|
| |
|
1127 | Parent and subsidiary undertakings |
| |
(1) | This section (together with Schedule 8) defines “parent undertaking” and |
| |
“subsidiary undertaking” for the purposes of the Companies Acts. |
| |
(2) | An undertaking is a parent undertaking in relation to another undertaking, a |
| |
subsidiary undertaking, if— |
| 5 |
(a) | it holds a majority of the voting rights in the undertaking, or |
| |
(b) | it is a member of the undertaking and has the right to appoint or |
| |
remove a majority of its board of directors, or |
| |
(c) | it has the right to exercise a dominant influence over the undertaking— |
| |
(i) | by virtue of provisions contained in the undertaking’s articles, |
| 10 |
| |
(ii) | by virtue of a control contract, or |
| |
(d) | it is a member of the undertaking and controls alone, pursuant to an |
| |
agreement with other shareholders or members, a majority of the |
| |
voting rights in the undertaking. |
| 15 |
(3) | For the purposes of subsection (2) an undertaking shall be treated as a member |
| |
| |
(a) | if any of its subsidiary undertakings is a member of that undertaking, |
| |
| |
(b) | if any shares in that other undertaking are held by a person acting on |
| 20 |
behalf of the undertaking or any of its subsidiary undertakings. |
| |
(4) | An undertaking is also a parent undertaking in relation to another |
| |
undertaking, a subsidiary undertaking, if— |
| |
(a) | it has the power to exercise, or actually exercises, dominant influence or |
| |
| 25 |
(b) | it and the subsidiary undertaking are managed on a unified basis. |
| |
(5) | A parent undertaking shall be treated as the parent undertaking of |
| |
undertakings in relation to which any of its subsidiary undertakings are, or are |
| |
to be treated as, parent undertakings; and references to its subsidiary |
| |
undertakings shall be construed accordingly. |
| 30 |
(6) | Schedule 8 contains provisions explaining expressions used in this section and |
| |
otherwise supplementing this section. |
| |
(7) | In this section and that Schedule references to shares, in relation to an |
| |
undertaking, are to allotted shares. |
| |
| 35 |
1128 | Meaning of “banking company” and “banking group” |
| |
(1) | This section defines “banking company” and “banking group” for the purposes |
| |
| |
(2) | “Banking company” means a person who has permission under Part 4 of the |
| |
Financial Services and Markets Act 2000 (c. 8) to accept deposits, other than— |
| 40 |
(a) | a person who is not a company, and |
| |
(b) | a person who has such permission only for the purpose of carrying on |
| |
another regulated activity in accordance with permission under that |
| |
| |
|
| |
|
| |
|
(3) | The definition in subsection (2) must be read with section 22 of that Act, any |
| |
relevant order under that section and Schedule 2 to that Act. |
| |
(4) | References to a banking group are to a group where the parent company is a |
| |
banking company or where— |
| |
(a) | the parent company’s principal subsidiary undertakings are wholly or |
| 5 |
mainly credit institutions, and |
| |
(b) | the parent company does not itself carry on any material business apart |
| |
from the acquisition, management and disposal of interests in |
| |
| |
| “Group” here means a parent undertaking and its subsidiary undertakings. |
| 10 |
(5) | For the purposes of subsection (4)— |
| |
(a) | a parent company’s principal subsidiary undertakings are the |
| |
subsidiary undertakings of the company whose results or financial |
| |
position would principally affect the figures shown in the group |
| |
| 15 |
(b) | the management of interests in subsidiary undertakings includes the |
| |
provision of services to such undertakings. |
| |
1129 | Meaning of “insurance company” and related expressions |
| |
(1) | This section defines “insurance company”, “authorised insurance company”, |
| |
“insurance group” and “insurance market activity” for the purposes of the |
| 20 |
| |
(2) | An “authorised insurance company” means a person (whether incorporated or |
| |
not) who has permission under Part 4 of the Financial Services and Markets Act |
| |
2000 (c. 8) to effect or carry out contracts of insurance. |
| |
(3) | An “insurance company” means— |
| 25 |
(a) | an authorised insurance company, or |
| |
(b) | any other person (whether incorporated or not) who— |
| |
(i) | carries on insurance market activity, or |
| |
(ii) | may effect or carry out contracts of insurance under which the |
| |
benefits provided by that person are exclusively or primarily |
