Company Law Reform Bill [HL] (463-469)

House of Commons

Session 2005 - 06
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Other Bills before Parliament

Company Law Reform Bill [HL] (463-469)

Company Law Reform Bill [HL] (changed to Companies Bill [HL])
Part 31 — Dissolution and restoration to the register
Chapter 1 — Striking off
463

967
Duty to act in case of company being wound up
(1)
If, in a case where a company is being wound up—
(a)
the registrar has reasonable cause to believe—
(i)
that no liquidator is acting, or
(ii)
that the affairs of the company are fully wound up, and
5
(b)
the returns required to be made by the liquidator have not been made
for a period of six consecutive months,

the registrar must publish in the Gazette and send to the company or the
liquidator (if any) a notice that at the expiration of three months from the date
of the notice the name of the company mentioned in it will, unless cause is
10
shown to the contrary, be struck off the register and the company will be
dissolved.
(2)
At the expiration of the time mentioned in the notice the registrar may, unless
cause to the contrary is previously shown by the company, strike its name off
the register.
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(3)
The registrar must publish notice in the Gazette of the company’s name having
been struck off the register.
(4)
On the publication of the notice in the Gazette the company is dissolved.
(5)
However—
(a)
the liability (if any) of every director, managing officer and member of
20
the company continues and may be enforced as if the company had not
been dissolved, and
(b)
nothing in this section affects the power of the court to wind up a
company the name of which has been struck off the register.
968
Supplementary provisions as to service of letter or notice
25
(1)
A letter or notice to be sent under section 966 or 967 to a company may be
addressed to the company at its registered office or, if no office has been
registered, to the care of some officer of the company.
(2)
If there is no officer of the company whose name and address are known to the
registrar, the letter or notice may be sent to each of the persons who subscribed
30
the memorandum (if their addresses are known to the registrar).
(3)
A notice to be sent to a liquidator under section 967 may be addressed to him
at his last known place of business
Voluntary striking off
969
Striking off on application by company
35
(1)
On application by a company, the registrar of companies may strike the
company’s name off the register.
(2)
The application—
(a)
must be made on the company’s behalf by its directors or by a majority
of them, and
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(b)
must contain the prescribed information.

Company Law Reform Bill [HL] (changed to Companies Bill [HL])
Part 31 — Dissolution and restoration to the register
Chapter 1 — Striking off
464

(3)
The registrar may not strike a company off under this section until after the
expiration of three months from the publication by the registrar in the Gazette
of a notice—
(a)
stating that the registrar may exercise the power under this section in
relation to the company, and
5
(b)
inviting any person to show cause why that should not be done.
(4)
The registrar must publish notice in the Gazette of the company’s name having
been struck off.
(5)
On the publication of the notice in the Gazette the company is dissolved.
(6)
However—
10
(a)
the liability (if any) of every director, managing officer and member of
the company continues and may be enforced as if the company had not
been dissolved, and
(b)
nothing in this section affects the power of the court to wind up a
company the name of which has been struck off the register.
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970
Circumstances in which application not to be made: activities of company
(1)
An application under section 969 on behalf of a company must not be made if,
at any time in the previous three months, the company has—
(a)
changed its name,
(b)
traded or otherwise carried on business,
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(c)
made a disposal for value of property or rights that, immediately before
ceasing to trade or otherwise carry on business, it held for the purpose
of disposal for gain in the normal course of trading or otherwise
carrying on business, or
(d)
engaged in any other activity, except one which is—
25
(i)
necessary or expedient for the purpose of making an
application under that section, or deciding whether to do so,
(ii)
necessary or expedient for the purpose of concluding the affairs
of the company,
(iii)
necessary or expedient for the purpose of complying with any
30
statutory requirement, or
(iv)
specified by the Secretary of State by order for the purposes of
this sub-paragraph.
(2)
For the purposes of this section, a company is not to be treated as trading or
otherwise carrying on business by virtue only of the fact that it makes a
35
payment in respect of a liability incurred in the course of trading or otherwise
carrying on business.
(3)
The Secretary of State may by order amend subsection (1) for the purpose of
altering the period in relation to which the doing of the things mentioned in
paragraphs (a) to (d) of that subsection is relevant.
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(4)
An order under this section is subject to negative resolution procedure.
(5)
It is an offence for a person to make an application in contravention of this
section.
(6)
In proceedings for such an offence it is a defence for the accused to prove that
he did not know, and could not reasonably have known, of the existence of the
45
facts that led to the contravention.

