| Company Law Reform Bill [HL] - continued | House of Lords |
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Registration of particulars Clause 661: Duty to register particulars 1272. This clause confers on the Secretary of State a new power to make regulations to require oversea companies to register with the registrar of companies. The regulations may require particular information to be included in the registration. For example, an address for the company and details of its directors. The regulations may also require particular documents to be sent to the registrar, such as a copy of the company's constitution. Subsection (2) ensures that the regulations implement the requirements of the Eleventh Company Law Directive (89/666/EEC), under which an oversea company must register if the company opens a branch in the UK. 1273. Regulations may require the oversea company to inform the registrar of companies of any changes in the details or documents it has registered (subsection (3)). The regulations may set deadlines for sending the information to the registrar of companies. They may also determine whether the oversea company should register with the registrar for England and Wales, the registrar for Scotland or the registrar for Northern Ireland. For example, an oversea company that opens a branch in Scotland may be required to register with the registrar of companies for Scotland. 1274. The Eleventh Company Law Directive imposes different disclosure requirements depending on where the oversea company setting up the branch is incorporated. Different reporting requirements are imposed on credit and financial institutions. Therefore regulations under this clause may make different provision according to the place where the company is incorporated and the activities carried on by it. 1275. Regulations made under this clause will be subject to the affirmative resolution procedure. Clause 662: Registered name of oversea company 1276. This clause applies to oversea companies required to register with the registrar of companies by regulations made under clause 661 (duty to register particulars). Oversea companies registered under that clause must be required to provide a name for registration. The name will be entered on the index of company names (clause 707). 1277. The company may register its corporate name (by which is meant its registered or legal name in its place of incorporation) or another name (referred to in these clauses as an alternative name). All companies are free to choose whether to register their corporate name or an alternative name, subject to the restrictions imposed by subsections (4) and (5). An alternative name can only be registered if it complies with the requirements imposed on the names of companies formed and registered under the Bill. Likewise, unless the oversea company is incorporated in an EEA State, its corporate name can only be registered if it complies with these requirements. The only requirements of Chapters 1 to 4 of Part 5 (a company's name) that do not apply are the requirements for the names of certain types of company to end with certain words. These rules are not appropriate for oversea companies as they are specific to the types of company formed under the Companies Acts. 1278. Where the oversea company is incorporated in an EEA State (defined in clause 764), it may always register its corporate name, even if it does not comply with the requirements imposed on the names of companies formed under the Bill, other than the requirement relating to permitted characters (contained in clause 58). This clause, together with clause 663 (registration under alternative name) replaces section 694 of the 1985 Act. Clause 663: Registration under alternative name 1279. This clause enables an oversea company to be registered under an alternative name rather than its corporate name. It also enables an oversea company to change the name by which it is registered. To do so it must deliver a statement to the registrar of companies with its proposed new name for registration. As long as the proposed name complies with the requirements for registration (see clause 662) the registrar of companies will enter it on the index of company names in place of the name previously registered. 1280. The clause also provides that whatever name under which an oversea company is registered, whether its corporate name or an alternative, it is treated as being its corporate name for the purposes of the law in the UK. The change of name will not affect any legal proceedings that are continued or commenced by or against the company. Other requirements Clause 664: Accounts and reports: general 1281. This clause confers on the Secretary of State a power to make regulations requiring oversea companies to prepare accounts and directors' reports, and to obtain an auditor's report. The requirements must be like those imposed on companies formed and registered under the Bill. The accounts, directors' report and auditor's report requirements applying to companies formed and registered under the Bill appear in Part 15 (accounts and reports) and Part 16 (audit). 1282. Regulations under this clause may modify those requirements in their application to oversea companies as appropriate. Regulations under this clause may require the oversea company to deliver to the registrar of companies copies of the accounts and reports prepared in accordance with the regulations; alternatively the oversea company may be required to deliver to the registrar a copy of the accounts and reports that it prepared and had audited in accordance with the law of its place of incorporation. The registrar will place the accounts and reports on the public register. 1283. Regulations under this clause will replace sections 699AA to 703 and Schedule 21D to the 1985 Act. The regulations will be subject to the negative resolution procedure. Clause 665: Accounts and reports: credit or financial institutions 1284. This clause applies only to credit or financial institutions incorporated or formed outside the UK and Gibraltar, with their head office outside the UK and Gibraltar but having a branch in the UK (subsection (1)). This clause confers on the Secretary of State a power to make regulations specifically in respect of accounts and directors' reports by these credit or financial institutions. 