| 30 |
benefits in kind in the event of accident to or breakdown of a |
| |
| |
(4) | Neither expression includes a friendly society within the meaning of the |
| |
Friendly Societies Act 1992 (c. 40). |
| |
(5) | References to an insurance group are to a group where the parent company is |
| 35 |
an insurance company or where— |
| |
(a) | the parent company’s principal subsidiary undertakings are wholly or |
| |
mainly insurance companies, and |
| |
(b) | the parent company does not itself carry on any material business apart |
| |
from the acquisition, management and disposal of interests in |
| 40 |
| |
| “Group” here means a parent undertaking and its subsidiary undertakings. |
| |
(6) | For the purposes of subsection (5)— |
| |
(a) | a parent company’s principal subsidiary undertakings are the |
| |
subsidiary undertakings of the company whose results or financial |
| 45 |
|
| |
|
| |
|
position would principally affect the figures shown in the group |
| |
| |
(b) | the management of interests in subsidiary undertakings includes the |
| |
provision of services to such undertakings. |
| |
(7) | “Insurance market activity” has the meaning given in section 316(3) of the |
| 5 |
Financial Services and Markets Act 2000 (c. 8). |
| |
(8) | References in this section to contracts of insurance and to the effecting or |
| |
carrying out of such contracts must be read with section 22 of that Act, any |
| |
relevant order under that section and Schedule 2 to that Act. |
| |
1130 | “Employees’ share scheme” |
| 10 |
For the purposes of the Companies Acts an employees’ share scheme is a |
| |
scheme for encouraging or facilitating the holding of shares in or debentures of |
| |
a company by or for the benefit of— |
| |
(a) | the bona fide employees or former employees of— |
| |
| 15 |
(ii) | any subsidiary of the company, or |
| |
(iii) | the company’s holding company or any subsidiary of the |
| |
company’s holding company, or |
| |
(b) | the spouses, civil partners, surviving spouses, surviving civil partners, |
| |
or minor children or step-children of such employees or former |
| 20 |
| |
1131 | Meaning of “prescribed” |
| |
In the Companies Acts “prescribed” means prescribed (by order or by |
| |
regulations) by the Secretary of State. |
| |
1132 | Hard copy and electronic form and related expressions |
| 25 |
(1) | The following provisions apply for the purposes of the Companies Acts. |
| |
(2) | A document or information is sent or supplied in hard copy form if it is sent or |
| |
supplied in a paper copy or similar form capable of being read. |
| |
| References to hard copy have a corresponding meaning. |
| |
(3) | A document or information is sent or supplied in electronic form if it is sent or |
| 30 |
| |
(a) | by electronic means (for example, by e-mail or fax), or |
| |
(b) | by any other means while in an electronic form (for example, sending a |
| |
| |
| References to electronic copy have a corresponding meaning. |
| 35 |
(4) | A document or information is sent or supplied by electronic means if it is— |
| |
(a) | sent initially and received at its destination by means of electronic |
| |
equipment for the processing (which expression includes digital |
| |
compression) or storage of data, and |
| |
(b) | entirely transmitted, conveyed and received by wire, by radio, by |
| 40 |
optical means or by other electromagnetic means. |
| |
| References to electronic means have a corresponding meaning. |
| |
|
| |
|
| |
|
(5) | A document or information authorised or required to be sent or supplied in |
| |
electronic form must be sent or supplied in a form, and by a means, that the |
| |
sender or supplier reasonably considers will enable the recipient— |
| |
| |
(b) | to retain a copy of it. |
| 5 |
(6) | For the purposes of this section, a document or information can be read only |
| |
| |
(a) | it can be read with the naked eye, or |
| |
(b) | to the extent that it consists of images (for example photographs, |
| |
pictures, maps, plans or drawings), it can be seen with the naked eye. |
| 10 |
(7) | The provisions of this section apply whether the provision of the Companies |
| |
Acts in question uses the words “sent” or “supplied” or uses other words (such |
| |
as “deliver”, “provide”, “produce” or, in the case of a notice, “give”) to refer to |
| |
the sending or supplying of a document or information. |
| |
| 15 |
(1) | For the purpose of the Companies Acts shares are of one class if the rights |
| |
