Company Law Reform Bill [HL] (483-489)

House of Commons

Session 2005 - 06
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Company Law Reform Bill [HL] (483-489)

Company Law Reform Bill [HL] (changed to Companies Bill [HL])
Part 32 — Company investigations: amendments
483

1002
Resignation, removal and replacement of inspectors
After section 446B of the Companies Act 1985 (c. 6) (inserted by section 1001
above) insert—
“Resignation, removal and replacement of inspectors
446C
Resignation and revocation of appointment
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(1)
An inspector may resign by notice in writing to the Secretary of State.
(2)
The Secretary of State may revoke the appointment of an inspector by
notice in writing to the inspector.
446D
Appointment of replacement inspectors
(1)
Where—
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(a)
an inspector resigns,
(b)
an inspector’s appointment is revoked, or
(c)
an inspector dies,

the Secretary of State may appoint one or more competent inspectors to
continue the investigation.
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(2)
An appointment under subsection (1) shall be treated for the purposes
of this Part (apart from this section) as an appointment under the
provision of this Part under which the former inspector was appointed.
(3)
The Secretary of State must exercise his power under subsection (1) so
as to secure that at least one inspector continues the investigation.
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(4)
Subsection (3) does not apply if—
(a)
the Secretary of State could give any replacement inspector a
direction under section 446B (termination of investigation), and
(b)
such a direction would (under subsection (4) of that section)
result in a final report not being made.
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(5)
In this section, references to an investigation include any investigation
the former inspector conducted under section 433(1) (power to
investigate affairs of holding company or subsidiary).”.
1003
Power to obtain information from former inspectors etc
(1)
After section 446D of the Companies Act 1985 (inserted by section 1002 above)
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insert—
“Power to obtain information from former inspectors etc
446E
Obtaining information from former inspectors etc
(1)
This section applies to a person who was appointed as an inspector
under this Part—
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(a)
who has resigned, or
(b)
whose appointment has been revoked.
(2)
This section also applies to an inspector to whom the Secretary of State
has given a direction under section 446B (termination of investigation).

Company Law Reform Bill [HL] (changed to Companies Bill [HL])
Part 32 — Company investigations: amendments
484

(3)
The Secretary of State may direct a person to whom this section applies
to produce documents obtained or generated by that person during the
course of his investigation to—
(a)
the Secretary of State, or
(b)
an inspector appointed under this Part.
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(4)
The power under subsection (3) to require production of a document
includes power, in the case of a document not in hard copy form, to
require the production of a copy of the document—
(a)
in hard copy form, or
(b)
in a form from which a hard copy can be readily obtained.
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(5)
The Secretary of State may take copies of or extracts from a document
produced in pursuance of this section.
(6)
The Secretary of State may direct a person to whom this section applies
to inform him of any matters that came to that person’s knowledge as
a result of his investigation.
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(7)
A person shall comply with any direction given to him under this
section.
(8)
In this section—
(a)
references to the investigation of a former inspector or inspector
include any investigation he conducted under section 433(1)
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(power to investigate affairs of holding company or subsidiary),
and
(b)
“document” includes information recorded in any form.”.
(2)
In section 451A of that Act (disclosure of information by Secretary of State or
inspector), in subsection (1)(a) for “446” substitute “446E”.
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(3)
In section 452(1) of that Act (privileged information) for “446” substitute
“446E”.
1004
Power to require production of documents
(1)
In section 434 of the Companies Act 1985 (production of documents and
evidence to inspectors), for subsection (6) substitute—
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“(6)
In this section “document” includes information recorded in any form.
(7)
The power under this section to require production of a document
includes power, in the case of a document not in hard copy form, to
require the production of a copy of the document—
(a)
in hard copy form, or
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(b)
in a form from which a hard copy can be readily obtained.
(8)
An inspector may take copies of or extracts from a document produced
in pursuance of this section.”.
(2)
In section 447 of the Companies Act 1985 (power of Secretary of State to require
documents and information), for subsection (9) substitute—
40
“(9)
The power under this section to require production of a document
includes power, in the case of a document not in hard copy form, to
require the production of a copy of the document—

Company Law Reform Bill [HL] (changed to Companies Bill [HL])
Part 33 — UK companies not formed under the Companies Acts
Chapter 1 — Companies not formed under the Companies Acts but authorised to register
485