1285. A credit institution means a credit institution as defined in Article 1(1)(a) of Directive 2000/12/EC of the European Parliament and of the Council of 20th March 2000 relating to the taking up and pursuit of the business of credit institutions, that is to say an undertaking whose business is to receive deposits or other repayable funds from the public and to grant credits for its own account (clause 766). 1286. A "financial institution" means a financial institution within the meaning of Article 1(1) of the Council Directive on the obligations of branches established in a Member State of credit and financial institutions having their head offices outside that Member State regarding the publication of annual accounting documents (clause 766). 1287. Regulations under this clause will implement requirements of the Bank Branches Directive 89/117/EEC of the Council of 13th February 1989. The power to make regulations under this clause takes the same pattern as under clause 664 (accounts and reports: general). 1288. The regulations will replace section 699A and Schedule 21C to the 1985 Act. The regulations will be subject to the negative resolution procedure. Clause 666: Trading disclosures 1289. This clause confers on the Secretary of State a power to make regulations as to the information that oversea companies must display in specified locations, include in specified documents or communications, or provide to those who make a request in the course of business. Regulations made under this clause will replace the provision made by section 693 of the 1985 Act. This clause complements the similar power under clause 82 to make regulations imposing trading disclosure obligations on companies formed and registered under the Companies Acts. Regulations under this clause may require an oversea company carrying on business in the UK:
1290. They may also make provision, corresponding to that made in clauses 83 and 84, in respect of a failure by a company formed and registered under the Companies Acts to comply with the trading disclosure requirements imposed on them by regulations under clause 82. 1291. Regulations under this clause, like those under clause 82, are subject to the affirmative resolution procedure. Supplementary Clause 667: Offences 1292. This clause ensures that the regulations will be able to specify the person or persons who would be responsible for complying with any specified requirement of the regulations. It allows regulations to provide for offences, including who would be liable in the event of any contravention and what might be considered a defence should a charge be brought. The maximum level of penalty permissible under the regulations on indictment is an unlimited fine and on summary conviction a fine not exceeding level 5 on the standard scale, or for continued contravention, a daily default fine not exceeding one-tenth of that. Clause 668: Disclosure of individual's residential address: non-disclosure certificate 1293. If an oversea company is required by regulations under clause 661 to disclose an individual's usual residential address, then that individual must be able to apply for a non-disclosure certificate to protect her or his home address. Provision for non-disclosure certificates for directors of companies formed and registered under the Companies Acts is made in Chapter 8 of Part 10. 1294. The registrar will hold a separate record of the protected home addresses, which will not be made available to the public. Every holder of a non-disclosure certificate must notify the registrar of any change to his/her home address. Clause 669: Requirement to identify persons to accept service of documents 1295. Every oversea company required by regulations under clause 661 to register with the registrar of companies must specify one or more persons resident in the UK who are authorised to accept service of documents on the company's behalf. This information will be included in the details that must be delivered to the registrar of companies and placed on the public register. 1296. A document may be served on a registered oversea company by leaving it at, or sending it by post to, the registered address of any person resident in the UK who is authorised to accept service on the company's behalf (clause 746). 1297. This clause replaces the provision made by section 691(1)(b)(ii) and paragraph 3(e) of Schedule 21A to the 1985 Act. Clause 670: Duty to give notice of ceasing to have registrable presence in the UK 1298. Oversea companies that have registered with the registrar of companies must inform the registrar of companies when they cease to be under any obligation to register under clause 661. This will occur when the regulations made under that clause no longer apply to the oversea company. The circumstances when this occurs will depend on the regulations, but an example might be when an oversea company closes all its branches in the UK. The notice will indicate to the registrar of companies that the oversea company is no longer subject to registration and reporting requirements under that clause and that the oversea company's name may be removed from the index of company names (clause 707). If a company fails to inform the registrar of companies then an offence is committed by both the company and every officer of the company who is in default. The penalty will be a fine not exceeding level 3 on the standard scale. PART 26: THE REGISTRAR OF COMPANIES 1299. This Part largely replaces Part 24 of the 1985 Act, and sets out the basic functions of the registrar of companies (these functions are currently carried out by Companies House in England and Wales and in Scotland and by the equivalent registry in Northern Ireland). The new clauses implement a number of recommendations of the Company Law Review (CLR). The registrar Clause 671: The registrar Clause 672: The registrar's functions 1300. The Registrar of Companies in England and Wales and the Registrar of Companies in Scotland have various functions allocated by legislation - in particular, the 1985 Act. The most significant of these are functions relating to formation of companies and the collection and distribution of company information. 