Company Law Reform Bill [HL] (changed to Companies Bill [HL])
Part 31 — Dissolution and restoration to the register
Chapter 1 — Striking off
465

(7)
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
maximum.
971
Circumstances in which application not to be made: other proceedings not
5
concluded
(1)
An application under section 969 on behalf of a company must not be made at
a time when—
(a)
an application to the court under Part 27 has been made on behalf of the
company for the sanctioning of a compromise or arrangement and the
10
matter has not been finally concluded;
(b)
a voluntary arrangement in relation to the company has been proposed
under Part 1 of the Insolvency Act 1986 (c. 45) or Part 2 of the
Insolvency (Northern Ireland) Order 1989 (S.I. 1989/2405 (N.I. 19)) and
the matter has not been finally concluded;
15
(c)
the company is in administration under Part 2 of that Act or Part 3 of
that Order;
(d)
paragraph 44 of Schedule B1 to that Act or paragraph 45 of Schedule B1
to that Order applies (interim moratorium on proceedings where
application to the court for an administration order has been made or
20
notice of intention to appoint administrator has been filed);
(e)
the company is being wound up under Part 4 of that Act or Part 5 of that
Order, whether voluntarily or by the court, or a petition under that Part
for winding up of the company by the court has been presented and not
finally dealt with or withdrawn;
25
(f)
there is a receiver or manager of the company’s property;
(g)
the company’s estate is being administered by a judicial factor.
(2)
For the purposes of subsection (1)(a), the matter is finally concluded if—
(a)
the application has been withdrawn,
(b)
the application has been finally dealt with without a compromise or
30
arrangement being sanctioned by the court, or
(c)
a compromise or arrangement has been sanctioned by the court and
has, together with anything required to be done under any provision
made in relation to the matter by order of the court, been fully carried
out.
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(3)
For the purposes of subsection (1)(b), the matter is finally concluded if—
(a)
no meetings are to be summoned under section 3 of the Insolvency Act
1986 or Article 16 of the Insolvency (Northern Ireland) Order 1989
(S.I. 1989/2405 (N.I. 19)),
(b)
meetings summoned under that section or Article fail to approve the
40
arrangement with no, or the same, modifications,
(c)
an arrangement approved by meetings summoned under that section,
or in consequence of a direction under section 6(4)(b) of that Act or
Article 19(4)(b) of that Order, has been fully implemented, or
(d)
the court makes an order under section 6(5) of that Act or Article 19(5)
45
of that Order revoking approval given at previous meetings and, if the
court gives any directions under section 6(6) of that Act or Article 19(6)
of that Order, the company has done whatever it is required to do
under those directions.

Company Law Reform Bill [HL] (changed to Companies Bill [HL])
Part 31 — Dissolution and restoration to the register
Chapter 1 — Striking off
466

(4)
It is an offence for a person to make an application in contravention of this
section.
(5)
In proceedings for such an offence it is a defence for the accused to prove that
he did not know, and could not reasonably have known, of the existence of the
facts that led to the contravention.
5
(6)
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
maximum.
972
Copy of application to be given to members, employees, etc
10
(1)
A person who makes an application under section 969 on behalf of a company
must secure that, within seven days from the day on which the application is
made, a copy of it is given to every person who at any time on that day is—
(a)
a member of the company,
(b)
an employee of the company,
15
(c)
a creditor of the company,
(d)
a director of the company,
(e)
a manager or trustee of any pension fund established for the benefit of
employees of the company, or
(f)
a person of a description specified for the purposes of this paragraph
20
by regulations made by the Secretary of State.

Regulations under paragraph (f) are subject to negative resolution procedure.
(2)
Subsection (1) does not require a copy of the application to be given to a
director who is a party to the application.
(3)
The duty imposed by this section ceases to apply if the application is
25
withdrawn before the end of the period for giving the copy application.
(4)
A person who fails to perform the duty imposed on him by this section
commits an offence.

If he does so with the intention of concealing the making of the application
from the person concerned, he commits an aggravated offence.
30
(5)
In proceedings for an offence under this section it is a defence for the accused
to prove that he took all reasonable steps to perform the duty.
(6)
A person guilty of an offence under this section (other than an aggravated
offence) is liable—
(a)
on conviction on indictment, to a fine;
35
(b)
on summary conviction, to a fine not exceeding the statutory
maximum.
(7)
A person guilty of an aggravated offence under this section is liable—
(a)
on conviction on indictment, to imprisonment for a term not exceeding
seven years or a fine (or both);
40
(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);

Company Law Reform Bill [HL] (changed to Companies Bill [HL])
Part 31 — Dissolution and restoration to the register
Chapter 1 — Striking off
467

(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).
973
Copy of application to be given to new members, employees, etc
(1)
This section applies in relation to any time after the day on which a company
5
makes an application under section 969 (application for voluntary striking off)
and before the day on which the application is finally dealt with or withdrawn.
(2)
A person who is a director of the company at the end of a day on which a
person (other than himself) becomes—
(a)
a member of the company,
10
(b)
an employee of the company,
(c)
a creditor of the company,
(d)
a director of the company,
(e)
a manager or trustee of any pension fund established for the benefit of
employees of the company, or
15
(f)
a person of a description specified for the purposes of this paragraph
by regulations made by the Secretary of State,

must secure that a copy of the application is given to that person within seven
days from that day.

