Company Law Reform Bill [HL] (20-24)

House of Commons

Session 2005 - 06
Internet Publications
Other Bills before Parliament

Company Law Reform Bill [HL] (20-24)

Company Law Reform Bill [HL] (changed to Companies Bill [HL])
Part 4 — A company’s capacity and related matters
20

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Execution of deeds
(1)
A document is validly executed by a company as a deed for the purposes of
section 1(2)(b) of the Law of Property (Miscellaneous Provisions) Act 1989
(c. 34) and for the purposes of the law of Northern Ireland if, and only if—
(a)
it is duly executed by the company, and
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(b)
it is delivered as a deed.
(2)
For the purposes of subsection (1)(b) a document is presumed to be delivered
upon its being executed, unless a contrary intention is proved.
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Execution of deeds or other documents by attorney
(1)
Under the law of England and Wales or Northern Ireland a company may, by
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instrument in writing, empower a person, either generally or in respect of
specified matters, as its attorney to execute deeds or other documents on its
behalf.
(2)
A deed or other document so executed, whether in the United Kingdom or
elsewhere, has effect as if executed by the company.
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Authentication of documents

A document or proceedings requiring authentication by a company is
sufficiently authenticated for the purposes of the law of England and Wales or
Northern Ireland by a signature of a person authorised by the company to act
on its behalf.
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Formalities of doing business under the law of Scotland
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Execution of documents by companies
(1)
The following provisions form part of the law of Scotland only.
(2)
Notwithstanding the provisions of any enactment, a company need not have a
company seal.
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(3)
For the purposes of any enactment—
(a)
providing for a document to be executed by a company by affixing its
common seal, or
(b)
referring (in whatever terms) to a document so executed,

a document signed or subscribed by or on behalf of the company in accordance
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with the provisions of the Requirements of Writing (Scotland) Act 1995 (c. 7)
has effect as if so executed.
Other matters
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Official seal for use abroad
(1)
A company that has a common seal may have an official seal for use outside
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the United Kingdom.
(2)
The official seal must be a facsimile of the company’s common seal, with the
addition on its face of the place or places where it is to be used.

Company Law Reform Bill [HL] (changed to Companies Bill [HL])
Part 4 — A company’s capacity and related matters
21

(3)
The official seal when duly affixed to a document has the same effect as the
company’s common seal.

This subsection does not extend to Scotland.
(4)
A company having an official seal for use outside the United Kingdom may—
(a)
by writing under its common seal, or
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(b)
as respects Scotland, by writing subscribed in accordance with the
Requirements of Writing (Scotland) Act 1995 (c. 7),

authorise any person appointed for the purpose to affix the official seal to any
deed or other document to which the company is party.
(5)
As between the company and a person dealing with such an agent, the agent’s
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authority continues—
(a)
during the period mentioned in the instrument conferring the
authority, or
(b)
if no period is mentioned, until notice of the revocation or termination
of the agent’s authority has been given to the person dealing with him.
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(6)
The person affixing the official seal must certify in writing on the deed or other
document to which the seal is affixed the date on which, and place at which, it
is affixed.
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Official seal for share certificates etc
(1)
A company that has a common seal may have an official seal for use—
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(a)
for sealing securities issued by the company, or
(b)
for sealing documents creating or evidencing securities so issued.
(2)
The official seal—
(a)
must be a facsimile of the company’s common seal, with the addition
on its face of the word “Securities”, and
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(b)
when duly affixed to the document has the same effect as the
company’s common seal.
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Pre-incorporation contracts, deeds and obligations
(1)
A contract that purports to be made by or on behalf of a company at a time
when the company has not been formed has effect, subject to any agreement to
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the contrary, as one made with the person purporting to act for the company
or as agent for it, and he is personally liable on the contract accordingly.
(2)
Subsection (1) applies—
(a)
to the making of a deed under the law of England and Wales or
Northern Ireland, and
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(b)
to the undertaking of an obligation under the law of Scotland,

as it applies to the making of a contract.
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Bills of exchange and promissory notes

A bill of exchange or promissory note is deemed to have been made, accepted
or endorsed on behalf of a company if made, accepted or endorsed in the name
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of, or by or on behalf or on account of, the company by a person acting under
its authority.

