Company Law Reform Bill [HL]

moved Amendment No. 13:"Page 7, line 34, leave out subsection (3) and insert—" ““(   )   A company’s articles of association must— (a)   be contained in a single document, and (b)   be divided into paragraphs numbered consecutively.”” The noble Lord said: Model articles of association have been prescribed for companies limited by shares since 1856. The current form of model articles contained in Table A are prescribed under the Companies Act 1985. By long-established tradition, the model articles that apply to a company are those prescribed at the time that company was first formed by registration. For example, if a company was formed and registered as a private company limited by shares under the Companies Act 1929, it remains subject to the 1929 Table A, unless or until its articles exclude or modify the provision of that Table A or it consciously adopts a later Table A. Clause 20 allows the Secretary of State to prescribe different model articles for different types of company and that has prompted us to think about which model articles should apply when a company changes its status, particularly when it moves from being a private company limited by shares to a public company or vice versa. We think that consistency with the approach adopted in previous companies Acts requires that the model articles that applied when the company was first registered should continue to apply following the change of status. That means, for example, that if a company to which model articles apply starts life as a public company, it will remain subject to the model articles prescribed for public companies when the company was originally formed and registered, even if it subsequently re-registers as a private company. We have consulted practitioners and they agree that this is the right approach. The purpose of these amendments is simply to make it clear what the position is since we felt that the drafting of Clause 21 as introduced could have been misinterpreted as suggesting that a different set of model articles applies on re-registration. I beg to move.