Jonathan Djanogly (Shadow Solicitor General (Also Shadow Minister for Trade and Industry), Law Officers (Assist the Home Affairs Team); Huntingdon, Conservative)

I am in such a state of shock after the last decision that I nearly missed my spot. I will speak to clause 35 stand part briefly. We received a briefing from the Finance and Leasing Association that is significant enough that it deserves to be read. It says:

“There is an issue around existing safeguards provided to lenders under section 35 and 35B of the 1985 Companies Act which do not appear to have been transposed into the new Bill. In particular the Bill does not appear to include a provision making clear that a party dealing with a company is not bound to enquire whether the transaction that is being entered into is permitted by the company’s constitution, as was the case under Section 35B of the 1985 Act. Clause 31 (1) of the Bill says that the validity of any action taken by a company shall not be called into question by anything in the company’s constitution, which essentially replicates section 35 (1) of the 1985 Act. The explicit safeguard for parties...dealing with a company provided under 35B of the 1985 Act appears to be missing.

It does not appear to be an intention of the drafting to reduce the safeguards provided to lenders under the 1985 Act. The DTI Company Law Bill Team have confirmed that the intention was to transpose existing standards through”—

the Bill—

“however we believe that drafting has been misapplied and does not achieve equivalence with the 1985 Act.”

Margaret Hodge (Minister of State (Industry and the Regions), Department of Trade and Industry; Barking, Labour)

I will consider that point.