Company Law Reform Bill [HL] (627-633)

House of Commons

Session 2005 - 06
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Other Bills before Parliament

Company Law Reform Bill [HL] (627-633)

Company Law Reform Bill [HL] (changed to Companies Bill [HL])
Schedule 3 — Amendments of remaining provisions of the Companies Act 1985 relating to offences
627

substitute—
“(7)
If an inspection under subsection (6) is refused, an offence is
committed by—
(a)
the company, and
(b)
every officer of the company who is in default.
5
(8)
A person guilty of an offence under subsection (7) is liable on
summary conviction to a fine not exceeding level 3 on the standard
scale and, for continued contravention, a daily default fine not
exceeding one-tenth of level 3 on the standard scale.”.
Failure to give notice to registrar of application to court or to deliver copy of court order
10
15
For section 176(4) of the Companies Act 1985 (c. 6) (failure to give notice to
registrar of application to court or to deliver copy of court order)
substitute—
“(4)
If a company fails to comply with subsection (3), an offence is
committed by—
15
(a)
the company, and
(b)
every officer of the company who is in default.
(5)
A person guilty of an offence under this section is liable on summary
conviction to a fine not exceeding level 3 on the standard scale and,
for continued contravention, a daily default fine not exceeding one-
20
tenth of level 3 on the standard scale.”.
Failure to make ready certificates following allotment or transfer of shares
16
For section 185(5) of the Companies Act 1985 (failure to prepare share
certificates, etc) substitute—
“(5)
If default is made in complying with subsection (1), an offence is
25
committed by every officer of the company who is in default.
(5A)
A person guilty of an offence under this section is liable on summary
conviction to a fine not exceeding level 3 on the standard scale and,
for continued contravention, a daily default fine not exceeding one-
tenth of level 3 on the standard scale.”.
30
Offences in connection with share warrants (Scotland)
17    (1)
Section 189 of the Companies Act 1985 (offences in connection with share
warrants (Scotland)) is amended as follows.
      (2)
In subsection (1), for the words “he is on conviction thereof” to the end
substitute “he commits an offence.”.
35
      (3)
In subsection (2), for the words “he is on conviction thereof” to the end
substitute “he commits an offence.”.
      (4)
At the end add—
“(3)
A person guilty of an offence under subsection (1) is liable on
summary conviction to imprisonment for a term not exceeding six
40
months or to a fine not exceeding level 5 on the standard scale (or
both).

Company Law Reform Bill [HL] (changed to Companies Bill [HL])
Schedule 3 — Amendments of remaining provisions of the Companies Act 1985 relating to offences
628

(4)
A person guilty of an offence under subsection (2) is liable—
(a)
on conviction on indictment, to imprisonment for a term not
exceeding seven years or a fine (or both);
(b)
on summary conviction, to imprisonment for a term not
exceeding six months or a fine not exceeding the statutory
5
maximum (or both).”.
Failure to send to registrar particulars of charge or of issue of debentures (England and Wales)
18    (1)
In subsection (3) of section 399 of the Companies Act 1985 (c. 6) (failure to
send to registrar particulars of charge or of issue of debentures) for the
words “the company” to the end substitute “an offence is committed by—
10
(a)
the company, and
(b)
every officer of the company who is in default.”.
      (2)
At the end of that section add—
“(4)
A person guilty of an offence under this section is liable—
(a)
on conviction on indictment, to a fine;
15
(b)
on summary conviction, to a fine not exceeding the statutory
maximum and, for continued contravention, a daily default
fine not exceeding one-tenth of the statutory maximum.”.
Failure to send to registrar particulars of charge on property acquired (England and Wales)
19
For section 400(4) of the Companies Act 1985 (failure to send to registrar
20
particulars of charge on property acquired) substitute—
“(4)
If default is made in complying with this section, an offence is
committed by—
(a)
the company, and
(b)
every officer of the company who is in default.
25
(5)
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 and, for continued contravention, a daily default
fine not exceeding one-tenth of the statutory maximum.”.
30
Delivery of debenture etc without endorsement of certificate of registration of charge (England
and Wales)
20    (1)
In subsection (3) of section 402 of the Companies Act 1985 (delivery of
debenture without required endorsement) for the words “he is liable” to the
end substitute “he commits an offence.”.
35
      (2)
At the end of that section add—
“(4)
A person guilty of an offence under this section is liable on summary
conviction to a fine not exceeding level 3 on the standard scale.”.
Failure to give notice of appointment of receiver or manager, or of his ceasing to act (England
and Wales)
40
21
For section 405(4) of the Companies Act 1985 (notice to registrar of

