Company Law Bill [HL]

Before turning to Amendments Nos. A94 and A95, I shall speak to government Amendment No. A94A, which is in this group. This makes a small correction to subsection (4) of Clause 583. This subsection requires the registrar to,"““register the notice and the statements on receipt””." The reference to ““the statements”” in this subsection is incorrect. This should in fact be a reference to ““statement”” in the singular; that is, the statement of capital mentioned in subsection (2). Government Amendment No. A94 corrects that. The effect of Amendments Nos. A94 and A95 is that a reduction of capital under Clause 582 would not take effect until the further statement that must be delivered to the registrar under Clause 583(6), as well as the notice and statement of capital, are registered by the registrar. The statement in question is a statement, made by the directors under Clause 582, confirming that the reduction of share capital does not exceed 10 per cent of the nominal value of the company’s allotted share capital immediately after the reduction. This statement must be delivered to the registrar within 15 days of the date on which the resolution to reduce capital is passed. We do not believe that it is necessary to link the directors’ statement to the effectiveness of a proposed reduction of capital. The purpose of the directors’ statement is to concentrate the directors’ minds on this important feature of the procedure. Where a company fails to comply with the filing requirements under Clause 583, the company, and every officer of the company who is in default, commits an offence. In addition, where the directors’ statement is misleading, false or deceptive in a material particular, the directors commit an offence under Clause 719—which provides a general false statement offence. In short, we consider that there are already sufficient incentives for the company and its directors to ensure that the directors’ statement is correctly made and filed within the prescribed time limits. I hope that explains why the Government are not convinced that Amendments Nos. A94 and A95 are necessary. I hope that the noble Lord will agree to withdraw the amendment.