Company Law Reform Bill [HL]

This clause replaces Section 288(2) of the 1985 Act so far as it applies to directors. It retains the requirement that the appointment of a director, a director ceasing to hold office, or any change in an existing director’s particulars be notified to the registrar within 14 days; default is an offence. It also requires a notice of appointment to be accompanied by evidence that the appointee has consented. This provision ensures that the public record is kept up to date. The new provision is substantively different from the 1985 Act in that only officers of the company in default will be liable for a breach of its requirements. The current formulation is ““the company and every officer of it who is in default””. As noble Lords will know, there are offences in the Bill where we are removing company liability. We are doing that because we believe, as did the Company Law Review, that there should be presumption against liability falling on the company itself where the perpetrators are clearly the directors or other individuals and the victims of the offence are the shareholders of the company. In these cases, making the company liable would impose an additional penalty upon the shareholders. However, the obligation in the provision is specifically on the directors of the company, and therefore we believe that it is appropriate to limit the scope of liability in this case. This change to the existing law was set out in Annex D to the March 2005 White Paper. In the subsequent consultation we did not receive any comments from interested parties suggesting that it would be inappropriate to remove the liability of the company from this provision.