Company Law Reform Bill [HL]

moved Amendment No. 99:"Page 77, line 40, leave out from beginning to ““a”” in line 41 and insert ““This section applies to””" The noble Lord said: My Lords, Clause 176 is an exception from the requirements for member approval for substantial property transactions. It is derived from Section 321 of the Companies Act 1985, but differs from it in two ways. First, the circumstances in which the exception applies have been widened to include administration. That implements a recommendation of the Law Commissions. Secondly, there has been a change in the operation of the exception. In the Companies Act 1985, the exception applies to arrangements entered into by a company that is being wound up. Clause 176 operates differently by removing the need for approval on the part of the members of a company that is being wound up. The amendments widen the exception to include the Companies Act 1985 approach in addition to the approach taken by Clause 176 as it stands. The point of the exception is that when a company is being wound up or is in administration, the conduct of the company’s affairs is no longer in the hands of the members. If a liquidator or administrator is content with the substantial property transaction, it is not appropriate to require approval under Clause 173, either by the members of the company being wound up or in administration, or by the members of its holding company. I beg to move. On Question, amendment agreed to.