Company Law Reform Bill [HL] (583-587)

House of Commons

Session 2005 - 06
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Other Bills before Parliament

Company Law Reform Bill [HL] (583-587)

Company Law Reform Bill [HL] (changed to Companies Bill [HL])
Part 42 — Statutory Auditors
Chapter 6 — Supplementary and general
583

(4)
A complaint charging an offence under this Part which is triable by a
magistrates’ court in Northern Ireland may be so tried if it is made at any time
within the period of twelve months beginning with the date on which evidence
sufficient in the opinion of the Director of Public Prosecutions for Northern
Ireland or the Secretary of State to justify the proceedings comes to his
5
knowledge.
(5)
This section does not authorise—
(a)
in the case of proceedings in England and Wales, the trial of an
information laid,
(b)
in the case of proceedings in Scotland, the commencement of
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proceedings, or
(c)
in the case of proceedings in Northern Ireland, the trial of a complaint
made,

more than three years after the commission of the offence.
(6)
For the purposes of this section a certificate of the Director of Public
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Prosecutions, the Lord Advocate, the Director of Public Prosecutions for
Northern Ireland or the Secretary of State as to the date on which such evidence
as is referred to above came to his knowledge is conclusive evidence.
(7)
Nothing in this section affects proceedings within the time limits prescribed by
section 127(1) of the Magistrates’ Courts Act 1980 (c. 43), section 331 of the
20
Criminal Procedure (Scotland) Act 1975 or Article 19 of the Magistrates’ Courts
(Northern Ireland) Order 1981 (S.I. 1981/1675 (N.I. 26)) (the usual time limits
for criminal proceedings).
1221
Jurisdiction and procedure in respect of offences
(1)
Summary proceedings for an offence under this Part may, without prejudice to
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any jurisdiction exercisable apart from this section, be taken—
(a)
against a body corporate or unincorporated association at any place at
which it has a place of business, and
(b)
against an individual at any place where he is for the time being.
(2)
Proceedings for an offence alleged to have been committed under this Part by
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an unincorporated association must be brought in the name of the association
(and not in that of any of its members), and for the purposes of any such
proceedings any rules of court relating to the service of documents apply as in
relation to a body corporate.
(3)
Section 33 of the Criminal Justice Act 1925 (c. 86) and Schedule 3 to the
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Magistrates’ Courts Act 1980 (procedure on charge of offence against a
corporation) apply in a case in which an unincorporated association is charged
in England and Wales with an offence under this Part as they apply in the case
of a corporation.
(4)
Section 18 of the Criminal Justice Act (Northern Ireland) 1945 (c. 15 (N.I.)) and
40
Article 166 and Schedule 4 to the Magistrates’ Courts (Northern Ireland) Order
1981 (S.I. 1981/1675 (N.I. 26)) (procedure on charge of offence against a
corporation) apply in a case in which an unincorporated association is charged
in Northern Ireland with an offence under this Part as they apply in the case of
a corporation.
45
(5)
In relation to proceedings on indictment in Scotland for an offence alleged to
have been committed under this Part by an unincorporated association, section

Company Law Reform Bill [HL] (changed to Companies Bill [HL])
Part 42 — Statutory Auditors
Chapter 6 — Supplementary and general
584

70 of the Criminal Procedure (Scotland) Act 1995 (proceedings on indictment
against bodies corporate) applies as if the association were a body corporate.
(6)
A fine imposed on an unincorporated association on its conviction of such an
offence must be paid out of the funds of the association.
Notices etc
5
1222
Service of notices
(1)
This section has effect in relation to any notice, direction or other document
required or authorised by or by virtue of this Part to be given to or served on
any person other than the Secretary of State.
(2)
Any such document may be given to or served on the person in question—
10
(a)
by delivering it to him,
(b)
by leaving it at his proper address, or
(c)
by sending it by post to him at that address.
(3)
Any such document may—
(a)
in the case of a body corporate, be given to or served on an officer of
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that body;
(b)
in the case of a partnership, be given to or served on any partner;
(c)
in the case of an unincorporated association other than a partnership,
be given to or served on any member of the governing body of that
association.
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(4)
For the purposes of this section and section 7 of the Interpretation Act 1978
(c. 30) (service of documents by post) in its application to this section, the
proper address of any person is his last known address (whether of his
residence or of a place where he carries on business or is employed) and also—
(a)
in the case of a person who is eligible under the rules of a recognised
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supervisory body for appointment as a statutory auditor and who does
not have a place of business in the United Kingdom, the address of that
body;
(b)
in the case of a body corporate or an officer of that body, the address of
the registered or principal office of that body in the United Kingdom;
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(c)
in the case of an unincorporated association other than a partnership or
a member of its governing body, its principal office in the United
Kingdom.
1223
Documents in electronic form
(1)
This section applies where—
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(a)
section 1222 authorises the giving or sending of a notice, direction or
other document by its delivery to a particular person (“the recipient”),
and
(b)
the notice, direction or other document is transmitted to the recipient—
(i)
by means of an electronic communications network, or
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(ii)
by other means but in a form that requires the use of apparatus
by the recipient to render it intelligible.
(2)
The transmission has effect for the purposes of this Part as a delivery of the
notice, direction or other document to the recipient, but only if the recipient has