(a)
in hard copy form, or
(b)
in a form from which a hard copy can be readily obtained.”.
1005
Disqualification orders: consequential amendments
In section 8(1A)(b)(i) of the Company Directors Disqualification Act 1986
(c. 46) (disqualification after investigation of company: meaning of
5
“investigative material”)—
(a)
after “section” insert “437, 446E,”, and
(b)
after “448” insert “, 451A”.
Part 33
UK companies not formed under the Companies Acts
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Chapter 1
Companies not formed under the Companies Acts but authorised to register
1006
Companies authorised to register under the Companies Acts
(1)
This section applies to—
(a)
any company that was in existence on 2nd November 1862 (including
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any company registered under the Joint Stock Companies Acts), and
(b)
any company formed after that date (whether before or after the
commencement of this Act)—
(i)
in pursuance of an Act of Parliament other than the Companies
Acts or any of the former Companies Acts,
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(ii)
in pursuance of letters patent, or
(iii)
that is otherwise duly constituted according to law.
(2)
Any such company may on making application register under this Act.
(3)
Subject to the following provisions, it may register as an unlimited company,
as a company limited by shares or as a company limited by guarantee.
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(4)
A company having the liability of its members limited by Act of Parliament or
letters patent—
(a)
may not register under this section unless it is a joint stock company,
and
(b)
may not register under this section as an unlimited company or a
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company limited by guarantee.
(5)
A company that is not a joint stock company may not register under this
section as a company limited by shares.
(6)
The registration of a company under this section is not invalid by reason that
it has taken place with a view to the company’s being wound up.
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1007
Definition of “joint stock company”
(1)
For the purposes of section 1006 (companies authorised to register under the
Companies Acts) “joint stock company” means a company—

Company Law Reform Bill [HL] (changed to Companies Bill [HL])
Part 33 — UK companies not formed under the Companies Acts
Chapter 2 — Unregistered companies
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(a)
having a permanent paid-up or nominal share capital of fixed amount
divided into shares, also of fixed amount, or held and transferable as
stock, or divided and held partly in one way and partly in the other,
and
(b)
formed on the principle of having for its members the holders of those
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shares or that stock, and no other persons.
(2)
Such a company when registered with limited liability under the Companies
Acts is deemed a company limited by shares.
1008
Power to make provision by regulations
(1)
The Secretary of State may make provision by regulations—
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(a)
for and in connection with registration under section 1006 (companies
not formed under the Companies Acts but authorised to register), and
(b)
as to the application to companies so registered of the provisions of the
Companies Acts.
(2)
Without prejudice to the generality of that power, regulations under this
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section may make provision corresponding to any provision formerly made by
Chapter 2 of Part 22 of the Companies Act 1985 (c. 6).
(3)
Regulations under this section are subject to negative resolution procedure.
1009
Application of provisions to existing companies

The provisions of the Companies Acts apply to companies registered but not
20
formed under any of the former Companies Acts in the same manner as they
apply to companies registered under section 1006.
Chapter 2
Unregistered companies
1010
Unregistered companies
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(1)
This section applies to bodies corporate incorporated in and having a principal
place of business in the United Kingdom, other than—
(a)
bodies incorporated by, or registered under, a public general Act of
Parliament;
(b)
bodies not formed for the purpose of carrying on a business that has for
30
its object the acquisition of gain by the body or its individual members;
(c)
bodies for the time being exempted from this section by direction of the
Secretary of State;
(d)
open-ended investment companies.
(2)
The Secretary of State may make provision by regulations applying specified
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provisions of the Companies Acts to all, or any specified description of, the
bodies to which this section applies.
(3)
The regulations may provide that the specified provisions of the Companies
Acts apply subject to any specified limitations and to such adaptations and
modifications (if any) as may be specified.
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(4)
This section does not—

Company Law Reform Bill [HL] (changed to Companies Bill [HL])
Part 34 — Overseas companies
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(a)
repeal or revoke in whole or in part any enactment, royal charter or
other instrument constituting or regulating any body in relation to
which provisions of the Companies Acts are applied by regulations
under this section, or
(b)
restrict the power of Her Majesty to grant a charter in lieu or
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supplementary to any such charter.

But in relation to any such body the operation of any such enactment, charter
or instrument is suspended in so far as it is inconsistent with any of those
provisions as they apply for the time being to that body.
(5)
Regulations under this section are subject to negative resolution procedure.
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Part 34
Overseas companies
Introductory
1011
Overseas companies

