rs2181910.922-928

House of Commons

Session 2005 - 06
Internet Publications
Other Bills before Parliament

Report Stage Proceedings: 19th October 2006
922

Companies Bill–[ [], continued

Jim Cousins

Mr Austin Mitchell

Not called  803

Page  266,  line  41  [Clause  551],  leave out ‘Part’ and insert ‘Act’.

Jim Cousins

Mr Austin Mitchell

Not called  802

Page  267,  line  14  [Clause  552],  at end insert—

‘(1A)
The regulations must require that all such agreements must be filed at Companies

House within 21 days of the date of agreement together with a copy of the

correspondence relating to the agreement between the company, its advisers,

auditors and their advisers.’.

Mr Secretary Darling

Agreed to  549

Page  267,  line  25  [Clause  553],  at end insert—

‘“e-money issuer” means a person who has permission under Part 4 of the

Financial Services and Markets Act 2000 (c. 8) to carry on the activity of

issuing electronic money within the meaning of article 9B of the

Financial Services and Markets Act 2000 (Regulated Activities) Order

2001 (S.I. 2001/544);’.

Mr Secretary Darling

Agreed to  826

Page  267  [Clause  553],  leave out lines 26 and 27.

Mr Secretary Darling

Agreed to  550

Page  267,  line  27  [Clause  553],  at end insert—

‘“ISD investment firm” has the meaning given by the Glossary forming part

of the Handbook made by the Financial Services Authority under the

Financial Services and Markets Act 2000 (c. 8);’.

Mr Secretary Darling

Agreed to  551

Page  267,  line  35  [Clause  553],  leave out from begining to end of line 3 on page

268.

Mr Secretary Darling

Agreed to  552

Page  268,  line  9  [Clause  553],  at end insert—

‘“UCITS management company” has the meaning given by the Glossary

forming part of the Handbook made by the Financial Services Authority

under the Financial Services and Markets Act 2000 (c. 8).’.

Report Stage Proceedings: 19th October 2006
923

Companies Bill–[ [], continued

REMAINING NEW CLAUSES

Removal of special provisions about accounts and audit of charitable companies

Mr Secretary Darling

Added  NC8

To move the following Clause:—

‘(1)
Part 7 of the Companies Act 1985 and Part 8 of the Companies (Northern Ireland)

Order 1986 (accounts and audit) are amended in accordance with Schedule

(Removal of special provisions about accounts and audit of charitable

companies) to this Act so as to remove the special provisions about companies

that are charities.

(2)
In that Schedule—

Part 1 contains repeals and consequential amendments of provisions of the

Companies Act 1985;

Part 2 contains repeals and consequential amendments of provisions the

Companies (Northern Ireland) Order 1986.’.

Instruments creating charges and register of charges to be available for inspection

Mr Secretary Darling

Added  NC10

To move the following Clause:—

‘(1)
This section applies to—

(a)
documents required to be kept available for inspection under section 879

(copies of instruments creating charges), and

(b)
a company’s register of charges kept in pursuance of section 880.

(2)
The documents and register 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).

(3)
The company must give notice to the registrar—

(a)
of the place at which the documents and register 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.

(4)
The documents and register shall be open to the inspection—

(a)
of any creditor or member of the company without charge, and

(b)
of any other person on payment of such fee as may be prescribed.

(5)
If default is made for 14 days in complying with subsection (3) or an inspection

required under subsection (4) is refused, an offence is committed by—

Report Stage Proceedings: 19th October 2006
924

Companies Bill–[ [], continued

(a)
the company, and

(b)
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)
If an inspection required under subsection (4) is refused the court may by order

compel an immediate inspection.’.

Instruments creating charges and register of charges to be available for inspection

Mr Secretary Darling

Added  NC11

To move the following Clause:—

‘(1)
This section applies to—

(a)
documents required to be kept available for inspection under section 894

(copies of instruments creating charges), and

(b)
a company’s register of charges kept in pursuance of section 895.

(2)
The documents and register 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).

