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Company Law Reform Bill [HL]


Company Law Reform Bill [HL]
Part 10 — Company directors
Chapter 8 — Directors’ residential addresses: protection from disclosure

101

 

(b)   

the information that his service address is his usual residential address.

(2)   

That information is referred to in this Chapter as “protected information”.

221     

Protected information: restriction on use or disclosure by company

(1)   

A company must not use or disclose protected information about any of its

directors, except—

5

(a)   

for communicating with the director concerned,

(b)   

in order to comply with any requirement of the Companies Acts as to

particulars to be sent to the registrar, or

(c)   

in accordance with section 224 (disclosure under court order).

(2)   

Subsection (1) does not prohibit any use or disclosure of protected information

10

with the consent of the director concerned.

222     

Protected information: restriction on use or disclosure by registrar

(1)   

The registrar must omit protected information from the material on the register

that is available for inspection where—

(a)   

it is contained in a document delivered to him in which such

15

information is required to be stated, and

(b)   

in the case of a document having more than one part, it is contained in

a part of the document in which such information is required to be

stated.

(2)   

The registrar is not obliged—

20

(a)   

to check other documents or (as the case may be) other parts of the

document to ensure the absence of protected information, or

(b)   

to omit from the material that is available for public inspection

anything registered before this Chapter comes into force.

(3)   

The registrar must not use or disclose protected information except—

25

(a)   

as permitted by section 223 (permitted use or disclosure by registrar),

or

(b)   

in accordance with section 224 (disclosure under court order).

223     

Permitted use or disclosure by the registrar

(1)   

The registrar may use protected information for communicating with the

30

director in question.

(2)   

The registrar may disclose protected information—

(a)   

to a public authority specified for the purposes of this section by

regulations made by the Secretary of State, or

(b)   

to a credit reference agency.

35

(3)   

The Secretary of State may make provision by regulations—

(a)   

specifying conditions for the disclosure of protected information in

accordance with this section, and

(b)   

providing for the charging of fees.

(4)   

In this section—

40

“credit reference agency” means a person carrying on a business

comprising the furnishing of information relevant to the financial

 
 

Company Law Reform Bill [HL]
Part 10 — Company directors
Chapter 8 — Directors’ residential addresses: protection from disclosure

102

 

standing of individuals, being information collected by the agency for

that purpose; and

“public authority” includes any person or body having functions of a

public nature.

(5)   

Regulations under this section are subject to negative resolution procedure.

5

224     

Disclosure under court order

(1)   

The court may make an order for the disclosure of protected information by the

company or by the registrar if—

(a)   

there is evidence that service of documents at a service address other

than the director’s usual residential address is not effective to bring

10

them to the notice of the director, or

(b)   

it is necessary or expedient for the information to be provided in

connection with the enforcement of an order or decree of the court,

   

and the court is otherwise satisfied that it is appropriate to make the order.

(2)   

An order for disclosure by the registrar is to be made only if the company—

15

(a)   

does not have the director’s usual residential address, or

(b)   

has been dissolved.

(3)   

The order may be made on the application of a liquidator, creditor or member

of the company, or any other person appearing to the court to have a sufficient

interest.

20

(4)   

The order must specify the persons to whom, and purposes for which,

disclosure is authorised.

225     

Circumstances in which registrar may put address on the public record

(1)   

The registrar may put a director’s usual residential address on the public

record if—

25

(a)   

communications sent by the registrar to the director and requiring a

response within a specified period remain unanswered, or

(b)   

there is evidence that service of documents at a service address

provided in place of the director’s usual residential address is not

effective to bring them to the notice of the director.

30

(2)   

The registrar must give notice of the proposal—

(a)   

to the director, and

(b)   

to every company of which the registrar has been notified that the

individual is a director.

(3)   

The notice must—

35

(a)   

state the grounds on which it is proposed to put the director’s usual

residential address on the public record, and

(b)   

specify a period within which representations may be made before that

is done.

(4)   

It must be sent to the director at his usual residential address, unless it appears

40

to the registrar that service at that address may be ineffective to bring it to the

individual’s notice, in which case it may be sent to any service address

provided in place of that address.

 
 

Company Law Reform Bill [HL]
Part 10 — Company directors
Chapter 8 — Directors’ residential addresses: protection from disclosure

103

 

(5)   

The registrar must take account of any representations received within the

specified period.

(6)   

What is meant by putting the address on the public record is explained in

section 226.

226     

Putting the address on the public record

5

(1)   

The registrar, on deciding in accordance with section 225 that a director’s usual

residential address is to be put on the public record, shall proceed as if notice

of a change of registered particulars had been given—

(a)   

stating that address as the director’s service address, and

(b)   

stating that the director’s usual residential address is the same as his

10

service address.