In the Companies Acts an “overseas company” means a company incorporated
15
outside the United Kingdom.
Registration of particulars
1012
Duty to register particulars
(1)
The Secretary of State may make provision by regulations requiring an
overseas company—
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(a)
to deliver to the registrar for registration a return containing specified
particulars, and
(b)
to deliver to the registrar with the return specified documents.
(2)
The regulations—
(a)
must, in the case of a company other than a Gibraltar company, require
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the company to register particulars if the company opens a branch in
the United Kingdom, and
(b)
may, in the case of a Gibraltar company, require the company to
register particulars if the company opens a branch in the United
Kingdom, and
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(c)
may, in any case, require the registration of particulars in such other
circumstances as may be specified.
(3)
In subsection (2)—
“branch” means a branch within the meaning of the Eleventh Company
Law Directive (89/666/EEC);
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“Gibraltar company” means a company incorporated in Gibraltar.
(4)
The regulations may provide that where a company has registered particulars
under this section and any alteration is made—
(a)
in the specified particulars, or
(b)
in any document delivered with the return,
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Company Law Reform Bill [HL] (changed to Companies Bill [HL])
Part 34 — Overseas companies
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the company must deliver to the registrar for registration a return containing
specified particulars of the alteration.
(5)
The regulations may make provision—
(a)
requiring the return under this section to be delivered for registration
to the registrar for a specified part of the United Kingdom, and
5
(b)
requiring it to be so delivered before the end of a specified period.
(6)
The regulations may make different provision according to—
(a)
the place where the company is incorporated, and
(b)
the activities carried on (or proposed to be carried on) by it.

This is without prejudice to the general power to make different provision for
10
different cases.
(7)
Regulations under this section are subject to affirmative resolution procedure.
1013
Registered name of overseas company
(1)
Regulations under section 1012 (duty to register particulars) must require an
overseas company that is required to register particulars to state the name
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under which it proposes to be registered.
(2)
This may be—
(a)
the company’s corporate name (that is, its name under the law of the
country or territory in which it is incorporated) or
(b)
an alternative name specified in accordance with section 1014.
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(3)
Subject only to subsection (5), an EEA company may always be registered
under its corporate name.
(4)
In any other case, the following provisions of Part 5 (a company’s name) apply
in relation to the registration of the name of an overseas company—
(a)
section 54 (prohibited names);
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(b)
sections 55 to 57 (sensitive words and expressions);
(c)
section 66 (inappropriate use of indications of company type or legal
form);
(d)
sections 67 to 74 (similarity to other names);
(e)
section 75 (provision of misleading information etc);
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(f)
section 76 (misleading indication of activities).
(5)
The provisions of section 58 (permitted characters etc) apply in every case.
(6)
Any reference in the provisions mentioned in subsection (4) or (5) to a change
of name shall be read as a reference to registration of a different name under
section 1014.
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1014
Registration under alternative name
(1)
An overseas company that is required to register particulars under section 1012
may at any time deliver to the registrar for registration a statement specifying
a name, other than its corporate name, under which it proposes to carry on
business in the United Kingdom.
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(2)
An overseas company that has registered an alternative name may at any time
deliver to the registrar of companies for registration a statement specifying a
different name under which it proposes to carry on business in the United

Company Law Reform Bill [HL] (changed to Companies Bill [HL])
Part 34 — Overseas companies
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Kingdom (which may be its corporate name or a further alternative) in
substitution for the name previously registered.
(3)
The name by which an overseas company is for the time being registered under
this section is, for all purposes of the law applying in the United Kingdom,
deemed to be the company’s corporate name.
5
(4)
This does not—
(a)
affect the references in this section or section 1013 to the company’s
corporate name,
(b)
affect any rights or obligation of the company, or
(c)
render defective any legal proceedings by or against the company.
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(5)
Any legal proceedings that might have been continued or commenced against
the company by its corporate name, or any name previously registered under
this section, may be continued or commenced against it by its name for the time
being so registered.
Other requirements
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1015
Accounts and reports: general
(1)
The Secretary of State may make provision by regulations requiring an
overseas company that is required to register particulars under section 1012—
(a)
to prepare the like accounts and directors’ report, and
(b)
cause to be prepared such an auditor’s report,
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as would be required if the company were formed and registered under this
Act.
(2)
The regulations may for this purpose apply, with or without modifications, all
or any of the provisions of—
Part 16 (accounts and reports), and
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Part 17 (audit).
(3)
The Secretary of State may make provision by regulations requiring an
overseas company to deliver to the registrar copies of—
(a)
the accounts and reports prepared in accordance with the regulations,
or
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(b)
the accounts and reports that it is required to prepare and have audited
under the law of the country in which it is incorporated.
(4)
Regulations under this section are subject to negative resolution procedure.
1016
Accounts and reports: credit or financial institutions
(1)
This section applies to a credit or financial institution—
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(a)
that is incorporated or otherwise formed outside the United Kingdom
and Gibraltar,
(b)
whose head office is outside the United Kingdom and Gibraltar, and
(c)
that has a branch in the United Kingdom.
(2)
In subsection (1) “branch” means a place of business that forms a legally
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dependent part of the institution and conducts directly all or some of the
operations inherent in its business.