Company Law Reform Bill [HL]

moved Amendment No. 31:"Page 18, line 29, at end insert—" ““(2) A company which has a common seal shall have its name engraved in legible characters on the seal. (3)   If a company fails to comply with subsection (2) an offence is committed by— (a)   the company, and (b)   every officer of the company who is in default. (4)   An officer of a company, or a person acting on behalf of a company, commits an offence if he uses, or authorises the use of, a seal purporting to be a seal of the company on which its name is not engraved as required by subsection (2). (5)   A person guilty of an offence under this section is liable on summary conviction to a fine not exceeding level 3 on the standard scale.”” The noble Lord said: My Lords, in speaking to the amendment, I shall speak also to Amendment No. 32. Amendment No. 31 brings into the Bill the existing requirement in Section 350 of the 1985 Act for a common seal used by a company to include its name. It also brings in the offences associated with failure to do this. It thus consolidates the provisions relating to seals. As noble Lords have noted, this makes it easier for those concerned to discover the current position. Amendment No. 32 follows on from our consideration of this clause in Grand Committee. The noble Lords, Lord Hodgson and Lord Razzall, pressed for an amendment to spell out on the face of the Bill that a company has power to appoint an attorney to execute deeds and documents on its behalf within the UK. The 1985 Act, like the Bill as presently drafted, makes an express provision for this only in relation to execution of deeds and documents outside the UK. We agreed to reconsider this clause. Although there is already nothing in the law that prevents companies from appointing attorneys to execute deeds and documents within the UK, we have carefully considered whether it would be helpful to include a provision that spelled this out, alongside the provision which applies to execution abroad. Having sought the views of the Law Society, the Law Society of Scotland, the Incorporated Law Society of Northern Ireland and the British Bankers’ Association as to the best way forward, we now propose this amendment. It is of course essential to avoid the risk that a change would cast doubt on previous acts by companies or to risk limiting what they might otherwise do. It was that concern that led to the Law Commission recommending against change in its report, The Execution of Deeds and Documents by or on behalf of Bodies Corporate. We believe that, by being part of a comprehensive reform of company law, this amendment avoids that risk. It should be seen, among other reforms, in the light of our proposals for new model articles which do not include a provision akin to Regulation 71 of Table A, which permits the directors, by power of attorney or otherwise, to appoint any person to be the agent of the company. The amendment is not intended in any way to limit the purposes for which attorneys may be appointed by companies. It is merely to state in the Bill that which is considered to be the present position, which is that the power under the law of England and Wales and of Northern Ireland—namely, the legislation to appoint attorneys for this purpose for deeds and documents executed abroad—does not prevent attorneys from being so appointed in respect of deeds and documents to be executed.I therefore hope that noble Lords will agree to the amendments. I beg to move.