Company Law Reform Bill [HL] (changed to Companies Bill [HL])
Schedule 3 — Amendments of remaining provisions of the Companies Act 1985 relating to offences
629

enforcement of security) substitute—
“(4)
A person who makes default in complying with the requirements of
this section commits an offence.
(5)
A person guilty of an offence under this section is liable on summary
conviction to a fine not exceeding level 3 on the standard scale and,
5
for continued contravention, a daily default fine not exceeding one-
tenth of level 3 on the standard scale.”.
Omission of entry from company’s register of charges (England and Wales)
22    (1)
In subsection (3) of section 407 of the Companies Act 1985 (c. 6) (failure of
officer to make required entry in company’s register of charges) for “he is
10
liable to a fine” substitute “he commits an offence”.
      (2)
At the end of that section add—
“(4)
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
15
maximum.”.
Refusal of inspection of charging instrument or of register of charges (England and Wales)
23
For section 408(3) of the Companies Act 1985 (refusal of inspection of
charging instrument or register of charges) substitute—
“(3)
If inspection of copies, or of the register, is refused, an offence is
20
committed by—
(a)
the company, and
(b)
every officer of the company who is in default.
(3A)
A person guilty of an offence under this section is liable on summary
conviction to a fine not exceeding level 3 on the standard scale and,
25
for continued contravention, a daily default fine not exceeding one-
tenth of level 3 on the standard scale.”.
Failure to send to registrar particulars of charge or issue of debentures (Scotland)
24    (1)
In subsection (3) of section 415 of the Companies Act 1985 (Scotland: failure
to send registrar particulars of charge or issue of debenture) for the words
30
“the company and every officer of it” to the end substitute “an offence is
committed by—
(a)
the company, and
(b)
every officer of the company who is in default.”.
      (2)
At the end of that section add—
35
“(4)
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 and, for continued contravention, a daily default
fine not exceeding one-tenth of the statutory maximum.”.
40

Company Law Reform Bill [HL] (changed to Companies Bill [HL])
Schedule 3 — Amendments of remaining provisions of the Companies Act 1985 relating to offences
630

Failure to send to registrar particulars of charge on property acquired (Scotland)
25    (1)
In subsection (3) of section 416 of the Companies Act 1985 (c. 6) (Scotland:
failure to send registrar particulars of charge or issue of debenture) for the
words “the company and every officer of it” to the end substitute “an offence
is committed by—
5
(a)
the company, and
(b)
every officer of the company who is in default.”.
      (2)
At the end of that section add—
“(4)
A person guilty of an offence under this section is liable—
(a)
on conviction on indictment, to a fine;
10
(b)
on summary conviction, to a fine not exceeding the statutory
maximum and, for continued contravention, a daily default
fine not exceeding one-tenth of the statutory maximum.”.
Omission of entry from company’s register of charges (Scotland)
26    (1)
In subsection (3) of section 422 of the Companies Act 1985 (Scotland: failure
15
to make entry in company’s register of charges) for “he is liable to a fine”
substitute “he commits an offence”.
      (2)
At the end of that section add—
“(4)
A person guilty of an offence under this section is liable—
(a)
on conviction on indictment, to a fine;
20
(b)
on summary conviction, to a fine not exceeding the statutory
maximum.”.
Refusal of inspection of charging instrument or of register of charges (Scotland)
27
For section 423(3) of the Companies Act 1985 (Scotland: refusal of inspection
of charging instrument or register of charges) substitute—
25
“(3)
If inspection of the copies or register is refused, an offence is
committed by—
(a)
the company, and
(b)
every officer of the company who is in default.
(3A)
A person guilty of an offence under this section is liable on summary
30
conviction to a fine not exceeding level 3 on the standard scale and,
for continued contravention, a daily default fine not exceeding one-
tenth of level 3 on the standard scale.”.
Failure to annex to memorandum court order sanctioning compromise or arrangement with
creditors
35
28
For section 425(4) of the Companies Act 1985 (failure to annex to company’s
constitutional documents copy of court order sanctioning compromise or
arrangement with creditors) substitute—
“(4)
If a company makes default in complying with subsection (3), an
offence is committed by—
40
(a)
the company, and
(b)
every officer of the company who is in default.

Company Law Reform Bill [HL] (changed to Companies Bill [HL])
Schedule 3 — Amendments of remaining provisions of the Companies Act 1985 relating to offences
631

(4A)
A person guilty of an offence under this section is liable on summary
conviction to a fine not exceeding level 3 on the standard scale.”.
Failure to comply with requirements to inform members and creditors about compromise or
arrangement
29
For subsection (6) of section 426 of the Companies Act 1985 (c. 6) (failure to
5
inform members or creditors in advance of meeting about compromise or
arrangement) substitute—
“(6)
If a company makes default in complying with any requirement of
this section, an offence is committed by—
(a)
the company, and
10
(b)
every officer of the company who is in default.
(6A)
For the purposes of subsection (6) the following are treated as
officers of the company—
(a)
a liquidator or administrator of the company, and
(b)
a trustee of a deed for securing the issue of debentures of the
15
company.
(6B)
A person is not guilty of an offence under subsection (6) if he shows
that the default was due to the refusal of a director or trustee for
debenture holders to supply the necessary particulars of his
interests.
20
(6C)
A person guilty of an offence under subsection (6) is liable—
(a)
on conviction on indictment, to a fine;
(b)
on summary conviction, to a fine not exceeding the statutory
maximum.”.
Failure by director or trustee for debenture holders to give information to company
25
30    (1)
In subsection (7) of that section (failure by director or trustee for debenture
holders to give information to company) omit “; and any person who makes
default in complying with this subsection is liable to a fine”.
      (2)
At the end of that section add—
“(8)
A person who makes default in complying with subsection (7)
30
commits an offence.
(9)
A person guilty of an offence under subsection (8) is liable on
summary conviction to a fine not exceeding level 3 on the standard
scale.”.
Failure to deliver to registrar copy of order for company reconstruction or amalgamation
35
31    (1)
In section 427(5) of the Companies Act 1985 (failure to deliver to registrar
copy of order for company reconstruction or amalgamation) omit the words
“; and if default is made” to the end.
      (2)
After that provision insert—
“(5A)
If default is made in complying with subsection (5) an offence is
40
committed by—
(a)
the company, and

