Company Law Reform Bill [HL] (375-378)

House of Commons

Session 2005 - 06
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Other Bills before Parliament

Company Law Reform Bill [HL] (375-378)

Company Law Reform Bill [HL] (changed to Companies Bill [HL])
Part 23 — Information about interests in a company’s shares
375

(d)
empower the authority making the regulations to delegate to any
person willing and able to discharge them any functions of the
authority under the regulations.
799
Duty to consult
Before making—
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(a)
regulations under this Chapter, or
(b)
any order under section 797,
the authority having power to make regulations under this Chapter must carry
out such consultation as appears to it to be appropriate.
Part 23
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Information about interests in a company’s shares
Introductory
800
Companies to which this Part applies

This Part applies only to public companies.
801
Shares to which this Part applies
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(1)
References in this Part to a company’s shares are to the company’s issued
shares of a class carrying rights to vote in all circumstances at general meetings
of the company (including any shares held as treasury shares).
(2)
The temporary suspension of voting rights in respect of any shares does not
affect the application of this Part in relation to interests in those or any other
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shares.
Notice requiring information about interests in shares
802
Notice by company requiring information about interests in its shares
(1)
A public company may give notice under this section to any person whom the
company knows or has reasonable cause to believe—
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(a)
to be interested in the company’s shares, or
(b)
to have been so interested at any time during the three years
immediately preceding the date on which the notice is issued.
(2)
The notice may require the person—
(a)
to confirm that fact or (as the case may be) to state whether or not it is
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the case, and
(b)
if he holds, or has during that time held, any such interest, to give such
further information as may be required in accordance with the
following provisions of this section.
(3)
The notice may require the person to whom it is addressed to give particulars
35
of his own present or past interest in the company’s shares (held by him at any
time during the three year period mentioned in subsection (1)(b)).
(4)
The notice may require the person to whom it is addressed, where—

Company Law Reform Bill [HL] (changed to Companies Bill [HL])
Part 23 — Information about interests in a company’s shares
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(a)
his interest is a present interest and another interest in the shares
subsists, or
(b)
another interest in the shares subsisted during that three year period at
a time when his interest subsisted,

to give, so far as lies within his knowledge, such particulars with respect to that
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other interest as may be required by the notice.
(5)
The particulars referred to in subsections (3) and (4) include—
(a)
the identity of persons interested in the shares in question, and
(b)
whether persons interested in the same shares are or were parties to—
(i)
an agreement to which section 828 applies (certain share
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acquisition agreements), or
(ii)
an agreement or arrangement relating to the exercise of any
rights conferred by the holding of the shares.
(6)
The notice may require the person to whom it is addressed, where his interest
is a past interest, to give (so far as lies within his knowledge) particulars of the
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identity of the person who held that interest immediately upon his ceasing to
hold it.
(7)
The information required by the notice must be given within such reasonable
time as may be specified in the notice.
803
Notice requiring information: order imposing restrictions on shares
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(1)
Where—
(a)
a notice under section 802 (notice requiring information about interests
in company’s shares) is served by a company on a person who is or was
interested in shares in the company, and
(b)
that person fails to give the company the information required by the
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notice within the time specified in it,

the company may apply to the court for an order directing that the shares in
question be subject to the restrictions of Part 15 of the Companies Act 1985
(c. 6).
(2)
If the court is satisfied that such an order may unfairly affect the rights of third
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parties in respect of the shares, the court may, for the purpose of protecting
those rights and subject to such terms as it thinks fit, direct that such acts by
such persons or descriptions of persons and for such purposes as may be set
out in the order shall not constitute a breach of the restrictions.
(3)
On an application under this section the court may make an interim order.
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Any such order may be made unconditionally or on such terms as the court
thinks fit.
804
Notice requiring information: offences
(1)
A person who—
(a)
fails to comply with a notice under section 802 (notice requiring
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information about interests in company’s shares), or
(b)
in purported compliance with such a notice—
(i)
makes a statement that he knows to be false in a material
particular, or

Company Law Reform Bill [HL] (changed to Companies Bill [HL])
Part 23 — Information about interests in a company’s shares
377

(ii)
recklessly makes a statement that is false in a material
particular,

commits an offence.
(2)
A person does not commit an offence under subsection (1)(a) if he proves that
the requirement to give information was frivolous or vexatious.
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(3)
A person guilty of an offence under this section 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
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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).
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805
Notice requiring information: persons exempted from obligation to comply
(1)
A person is not obliged to comply with a notice under section 802 (notice
requiring information about interests in company’s shares) if he is for the time
being exempted by the Secretary of State from the operation of that section.
(2)
The Secretary of State must not grant any such exemption unless—
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(a)
he has consulted the Governor of the Bank of England, and
(b)
he (the Secretary of State) is satisfied that, having regard to any
undertaking given by the person in question with respect to any
interest held or to be held by him in any shares, there are special
reasons why that person should not be subject to the obligations
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imposed by that section.
Power of members to require company to act
806
Power of members to require company to act
(1)
The members of a company may require it to exercise its powers under section
802 (notice requiring information about interests in shares).
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(2)
A company is required to do so once it has received requests (to the same
effect) from members of the company holding at least 10% of such of the paid-
up capital of the company as carries a right to vote at general meetings of the
company (excluding any voting rights attached to any shares in the company
held as treasury shares).
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(3)
A request—
(a)
may be in hard copy form or in electronic form,
(b)
must—
(i)
state that the company is requested to exercise its powers under
section 802,
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(ii)
specify the manner in which the company is requested to act,
and
(iii)
give reasonable grounds for requiring the company to exercise
those powers in the manner specified, and

Company Law Reform Bill [HL] (changed to Companies Bill [HL])
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(c)
must be authenticated by the person or persons making it.
807
Duty of company to comply with requirement
(1)
A company that is required under section 806 to exercise its powers under
section 802 (notice requiring information about interests in company’s shares)
must exercise those powers in the manner specified in the requests.
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(2)
If default is made in complying with subsection (1) an offence is committed by
every officer of the company who is in default.
(3)
A person guilty of an offence under this section is liable—
(a)
on conviction on indictment, to a fine;
(b)
on summary conviction, to a fine not exceeding the statutory
10
maximum.
808
Report to members on outcome of investigation
(1)
On the conclusion of an investigation carried out by a company in pursuance
of a requirement under section 806 the company must cause a report of the
information received in pursuance of the investigation to be prepared.
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The report must be made available at the company’s registered office within a
reasonable period (not more than 15 days) after the conclusion of the
investigation.
(2)
Where—
(a)
a company undertakes an investigation in pursuance of a requirement
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under section 806, and
(b)
the investigation is not concluded within three months after the date on
which the company became subject to the requirement,

the company must cause to be prepared in respect of that period, and in respect
of each succeeding period of three months ending before the conclusion of the
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investigation, an interim report of the information received during that period
in pursuance of the investigation.
(3)
Each such report must be made available at the company’s registered office
within a reasonable period (not more than 15 days) after the end of the period
to which it relates.
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(4)
The company must within three days of making any report prepared under
this section available at its registered office, notify the members who made the
requests under section 802 that the report is so available.
(5)
For the purposes of this section an investigation carried out by a company in
pursuance of a requirement under section 806 is concluded when—
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(a)
the company has made all such inquiries as are necessary or expedient
for the purposes of the requirement, and
(b)
in the case of each such inquiry—
(i)
a response has been received by the company, or
(ii)
the time allowed for a response has elapsed.
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(6)
A report prepared under this section must be kept at the company’s registered
office for at least six years after the day on which it is first made available there.