1301. Clause 671 carries forward the approach of section 704 of the Companies Act 1985 as to the appointment and status of the registrar of companies but omits some of the more antiquated parts of that provision. It specifies that there shall continue to be a registrar for England and Wales, and a registrar for Scotland, and also, consistent with the approach of the Bill which is to legislate for company law on a UK-wide basis, a registrar of companies for Northern Ireland (the notes to Part 35 of the Bill discuss this approach further). 1302. Under clause 672, the registrar will continue to have the functions conferred on her by companies legislation, and the Secretary of State will additionally have power to confer on the registrar particular functions in relation to the registration of companies or other matters. Clause 673: The registrar's official seal 1303. This clause, replacing section 704(4) of the 1985 Act, provides that the registrar will have an official seal for the authentication of documents. Clause 674: Fees payable to the registrar 1304. This clause gives the Secretary of State a power to set fees by regulations in relation to any function of the registrar and in relation to the provision of services and facilities incidental to her functions. It replaces section 708 of the 1985 Companies Act, but provides more information (subsections (2) and (3)) on the types of issue which may be covered within the regulations, although these lists are not exhaustive. 1305. As now, fees relating to the normal statutory obligations of companies under companies legislation will be set by regulations made by the Secretary of State. 1306. It will also be possible for fees to be charged for any ad hoc and bespoke discretionary services which Companies House wishes to provide. The 1985 Act (section 708(5)) makes clear that the registrar can herself determine fees for services for which there is no direct legal obligation. Subsection (5) of the clause replaces this with a more general power for the registrar to determine fees where no fee has been set in regulations by the Secretary of State. Such fees might relate for example to the introduction of new services (e.g. those made possible by new technologies) which could not have been anticipated when the Secretary of State last made fees regulations; or for services such as seminars and road shows which Companies House arranges. Certificates of incorporation Clause 675: Public notice of issue of certificate of incorporation Clause 676: Right to certificate of incorporation 1307. These clauses replace, respectively, sections 711(1)(a) (notice of the issue of certificates of incorporation to be published in the Gazette) and 710 (which allows any person to obtain a certificate of incorporation of a company) of the 1985 Act. They cover all certificates of incorporation (including, for example, certificates of incorporation on change of name). Clause 675 provides for the possibility of alternatives to publication in the Gazette (see clause 724, which enables the Secretary of State to make regulations catering for this possibility). Registered numbers Clause 677: Company's registered numbers Clause 678: Registered numbers of branches of oversea company 1308. Clause 677 replaces section 705 of the 1985 Act (rules on companies' registered numbers), without change of substance. Clause 678 replaces those aspects of section 705A of that Act which relate to company numbers (other aspects of that sections are reproduced in clause 661 of the Bill). Delivery of documents to the registrar Clause 679: Prescribed forms etc 1309. Section 744 of the 1985 Act sets out that, where that Act refers to forms being "prescribed", it is the Secretary of State who makes the relevant regulations. Under this clause it will in future be the registrar herself who prescribes the nature of "prescribed forms" and of certain other matters. Subsection (2) however makes clear that regulations already made by the Secretary of State will continue to have effect unless and until superseded. Clause 725 provides for registrar's rules made under this and other clauses to have appropriate publicity. Clause 680: Registrar's requirements as to form and manner of delivery 1310. This clause gives the registrar power to make rules about form and manner of delivery of documents, including the form and means of communication (e.g. electronic or hard-copy by post), the format, and the address to which it is to be sent, and where appropriate, technical specification. The power conferred by this section does not authorise the registrar to require documents to be delivered in electronic form (this is dealt with in clause 681). 1311. Subsection (5) implements elements of the amendments to the First Company Law Directive (68/151/EEC) made by Directive 2003/58/EC. These provide that member states must by 1st January 2007 permit companies to file all the "documents and particulars" listed in Article 2 by "electronic means" (as defined in Article 3.8 from which part of clause 722 derives). Clause 690 of the Bill sets out the documents listed in Article 2 and other documents to which the new requirements apply by virtue of other Community legislation. 