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"( ) In subsection (2)—
"branch" means a branch within the meaning of the Eleventh Company Law Directive (89/666/EEC);
"Gibraltar company" means a company incorporated in Gibraltar."
On Question, amendment agreed to.
[Amendment No. 182 not moved.]
Clause 661, as amended, agreed to.
Clause 662 [Registered name of an oversea company]:
Lord Sharman moved Amendment No. A183:
The noble Lord said: This amendment seeks to clarify the relationship between Clause 662(3) and Clause 662(5). Clause 662(3) states that an EEA company, which is defined in Clause 764, may always be registered under its corporate name when stating its name for the purposes of registration as an oversea company under Clause 662(1).
Some EEA states, such as Greece, do not use the Roman alphabet, so there is a tension between Clause 662(3) and Clause 662(5), which provides:
It would be open to the Secretary of State to require, by regulations made under Clause 58, that the Roman alphabet must be used in stating a name for registration purposes. We suggest that Clause 717 does not provide a solution to this problem.
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We think that Clause 662(5) is intended to override Clause 662(3), but we suggest that the matter should be put beyond doubt by the amendment. I beg to move.
Lord McKenzie of Luton: We accept that there could be some scope for confusion as the Bill is drafted. We see no difficulty in putting the matter beyond doubt, and I am therefore happy to accept the amendment.
Lord Sharman: I am very grateful for that—it comes after a long afternoon.
On Question, amendment agreed to.
Clause 662, as amended, agreed to.
Clause 664 [Accounts and reports: general]:
Lord Hodgson of Astley Abbotts moved Amendment No. A183A:
Page 323, line 29, leave out "that" and insert "which is not required by the law of the country in which it is incorporated to prepare, have audited and publicly disclose accounts, and which"
The noble Lord said: In moving the amendment, I shall also speak to Amendments Nos. A183B and A183C. There seems to be an inconsistency between subsections (1) and (3), in that under subsection (1) it is envisaged that an overseas company is required to prepare UK-style reports and accounts, whereas subsection (3) stages that regulations may require that an overseas company should file either UK-style accounts or its home-state accounts. In any event, we are advised that Article 3 of the 11th EU company law directive suggests that it would not be possible to compel an overseas entity with a UK branch to produce UK-style accounts or to deliver them in a shorter time scale than would be required in its home state. This group of amendments is intended to address and rectify that anomaly. I beg to move.
Lord McKenzie of Luton: I am sympathetic to the reasoning behind the amendments. We recognise that it may be onerous to require an overseas company that has already produced and audited accounts and reports to prepare another set. Indeed, we will listen carefully to what people have to say in response to the planned consultation on the overseas provisions, and it is entirely possible that the end result will be just as the amendments suggest.
In the mean time, however, in considering what provision is needed to make regulations under Part 25, we have tried to maintain the flexibility to replicate the current requirements of the Companies Act 1985 as regards accounts and reports. I hope with that assurance that the noble Lord will not press his amendment.
Lord Hodgson of Astley Abbotts: I am grateful, but I am not sure that we are preserving flexibility. We are preserving the rigidity of the present situation, are we not? The proposals here are not permitted, if our advice is right, by the EU company law directive, so I am not sure what consultation is going to do. We have an EU company law directive that will override
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any consultation, if we are going to comply with it and, in the mean time, we are stuck with a framework established 21 years ago.
Lord McKenzie of Luton: The 11th company law directive imposes disclosure requirements on overseas companies opening branches in the UK. As for companies incorporated in the EEA, the 11th company law directive requires the disclosure of the accounting documents of the company as drawn up, audited and disclosed pursuant to the law of the member state by which the company is governed. As for companies incorporated outside the EEA, the 11th company law directive requires a disclosure of the accounting documents of the company as drawn up, audited and disclosed pursuant to the law of the state that governs the company. When they are not drawn up in accordance with, or in a manner equivalent to the fourth and seventh company law directives, member states may require that accounting documents relating to the activities of the branch be drawn up and disclosed. Therefore, the power contained in Clause 664(1) is not a compulsory requirement of the 11th company law directive, where the company of incorporation requires accounts to be drawn up, audited and disclosed.
I am not sure whether that has added to the confusion and the rigidity—but I hope on reflection, after a chance to read the Official Report, the noble Lord will be reassured.
Lord Hodgson of Astley Abbotts: I am grateful for that further elucidation, if elucidation it be. I shall read carefully the interplay between the various pieces of statute to which the Minister referred and decide whether this matter requires a further go round the track. In the mean time, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. A183B and A183C not moved.]
7.15 pm
Lord McKenzie of Luton moved Amendment No. A184:
Page 323, line 42, leave out from "required" to end of line 43 and insert "to prepare and have audited under the law of the country in which it is incorporated"
On Question, amendment agreed to.
Clause 664, as amended, agreed to.
Clause 665 [Accounts and reports: credit or financial institutions]:
Lord McKenzie of Luton moved Amendment No. A185:
Page 324, line 24, leave out from "required" to end of line 25 and insert "to prepare and have audited under the law of the country in which the institution has its head office"
On Question, amendment agreed to.
Clause 665, as amended, agreed to.
Clause 666 agreed to.
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Lord McKenzie of Luton moved Amendment No. A185A:
"OTHER RETURNS ETC
(1) This section applies to oversea companies that are required to register particulars under section 661.
(2) The Secretary of State may make provision by regulations requiring the delivery to the registrar of returns—
(a) by a company to which this section applies that—
(i) is being wound up, or
(ii) becomes or ceases to be subject to insolvency proceedings, or an arrangement or composition or any analogous proceedings;
(b) by the liquidator of a company to which this section applies.
(3) The regulations may specify—
(a) the circumstances in which a return is to be made,
(b) the particulars to be given in it, and
(c) the period within which it is to be made.
(4) The Secretary of State may make provision by regulations requiring notice to be given to the registrar of the appointment in relation to a company to which this section applies of a judicial factor (in Scotland).
(5) The regulations may include provision corresponding to any provision made by section 756 of this Act (duty to notify registrar of certain appointments).
(6) Regulations under this section are subject to affirmative resolution procedure."
The noble Lord said: In moving the amendment, I shall speak also to Amendment No. A185B. Amendment No. A185A ensures that the regulations may impose disclosure requirements replicating those which are currently imposed by Sections 703P and 703Q of the Companies Act 1985, which are being repealed. Clause 756 imposes a duty on UK companies to notify the registrar of the appointment of a judicial factor in Scotland. Subsections (4) and (5) of the amendment will enable regulations to impose the same requirement on oversea companies.
As well as requiring the disclosure of information when the oversea company is facing liquidation or winding up, the 11th company law directive also requires notification whenever a branch is closed. As Clause 670 seems insufficient for these purposes, we may need to bring further amendments to this end on Report.
Amendment No. A185B enables the regulations to set out what should happen when the oversea company is registered in more than one part of the United Kingdom. I beg to move.
On Question, amendment agreed to.
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