Clause 13
Company Law Reform Bill [Lords]
11:15 am
Jonathan Djanogly (Shadow Solicitor General (Also Shadow Minister for Trade and Industry), Law Officers (Assist the Home Affairs Team); Huntingdon, Conservative)
I beg to move amendment No. 15, in clause 31, page 12, line 19, after ‘a', insert ‘public'.
Clause 13 deals with the statement of compliance. It relates to section 12(3) and (3)A of the Companies Act 1985. Based on recommendations of the CLR, the current requirement of a statutory declaration or a chronic statement here and elsewhere in the Bill is replaced by a requirement to make a statement of compliance. This statement does not need to be witnessed and may be made on paper or in electronic form. It will be for the registrar’s rules under clause 75 to specify who makes a statement and its form. Will the Minister advise us whether her Department has now considered the form of the statement or whether that will follow?
My probing amendment provides for retaining the use of the statutory declaration. Our concern here is related to impersonation and the growing problem of identity theft. There is a growing problem of forms 288 being sent in by crooked individuals to change the directors of registered companies. They may do that in their own name or under a pseudonym or, often, the name of a dead individual. These so-called directors then change the registered office to one of their own choice so that the company has therefore been hijacked to some extent, and typically they enter into contracts using the false details.
The safest stage of the registration process at the moment is the company formation stage. That is because at that moment one has to go in front of a solicitor or possibly a commissioner for oaths and make a statutory declaration. Will the safety that we have within the system now disappear? I assume that it will. How do the Government intend to make sure that we retain this element of safety without the statutory declaration, not least in view of the additional risks of accepting details online? This is a probing amendment, I hasten to add. I am generally in favour of e-commerce and using the internet, but we need to appreciate that there are security concerns here that they are being misused. This is not me suggesting that a problem will happen; it is a growing problem and we need to have a remedy in place by the time the Bill comes into force.