Company Law Reform Bill [HL]

If the noble Baroness agrees, I should like to take together her proposed amendments to this clause. We believe that there is a need for changed laws so that there are circumstances in which companies may be relieved of the obligation to allow public access to the register of members. The Bill provides that a company may apply to the court for relief and that the court shall grant it, provided only that it is satisfied that the inspection or copy is not sought for a proper purpose. Obviously this is a less restrictive test than that contained in Amendments Nos. 116 and 117, which is that the court must be satisfied that it is sought for an improper purpose. Amendment No. 118 provides a definition of ““improper purpose””. A definition of either ““proper purpose”” or ““improper purpose”” could give rise to unintended loopholes or scams to get around the measure. We therefore consider that what is a proper purpose in this context is a matter best left to the courts to determine. In Amendment No. 118, the noble Baroness’s first example of an improper purpose is uncontroversial, but the second does not, I consider, achieve her purpose. The promotion of widgets is not, I believe a proper purpose for permitting access to the register of members of a company manufacturing widgets, and yet, under the noble Baroness’s amendment, the court would have no discretion to relieve the company from its obligation to permit access to an applicant wishing to use the register as a mailing list to promote such widgets. There is not much room for disagreement on this point. The courts and everyone else are clear that there is not a problem in regard to the governance of a company. People such as animal rights extremists and others are clearly using the register of members for improper purposes, but the kind of situations referred to by the noble Baroness are clearly concerned with the governance of a company, and that is not at all in debate. We intend to introduce regulations to change the requirements for the annual return to include the register of members.