Company Law Reform Bill [HL]

moved Amendment No. A8:"Page 250, line 33, leave out subsection (2) and insert—" ““(2)   There is an offer to the public if there is a communication to any person which presents sufficient information on the securities to be offered and the terms on which they are offered to enable an investor to decide to buy or subscribe for the securities in question, and the communication may be made in any form and by any means.”” The noble Lord said: Under Clause 526, an ““offer to the public”” is to be defined as including an offer to any section of the public. Under the Financial Services and Markets Act 2000, an offer to the public can be an offer to a single person provided that it contains the appropriate information. We argue that we should take this opportunity to align the definition in this Bill with the recently adopted definition in Section 102B of the Financial Services and Markets Act 2000, without then applying the exemptions in Section 86 of that Act. Those exemptions are that in certain circumstances, although securities are clearly being offered to the public, the company making the offer does not need to produce a formal prospectus which has to be approved by the FSA. Those conditions include offers to fewer than 100 persons, offers directed at qualified investors only and offers where the minimum consideration must be €50,000 or more. That is contained in Statutory Instrument 2005/1433, which came into force in July last year. These exemptions should not be included here as there are no similar exemptions currently in the Companies Act 1985, and Clause 526 already contains exemptions on what is regarded as an offer to the public, as can be seen in subsections (3) to (5). If these exemptions were included in the Bill, Part 17 would become rather toothless. As it stands, the vast majority of private companies understand and accept the general position that offers by them to the public are not permitted. However, after having two different definitions, as the Bill would create, could cause unnecessary confusion over what is meant by an ““offer to the public””. The amendment would insert in the Bill the definition found in the Financial Services and Markets Act 2000, thereby avoiding any issues that the current wording may cause were it left in place. I beg to move.