attached to them are in all respects uniform. |
| |
(2) | For this purpose the rights attached to shares are not regarded as different from |
| |
those attached to other shares by reason only that they do not carry the same |
| |
rights to dividends in the twelve months immediately following their |
| 20 |
| |
| |
(1) | For the purposes of the Companies Acts a company is “dormant” during any |
| |
period in which it has no significant accounting transaction. |
| |
(2) | A “significant accounting transaction” means a transaction that is required by |
| 25 |
section 392 to be entered in the company’s accounting records. |
| |
(3) | In determining whether or when a company is dormant, there shall be |
| |
| |
(a) | any transaction arising from the taking of shares in the company by a |
| |
subscriber to the memorandum as a result of an undertaking of his in |
| 30 |
connection with the formation of the company; |
| |
(b) | any transaction consisting of the payment of— |
| |
(i) | a fee to the registrar on a change of the company’s name, |
| |
(ii) | a fee to the registrar on the re-registration of the company, |
| |
(iii) | a penalty under section 461 (penalty for failure to file accounts), |
| 35 |
| |
(iv) | a fee to the registrar for the registration of an annual return. |
| |
(4) | Any reference in the Companies Acts to a body corporate other than a |
| |
company being dormant has a corresponding meaning. |
| |
1135 | Meaning of “EEA State” and related expressions |
| 40 |
| |
|
| |
|
| |
|
“EEA State” means a state which is a Contracting Party to the Agreement |
| |
on the European Economic Area signed at Oporto on 2nd May 1992 (as |
| |
it has effect from time to time); |
| |
“EEA company” and “EEA undertaking” mean a company or |
| |
undertaking governed by the law of an EEA State. |
| 5 |
1136 | The former Companies Acts |
| |
| |
“the former Companies Acts” means— |
| |
(a) | the Joint Stock Companies Acts, the Companies Act 1862 (c. 89), |
| |
the Companies (Consolidation) Act 1908 (c. 69), the Companies |
| 10 |
Act 1929 (c. 23), the Companies Act (Northern Ireland) 1932 (c. 7 |
| |
(N.I.)), the Companies Acts 1948 to 1983, the Companies Act |
| |
(Northern Ireland) 1960 (c. 22 (N.I.)), the Companies (Northern |
| |
Ireland) Order 1986 (S.I. 1986/1032 (N.I. 6)) and the Companies |
| |
Consolidation (Consequential Provisions) (Northern Ireland) |
| 15 |
Order 1986 (S.I. 1986/1035 (N.I. 9)), and |
| |
(b) | the provisions of the Companies Act 1985 (c. 6) and the |
| |
Companies Consolidation (Consequential Provisions) Act 1985 |
| |
(c. 9) that are no longer in force; |
| |
“the Joint Stock Companies Acts” means the Joint Stock Companies Act |
| 20 |
1856 (c. 47), the Joint Stock Companies Acts 1856, 1857 (20 & 21 Vict. |
| |
c. 14), the Joint Stock Banking Companies Act 1857 (c. 49), and the Act |
| |
to enable Joint Stock Banking Companies to be formed on the principle |
| |
of limited liability (1858 c. 91), but does not include the Joint Stock |
| |
Companies Act 1844 (c. 110). |
| 25 |
| |
1137 | References to requirements of this Act |
| |
References in the company law provisions of this Act to the requirements of |
| |
this Act include the requirements of regulations and orders made under it. |
| |
1138 | Minor definitions: general |
| 30 |
(1) | In the Companies Acts— |
| |
“body corporate” and “corporation” include a body incorporated outside |
| |
the United Kingdom, but do not include— |
| |
(a) | a corporation sole, or |
| |
(b) | a partnership that is not regarded as a legal person under the |
| 35 |
law by which it is governed; |
| |
“credit institution” means a credit institution as defined in Article 1(1)(a) |
| |
of Directive 2000/12/EC of the European Parliament and of the |
| |
Council of 20 March 2000 relating to the taking up and pursuit of the |
| |
business of credit institutions, that is to say an undertaking whose |
| 40 |
business is to receive deposits or other repayable funds from the public |
| |
and to grant credits for its own account; |
| |
“financial institution” means a financial institution within the meaning of |
| |
Article 1(1) of the Council Directive on the obligations of branches |
| |
established in a Member State of credit and financial institutions having |
| 45 |
|
| |
|
| |
|
their head offices outside that Member State regarding the publication |
| |
of annual accounting documents (the Bank Branches Directive, 89/ |
| |
| |
“firm” means any entity, whether or not a legal person, that is not an |
| |
