Clause 9
Company Law Reform Bill [Lords]
Public Bill Committees, 20 June 2006, 10:15 am
Jonathan Djanogly (Shadow Solicitor General (Also Shadow Minister for Trade and Industry), Law Officers (Assist the Home Affairs Team); Huntingdon, Conservative)
The clause replaces sections 2 and 10 of the 1985 Act, which refer exclusively to the delivery of a memorandum. The Bill changes how certain information is delivered: information that is set out in the memorandum will be provided to the registrar in accordance with the clause, which describes, among other things, the contents of an application for registration. It states that the application must contain a statement of the intended address of the company’s registered office and a copy of any proposed articles of association.
A probing Opposition amendment tabled in Grand Committee in the Lords was designed to find out why companies will need to state their country of incorporation, as an objective of the Bill is to extend company law to the whole of the UK. We feel that that point merits further discussion.
The application for registration, which is covered by amendment No. 2, and the resulting registered office, which is covered by amendment No. 64, must be in England, Wales, Scotland or Northern Ireland, as set out in part 6. In this globalised age, we are trying to simplify rules as much as possible to facilitate companies doing business. One reason for doing so is the certificate of incorporation, which will often need to be sent to overseas companies or used in legal opinions to validate the existence or good standing of a company.
As the clause stands, the certificate will say that a company is incorporated in England and Wales, in Scotland or in Northern Ireland. Frankly, that could be confusing for foreigners, who like to think that they are dealing with the United Kingdom. It would therefore be easier if the certificate said, “Registered in the United Kingdom.” That is what the amendments would achieve.
In Committee in the Lords, it was mentioned that non-company laws, such as insolvency laws, vary between the countries of the UK. In trying to move the Lords debate on a bit, I say to the Minister that insolvency processes can be started in any country, in the same way that a Scottish and French company could agree to a contract under English law. I am therefore not sure why it is necessary to have the country of incorporation on the certificate. I ask the Government to consider the issue.