Clause 40
Company Law Reform Bill [Lords]
6:00 pm
Quentin Davies (Grantham and Stamford, Conservative)
Encouraging me to table an amendment is a better response than the one that the Minister gave me on the first occasion.
When I raise an issue about the pertinence or meaning of a subsection, it is not satisfactory to say that the rest of the clause is perfectly all right. That is perfectly true—I totally agree with the purpose of the rest of the clause, and I likewise agree that anybody dealing with a company is entitled to take at face value the directors’ right to commit that company. That is clear, and our whole economic system would not survive were it not the case. The question, however, is whether the subsection is required at all. The hon. Lady says that directors’ liability is dealt with explicitly elsewhere in the Bill. That is perfectly correct. Why, then, do we need the subsection? It says:
“This section does not affect any liability incurred by directors, or any other person, by reason of the directors’ exceeding their powers.”
So the hon. Lady has introduced a reference to directors’ liability even though she stated that it did not belong in the clause but elsewhere in the Bill. There might be some slightly confused thinking on her part, and t is up to her to defend the presence of the subsection, because I am not convinced that it is necessary.