(3)
The company must give notice to the registrar—

(a)
of the place at which the documents and register 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.

(4)
The documents and register shall be open to the inspection—

(a)
of any creditor or member of the company without charge, and

(b)
of any other person on payment of such fee as may be prescribed.

(5)
If default is made for 14 days in complying with subsection (3) or an inspection

required under subsection (4) is refused, an offence is committed by—

(a)
the company, and

(b)
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)
If an inspection required under subsection (4) is refused the court may by order

compel an immediate inspection.’.

Report Stage Proceedings: 19th October 2006
925

Companies Bill–[ [], continued

Regulations about where certain company records to be kept available for inspection

Mr Secretary Darling

Added  NC12

To move the following Clause:—

‘(1)
The Secretary of State may make provision by regulations specifying places other

than a company’s registered office at which company records required to be kept

available for inspection under a relevant provision may be so kept in compliance

with that provision.

(2)
The “relevant provisions” are—

section 114 (register of members);

section 162 (register of directors);

section 228 (directors’ service contracts);

section 237 (directors’ indemnities);

section 275 (register of secretaries);

section (inspection of records of resolutions and meetings) (records of

resolutions etc);

section 715 (contracts relating to purchase of own shares);

section 733 (documents relating to redemption or purchase of own shares

out of capital by private company);

section 756 (register of debenture holders);

section 808 (report to members of outcome of investigation by public

company into interests in its shares);

section 812 (register of interests in shares disclosed to public company);

section (Instruments creating charges and register of charges to be open for

inspection) (instruments creating charges and register of charges:

England and Wales);

section (Instruments creating charges and register of charges to be open for

inspection) (instruments creating charges and register of charges:

Scotland).

(3)
The regulations may specify a place by reference to the company’s principal

place of business, the part of the United Kingdom in which the company is

registered, the place at which the company keeps any other records available for

inspection or in any other way.

(4)
The regulations may provide that a company does not comply with a relevant

provision by keeping company records available for inspection at a place

specified in the regulations unless conditions specified in the regulations are met.

(5)
The regulations—

(a)
need not specify a place in relation to each relevant provision;

(b)
may specify more than one place in relation to a relevant provision.

(6)
A requirement under a relevant provision to keep company records available for

inspection is not complied with by keeping them available for inspection at a

place specified in the regulations unless all the company’s records subject to the

requirement are kept there.

(7)
Regulations under this section are subject to negative resolution procedure.’.

Report Stage Proceedings: 19th October 2006
926

Companies Bill–[ [], continued

Application of this Part

Mr Secretary Darling

Added  nc18

To move the following Clause:—

‘(1)
This Part applies where—

(a)
a compromise or arrangement is proposed between a public company

and—

(i)
its creditors or any class of them, or

(ii)
its members or any class of them,


for the purposes of, or in connection with, a scheme for the reconstruction

of any company or companies or the amalgamation of any two or more

companies,

(b)
the scheme involves—

(i)
a merger (as defined in section (Mergers and merging

companies)), or

(ii)
a division (as defined in section (Divisions and companies

involved in a division)), and

(c)
the consideration for the transfer (or each of the transfers) envisaged is to

be shares in the transferee company (or one or more of the transferee

companies) receivable by members of the transferor company (or

transferor companies), with or without any cash payment to members.

(2)
In this Part—

(a)
a “new company” means a company formed for the purposes of, or in

connection with, the scheme, and

(b)
an “existing company” means a company other than one formed for the

purposes of, or in connection with, the scheme.

(3)
This Part does not apply where the company in respect of which the compromise

or arrangement is proposed is being wound up.’.

Relationship of this Part to Part 27

Mr Secretary Darling

Added  NC19

To move the following Clause:—

‘(1)
The court must not sanction the compromise or arrangement under Part 27

(arrangements and reconstructions) unless the relevant requirements of this Part

have been complied with.

(2)
The requirements applicable to a merger are specified in sections (Draft terms of

scheme (merger)) to (No allotment of shares to transferor company or its

nominee (merger)).


