights at meetings of the

board on all, or substantially all, matters.

      (2)
A company shall be treated as having the right to appoint to a directorship if—

(a)
a person’s appointment to it follows necessarily from his appointment

as director of the company, or

(b)
the directorship is held by the company itself.

      (3)
A right to appoint or remove which is exercisable only with the consent or

concurrence of another person shall be left out of account unless no other

person has a right to appoint or, as the case may be, remove in relation to that

directorship.

Rights exercisable only in certain circumstances or temporarily incapable of exercise

4    (1)
Rights which are exercisable only in certain circumstances shall be taken into

account only—

(a)
when the circumstances have arisen, and for so long as they continue

to obtain, or

(b)
when the circumstances are within the control of the person having the

rights.

      (2)
Rights which are normally exercisable but are temporarily incapable of

exercise shall continue to be taken into account.

Rights held by one person on behalf of another

5
Rights held by a person in a fiduciary capacity shall be treated as not held by

him.

6    (1)
Rights held by a person as nominee for another shall be treated as held by the

other.

S.C.D.  Standing Committee Proceedings: 20th July 2006
620

Company Law Reform Bill–[ [], continued

      (2)
Rights shall be regarded as held as nominee for another if they are exercisable

only on his instructions or with his consent or concurrence.

Rights attached to shares held by way of security

7
Rights attached to shares held by way of security shall be treated as held by the

person providing the security—

(a)
where apart from the right to exercise them for the purpose of

preserving the value of the security, or of realising it, the rights are

exercisable only in accordance with his instructions, and

(b)
where the shares are held in connection with the granting of loans as

part of normal business activities and apart from the right to exercise

them for the purpose of preserving the value of the security, or of

realising it, the rights are exercisable only in his interests.

Rights attributed to holding company

8    (1)
Rights shall be treated as held by a holding company if they are held by any of

its subsidiary companies.

      (2)
Nothing in paragraph 6 or 7 shall be construed as requiring rights held by a

holding company to be treated as held by any of its subsidiaries.

      (3)
For the purposes of paragraph 7 rights shall be treated as being exercisable in

accordance with the instructions or in the interests of a company if they are

exercisable in accordance with the instructions of or, as the case may be, in the

interests of—

(a)
any subsidiary or holding company of that company, or

(b)
any subsidiary of a holding company of that company.

Disregard of certain rights

9
The voting rights in a company shall be reduced by any rights held by the

company itself.

Supplementary

10
References in any provision of paragraphs 5 to 9 to rights held by a person

include rights falling to be treated as held by him by virtue of any other

provision of those paragraphs but not rights which by virtue of any such

provision are to be treated as not held by him.’.

Clauses 813 and 814 Agreed to.

Margaret Hodge

Agreed to  114

Schedule  9,  page  509,  line  17,  at end insert—

‘authorised signatory
section (Authorised signatories)’.

S.C.D.  Standing Committee Proceedings: 20th July 2006
621

Company Law Reform Bill–[ [], continued

Margaret Hodge

Agreed to  453

Schedule  9,  page  512,  leave out line 22.

Margaret Hodge

Agreed to  454

Schedule  9,  page  517,  line  22,  at end insert—

‘small companies regime, for accounts and reports
section 363’.

Margaret Hodge

Agreed to  115

Schedule  9,  page  514,  line  32,  leave out ‘section 362 of the 1985 Act’ and insert

‘section (Overseas branch registers)(1)’.

Margaret Hodge

Agreed to  310

Schedule  9,  page  515,  line  36,  at end insert—

‘qualifying pension scheme indemnity
section (Qualifying pension scheme

provision (in Chapter 7 of Part 10)
indemnity provision)’.

Schedule, as amended, Agreed to.

Clauses 815 to 820 and 920 Agreed to.

Mr Jonathan Djanogly

Mr Crispin Blunt

James Brokenshire

Not called  353

Schedule  16,  page  543,  line  30,  at end insert ‘in section 153(3)(d), the words “or

purchase”.’.

Schedule Agreed to.

Margaret Hodge

Agreed to  524

Title,  line  3,  after ‘about’ insert ‘directors’ disqualification,’.

Bill, as amended, to be reported.