Company Law Bill [HL]

moved Amendment No. A84:"Page 278, line 7, at end insert—" ““(   )   Subsection (2)(b) shall only apply where a company’s articles permit the directors to refuse to register a transfer of shares and debentures.”” The noble Lord said: This is another technical amendment about which I know that our friends in the Law Society are keen. The purpose of the amendment is to clarify that companies can refuse to register the transfer of shares and debentures only if they are authorised to do so by their articles of association. The proposed new sections do not take into account that by no means all companies have articles of association that allow the directors to refuse to register a transfer of shares. Some companies have articles that allow the directors to refuse to register in certain situations only—for example, if the proposed transferee is a competitor. Other companies’ articles provide that a transfer must be registered unless it is in favour of a minor—a child, not a coal miner, although it might have been a coal miner in the old days—or more than four transferees are involved. That is typically the case with a company whose shares are quoted. We presume that there is no intention to override such provisions, but it would be helpful if that could be clarified by stating that the new sections apply only where the articles of association of the company give the directors the right to refuse to register a transfer. I beg to move.