| Company Law Reform Bill [Lords] - continued | House of Commons |
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Enforcement of directors’ liabilities by shareholder action: supplementary Mr Secretary Darling NC82 To move the following Clause:— ‘(1) A group of members may not bring proceedings under section (Enforcement of directors’ liabilities by shareholder action) in the name of a company unless— (a) the group has given written notice to the company stating— (i) the cause of action and a summary of the facts on which the proceedings are to be based, (ii) the names and addresses of the members comprising the group, and (iii) the grounds on which it is alleged that those members constitute an authorised group; and (b) not less than 28 days have elapsed between the date of the giving of the notice to the company and the bringing of the proceedings. (2) Where such a notice is given to a company, any director of the company may apply to the court within the period of 28 days beginning with the date of the giving of the notice for an order directing that the proposed proceedings shall not be brought, on one or more of the following grounds— (a) that the unauthorised amount has been made good to the company; (b) that proceedings to enforce the liability have been brought, and are being pursued with due diligence, by the company; (c) that the members proposing to bring proceedings under this section do not constitute an authorised group. (3) Where an application is made on the ground mentioned in subsection (2)(b), the court may as an alternative to directing that the proposed proceedings under section (Enforcement of directors’ liabilities by shareholder action) are not to be brought, direct— (a) that such proceedings may be brought on such terms and conditions as the court thinks fit, and (b) that the proceedings brought by the company— (i) shall be discontinued, or (ii) may be continued on such terms and conditions as the court thinks fit. (4) The members by whom proceedings are brought under section (Enforcement of directors’ liabilities by shareholder action) owe to the company in whose name they are brought the same duties in relation to the proceedings as would be owed by the company’s directors if the proceedings were being brought by the company. But proceedings to enforce any such duty may be brought by the company only with the permission of the court. (5) Proceedings brought under section (Enforcement of directors’ liabilities by shareholder action) may not be discontinued or settled by the group except with the permission of the court, which may be given on such terms as the court thinks fit.’. Trade unions Mr Secretary Darling NC83 To move the following Clause:— ‘(1) A donation to a trade union, other than a contribution to the union’s political fund, is not a political donation for the purposes of this Part. (2) A trade union is not a political organisation for the purposes of section 371 (meaning of “political expenditure”). (3) In this section— “trade union” has the meaning given by section
1 of “political fund” means the fund from which payments by a trade union in the furtherance of political objects are required to be made by virtue of section 82(1)(a) of that Act or Article 57(2)(a) of that Order.’. Expenditure on lobbying Mr Edward Davey
NC76 To move the following Clause:— ‘(1) A company must not in any financial year incur expenditure on lobbying activity in excess of the limit then in force, unless the expenditure has been authorised by a resolution of the members of the company. (2) The provisions of sections 372(2) to (5), 372(6)(b), 372(7), 373(1), 373(2), 373(4), 373(6), 373(7), 374 and 375 to 379 shall apply to a resolution under this section. (3) The Secretary of State shall have power to make regulations, which shall be subject to the affirmative resolution procedure, to— (a) set the limit, and (b) exempt, to any extent the Secretary of State sees fit, expenditure incurred by companies in responding to requests for information initiated by governmental or parliamentary bodies, but if the Secretary of State fails to set the limit, the limit shall be £1,000. (4) Companies must report expenditure on lobbying activity in excess of the limit in a form to be specified by the Secretary of State by regulations, which shall be subject to the affirmative resolution procedure. (5) Failure to comply with reporting requirements established under subsection (4) shall count as a violation of the duty to keep accounting records under section 392 and shall be punishable in accordance with section 393. (6) This section applies to overseas companies, as defined in section 1011, as well as to UK companies, and the powers of the Secretary of State in Part 34 shall be deemed to include a power to require overseas companies to report their expenditure on lobbying activity in excess of the limit. (7) “Lobbying activity” means any activity intended directly or indirectly to influence legislation or policy at any level of government in the United Kingdom.’. amendments RELATING TO PART 15 Mr Edward Davey