individual and includes a body corporate, a corporation sole and a |
| 5 |
partnership or other unincorporated association; |
| |
| |
(a) | as respects companies registered in England and Wales, the |
| |
| |
(b) | as respects companies registered in Scotland, the Edinburgh |
| 10 |
| |
(c) | as respects companies registered in Northern Ireland, the |
| |
| |
“parent company” means a company that is a parent undertaking (see |
| |
section 1127 and Schedule 8); |
| 15 |
“regulated market” has the same meaning as in Directive 2004/39/EC of |
| |
the European Parliament and of the Council on markets in financial |
| |
instruments (see Article 4.1(14)); |
| |
“working day”, in relation to a company, means a day that is not a |
| |
Saturday or Sunday, Christmas Day, Good Friday or any day that is a |
| 20 |
bank holiday in the part of the United Kingdom where the company is |
| |
| |
(2) | Until such date as may be appointed by order under section 1264(2) for the |
| |
definition in subsection (1) of “regulated market” to come into force, the |
| |
following definition has effect for the purposes of the Companies Acts— |
| 25 |
“regulated market” has the same meaning as it has in Council Directive |
| |
93/22/EEC on investment services in the securities field. |
| |
1139 | Index of defined expressions |
| |
(1) | Schedule 9 contains an index of provisions defining or otherwise explaining |
| |
expressions used in the Companies Acts. |
| 30 |
(2) | For section 744A of the Companies Act 1985 (c. 6) substitute— |
| |
“744A | Index of defined expressions |
| |
| For an index which includes entries for provisions defining or |
| |
otherwise explaining expressions used in this Act, see Schedule 9 to the |
| |
Company Law Reform Act 2006.”. |
| 35 |
(3) | At the end of section 63(2) of the Companies (Audit, Investigations and |
| |
Community Enterprise) Act 2004 (c. 27) (interpretation) insert— |
| |
| “For an index which includes entries for provisions defining or |
| |
otherwise explaining expressions used in that Act, see Schedule 9 to the |
| |
Company Law Reform Act 2006.”. |
| 40 |
|
| |
|
| |
|
| |
Companies: minor amendments |
| |
1140 | Power of Secretary of State to bring civil proceedings on company’s behalf |
| |
(1) | Section 438 of the Companies Act 1985 (c. 6) (power of Secretary of State to |
| |
bring civil proceedings on company’s behalf) shall cease to have effect. |
| 5 |
(2) | In section 439 of that Act (expenses of investigating company’s affairs)— |
| |
(a) | in subsection (2) omit “, or is ordered to pay the whole or any part of the |
| |
costs of proceedings brought under section 438”; |
| |
(b) | omit subsections (3) and (7) (which relate to section 438); |
| |
| 10 |
(i) | for “subsections (2) and (3)” substitute “subsection (2)”, and |
| |
(ii) | omit “; and any such liability imposed by subsection (2) is |
| |
(subject as mentioned above) a liability also to indemnify all |
| |
persons against liability under subsection (3)”. |
| |
(3) | In section 453(1A) of that Act (investigation of overseas companies: provisions |
| 15 |
not applicable), omit paragraph (b) (which relates to section 438). |
| |
(4) | Nothing in this section affects proceedings brought under section 438 before |
| |
the commencement of this section. |
| |
1141 | Repeal of certain provisions about company directors |
| |
The following provisions of Part 10 of the Companies Act 1985 shall cease to |
| 20 |
| |
section 311 (prohibition on tax-free payments to directors); |
| |
sections 323 and 327 (prohibition on directors dealing in share options); |
| |
sections 324 to 326 and 328 to 329, and Parts 2 to 4 of Schedule 13 (register |
| |
of directors’ interests); |
| 25 |
sections 343 and 344 (special procedure for disclosure by banks). |
| |
1142 | Repeal of requirement that certain companies publish periodical statement |
| |
The following provisions shall cease to have effect— |
| |
section 720 of the Companies Act 1985 (certain companies to publish |
| |
periodical statement), and |
| 30 |
Schedule 23 to that Act (form of statement under section 720). |
| |
1143 | Repeal of requirement that Secretary of State prepare annual report |
| |
Section 729 of the Companies Act 1985 (annual report to Parliament by |
| |
Secretary of State on matters within the Companies Acts) shall cease to have |
| |
| 35 |
1144 | Repeal of certain provisions about company charges |
| |
Part 4 of the Companies Act 1989 (c. 40) (registration of company charges), |
| |
which has not been brought into force, is repealed. |
| |
|
| |
|