Company Law Reform Bill [HL] (634-640)

House of Commons

Session 2005 - 06
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Other Bills before Parliament

Company Law Reform Bill [HL] (634-640)

Company Law Reform Bill [HL] (changed to Companies Bill [HL])
Schedule 3 — Amendments of remaining provisions of the Companies Act 1985 relating to offences
634

(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);
(ii)
in Scotland or Northern Ireland, to imprisonment for
a term not exceeding six months, or to a fine not
5
exceeding the statutory maximum (or both).”.
      (2)
Omit subsection (4) of that section.
Provision of false information in purported compliance with section 447
38    (1)
For subsection (2) of section 451 of the Companies Act 1985 (c. 6) (provision
of false information in response to requirement under section 447)
10
substitute—
“(2)
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—
15
(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);
(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).”.
      (2)
Omit subsection (3) of that section.
Obstruction of inspector, etc exercising power to enter and remain on premises
39    (1)
Section 453A of the Companies Act 1985 (obstruction of inspector etc
exercising power to enter and remain on premises) is amended as follows.
25
      (2)
For subsection (5)(a) and (b) substitute “is guilty of an offence.”
      (3)
After subsection (5) insert—
“(5A)
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
30
maximum.”.
      (4)
Omit subsection (6).
Attempted evasion of restrictions under Part 15
40    (1)
In subsection (1) of section 455 of the Companies Act 1985 (attempted
evasion of restrictions under Part 15) for “is liable to a fine if he” substitute
35
“commits an offence if he”.
      (2)
In subsection (2) of that section for the words “the company” to the end
substitute “an offence is committed by—
(a)
the company, and
(b)
every officer of the company who is in default.”
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
635

      (3)
After that subsection insert—
“(2A)
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.”.
5
Fraudulent trading
41    (1)
Section 458 of the Companies Act 1985 (fraudulent trading) is amended as
follows.
      (2)
Make the existing provision subsection (1).
      (3)
For “is liable to imprisonment or a fine, or both” substitute “commits an
10
offence”.
      (4)
At the end add—
“(2)
A person guilty of an offence under this section is liable—
(a)
on conviction on indictment, to imprisonment for a term not
exceeding ten years or a fine (or both);
15
(b)
on summary conviction—
(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);
(ii)
in Scotland or Northern Ireland, to imprisonment for
20
a term not exceeding six months, or to a fine not
exceeding the statutory maximum (or both).”.
Failure to register court order in case of unfair prejudice to company members
42    (1)
In section 461(5) of the Companies Act 1985 (c. 6) (failure to register court
order in case of unfair prejudice to company members) omit the words “;
25
and if a company makes default” to the end.
      (2)
After that provision insert—
“(5A)
If a company makes default in complying with subsection (5), an
offence is committed by—
(a)
the company, and
30
(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 and,
for continued contravention, a daily default fine not exceeding one-
tenth of level 3 on the standard scale.”.
35
Breach of duty etc in connection with application to strike company off register
43    (1)
In subsection (1) of section 652E of the Companies Act 1985 (enforcement of
duties in connection with application to strike company off register) omit
“and liable to a fine”.
      (2)
In subsection (2) of that section omit “and liable to imprisonment or a fine,
40
or both”.

Company Law Reform Bill [HL] (changed to Companies Bill [HL])
Schedule 4 — Documents and information sent or supplied to a company
Part 2 — Communications in hard copy form
636

      (3)
At the end of that section add—
“(6)
A person guilty of an offence under subsection (1) is liable—
(a)
on conviction on indictment, to a fine;
(b)
on summary conviction, to a fine not exceeding the statutory
maximum.
5
(7)
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—
(i)
in England and Wales, to imprisonment for a term not
10
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).”.
15
Making unauthorised application to strike off company
44    (1)
In subsection (2) of section 652F of the Companies Act 1985 (c. 6) (making
unauthorised application to strike off company) omit “and liable to a fine”.
      (2)
At the end of that section add—
“(3)
A person guilty of an offence under this section is liable—
20
(a)
on conviction on indictment, to a fine;
(b)
on summary conviction, to a fine not exceeding the statutory
maximum.”.
Schedule 4
Section 1109(1)