Company Law Reform Bill [HL] (changed to Companies Bill [HL])
Schedule 3 — Amendments of remaining provisions of the Companies Act 1985 relating to offences
632

(b)
every officer of the company who is in default.
(5B)
A person guilty of an offence under this section is liable on summary
conviction to a fine not exceeding level 3 on the standard scale.”.
Failure to send notice etc relating to buy-out of minority shareholders
32    (1)
In subsection (6) of section 429 of the Companies Act 1985 (c. 6) (failure to
5
send notice etc relating to buy-out of minority shareholders) for the words
from “shall be liable to imprisonment” to the end substitute “commits an
offence.”
      (2)
After subsection (7) of that section insert—
“(7A)
A person guilty of an offence under this section is liable—
10
(a)
on conviction on indictment, to imprisonment for a term not
exceeding two years or a fine (or both);
(b)
on summary conviction—
(i)
in England and Wales, to imprisonment for a term not
exceeding twelve months or to a fine not exceeding
15
the statutory maximum (or both) and, for continued
contravention, a daily default fine not exceeding one-
fiftieth of the statutory maximum;
(ii)
in Scotland or Northern Ireland, to imprisonment for
a term not exceeding six months, or to a fine not
20
exceeding the statutory maximum (or both) and, for
continued contravention, a daily default fine not
exceeding one-fiftieth of the statutory maximum.”.
Failure to give notice of rights to minority shareholder
33    (1)
In subsection (6) of section 430A of the Companies Act 1985 (takeovers:
25
failure to give notice of rights to minority shareholder) for the words “shall
be liable” to the end substitute “commits an offence.”
      (2)
At the end of that section add—
“(8)
A person guilty of an offence under this section is liable—
(a)
on conviction on indictment, to a fine;
30
(b)
on summary conviction, to a fine not exceeding the statutory
maximum and, for continued contravention, a daily default
fine not exceeding one-fiftieth of the statutory maximum.”.
Failure to give information about interests in shares etc
34    (1)
In subsection (3) of section 444 of the Companies Act 1985 (failure to give
35
information requested by Secretary of State relating to interests in shares etc)
for “is liable to imprisonment or a fine, or both” substitute “commits an
offence”.
      (2)
At the end of that section add—
“(4)
A person guilty of an offence under this section is liable—
40
(a)
on conviction on indictment, to imprisonment for a term not
exceeding two years or a fine (or both);
(b)
on summary conviction—

Company Law Reform Bill [HL] (changed to Companies Bill [HL])
Schedule 3 — Amendments of remaining provisions of the Companies Act 1985 relating to offences
633

(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) and, for continued
contravention, a daily default fine not exceeding one-
fiftieth of the statutory maximum;
5
(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) and, for
continued contravention, a daily default fine not
exceeding one-fiftieth of the statutory maximum.”.
10
Obstruction of rights conferred by a warrant or failure to comply with requirement under
section 448
35    (1)
In section 448(7) of the Companies Act 1985 (c. 6) (obstruction of rights
conferred by or by virtue of warrant for entry and search of premises) omit
the words “and liable to a fine.” to the end.
15
      (2)
After that provision insert—
“(7A)
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.”.
20
Wrongful disclosure of information to which section 449 applies
36    (1)
Section 449 of the Companies Act 1985 (wrongful disclosure of information
obtained in course of company investigation) is amended as follows.
      (2)
For subsection (6)(a) and (b) substitute “is guilty of an offence.”
      (3)
After subsection (6) insert—
25
“(6A)
A person guilty of an offence under this section is liable—
(a)
on conviction on indictment, to imprisonment for a term not
exceeding two years or a fine (or both);
(b)
on summary conviction—
(i)
in England and Wales, to imprisonment for a term not
30
exceeding twelve months or to a fine not exceeding
the statutory maximum (or both);
(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).”.
35
      (4)
Omit subsection (7).
Destruction, mutilation etc of company documents
37    (1)
For subsection (3) of section 450 of the Companies Act 1985 (offence of
destroying, etc company documents) substitute—
“(3)
A person guilty of an offence under this section is liable—
40
(a)
on conviction on indictment, to imprisonment for a term not
exceeding seven years or a fine (or both);
(b)
on summary conviction—