687 Page 168 [Clause 372], leave out lines 34 and 35 and insert— ‘(3) Subsection (2)(b)(i) shall not apply where a company is a wholly owned subsidiary of a UK company.’. Mr Secretary Darling 495 Page 168, line 35 [Clause 372], leave out ‘UK’ and insert ‘UK-registered’. Mr Secretary Darling 496 Page 168, line 41 [Clause 372], leave out ‘UK’ and insert ‘UK-registered’. Mr Secretary Darling 497 Page 168, line 43 [Clause 372], leave out ‘UK’ and insert ‘UK-registered’. Mr Secretary Darling 706 Page 168, line 44 [Clause 372], leave out sub-paragraph (ii). Mr Secretary Darling 499 Page 169, line 1 [Clause 372], leave out subsection (5). Mr Secretary Darling 647 Page 170, line 1, leave out Clause 374. Mr Secretary Darling 500 Page 170, line 38 [Clause 376], leave out ‘UK’ and insert ‘UK-registered’. Mr Secretary Darling 501 Page 170, line 40 [Clause 376], leave out ‘UK’ and insert ‘UK-registered’. Mr Secretary Darling 707 Page 170, line 41 [Clause 376], leave out sub-paragraph (ii). Mr Secretary Darling 503 Page 170, line 43 [Clause 376], leave out subsection (5). Mr Secretary Darling 708 Page 171, line 14, leave out Clause 377. Mr Secretary Darling 709 Page 172, line 23 [Clause 378], leave out from ‘under’ to ‘(“the’ in line 24 and insert ‘section (Enforcement of directors’ liabilities by shareholder action) in the name of a company (“the company”) by an authorised group’. Mr Secretary Darling 710 Page 172, line 43 [Clause 379], leave out ‘section 377’ and insert ‘section (Enforcement of directors’ liabilities by shareholder action) in the name of a company’. Mr Secretary Darling 711 Page 173, line 11, leave out Clause 380. Mr Alan Duncan
376 Page 173, line 12 [Clause 380], at end insert ‘provided that it satisfies the conditions set out in subsection (3).’. Mr Alan Duncan
377 Page 173, line 15 [Clause 380], at end insert— ‘(3) The conditions are that the trade union currently has in force a political resolution authorising the trade union to apply its funds in the furtherance of political objects and such political resolution authorised donations or expenditure under one or more of the following heads— (a) donations to political parties or independent election candidates, (b) donations to political organisations other than political parties, and (c) political expenditure, in each case up to a specified amount in the period for which the resolution has effect; and for this purpose “political resolution” shall have the meaning set out in the Trade Union and Labour Relations (Consolidation) Act 1992 (c. 52) save that the reference in section 73(3) of such act to “ten years” shall be deemed to be “four years”.’. new clauses relating to part 14 Inspection of records of resolutions and meetings Mr Secretary Darling NC9 To move the following Clause:— ‘(1) The records referred to in section 362 (records of resolutions etc) relating to the previous ten years must be kept available for inspection— (a) at the company’s registered office, or (b) at a place specified in regulations under section (Regulations about where certain company records to be kept available for inspection). (2) The company must give notice to the registrar— (a) of the place at which the records are kept available for inspection, and (b) of any change in that place, unless they have at all times been kept at the company’s registered office. (3) The records must be open to the inspection of any member of the company without charge. (4) Any member may require a copy of any of the records on payment of such fee as may be prescribed. (5) If default is made for 14 days in complying with subsection (2) or an inspection required under subsection (3) is refused, or a copy requested under subsection (4) is not sent, an offence is committed by every officer of the company who is in default. (6) 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, to a daily default fine not exceeding one-tenth of level 3 on the standard scale. (7) In a case in which an inspection required under subsection (3) is refused or a copy requested under subsection (4) is not sent, the court may by order compel an immediate inspection of the records or direct that the copies required be sent to the persons who requested them.’. Saving for provisions of articles as to determination of entitlement to vote Mr Secretary Darling NC13 To move the following Clause:— ‘Nothing in this Chapter affects— (a) any provision of a company’s articles— (i) requiring an objection to a person’s entitlement to vote on a resolution to be made in accordance with the articles, and (ii) for the determination of any such objection to be final and conclusive, or (b) the grounds on which such a determination may be questioned in legal proceedings.’. Computation of periods of notice etc: clear day rule Mr Secretary Darling NC14 To move the following Clause:— ‘(1) This section applies for the purposes of the following provisions of this Part— section 314(1) and (2) (notice required of general meeting), section 319(1) and (3) (resolution requiring special notice), section 321(4)(d) (request to circulate members’ statement), section 323(2)(b) (expenses of circulating statement to be deposited or tendered before meeting), section 345(4)(d)(i) (request to circulate member’s resolution at AGM of public company), and section 347(2)(b)(i) (expenses of circulating statement to be deposited or tendered before meeting). (2) Any reference in those provisions to a period of notice, or to a period before a meeting by which a request must be received or sum deposited or tendered, is to a period of the specified length excluding— (a) the day of the meeting, and (b) the day on which the notice is given, the request received or the sum deposited or tendered.’. AMENDMENTs relating to part 14 Mr Secretary Darling 643 Page 135, line 23 [Clause 288], at end insert— ‘(2A) Where a provision of the Companies Acts— (a) requires a resolution of a company, or of the members (or a class of members) of a company, and (b) does not specify what kind of resolution is required, what is required is an ordinary resolution unless the company’s articles require a higher majority (or unanimity).’. Jim Cousins