Documents and information sent or supplied to a company
25
Part 1
Introduction
Application of Schedule
1
This Schedule does not apply to documents or information sent or supplied
by one company to another (see section 1109(4) and Schedules 5 and 6).
30
Part 2
Communications in hard copy form
Introduction
2
A document or information is validly sent or supplied to a company if it is
sent or supplied in hard copy form in accordance with this Part of this
35
Schedule.

Company Law Reform Bill [HL] (changed to Companies Bill [HL])
Schedule 4 — Documents and information sent or supplied to a company
Part 3 — Communications in electronic form
637

Method of communication in hard copy form
3     (1)
A document or information in hard copy form may be sent or supplied by
hand or by post to an address (in accordance with paragraph 4).
      (2)
For the purposes of this Schedule, a person sends a document or information
by post if he prepays and posts an envelope containing the document or
5
information.
Address for communications in hard copy form
4
A document or information in hard copy form may be sent or supplied—
(a)
to an address specified by the company for the purpose;
(b)
to the company’s registered office;
10
(c)
to an address to which any provision of the Companies Acts
authorises the document or information to be sent or supplied.
Part 3
Communications in electronic form
Introduction
15
5     (1)
A document or information is validly sent or supplied to a company if it is
sent or supplied in electronic form in accordance with this Part of this
Schedule.
      (2)
This paragraph has effect subject to any requirements or contrary provision
in the Companies Acts.
20
Conditions for use of communications in electronic form
6
A document or information may only be sent or supplied to a company in
an electronic form if—
(a)
the company has agreed (generally or specifically) that the document
or information may be sent or supplied in that form (and has not
25
revoked that agreement), or
(b)
the company is deemed to have so agreed by a provision in the
Companies Acts.
Address for communications in electronic form
7     (1)
Where the document or information is sent or supplied by electronic means,
30
it may only be sent or supplied in electronic form to an address—
(a)
specified for the purpose by the company (generally or specifically),
or
(b)
deemed by a provision in the Companies Acts to have been so
specified.
35
      (2)
Where the document or information is sent or supplied in electronic form by
hand or by post, it must be sent or supplied to an address to which it could
be validly sent if it were in hard copy form.

Company Law Reform Bill [HL] (changed to Companies Bill [HL])
Schedule 5 — Communications by a company other than a traded company
Part 2 — Communications in hard copy form
638

Part 4
Other agreed forms of communication
8     (1)
A document or information that is sent or supplied to a company otherwise
than in hard copy form or electronic form is validly sent or supplied if it is
sent or supplied in a form or manner that has been agreed by the company.
5
      (2)
This paragraph has effect subject to any requirements or contrary provision
in the Companies Acts.
Schedule 5
Section 1109(2)

Communications by a company other than a traded company
Part 1
10
Introduction
Application of this Schedule
1
This Schedule applies to documents or information sent or supplied by
companies that are not traded companies.
Part 2
15
Communications in hard copy form
Introduction
2
A document or information is validly sent or supplied by a company if it is
sent or supplied in hard copy form in accordance with this Part of this
Schedule.
20
Method of communication in hard copy form
3     (1)
A document or information in hard copy form must be—
(a)
handed to the intended recipient, or
(b)
sent or supplied by hand or by post to an address (in accordance with
paragraph 4).
25
      (2)
For the purposes of this Schedule, a person sends a document or information
by post if he prepays and posts an envelope containing the document or
information.
Address for communications in hard copy form
4     (1)
A document or information in hard copy form may be sent or supplied by
30
the company—
(a)
to an address specified for the purpose by the intended recipient;
(b)
to a company at its registered office;
(c)
to a person in his capacity as a member of the company at his address
as shown in the company’s register of members;
35