Certain of those requirements, and certain general requirements of Part 27, are

modified or excluded by the provisions of sections (Circumstances in which

certain particulars and reports not required (merger)) to (Other circumstances

in which meeting of members of transferee company not required (merger)).

(3)
The requirements applicable to a division are specified in sections (Draft terms of

scheme (division)) to (No allotment of shares to transferor company or its

nominee (division)).

Report Stage Proceedings: 19th October 2006
927

Companies Bill–[ [], continued


Certain of those requirements, and certain general requirements of Part 27, are

modified or excluded by the provisions of sections (Circumstances in which

meeting of members of transferor company not required (division)) to (Power of

court to exclude certain requirements (division)).’.

Mergers and merging companies

Mr Secretary Darling

Added  NC20

To move the following Clause:—

‘(1)
The scheme involves a merger where under the scheme—

(a)
the undertaking, property and liabilities of one or more public companies,

including the company in respect of which the compromise or

arrangement is proposed, are to be transferred to another existing public

company (a “merger by absorption”), or

(b)
the undertaking, property and liabilities of two or more public

companies, including the company in respect of which the compromise

or arrangement is proposed, are to be transferred to a new company,

whether or not a public company, (a “merger by formation of a new

company”).

(2)
References in this Part to “the merging companies” are—

(a)
in relation to a merger by absorption, to the transferor and transferee

companies;

(b)
in relation to a merger by formation of a new company, to the transferor

companies.’.

Draft terms of scheme (merger)

Mr Secretary Darling

Added  NC21

To move the following Clause:—

‘(1)
A draft of the proposed terms of the scheme must be drawn up and adopted by the

directors of the merging companies.

(2)
The draft terms must give particulars of at least the following matters—

(a)
in respect of each transferor company and the transferee company—

(i)
its name,

(ii)
the address of its registered office, and

(iii)
whether it is a company limited by shares or a company limited

by guarantee and having a share capital;

(b)
the number of shares in the transferee company to be allotted to members

of a transferor company for a given number of their shares (the “share

exchange ratio”) and the amount of any cash payment;

(c)
the terms relating to the allotment of shares in the transferee company;

Report Stage Proceedings: 19th October 2006
928

Companies Bill–[ [], continued

(d)
the date from which the holding of shares in the transferee company will

entitle the holders to participate in profits, and any special conditions

affecting that entitlement;

(e)
the date from which the transactions of a transferor company are to be

treated for accounting purposes as being those of the transferee company;

(f)
any rights or restrictions attaching to shares or other securities in the

transferee company to be allotted under the scheme to the holders of

shares or other securities in a transferor company to which any special

rights or restrictions attach, or the measures proposed concerning them;

(g)
any amount of benefit paid or given or intended to be paid or given—

(i)
to any of the experts referred to in section (Expert’s report

(merger)) (expert’s report), or

(ii)
to any director of a merging company,


and the consideration for the payment of benefit.

(3)
The requirements in subsection (2)(b), (c) and (d) are subject to section

(Circumstances in which certain particulars and reports not required (merger))

(circumstances in which certain particulars not required).’.

Publication of draft terms (merger)

Mr Secretary Darling

Added  NC22

To move the following Clause:—

‘(1)
The directors of each of the merging companies must deliver a copy of the draft

terms to the registrar.

(2)
The registrar must publish in the Gazette notice of receipt by him from that

company of a copy of the draft terms.

(3)
That notice must be published at least one month before the date of any meeting

of that company summoned for the purpose of approving the scheme.’.

Approval of members of merging companies

Mr Secretary Darling

Added  nc23

To move the following Clause:—

‘(1)
The scheme must be approved by a majority in number, representing 75% in

value, of each class of members of each of the merging companies, present and

voting either in person or by proxy at a meeting.

(2)
This requirement is subject to sections (Circumstances in which meeting of

members of transferee company not required (merger)), (Circumstances in which

no meetings required (merger)) and (Other circumstances in which meeting of