Company Law Reform Bill [HL] (602-608)

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Session 2005 - 06
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Company Law Reform Bill [HL] (602-608)

Company Law Reform Bill [HL] (changed to Companies Bill [HL])
Part 44 — Miscellaneous provisions
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and Community Enterprise) Act 2004 after this section comes into force,
regardless of when the expenses to be met by the levy in respect of which the
regulations are made were incurred.
(7)
In Schedule 3 to the Pensions Act 2004 (c. 35) (disclosure of information held
by the Pensions Regulator), in the entry relating to the Secretary of State, in the
5
second column, for “or” at the end of paragraph (g) substitute—
“(ga)
Section 17 of the Companies (Audit, Investigations and
Community Enterprise) Act 2004 (levy to pay expenses of
bodies concerned with accounting standards, actuarial
standards etc), or”.
10
1240
Application of provisions to Scotland and Northern Ireland
(1)
Section 16 of the Companies (Audit, Investigations and Community
Enterprise) Act 2004 (grants to bodies concerned with accounting standards
etc) is amended as follows.
(2)
For subsection (6) (application of section to Scotland) substitute—
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“(6)
In their application to Scotland, subsection (2)(a) to (t) are to be read as
referring only to matters provision relating to which would be outside
the legislative competence of the Scottish Parliament.”.
(3)
In subsection (2) in paragraph (c), after “1985 (c. 6)” insert “or the 1986 Order”.
(4)
In subsection (5)—
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(a)
in the definition of “company” after “1985 (c. 6)” insert “or the 1986
Order”,
(b)
in the definition of “subsidiary” after “1985” insert “or Article 4 of the
1986 Order”, and
(c)
after that definition insert—
25
““the 1986 Order” means the Companies (Northern
Ireland) Order 1986 (S.I. 1986/1032 (N.I. 6)).”.
(5)
In section 66 of that Act (extent), in subsection (2) (provisions extending to
Northern Ireland, as well as England and Wales and Scotland) for “17”
substitute “16 to 18”.
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Information as to exercise of voting rights by institutional investors
1241
Power to require information about exercise of voting rights
(1)
The Treasury or the Secretary of State may make provision by regulations
requiring institutions to which this section applies to provide information
about the exercise of voting rights attached to shares to which this section
35
applies.
(2)
This power is exercisable in accordance with—
section 1242 (institutions to which information provisions apply),
section 1243 (shares to which information provisions apply), and
section 1244 (obligations with respect to provision of information).
40
(3)
In this section and the sections mentioned above—
(a)
references to a person acting on behalf of an institution include—

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(i)
any person to whom authority has been delegated by the
institution to take decisions as to any matter relevant to the
subject matter of the regulations, and
(ii)
such other persons as may be specified; and
(b)
“specified” means specified in the regulations.
5
(4)
The obligation imposed by regulations under this section is enforceable by civil
proceedings brought by—
(a)
any person to whom the information should have been provided, or
(b)
a specified regulatory authority.
(5)
Regulations under this section may make different provision for different
10
descriptions of institution, different descriptions of shares and for other
different circumstances.
(6)
Regulations under this section are subject to affirmative resolution procedure.
1242
Institutions to which information provisions apply
(1)
The institutions to which section 1241 applies are—
15
(a)
unit trust schemes within the meaning of the Financial Services and
Markets Act 2000 (c. 8) in respect of which an order is in force under
section 243 of that Act;
(b)
open-ended investment companies incorporated by virtue of
regulations under section 262 of that Act;
20
(c)
companies approved for the purposes of section 842 of the Income and
Corporation Taxes Act 1988 (c. 1) (investment trusts);
(d)
pension schemes as defined in section 1(5) of the Pension Schemes Act
1993 (c. 48) or the Pension Schemes (Northern Ireland) Act 1993 (c. 49);
(e)
undertakings authorised under the Financial Services and Markets Act
25
2000 to carry on long-term insurance business (that is, the activity of
effecting or carrying out contracts of long term insurance within the
meaning of the Financial Services and Markets (Regulated Activities)
Order 2001);
(f)
collective investment schemes that are recognised by virtue of section
30
270 of that Act (schemes authorised in designated countries or
territories).
(2)
Regulations under that section may—
(a)
provide that the section applies to other descriptions of institution;
(b)
provide that the section does not apply to a specified description of
35
institution.
(3)
The regulations must specify by whom, in the case of any description of
institution, the duty imposed by the regulations is to be fulfilled.
1243
Shares to which information provisions apply
(1)
The shares to which section 1241 applies are shares—
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(a)
of a description traded on a specified market, and
(b)
in which the institution has, or is taken to have, an interest.

Regulations under that section may provide that the section does not apply to
shares of a specified description.

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(2)
For this purpose an institution has an interest in shares if the shares, or a
depositary certificate in respect of them, are held by it, or on its behalf.