Company Law Reform Bill [HL] (changed to Companies Bill [HL])
Schedule 5 — Communications by a company other than a traded company
Part 4 — Communications by means of a website
639

(d)
to a person in his capacity as a director of the company at his address
as shown in the company’s register of directors;
(e)
to an address to which any provision of the Companies Acts
authorises the document or information to be sent or supplied.
      (2)
Where the company is unable to obtain an address falling within sub-
5
paragraph (1), the document or information may be sent or supplied to the
intended recipient’s last address known to the company.
Part 3
Communications in electronic form
Introduction
10
5     (1)
A document or information is validly sent or supplied by a company if it is
sent in electronic form in accordance with this Part of this Schedule.
      (2)
This paragraph has effect subject to any requirements or contrary provision
in the Companies Acts.
Agreement to communications in electronic form
15
6
A document or information may only be sent or supplied by a company in
electronic form—
(a)
to a person who has agreed (generally or specifically) that the
document or information may be sent or supplied in that form (and
has not revoked that agreement), or
20
(b)
to a company that is deemed to have so agreed by a provision in the
Companies Acts.
Address for communications in electronic form
7     (1)
Where the document or information is sent or supplied by electronic means,
it may only be sent or supplied to an address—
25
(a)
specified for the purpose by the intended recipient (generally or
specifically), or
(b)
where the intended recipient is a company, deemed by a provision
of the Companies Acts to have been so specified.
      (2)
Where the document or information is sent or supplied in electronic form by
30
hand or by post, it must be—
(a)
handed to the intended recipient, or
(b)
sent or supplied to an address to which it could be validly sent if it
were in hard copy form.
Part 4
35
Communications by means of a website
Use of website
8     (1)
A document or information is validly sent or supplied by a company if it is
made available on a website in accordance with this Part of this Schedule.

Company Law Reform Bill [HL] (changed to Companies Bill [HL])
Schedule 5 — Communications by a company other than a traded company
Part 4 — Communications by means of a website
640

      (2)
This paragraph has effect subject to any requirements or contrary provision
in the Companies Acts.
Agreement to use of website
9
A document or information may only be sent or supplied by the company to
a person by being made available on a website if the person—
5
(a)
has agreed (generally or specifically) that the document or
information may be sent or supplied to him in that manner, or
(b)
is taken to have so agreed under—
(i)
paragraph 10 (members of the company etc), or
(ii)
paragraph 11 (debenture holders),
10

and has not revoked that agreement.
Deemed agreement of members of company etc to use of website
10    (1)
This paragraph applies to a document or information to be sent or supplied
to a person—
(a)
as a member of the company, or
15
(b)
as a person identified by a member (in accordance with the
company’s articles or regulations made under section 137) as entitled
to enjoy or exercise all or any specified rights of the member in
relation to the company (an “entitled person”).
      (2)
To the extent that—
20
(a)
the members of the company have resolved that the company may
send or supply documents or information to members by making
them available on a website, or
(b)
the company’s articles contain provision to that effect,

a member of the company or entitled person in relation to whom the
25
following conditions are met is taken to have agreed that the company may
send or supply documents or information to him in that manner.
      (3)
The conditions are that—
(a)
the member or entitled person has been asked individually by the
company to agree that the company may send or supply documents
30
or information generally, or the documents or information in
question, to him by means of a website, and
(b)
the company has not received a response within the period of 28
days beginning with the date on which the company’s request was
sent.
35
      (4)
A member or entitled person is not taken to have so agreed if the company’s
request—
(a)
did not state clearly what the effect of a failure to respond would be,
or
(b)
was sent less than twelve months after a previous request made to
40
him for the purposes of this paragraph in respect of the same or a
similar class of documents or information.
      (5)
A resolution under this paragraph is subject to Chapter 3 of Part 3 of this Act
(resolutions affecting company’s constitution).