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Company Law Reform Bill [Lords]


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New Clause 39

Termination or suspension of nomination
‘(1) The following provisions have effect in relation to a nomination under section (Traded companies: nomination of person to enjoy information rights) (nomination of person to enjoy information rights).
(2) The nomination may be terminated at the request of the member or of the nominated person.
(3) The nomination ceases to have effect on the occurrence in relation of the member or the nominated person of any of the following—
(a) in the case of an individual, death or bankruptcy;
(b) in the case of a body corporate, dissolution or the making of an order for the winding up of the body otherwise than for the purposes of reconstruction.
(4) In subsection (3)—
(a) the reference to bankruptcy includes—
(i) the sequestration of a person’s estate, and
(ii) a person’s estate being the subject of a protected trust deed (within the meaning of the Bankruptcy (Scotland) Act 1985 (c. 66)); and
(b) the reference to the making of an order for winding up is to—
(i) the making of such an order under the Insolvency Act 1986 (c.45) or the Insolvency (Northern Ireland) Order 1989 (S.I.1989/2405(N.I.19)), or
(ii) any corresponding proceeding under the law of a country or territory outside the United Kingdom.
(5) The effect of any nominations made by a member is suspended at any time when there are more nominated persons than the member has shares in the company.
(6) Where—
(a) the member holds different classes of shares with different information rights, and
(b) there are more nominated persons than he has shares conferring a particular right,
the effect of any nominations made by him is suspended to the extent that they confer that right.
(7) Where the company—
(a) enquires of a nominated person whether he wishes to retain information rights, and
(b) does not receive a response within the period of 28 days beginning with the date on which the company’s enquiry was sent,
the nomination ceases to have effect at the end of that period.
Such an enquiry is not to be made of a person more than once in any twelve- month period.
(8) The termination or suspension of a nomination means that the company is not required to act on it.
It does not prevent the company from continuing to do so, to such extent or for such period as it thinks fit.’.—[Margaret Hodge.]
Brought up, and added to the Bill.

New Clause 40

Information as to possible rights in relation to voting
‘(1) This section applies where a company sends a copy of a notice of a meeting to a person nominated under section (Traded companies: nomination of person to enjoy information rights) (nomination of person to enjoy information rights)
(2) The copy of the notice must be accompanied by a statement that—
(a) he may have a right under an agreement between him and the member by whom he was nominated to be appointed, or to have someone else appointed, as a proxy for the meeting, or
(b) if he has no such right or does not wish to exercise it, he may have a right under such an agreement to give instructions to the member as to the exercise of voting rights.
(3) Section 308 (notice of meeting to contain statement of member’s rights in relation to appointment of proxy) does not apply to the copy, and the company must either—
(a) omit the notice required by that section, or
(b) include it but state that it does not apply to the nominated person.’.—[Margaret Hodge.]
Brought up, and added to the Bill.

New Clause 41

Information rights: status of rights
‘(1) This section has effect as regards the rights conferred by a nomination under section (Traded companies: nomination of person to enjoy information rights) (nomination of person to enjoy information rights).
(2) Enjoyment by the nominated person of the rights conferred by the nomination is enforceable against the company by the member as if they were rights conferred by the company’s articles.
(3) Any enactment, and any provision of the company’s articles, having effect in relation to communications with members has a corresponding effect (subject to any necessary adaptations) in relation to communications with the nominated person.
(4) In particular—
(a) where under any enactment, or any provision of the company’s articles, the members of a company entitled to receive a document or information are determined as at a date or time before it is sent or supplied, the company need not send or supply it to a nominated person—
(i) whose nomination was received by the company after that date or time, or
(ii) if that date or time falls in a period of suspension of his nomination; and
(b) where under any enactment, or any provision of the company’s articles, the right of a member to receive a document or information depends on the company having a current address for him, the same applies to any person nominated by him.
(5) The rights conferred by the nomination—
(a) are in addition to the rights of the member himself, and
Brought up, and added to the Bill.