1312. The registrar, where she believes it to be desirable, would be able to impose authentication requirements. Clause 681: Power to require delivery by electronic means 1313. This clause provides that the Secretary of State (not the registrar) will have a new power to provide for electronic-only delivery of classes of document. The Secretary of State will only be able to exercise this power in respect of classes of document which are authorised or required to be delivered and for which the registrar has published rules relating to electronic delivery (in other words where it is clear precisely what the mechanism for the electronic communication should be). Clause 682: Agreement for delivery by electronic means 1314. This clause sets out the power of the registrar to make agreements with companies to deliver information to her only electronically. The agreements could cover all documents (to the extent that electronic means of filing are available) or just selected documents. It is envisaged that the agreements will be in a standard form and contain detailed provisions for communications between the registrar and the company (including possible use of codes and encryption). The agreements need not be available to be entered into by everyone in the same form or at all. Clause 683: Document not delivered until received 1315. This clause makes clear that "delivery" obligations go beyond an obligation simply to send or post information to the registrar, and that the registrar may make rules governing what it is for a document to be "received" (which might include, for example, setting out which offices of the registrar should receive a document). Defective delivery Clause 684: Defective delivery 1316. When the registrar receives documents, she has to decide whether to make the information contained in them available for public inspection or not. This clause clarifies her powers in this area. 1317. It ensures that the registrar has power to omit from the register any or all of the information contained in a document which does not meet the necessary requirements (for example, as to form or manner of delivery, or which is not appropriately authenticated; or where requirements as to content are not met, or where the fee payable has not been made). However, the registrar will still be able to accept (and register) such a document at her discretion, although such acceptance on her part does not (subsection (3)) exempt the filer from any consequence which may attach to their failure to comply with the original requirements for delivery. Clause 685: Informal correction of document 1318. This is a new provision, giving the registrar power to correct information by informal means (for example, by taking revisions or supplementary information from the company over the telephone) but only in very limited circumstances. It can be used as an alternative to rejecting or removing information:
1319. This ability to make informal corrections would only apply where companies have informed the registrar that it should apply. The registrar will need to initiate the correction and be satisfied that the person is authorised to give the information sought. In order to be satisfied as to the authority of the person she is telephoning, the registrar would be able to provide for identification numbers or other checks on identity. Clause 686: Voluntary replacement of document previously delivered 1320. This clause sets out how the registrar may accept a replacement document where, for example, a document is delivered in the wrong form. In essence she must satisfy herself that the replacement document is delivered by the original filer, or by the company to which the original document relates, and that the replacement is "properly delivered" (as defined in clause 684(1)). It also allows her to impose requirements which will ensure that the replacement can clearly be associated with a particular original. Clause 687: Exclusion of unnecessary material 1321. This clause provides for cases where a delivered document contains unnecessary material (i.e. material for which there was no legal requirement). It provides that the registrar may exclude the material from the register (treating it as defectively-delivered under clause 684); may use the informal correction procedure in clause 685; and may issue a notice to remedy the defective delivery (clause 688). Clause 688: Registrar's notice to remedy defective delivery 1322. A process is needed where a document is delivered to the registrar but is not "properly" delivered. That is to say, it does not satisfy the requirements in clause 684 for example as to its contents, its form and manner of delivery, its authentication, and so on. 1323. In these circumstances the registrar will be able to send a notice to the person who delivered the document. If their contact details are unknown, she will send a notice to the company. The presenter (or other person) will then have 14 days in which to address the grounds for rejection, by sending a replacement set of information which satisfies the requirements. If no replacement is provided, an offence is committed. This procedure replaces the more limited procedure in section 706 of the 1985 Act. Public notice of receipt of certain documents Clause 689: Public notice of receipt of certain documents Clause 690: Documents subject to Directive disclosure requirements 1324. These clauses replace section 711 of the 1985 Act, which provides that certain notices must be published in the Gazette (that is, the London, Edinburgh or Belfast Gazette as appropriate: see clause 766), and lists the documents to which that requirement relates. This list derives from Community legislation, principally the First Company Law Directive (68/151/EEC). Clause 689 makes clear that notices of receipt of these documents must be published either in the Gazette, or by some other means (as may be specified under clause 724). Clause 691: Effect of failure to give public notice 1325. This clause effectively replaces section 42 of the 1985 Act. It sets out how a company, in its dealings with third parties, may not rely on the consequences of certain events (those which are set out in subsection (2)) unless notice of the event has duly appeared in the Gazette or been published in some other way provided for in clause 724. |
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| © Parliamentary copyright 2005 | Prepared: 17 November 2005 |