682 Page 137, line 1 [Clause 291], at end insert— ‘(3A) Directors of the company shall be ineligible to cast any proxy votes.’. Mr Secretary Darling 301 Page 137, line 35, leave out Clause 294. Mr Alan Duncan
355 Page 142, line 23 [Clause 307], at end insert— ‘( ) Nothing in this Chapter affects a provision of a company’s articles which provides for a resolution in writing executed by or on behalf of each member who would have been entitled to vote upon it if it had been proposed at a general meeting, or at a meeting of any class of members of the company, at which he was present (whether such resolution consists of one instrument executed by or on behalf of each such member or of several instruments in the like form each executed by or on behalf of one or more such members) to be as effectual as if it had been passed at a general meeting, or at a meeting of any class of members of the company, duly convened and held. A resolution in writing passed in accordance with such a provision of the company’s articles shall be treated as if it were a “written resolution” for the purposes of this Chapter.’. Mr Secretary Darling 443 Page 143, line 6 [Clause 310], leave out ‘who hold’ and insert ‘representing’. Mr Secretary Darling 302 Page 144, line 25 [Clause 312], leave out ‘their services to’ and insert ‘the services of’. Mr Secretary Darling 348 Page 145 [Clause 314], leave out line 16. Mr Secretary Darling 349 Page 145, line 28 [Clause 314], at end insert— ‘( ) Subsections (5) and (6) do not apply to an annual general meeting of a public company (see instead section 344(2)).’. Mr Alan Duncan
418 Page 146, line 2 [Clause 316], at end insert ‘and (d) be communicated directly to the member either in electronic form or in hard copy form’. Mr Secretary Darling 444 Page 147, line 30 [Clause 321], at end insert— ‘See also section 153 (exercise of rights where shares held on behalf of others).’. Mr Alan Duncan
419 Page 149, line 30 [Clause 327], at end insert— ‘(1A) The chairman must demand a poll when he is aware that the outcome would be different from that reached on a show of hands.’. Mr Alan Duncan
420 Page 149, line 30 [Clause 327], at end insert— ‘(1A) The chairman must announce the number of proxy votes in favour and against each resolution, before such a resolution is put to a vote of members in general meeting.’. Mr Secretary Darling 445 Page 156, line 28 [Clause 345], at end insert— ‘See also section 153 (exercise of rights where shares held on behalf of others).’. Mr Secretary Darling 446 Page 158, line 25 [Clause 349], at end insert— ‘See also section 153 (exercise of rights where shares held on behalf of others).’. Mr Alan Duncan
421 Page 158, line 13, leave out Clauses 349 to 352. Mr Secretary Darling 350 Page 162, line 32 [Clause 357], leave out ‘auditor’ and insert ‘independent assessor’. Mr Secretary Darling 269 Page 165, line 33, leave out Clause 365. NEW CLAUSE RELATING TO PART 44 Duty to provide information about exercise of voting rights Mr Alan Duncan
NC15 To move the following Clause:— ‘Institutions to which section 1241 applies shall publicise on their website, in relation to each opportunity that they have to exercise voting rights attached to shares to which that section applies, whether or not they have exercised such voting rights.’. amendments RELATING TO PART 44 Mr Alan Duncan
434 Page 603, line 22, leave out Clauses 1241 to 1244. Mr Alan Duncan
435 Page 604, line 4 [Clause 1241], at end insert— ‘(7) Regulations under this section shall be subject to public consultation prior to publication, and shall be the subject of a cost benefit analysis.’. Mr Secretary Darling 740 Page 606, line 10 [Clause 1245], after ‘Kingdom’ insert ‘or elsewhere’. Mr Alan Duncan
436 Page 606, line 10 [Clause 1245], after ‘Kingdom’, insert ‘or, if such proceedings relate only to intellectual property rights, in any jurisdiction’. Mr Alan Duncan
437 Page 606, line 35 [Clause 1245], leave out ‘annulment in pursuance of a resolution of either’ and insert ‘affirmative resolution of each’. Mr Alan Duncan
438 Page 606, line 36 [Clause 1245], at end insert ‘and after prior public consultation on the terms of a draft statutory instrument’. amendments RELATING TO clauses 521 to 523 Justine Greening
439 Page 251, line 28 [Clause 521], leave out ‘knowingly or recklessly’ and insert ‘dishonestly or fraudulently’. |
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| © Parliamentary copyright 2006 | Prepared: 17 October 2006 |