Company Law Reform Bill [HL]

moved Amendment No. 97:"Page 39, line 25, leave out paragraph (c)." The noble Lord said: The question been raised with us, and on which we seek the Government’s view, is the need for Clause 92(1)(c). It requires a company to have a written statement from its auditor that the balance sheet amount at that date is not less than the aggregate of its called-up share capital and undistributable reserves. We accept that this is not a new provision, as it comes from Section 43(3)(b) of the Companies Act 1985. However, we are told that it prevents many companies re-registering as plcs, which they would need to do if they wished to make an offer to the public.  In practice, we understand, that problem is overcome by forming a new plc and for that new company to acquire, normally by a share swap, all the shares in the existing company. That creates work and expense and achieves nothing. The amendment would remove that requirement which, in practice, often is only fulfilled by the artificial device that I have just described. Therefore, we question its value. I beg to move.