(2)   

The registrar must give notice of having done so—

(a)   

to the director, and

(b)   

to the company.

(3)   

On receipt of the notice the company must—

15

(a)   

enter the director’s usual residential address in its register of directors

as his service address, and

(b)   

state in its register of directors’ residential addresses that his usual

residential address is the same as his service address.

(4)   

If the company has been notified by the director in question of a more recent

20

address as his usual residential address, it must—

(a)   

enter that address in its register of directors as the director’s service

address, and

(b)   

give notice to the registrar as on a change of registered particulars.

(5)   

If a company fails to comply with subsection (3) or (4), an offence is committed

25

by—

(a)   

the company, and

(b)   

every officer of the company who is in default.

(6)   

A person guilty of an offence under subsection (5) is liable on summary

conviction to a fine not exceeding level 5 on the standard scale and, for

30

continued contravention, a daily default fine not exceeding one-tenth of level

5 on the standard scale.

(7)   

A director whose usual residential address has been put on the public record

by the registrar under this section may not register a service address other than

his usual residential address for a period of five years from the date of the

35

registrar’s decision.

 
 

Company Law Reform Bill [HL]
Part 10 — Company directors
Chapter 9 — Supplementary provisions

104

 

Chapter 9

Supplementary provisions

Provision for employees on cessation or transfer of business

227     

Power to make provision for employees on cessation or transfer of business

(1)   

The powers of the directors of a company include (if they would not otherwise

5

do so) power to make provision for the benefit of persons employed or

formerly employed by the company, or any of its subsidiaries, in connection

with the cessation or the transfer to any person of the whole or part of the

undertaking of the company or that subsidiary.

(2)   

This power is exercisable notwithstanding the general duty imposed by section

10

155 (duty to promote the success of the company).

(3)   

In the case of a company that is a charity it is exercisable notwithstanding any

restrictions on the directors’ powers (or the company’s capacity) flowing from

the objects of the company.

(4)   

The power may only be exercised if sanctioned—

15

(a)   

by a resolution of the company, or

(b)   

by a resolution of the directors,

   

in accordance with the following provisions.

(5)   

The resolution of the company required is an ordinary resolution, subject to

anything in the company’s articles requiring a higher majority (or unanimity).

20

(6)   

A resolution of the directors—

(a)   

must be authorised by the company’s articles, and

(b)   

is not sufficient sanction for payments to or for the benefit of directors,

former directors or shadow directors.

(7)   

Any other requirements of the company’s articles as to the exercise of the

25

power conferred by this section must be complied with.

(8)   

Any payment under this section must be made—

(a)   

before the commencement of any winding up of the company, and

(b)   

out of profits of the company that are available for dividend.

Records of meetings of directors

30

228     

Minutes of directors’ meetings

(1)   

Every company must cause minutes of all proceedings at meetings of its

directors to be recorded.

(2)   

The records must be kept for at least ten years from the date of the meeting.

(3)   

If a company fails to comply with this section, an offence is committed by every

35

officer of the company who is in default.

(4)   

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

 
 

Company Law Reform Bill [HL]
Part 10 — Company directors
Chapter 9 — Supplementary provisions

105

 

continued contravention, a daily default fine not exceeding one-tenth of level

3 on the standard scale.

229     

Minutes as evidence

(1)   

Minutes recorded in accordance with section 228, if purporting to be

authenticated by the chairman of the meeting or by the chairman of the next

5

directors’ meeting, are evidence (in Scotland, sufficient evidence) of the

proceedings at the meeting.

(2)   

Where minutes have been made in accordance with that section of the

proceedings of a meeting of directors, then, until the contrary is proved—

(a)   

the meeting is deemed duly held and convened,

10

(b)   

all proceedings at the meeting are deemed to have duly taken place,

and

(c)   

all appointments at the meeting are deemed valid.

Meaning of "director" and "shadow director"

230     

“Director”

15

   

In the Companies Acts “director” includes any person occupying the position

of director, by whatever name called.

231     

“Shadow director”

(1)   

In the Companies Acts “shadow director”, in relation to a company, means a

person in accordance with whose directions or instructions the directors of the

20

company are accustomed to act.

(2)   

A person is not to be regarded as a shadow director by reason only that the

directors act on advice given by him in a professional capacity.

(3)   

A body corporate is not to be regarded as a shadow director of any of its

subsidiary companies for the purposes of—

25

Chapter 2 (general duties of directors),

Chapter 4 (transactions requiring members’ approval), or

Chapter 6 (contract with sole member who is also a director),

   

by reason only that the directors of the subsidiary are accustomed to act in

accordance with its directions or instructions.

30

Other definitions

232     

Persons connected with a director

(1)   

This section defines what is meant by references in this Part to a person being

“connected” with a director of a company (or a director being “connected” with

a person).

