Company Law Bill [HL]

moved Amendment No. A68A:"Page 268, line 31, leave out from ““statement”” to end of line 32 and insert—" ““(a)   must be sent or submitted to every member eligible to vote on the said resolution of the company at or before the time at which the proposed resolution is supplied to him; and (b)   if the company has auditors, must be sent to them at or before the time the resolution is supplied to a member for signature together with the copy of the resolution, and the provisions of section 381B of the 1985 Act shall apply thereto.”” The noble Lord said: We move on to Clause 562—““Reduction of capital supported by solvency statement””—and in particular the requirement for a solvency statement. This amendment seeks to change the wording of proposed new Section 135A(2) at line 31 on page 268. The amendment has two aims, the first of which I do not think that the Government will have any problems with. First, it seeks to alter the wording from a resolution being ““served on”” a member to being ““supplied to”” a member. That mirrors the terminology found in Section 381B of the Companies Act 1985 and is, indeed, covered by the Government’s own Amendment No. A69. Secondly, it would provide that companies that have auditors must supply them with a copy of the resolution, and it applies the provisions of Section 381B of the Companies Act 1985 to this—namely, that it is an offence not to do so. The two legitimate defences to a prosecution under that section are, first, that it was not practicable for him to comply—that is the wording of the Act—or, secondly, that he believed on reasonable grounds that it had been sent or that the auditors had otherwise been informed of its contents. We think that it would be sensible to follow the wording of the 1985 Act, which is familiar. There is no reason to make a change; if anything, there is reason to preserve the wording of the Act. I beg to move.