New Clause 42

Information rights: power to amend
‘(1) The Secretary of State may by regulations amend the provisions of sections (Traded companies: nomination of persons to enjoy information rights) to (Information rights: status of rights) (information rights) so as to—
(a) extend or restrict the classes of companies to which section (Traded companies: nomination of persons to enjoy information rights) applies,
(b) make other provision as to the circumstances in which a nomination may be made under that section, or
(c) extend or restrict the rights conferred by such a nomination.
(2) The regulations may make such consequential modifications of any other provisions of this Part, or of any other enactment, as appear to the Secretary of State to be necessary.
(3) Regulations under this section are subject to affirmative resolution procedure.’—[Margaret Hodge.]
Brought up, read the First and Second time and added to the Bill..

New Clause 43

Exercise of rights where shares held on behalf of others: exercise in different ways
‘(1) Where a person holds shares in a company on behalf of more than one person—
(a) rights attached to the shares, and
(b) rights under any enactment exercisable by the person holding the shares,
need not all be exercised, and if exercised, need not all be exercised in the same way.
(2) A member who exercises such rights but does not exercise all his rights, must inform the company to what extent he is exercising the rights.
(3) A member who exercises such rights in different ways must inform the company of the ways in which he is exercising them and to what extent they are exercised in each way.
(4) If a member exercises such rights without informing the company—
(a) that he is not exercising all his rights, or
Brought up, and added to the Bill.

New Clause 44

Exercise of rights where shares held on behalf of others: members’ requests
‘(1) This section applies for the purposes of—
(a) section 297 (power to require circulation of statement),
(b) section 321 (public companies: power to require circulation of resolution for AGM),
(c) section 325 (power to require independent report on poll), and
(d) section 517 (power to require website publication of audit concerns).
(2) A company is required to act under any of those sections if it receives a request in relation to which the following conditions are met—
(a) it is made by at least 100 persons;
(b) it is authenticated by all the persons making it;
(c) in the case of any of those persons who is not a member of the company, it is accompanied by a statement—
(i) of the full name and address of a person (“the member”) who is a member of the company and holds shares on behalf of that person,
(ii) that the member is holding those shares on behalf of that person in the course of a business,
(iii) of the number of shares in the company that the member holds on behalf of that person,
(iv) of the total amount paid up on those shares,
(v) that those shares are not held on behalf of anyone else or, if they are, that the other person or persons are not among the other persons making the request,
(vi) that some or all of those shares confer voting rights that are relevant for the purposes of making a request under the section in question, and
(vii) that the person has the right to instruct the member how to exercise those rights;
(d) in the case of any of those persons who is a member of the company, it is accompanied by a statement—
(i) that he holds shares otherwise than on behalf of another person, or
(ii) that he holds shares on behalf of one or more other persons but those persons are not among the other persons making the request;
(e) it is accompanied by such evidence as the company may reasonably require of the matters mentioned in paragraph (c) and (d);
(f) the total amount of the sums paid up on—
(i) shares held as mentioned in paragraph (c), and
(ii) shares held as mentioned in paragraph (d),
divided by the number of persons making the request, is not less than £100;
(g) the request complies with any other requirements of the section in question as to contents, timing and otherwise.’. —[Margaret Hodge.]
Brought up, and added to the Bill.

New Clause 45

Shares
‘(1) In the Companies Acts “share”, in relation to a company, means share in the company’s share capital.
(2) A company’s shares may no longer be converted into stock.
(3) Stock created before the commencement of this Part may be reconverted into shares in accordance with section (Re-conversion of stock into shares).
(4) In the Companies Acts—
(a) references to shares include stock except where a distinction between share and stock is express or implied, and
(b) references to a number of shares include an amount of stock where the context admits of the reference to shares being read as including stock.’. —[Margaret Hodge.]
Brought up, and added to the Bill.
 
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Prepared 21 July 2006