A “depositary certificate” means an instrument conferring rights (other than
options)—
(a)
in respect of shares held by another person, and
5
(b)
the transfer of which may be effected without the consent of that
person.
(3)
Where an institution has an interest—
(a)
in a specified description of collective investment scheme (within the
meaning of the Financial Services and Markets Act 2000 (c. 8)), or
10
(b)
in any other specified description of scheme or collective investment
vehicle,

it is taken to have an interest in any shares in which that scheme or vehicle has
or is taken to have an interest.
(4)
For this purpose a scheme or vehicle is taken to have an interest in shares if it
15
would be regarded as having such an interest in accordance with subsection (2)
if it was an institution to which section 1241 applied.
1244
Obligations with respect to provision of information
(1)
Regulations under section 1241 may require the provision of specified
information about—
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(a)
the exercise or non-exercise of voting rights by the institution or any
person acting on its behalf,
(b)
any instructions given by the institution or any person acting on its
behalf as to the exercise or non-exercise of voting rights, and
(c)
any delegation by the institution or any person acting on its behalf of
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any functions in relation to the exercise or non-exercise of voting rights
or the giving of such instructions.
(2)
The regulations may require information to be provided in respect of specified
occasions or specified periods.
(3)
Where instructions are given to act on the recommendations or advice of
30
another person, the regulations may require the provision of information about
what recommendations or advice were given.
(4)
The regulations may require information to be provided—
(a)
in such manner as may be specified, and
(b)
to such persons as may be specified, or to the public, or both.
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(5)
The regulations may provide—
(a)
that an institution may discharge its obligations under the regulations
by referring to information disclosed by a person acting on its behalf,
and
(b)
that in such a case it is sufficient, where that other person acts on behalf
40
of more than one institution, that the reference is to information given
in aggregated form, that is—
(i)
relating to the exercise or non-exercise by that person of voting
rights on behalf of more than one institution, or

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(ii)
relating to the instructions given by that person in respect of the
exercise or non-exercise of voting rights on behalf of more than
one institution, or
(iii)
relating to the delegation by that person of functions in relation
to the exercise or non-exercise of voting rights, or the giving of
5
instructions in respect of the exercise or non-exercise of voting
rights, on behalf of more than one institution.
(6)
References in this section to instructions are to instructions of any description,
whether general or specific, whether binding or not and whether or not acted
upon.
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Disclosure of information under the Enterprise Act 2002
1245
Disclosure of information under the Enterprise Act 2002

In Part 9 of the Enterprise Act 2002 (c. 40) (information), after section 241
insert—
“241A
Civil proceedings
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(1)
A public authority which holds prescribed information to which
section 237 applies may disclose that information to any person—
(a)
for the purposes of, or in connection with, prescribed civil
proceedings (including prospective proceedings) in the United
Kingdom, or
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(b)
for the purposes of obtaining legal advice in relation to such
proceedings, or
(c)
otherwise for the purposes of establishing, enforcing or
defending legal rights that are or may be the subject of such
proceedings.
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(2)
Subsection (1) does not apply to—
(a)
information which comes to a public authority in connection
with an investigation under Part 4, 5 or 6 of the 1973 Act or
under section 11 of the Competition Act 1980;
(b)
competition information within the meaning of section 351 of
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the Financial Services and Markets Act 2000;
(c)
information which comes to a public authority in connection
with an investigation under Part 3 or 4 or section 174 of this Act;
(d)
information which comes to a public authority in connection
with an investigation under the Competition Act 1998 (c. 41).
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(3)
In subsection (1) “prescribed” means prescribed by order of the
Secretary of State.
(4)
An order under this section—
(a)
may prescribe information, or civil proceedings, for the
purposes of this section by reference to such factors as appear to
40
the Secretary of State to be appropriate;
(b)
may prescribe for the purposes of this section all information, or
civil proceedings, or all information or civil proceedings not
falling within one or more specified exceptions;
(c)
must be made by statutory instrument subject to annulment in
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pursuance of a resolution of either House of Parliament.

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(5)
Information disclosed under this section must not be used by the
person to whom it is disclosed for any purpose other than those
specified in subsection (1).”.
Expenses of winding up
1246
Payment of expenses of winding up
5
(1)
In Chapter 8 of Part 4 of the Insolvency Act 1986 (c. 45) (winding up of
companies: provisions of general application), before section 176A (under the
heading “Property subject to floating charge”) insert—
“176ZA
   Payment of expenses of winding up (England and Wales)
(1)
The expenses of winding up in England and Wales, so far as the assets
10
of the company available for payment of general creditors are
insufficient to meet them, have priority over any claims to property
comprised in or subject to any floating charge created by the company
and shall be paid out of any such property accordingly.
(2)
In subsection (1)—
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(a)
the reference to assets of the company available for payment of
general creditors does not include any amount made available
under section 176A(2)(a);
(b)
the reference to claims to property comprised in or subject to a
floating charge is to the claims of—
20
(i)
the holders of debentures secured by, or holders of, the
floating charge, and
(ii)
any preferential creditors entitled to be paid out of that
property in priority to them.
(3)
Provision may be made by rules restricting the application of
25
subsection (1), in such circumstances as may be prescribed, to expenses
authorised or approved—
(a)
by the holders of debentures secured by, or holders of, the
floating charge and by any preferential creditors entitled to be
paid in priority to them, or
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(b)
by the court.
(4)
References in this section to the expenses of the winding up are to all
expenses properly incurred in the winding up, including the
remuneration of the liquidator.”.
(2)
In Chapter 8 of Part 5 of the Insolvency (Northern Ireland) Order 1989 (S.I.
35
1989/2405 (N.I. 19)) (winding up of companies: provisions of general
application), before Article 150A (under the heading “Property subject to floating
charge”) insert—
“150ZA
   Payment of expenses of winding up
(1)
The expenses of winding up, so far as the assets of the company
40
available for payment of general creditors are insufficient to meet them,
have priority over any claims to property comprised in or subject to any
floating charge created by the company and shall be paid out of any
such property accordingly.

