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Public Bill Committee Debates

Draft Companies Act 2006 (Consequential Amendments Etc) Order 2008

The Committee consisted of the following Members:

Chairman: John Bercow
Atkins, Charlotte (Staffordshire, Moorlands) (Lab)
Bacon, Mr. Richard (South Norfolk) (Con)
Baldry, Tony (Banbury) (Con)
Baron, Mr. John (Billericay) (Con)
Burt, Lorely (Solihull) (LD)
Djanogly, Mr. Jonathan (Huntingdon) (Con)
Gilroy, Linda (Plymouth, Sutton) (Lab/Co-op)
Keen, Alan (Feltham and Heston) (Lab/Co-op)
McDonnell, John (Hayes and Harlington) (Lab)
Mole, Chris (Ipswich) (Lab)
Palmer, Dr. Nick (Broxtowe) (Lab)
Seabeck, Alison (Plymouth, Devonport) (Lab)
Stuart, Ms Gisela (Birmingham, Edgbaston) (Lab)
Teather, Sarah (Brent, East) (LD)
Thomas, Mr. Gareth (Parliamentary Under-Secretary of State for International Development)
Todd, Mr. Mark (South Derbyshire) (Lab)
Young, Sir George (North-West Hampshire) (Con)
David Weir, Committee Clerk
† attended the Committee

Seventh Delegated Legislation Committee

Thursday 27 March 2008

[John Bercow in the Chair]

Draft Companies Act 2006 (Consequential Amendments Etc) Order 2008

8.55 am
The Parliamentary Under-Secretary of State for Business, Enterprise and Regulatory Reform I beg to move,
That the Committee has considered the draft Companies Act 2006 (Consequential Amendments Etc) Order 2008.
The Chairman: With this it will be convenient to consider the draft Companies Act 2006 (Consequential Amendments) (Taxes and National Insurance) Order 2008.
Mr. Thomas: It is a genuine pleasure to serve under your chairmanship, Mr. Bercow. I do not believe that I have had the privilege before. I have had the joy—I shall put it like that—of answering many of your questions in Select Committee debates, and no doubt that will continue, but I think that this is the first time that I have served under your chairmanship, and I look forward to it being a positive experience.
The orders are being made under sections 1292, 1294 and 1296 of the Companies Act 2006. They make consequential amendments to other legislation that are required as a direct result of the coming into force of provisions of the Act. As the Committee will be aware, the Act is being implemented in phases. The draft orders relate to provisions that will commence on 6 April and 1 October this year, including important provisions on accounts, reports and audits. There are also a few amendments relating to provisions commencing earlier. We expect to lay a further consequential amendments order in draft towards the end of this year, or perhaps early next year, which will deal with the amendments required as a result of the commencement of certain provisions of the Act on 1 October next year.
The draft Companies Act 2006 (Consequential Amendments Etc) Order 2008 will make consequential changes to many different pieces of legislation; the size of the order is a clue to how many. The changes can be broken down into four broad areas. The first is consequential amendments to existing company law: for example, the remaining parts of the Companies Act 1985 and the Companies (Audit, Investigations and Community Enterprise) Act 2004.
The second area is amendments to insolvency legislation. The changes are required because the 2006 Act breaks the link between the Companies Act 1985 and the Insolvency Act 1986. We have inserted provisions previously contained in companies legislation into insolvency legislation, and additional changes have been made to ensure that the two pieces of legislation work effectively together.
The third area is statutory audit. About 50 Acts provide for audits of certain non-company accounts by auditors who must be eligible for appointment under part 2 of the Companies Act 1989. The order will amend those requirements to refer to part 42 of the 2006 Act.
Finally, the draft order will make consequential amendments to other primary legislation that refers to or includes concepts from the 1985 or 1989 Acts, including—to pick two examples at random—the Pig Production Development Act (Northern Ireland) 1964 and the Hairdressers (Registration) Act 1964, which may be of interest to some Committee members.
The draft Companies Act 2006 (Consequential Amendments) (Taxes and National Insurance) Order 2008 will amend legislation for which Her Majesty’s Revenue and Customs is responsible but which uses Companies Act references, definitions and concepts. I hope that the Committee will recognise that it is sensible to consider the two orders together, given that they make consequential amendments arising from the implementation of the 2006 Act.
The orders make two types of consequential amendment. The first relates to references and definitions in other Acts changed by the 2006 Act, and makes purely mechanical amendments. For example, a reference to the Companies Act 1985 is on occasion simply changed to a reference to the Companies Act 2006. The second type relates to a change in the substance of company law; for example, a change has been made to the rules relating to how a company can execute documents. Nevertheless, the changes are not dramatic.
On the basis of that information, I hope that the Committee can approve the orders. I am happy to answer Members’ questions.
9 am
Mr. Jonathan Djanogly (Huntingdon) (Con): Good morning, Mr. Bercow. The Companies Act 2006 has many facets and indeed many complications, not least as a result of its long and staggered implementation. We always recognised that that would involve a large number of creases to be ironed out and consequential amendments to other Acts. Whoever got the job of looking through all the other Acts to see where consequential amendments should be made deserves a medal, in my opinion.
Nothing in the orders presents a problem to us. I congratulate the Joint Committee on Statutory Instruments on doing its usual fastidious job of spotting the unintended consequence of the new directors’ loans disclosure requirements in section 413 of the 2006 Act.
9.1 am
Lorely Burt (Solihull) (LD): I, too, am a veteran of the Companies Act 2006, so I can sympathise with the hon. Member for Huntingdon about the number of consequential amendments that were bound to be incurred by the longest Bill in history. As the amendments are all consequential and contained in previous legislation, we have no objections to the orders.
9.2 am
9.3 am
Mr. Thomas: I am grateful to Committee members for how they have received and considered the orders. I say to the hon. Member for Huntingdon that my officials fought for the privilege of looking through all the other Acts of Parliament that might contain relevant references. Frankly, it was the task of Solomon to decide which official should have that privilege, but I hope that Members will recognise that I did a good job in choosing.
Question put and agreed to.
That the Committee has considered the draft Companies Act 2006 (Consequential Amendments Etc) Order 2008.


That the Committee has considered the draft Companies Act 2006 (Consequential Amendments) (Taxes and National Insurance) Order 2008.—[Mr. Thomas.]
Committee rose at five minutes past Nine o’clock.

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