35

(2)   

The following persons (and only those persons) are connected with a director

of a company—

(a)   

members of the director’s family (see section 233);

 
 

Company Law Reform Bill [HL]
Part 10 — Company directors
Chapter 9 — Supplementary provisions

106

 

(b)   

a body corporate with which the director is connected (as defined in

section 234);

(c)   

a person acting in his capacity as trustee of a trust—

(i)   

the beneficiaries of which include the director or a person who

by virtue of paragraph (a) or (b) is connected with him, or

5

(ii)   

the terms of which confer a power on the trustees that may be

exercised for the benefit of the director or any such person,

   

other than a trust for the purposes of an employees’ share scheme or a

pension scheme;

(d)   

a person acting in his capacity as partner—

10

(i)   

of the director, or

(ii)   

of a person who, by virtue of paragraph (a), (b) or (c), is

connected with that director;

(e)   

a firm that is a legal person under the law by which it is governed and

in which—

15

(i)   

the director is a partner,

(ii)   

a partner is a person who, by virtue of paragraph (a), (b) or (c)

is connected with the director, or

(iii)   

a partner is a firm in which the director is a partner or in which

there is a partner who, by virtue of paragraph (a), (b) or (c), is

20

connected with the director.

(3)   

References in this Part to a person connected with a director of a company do

not include a person who is himself a director of the company.

233     

Members of a director’s family

(1)   

This section defines what is meant by references in this Part to members of a

25

director’s family.

(2)   

For the purposes of this Part the members of a director’s family are—

(a)   

the director’s spouse or civil partner;

(b)   

any other person (whether of a different sex or the same sex) with

whom the director lives as partner in an enduring family relationship;

30

(c)   

the director’s children or step-children;

(d)   

any children or step-children of a person within paragraph (b) (and

who are not children or step-children of the director) who live with the

director and have not attained the age of 18;

(e)   

the director’s parents.

35

(3)   

Subsection (2)(b) does not apply if the other person is the director’s

grandparent or grandchild, sister, brother, aunt or uncle, or nephew or niece.

234     

Director “connected with” a body corporate

(1)   

This section defines what is meant by references in this Part to a director being

“connected with” a body corporate.

40

(2)   

A director is connected with a body corporate if, but only if, he and the persons

connected with him together—

(a)   

are interested in shares comprised in the equity share capital of that

body corporate of a nominal value equal to at least 20% of that share

capital, or

45

 
 

Company Law Reform Bill [HL]
Part 10 — Company directors
Chapter 9 — Supplementary provisions

107

 

(b)   

are entitled to exercise or control the exercise of more than 20% of the

voting power at any general meeting of that body.

(3)   

The rules set out in Schedule 1 (references to interest in shares or debentures)

apply for the purposes of this section.

(4)   

References in this section to voting power the exercise of which is controlled by

5

a director include voting power whose exercise is controlled by a body

corporate controlled by him.

(5)   

Shares in a company held as treasury shares, and any voting rights attached to

such shares, are disregarded for the purposes of this section.

(6)   

For the avoidance of circularity in the application of section 232 (meaning of

10

“connected person”) —

(a)   

a body corporate with which a director is connected is not treated for

the purposes of this section as connected with him unless it is also

connected with him by virtue of subsection (2)(c) or (d) of that section

(connection as trustee or partner); and

15

(b)   

a trustee of a trust the beneficiaries of which include (or may include) a

body corporate with which a director is connected is not treated for the

purposes of this section as connected with a director by reason only of

that fact.

235     

Director “controlling” a body corporate

20

(1)   

This section defines what is meant by references in this Part to a director

“controlling” a body corporate.

(2)   

A director of a company is taken to control a body corporate if, but only if—

(a)   

he or any person connected with him—

(i)   

is interested in any part of the equity share capital of that body,

25

or

(ii)   

is entitled to exercise or control the exercise of any part of the

voting power at any general meeting of that body, and

(b)   

he, the persons connected with him and the other directors of that

company, together—

30

(i)   

are interested in more than 50% of that share capital, or

(ii)   

are entitled to exercise or control the exercise of more than 50%

of that voting power.

(3)   

The rules set out in Schedule 1 (references to interest in shares or debentures)

apply for the purposes of this section.

35

(4)   

References in this section to voting power the exercise of which is controlled by

a director include voting power whose exercise is controlled by a body

corporate controlled by him.

(5)   

Shares in a company held as treasury shares, and any voting rights attached to

such shares, are disregarded for the purposes of this section.

40

(6)   

For the avoidance of circularity in the application of section 232 (meaning of

“connected person”)—

(a)   

a body corporate with which a director is connected is not treated for

the purposes of this section as connected with him unless it is also

 
 

 
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