Company Law Reform Bill [HL]

moved Amendment No. 77:"Page 32, line 11, leave out ““five”” and insert ““three””" The noble Lord said: I shall speak also to Amendment No. 78, which concerns Clause 76. Clause 75 allows the Secretary of State to direct a change of name by a company in the event of misleading information being given at the time of registration of the name. This decision can be made up to five years from the date of registration of the name. The question is how long the period should be. Five years seems a long time to have this potential threat hanging over a company. During a five-year period a number of things could have happened. The company could, for example, have been sold and the person providing the misleading information might have realised his or her profit on the investment and moved on, leaving those with no responsibility for providing the misleading information suffering as a result. The amendment does not seek to eliminate the penalty, merely to reduce the period to three years. This would fit with our earlier amendment to Clause 12, in which we sought to increase the length of the continuing liability of companies limited by guarantee from one year to three years. Three years would be a reasonable period for any problems and misleading information to come to the surface and to the notice of parties who might be offended thereby. Amendment No. 78 is probing in nature and concerns a change from the Companies Act 1985. Under that Act, officers of the company are not liable. Nor is it a criminal offence under the corresponding section of that Act—I think it is Section 32—to fail to comply with a direction by the Secretary of State. Slightly more concerning is the assurance in the table of derivations that this clause makes no substantial change to Section 32 of the Companies Act 1985. I would argue that the introduction of a criminal offence and the expansion of the liabilities of officers of the company represent a substantial change. The amendment seeks to remove these additions and to return the meaning of the clause to that found in Section 32 of the Companies Act 1985. It also sets the level of the fine at £1,000 initially, followed by a £100 daily default fine for continued non-compliance. This seems a reasonable level which would encourage businesses to act promptly. I beg to move.