Company Law Reform Bill [HL]

moved Amendment No. 137:"Page 63, line 10, leave out ““16”” and insert ““18””" The noble Lord said: I rise in support and on behalf of my noble friends on the Back-Benches of the Committee to deal with Part 10. I declare several interests as a director of public and private companies, resident both here in the United Kingdom and in France. My list of interests is not as distinguished as that of those sitting on the Front-Bench, but I live in hope. The amendments with which I hope to deal—I understand that we will try to reach Amendment No.148 this evening—are all probing amendments. They are designed to elicit clear explanations for what may not be as clear in the Bill as appears at first blush. I repeat what my noble friend said on Second Reading when he congratulated the parliamentary draftsman on the clarity of the Bill. In dealing with this and other amendments, I have found the Bill much easier to understand than others with which colleagues have had to deal. In moving amendment No. 137, I should like also to speak to Clause 142 stand part. Amendment No. 137 and Clauses 141 and 142 deal with the age of directors. I argue that the age of capacity for directorships should be 18, not 16, and I look forward to the Minister’s response. There are two reasons: the first is legal and the second concerns the message that might be sent out to young people and those at school if the Bill passes in its present form. Let me deal first with the legal objections. The age of capacity for contract, which was reduced to 18 by the Family Law Reform Act 1969—below which age you are a minor—would clearly support the argument that the minimum age should be 18, not 16. Secondly, there is the age of capacity for legal proceedings under the civil procedure rules—below 18, you are a child, and special court rules apply with regard to being involved in legal proceedings. The courts are willing to enforce a contract of employment against a minor but only if it is held to have been beneficial to the minor when entered into. There could be difficulties in enforcing certain provisions of a company’s articles of association or a shareholder’s agreement against a shareholding director who was under 18. For example, it may not be possible to put options over shares in the company to be enforced against a minor. The message to young people should be that becoming the director of a company, however modest and private the company, is an important task that should be taken seriously. I appreciate that under common law there is no restriction on the minimum age for a director. But the Bill provides an opportunity to set that down and I think it should be 18. Clause 142 provides the Government with an opportunity, by regulation, in special circumstances, to reduce that age below 16. My question to the Minister is why? And when would such regulations be introduced? I beg to move.