Company Law Reform Bill

Clause 196 treats certain payments to be payments for loss of office. These are payments where, if in connection with a transfer of the shares or undertaking of the company, the director gets given more for the shares than other holders of like shares, or the director receives other valuable consideration. The clause is derived from Section 316(2) of the Companies Act 1985. As currently drafted, Clause 196 applies in those cases where the director is losing or retiring from office. However, in this form it is not consistent with Clause 195. Under Clause 195(1) payments for loss of office include payments on loss of office as director and on retirement from office as director. They also include payments on loss of, or retirement from, any other office or employment in connection with the management of the affairs of the company or any subsidiary undertaking of the company. We therefore seek to replace Clause 196 with a new clause which is consistent with the approach taken in Clause 195. It will remove any doubts on whether Clause 196 applies to the same set of circumstances as Clause 195. Therefore, I oppose the question that Clause 196 stand part of the Bill. Clause 196 negatived.