Regulations under paragraph (f) are subject to negative resolution procedure.
20
(3)
The duty imposed by this section ceases to apply if the application is finally
dealt with or withdrawn before the end of the period for giving the copy
application.
(4)
A person who fails to perform the duty imposed on him by this section
commits an offence.
25

If he does so with the intention of concealing the making of the application
from the person concerned, he commits an aggravated offence.
(5)
In proceedings for an offence under this section it is a defence for the accused
to prove—
(a)
that at the time of the failure he was not aware of the fact that the
30
company had made an application under section 969, or
(b)
that he took all reasonable steps to perform the duty.
(6)
A person guilty of an offence under this section (other than an aggravated
offence) is liable—
(a)
on conviction on indictment, to a fine;
35
(b)
on summary conviction, to a fine not exceeding the statutory
maximum.
(7)
A person guilty of an aggravated offence under this section is liable—
(a)
on conviction on indictment, to imprisonment for a term not exceeding
seven years or a fine (or both);
40
(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);

Company Law Reform Bill [HL] (changed to Companies Bill [HL])
Part 31 — Dissolution and restoration to the register
Chapter 1 — Striking off
468

(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).
974
Copy of application: provisions as to service of documents
(1)
The following provisions have effect for the purposes of—
5
section 972 (copy of application to be given to members, employees, etc),
and
section 973 (copy of application to be given to new members, employees,
etc).
(2)
A document is treated as given to a person if it is—
10
(a)
delivered to him, or
(b)
left at his proper address, or
(c)
sent by post to him at that address.
(3)
For the purposes of subsection (2) and section 7 of the Interpretation Act 1978
(c. 30) (service of documents by post) as it applies in relation to that subsection,
15
the proper address of a person is—
(a)
in the case of a firm incorporated or formed in the United Kingdom, its
registered or principal office;
(b)
in the case of a firm incorporated or formed outside the United
Kingdom—
20
(i)
if it has a place of business in the United Kingdom, its principal
office in the United Kingdom, or
(ii)
if it does not have a place of business in the United Kingdom, its
registered or principal office;
(c)
in the case of an individual, his last known address.
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(4)
In the case of a creditor of the company a document is treated as given to him
if it is left or sent by post to him—
(a)
at the place of business of his with which the company has had dealings
by virtue of which he is a creditor of the company, or
(b)
if there is more than one such place of business, at each of them.
30
975
Circumstances in which application to be withdrawn
(1)
This section applies where, at any time on or after the day on which a company
makes an application under section 969 and before the day on which the
application is finally dealt with or withdrawn—
(a)
the company—
35
(i)
changes its name,
(ii)
trades or otherwise carries on business,
(iii)
makes a disposal for value of any property or rights other than
those which it was necessary or expedient for it to hold for the
purpose of making, or proceeding with, an application under
40
that section, or
(iv)
engages in any activity, except one to which subsection (3)
applies;
(b)
an application is made to the court under Part 27 on behalf of the
company for the sanctioning of a compromise or arrangement;
45

Company Law Reform Bill [HL] (changed to Companies Bill [HL])
Part 31 — Dissolution and restoration to the register
Chapter 1 — Striking off
469

(c)
a voluntary arrangement in relation to the company is proposed under
Part 1 of the Insolvency Act 1986 (c. 45) or Part 2 of the Insolvency
(Northern Ireland) Order 1989 (S.I. 1989/2405 (N.I. 19));
(d)
an application to the court for an administration order in respect of the
company is made under paragraph 12 of Schedule B1 to that Act or
5
paragraph 13 of Schedule B1 to that Order;
(e)
an administrator is appointed in respect of the company under
paragraph 14 or 22 of Schedule B1 to that Act or paragraph 15 or 23 of
Schedule B1 to that Order, or a copy of notice of intention to appoint an
administrator of the company under any of those provisions is filed
10
with the court;
(f)
there arise any of the circumstances in which, under section 84(1) of
that Act or Article 70 of that Order, the company may be voluntarily
wound up;
(g)
a petition is presented for the winding up of the company by the court
15
under Part 4 of that Act or Part 5 of that Order;
(h)
a receiver or manager of the company’s property is appointed; or
(i)
a judicial factor is appointed to administer the company’s estate.
(2)
A person who, at the end of a day on which any of the events mentioned in
subsection (1) occurs, is a director of the company must secure that the
20
company’s application is withdrawn forthwith.
(3)
For the purposes of subsection (1)(a), a company is not treated as trading or
otherwise carrying on business by virtue only of the fact that it makes a
payment in respect of a liability incurred in the course of trading or otherwise
carrying on business.
25
(4)
The excepted activities referred to in subsection (1)(a)(iv) are—
(a)
any activity necessary or expedient—
(i)
for the purpose of making, or proceeding with, an application
under section 969, or
(ii)
for the purpose of concluding affairs of the company that are
30
outstanding because of what has been necessary or expedient
for the purpose of making, or proceeding with, such an
application;
(b)
any activity necessary or expedient for the purpose of complying with
any statutory requirement;
35
(c)
any activity specified by the Secretary of State by order for the purposes
of this subsection.

An order under paragraph (c) is subject to negative resolution procedure.
(5)
A person who fails to perform the duty imposed on him by this section
commits an offence.
40
(6)
In proceedings for an offence under this section it is a defence for the accused
to prove—
(a)
that at the time of the failure he was not aware of the fact that the
company had made an application under section 969, or
(b)
that he took all reasonable steps to perform the duty.
45
(7)
A person guilty of an offence under this section is liable—
(a)
on conviction on indictment, to a fine;