Company Law Reform Bill [HL] (changed to Companies Bill [HL])
Part 5 — A company’s name
Chapter 1 — General requirements
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Part 5
A company’s name
Chapter 1
General requirements
Prohibited names
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Prohibited names

A company must not be registered under the Companies Acts by a name if, in
the opinion of the Secretary of State—
(a)
its use by the company would constitute an offence, or
(b)
it is offensive.
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Sensitive words and expressions
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Names suggesting connection with government or public authority
(1)
The approval of the Secretary of State is required for a company to be
registered under the Companies Acts by a name that would be likely to give
the impression that the company is connected with—
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(a)
Her Majesty’s Government, any part of the Scottish administration or
Her Majesty’s Government in Northern Ireland,
(b)
a local authority, or
(c)
any public authority specified for the purposes of this section by
regulations made by the Secretary of State.
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(2)
For the purposes of this section—
“local authority” means—
(a)
a local authority within the meaning of the Local Government
Act 1972 (c. 70), the Common Council of the City of London or
the Council of the Isles of Scilly,
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(b)
a council constituted under section 2 of the Local Government
etc. (Scotland) Act 1994 (c. 39), or
(c)
a district council in Northern Ireland;
“public authority” includes any person or body having functions of a
public nature.
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(3)
Regulations under this section are subject to affirmative resolution procedure.
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Other sensitive words or expressions
(1)
The approval of the Secretary of State is required for a company to be
registered under the Companies Acts by a name that includes a word or
expression for the time being specified in regulations made by the Secretary of
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State under this section.
(2)
Regulations under this section are subject to approval after being made.

Company Law Reform Bill [HL] (changed to Companies Bill [HL])
Part 5 — A company’s name
Chapter 1 — General requirements
23

57
Duty to seek comments of government department or other specified body
(1)
The Secretary of State may by regulations under—
(a)
section 55 (name suggesting connection with government or public
authority), or
(b)
section 56 (other sensitive words or expressions),
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require that, in connection with an application for the approval of the Secretary
of State under that section, the applicant must seek the view of a specified
Government department or other body.
(2)
Where such a requirement applies, the applicant must request the specified
department or other body (in writing) to indicate whether (and if so why) it has
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any objections to the proposed name.
(3)
Where a request under this section is made in connection with an application
for the registration of a company under this Act, the application must—
(a)
include a statement that a request under this section has been made,
and
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(b)
be accompanied by a copy of any response received.
(4)
Where a request under this section is made in connection with a change in a
company’s name, the notice of the change sent to the registrar must be
accompanied by—
(a)
a statement by a director or secretary of the company that a request
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under this section has been made, and
(b)
a copy of any response received.
Permitted characters etc
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Permitted characters etc
(1)
The Secretary of State may make provision by regulations—
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(a)
as to the letters or other characters, signs or symbols (including accents
and other diacritical marks) and punctuation that may be used in the
name of a company registered under the Companies Acts; and
(b)
specifying a standard style or format for the name of a company for the
purposes of registration.
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(2)
The regulations may prohibit the use of specified characters, signs or symbols
when appearing in a specified position (in particular, at the beginning of a
name).
(3)
A company may not be registered under the Companies Acts by a name that
consists of or includes anything that is not permitted in accordance with
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regulations under this section.
(4)
Regulations under this section are subject to negative resolution procedure.

Company Law Reform Bill [HL] (changed to Companies Bill [HL])
Part 5 — A company’s name
Chapter 2 — Indications of company type or legal form
24

Chapter 2
Indications of company type or legal form
Required indications for limited companies
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Public limited companies
(1)
The name of a limited company that is a public company must end with
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“public limited company” or “p.l.c.”.
(2)
In the case of a Welsh company, its name may instead end with “cwmni
cyfyngedig cyhoeddus” or “c.c.c.”.
(3)
This section does not apply to community interest companies (but see section
33(3) and (4) of the Companies (Audit, Investigations and Community
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Enterprise) Act 2004 (c. 27)).
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Private limited companies
(1)
The name of a limited company that is a private company must end with
“limited” or “ltd.”.
(2)
In the case of a Welsh company, its name may instead end with “cyfyngedig”
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or “cyf.”.
(3)
Certain companies are exempt from this requirement (see section 61).
(4)
This section does not apply to community interest companies (but see section
33(1) and (2) of the Companies (Audit, Investigations and Community
Enterprise) Act 2004).
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Exemption from requirement as to use of “limited”
(1)
A private company is exempt from section 60 (requirement to have name
ending with “limited” or permitted alternative) if—
(a)
it is a charity,
(b)
it is exempted from the requirement of that section by regulations made
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by the Secretary of State, or
(c)
it meets the conditions specified in—
section 62 (continuation of existing exemption: companies limited
by shares), or
section 63 (continuation of existing exemption: companies limited
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by guarantee).
(2)
The registrar may refuse to register a private limited company by a name that
does not include the word “limited” (or a permitted alternative) unless a
statement has been delivered to him that the company meets the conditions for
exemption.
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(3)
The registrar may accept the statement as sufficient evidence of the matters
stated in it.
(4)
Regulations under this section are subject to negative resolution procedure.