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(2)
In paragraph (1)—
(a)
the reference to assets of the company available for payment of
general creditors does not include any amount made available
under Article 150A(2)(a);
(b)
the reference to claims to property comprised in or subject to a
5
floating charge is to the claims of—
(i)
the holders of debentures secured by, or holders of, the
floating charge, and
(ii)
any preferential creditors entitled to be paid out of that
property in priority to them.
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(3)
Provision may be made by rules restricting the application of
paragraph (1), in such circumstances as may be prescribed, to expenses
authorised or approved—
(a)
by the holders of debentures secured by, or holders of, the
floating charge and by any preferential creditors entitled to be
15
paid in priority to them, or
(b)
by the Court.
(4)
References in this Article to the expenses of the winding up are to all
expenses properly incurred in the winding up, including the
remuneration of the liquidator.”.
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Commonhold associations
1247
Amendment of memorandum or articles of commonhold association
In paragraph 3(1) of Schedule 3 to the Commonhold and Leasehold Reform Act
2002 (c. 15) (alteration of memorandum or articles by commonhold association
to be of no effect until altered version registered with Land Registry) for “An
25
alteration of the memorandum or articles of association” substitute “Where a
commonhold association alters its memorandum or articles at a time when the
land specified in its memorandum is commonhold land, the alteration”.
Part 45
Northern Ireland
30
1248
Extension of Companies Acts to Northern Ireland
(1)
The Companies Acts as defined by this Act (see section 2) extend to Northern
Ireland.
(2)
The Companies (Northern Ireland) Order 1986 (S.I. 1986/1032 (N.I. 6)), the
Companies Consolidation (Consequential Provisions) (Northern Ireland)
35
Order 1986 (S.I. 1986/1035 (N.I. 9)) and Part 3 of the Companies (Audit,
Investigations and Community Enterprise) Order 2005 (S.I. 2005/1967
(N.I. 17)) shall cease to have effect accordingly.
1249
Extension of GB enactments relating to SEs
(1)
The enactments in force in Great Britain relating to SEs extend to Northern
40
Ireland.

Company Law Reform Bill [HL] (changed to Companies Bill [HL])
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(2)
The following enactments shall cease to have effect accordingly—
(a)
the European Public Limited-Liability Company Regulations
(Northern Ireland) 2004 (SR 2004/417), and
(b)
the European Public Limited-Liability Company (Fees) Regulations
(Northern Ireland) 2004 (SR 2004/418).
5
(3)
In this section “SE” means a European Public Limited-Liability Company (or
Societas Europaea) within the meaning of Council Regulation 2157/2001/EC
of 8 October 2001 on the Statute for a European Company.
1250
Extension of GB enactments relating to certain other forms of business
organisation
10
(1)
The enactments in force in Great Britain relating to—
(a)
limited liability partnerships,
(b)
limited partnerships,
(c)
open-ended investment companies, and
(d)
European Economic Interest Groupings,
15

extend to Northern Ireland.
(2)
The following enactments shall cease to have effect accordingly—
(a)
the Limited Liability Partnerships Act (Northern Ireland) 2002 (c. 12 (N.
I.));
(b)
the Limited Partnerships Act 1907 (c. 24) as it formerly had effect in
20
Northern Ireland;
(c)
the Open-Ended Investment Companies Act (Northern Ireland) 2002
(c. 13 (N.I.));
(d)
the European Economic Interest Groupings Regulations (Northern
Ireland) 1989 (SR 1989/216).
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1251
Extension of enactments relating to business names
(1)
The provisions of Part 41 of this Act (business names) extend to Northern
Ireland.
(2)
The Business Names (Northern Ireland) Order 1986 (S.I. 1986/1033 (N.I. 7))
shall cease to have effect accordingly.
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Part 46
General supplementary provisions
Regulations and orders
1252
Regulations and orders: statutory instrument

Except as otherwise provided, regulations and orders under this Act shall be
35
made by statutory instrument.
1253
Regulations and orders: negative resolution procedure

Where regulations or orders under this Act are subject to “negative resolution
procedure” the statutory instrument containing the regulations or order shall