Company Law Reform Bill [HL]

I am grateful to Members of the Committee for the opportunity to explain the importance of Clause 750 and the three schedules that this clause introduces. Clause 750, together with the clauses coming immediately after it, and Schedules 5, 6 and 7 make new provision for how documents or information are to be sent or supplied to or by a company. They apply in respect of supply of information under the Companies Act. Importantly, this is the part of the Bill which enables companies to make greater use of e-communications. These e-communications provisions will produce some of the most important cost-savings of the Bill, in the region of £50 million per annum for UK listed companies alone. But the measures should also deliver many further savings and benefits for private companies and their shareholders too: for example, by making it easier for shareholders to take decisions by email or other electronic means rather than in general meeting. I now turn now to the noble Lord’s concerns about enforcement and penalties for failure to comply with the ““company communications provisions””. The consequences from—and where appropriate a penalty for—not sending a document or information in accordance with these provisions will follow from the provision that required the document or information to be sent. That will differ from case to case. For example, the consequence for failing to send a meeting notice properly may be that the meeting is not properly convened and that therefore members cannot pass effective resolutions, although this depends on the company’s articles. It would not be right to make provision for a general penalty under the ““company communication provisions””. I trust that Members of the Committee will allow Clause 750 to stand part.