Company Law Reform Bill [HL] (changed to Companies Bill [HL])
Part 42 — Statutory Auditors
Chapter 6 — Supplementary and general
585

indicated to the person making the transmission his willingness to receive the
notice, direction or other document in the form and manner used.
(3)
An indication to a person for the purposes of subsection (2)—
(a)
must be given to the person in such manner as he may require,
(b)
may be a general indication or an indication that is limited to notices,
5
directions or other documents of a particular description,
(c)
must state the address to be used,
(d)
must be accompanied by such other information as the person requires
for the making of the transmission, and
(e)
may be modified or withdrawn at any time by a notice given to the
10
person in such manner as he may require.
(4)
In this section “electronic communications network” has the same meaning as
in the Communications Act 2003 (c. 21).
Interpretation
1224
Meaning of “associate”
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(1)
In this Part “associate”, in relation to a person, is to be construed as follows.
(2)
In relation to an individual, “associate” means—
(a)
that individual’s spouse, civil partner or minor child or step-child,
(b)
any body corporate of which that individual is a director, and
(c)
any employee or partner of that individual.
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(3)
In relation to a body corporate, “associate” means—
(a)
any body corporate of which that body is a director,
(b)
any body corporate in the same group as that body, and
(c)
any employee or partner of that body or of any body corporate in the
same group.
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(4)
In relation to a partnership constituted under the law of Scotland, or any other
country or territory in which a partnership is a legal person, “associate”
means—
(a)
any body corporate of which that partnership is a director,
(b)
any employee of or partner in that partnership, and
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(c)
any person who is an associate of a partner in that partnership.
(5)
In relation to a partnership constituted under the law of England and Wales or
Northern Ireland, or the law of any other country or territory in which a
partnership is not a legal person, “associate” means any person who is an
associate of any of the partners.
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(6)
In subsections (2)(b), (3)(a) and (4)(a), in the case of a body corporate which is
a limited liability partnership, “director” is to be read as “member”.
1225
Minor definitions
(1)
In this Part, unless a contrary intention appears—
“address” means—
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(a)
in relation to an individual, his usual residential or business
address;

Company Law Reform Bill [HL] (changed to Companies Bill [HL])
Part 42 — Statutory Auditors
Chapter 6 — Supplementary and general
586

(b)
in relation to a firm, its registered or principal office in the
United Kingdom;
“company” means any company or other body the accounts of which
must be audited in accordance with Part 17;
“director”, in relation to a body corporate, includes any person occupying
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in relation to it the position of a director (by whatever name called) and
any person in accordance with whose directions or instructions (not
being advice given in a professional capacity) the directors of the body
are accustomed to act;
“firm” means any entity, whether or not a legal person, which is not an
10
individual and includes a body corporate, a corporation sole and a
partnership or other unincorporated association;
“group”, in relation to a body corporate, means the body corporate, any
other body corporate which is its holding company or subsidiary and
any other body corporate which is a subsidiary of that holding
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company;
“holding company” and “subsidiary” are to be read in accordance with
section 736 of the Companies Act 1985 (c. 6);
“officer”, in relation to a body corporate, includes a director, a manager, a
secretary or, where the affairs of the body are managed by its members,
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a member;
“parent undertaking” and “subsidiary undertaking” are to be read in
accordance with section 1127 and Schedule 8.
(2)
For the purposes of this Part a body is to be regarded as “established in the
United Kingdom” if and only if—
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(a)
it is incorporated or formed under the law of the United Kingdom or a
part of the United Kingdom, or
(b)
its central management and control are exercised in the United
Kingdom;

and any reference to a qualification “obtained in the United Kingdom” is to a
30
qualification obtained from such a body.
(3)
The Secretary of State may by regulations make such modifications of this Part
as appear to him to be necessary or appropriate for the purposes of its
application in relation to any firm, or description of firm, which is not a body
corporate or a partnership.
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(4)
Regulations under subsection (3) are subject to negative resolution procedure.
1226
Index of defined expressions
The following Table shows provisions defining or otherwise explaining
expressions used in this Part (other than provisions defining or explaining an
expression used only in the same section)—
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Expression
Provision

address
section 1225(1)

appropriate qualification
section 1183

associate
section 1224

Company Law Reform Bill [HL] (changed to Companies Bill [HL])
Part 42 — Statutory Auditors
Chapter 6 — Supplementary and general
587

Expression
Provision

audited person
section 1174(2)

Auditor General
section 1190(1)

company
section 1225(1)

delegation order
section 1216(1)

5

director (of a body corporate)
section 1225(1)

enactment
section 1257

established in the United Kingdom
section 1225(2)

firm
section 1225(1)

group (in relation to a body corporate)
section 1225(1)

10

holding company
section 1225(1)

main purposes of this Part
section 1173

member (of a supervisory body)
section 1181(2)

obtained in the United Kingdom
section 1225(2)

officer
section 1225(1)

15

parent undertaking
section 1225(1)

qualifying body
section 1184(1)

recognised, in relation to a
section 1184(3) and

professional qualification
Schedule 11

recognised, in relation to a qualifying
paragraph 1(2) of Schedule

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body
11

recognised, in relation to a
section 1181(4) and

supervisory body
Schedule 10

registered third country auditor
section 1205(1)

rules of a qualifying body
section 1184(2)

25

rules of a supervisory body
section 1181(3)

statutory auditor, statutory audit and
section 1174(1)

statutory audit work

subsidiary
section 1225(1)

supervisory body
section 1181(1)

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subsidiary undertaking
section 1225(1)

third country auditor, third country
section 1205(1)

audit and third country audit work