Clause 57
Company Law Reform Bill [Lords]
6:30 pm
James Brokenshire (Hornchurch, Conservative)
The clause makes additional provisions in connection with clauses 55 and 56. We discussed clause 56 under our previous batch of amendments. Clause 55 provides an approval mechanism, through the Secretary of State, in the event that the proposed name for a company suggests a connection with Government or with a public authority. Clause 57, to which the amendments relate, gives power to the Secretary of State by regulation to require an applicant wishing to change its name to a name falling within the ambit of clauses 55 and 56 to seek the view of a specified Government Department or other body. In such circumstances, the applicant must write to the relevant Department or body to ask it to indicate whether and, if so why, that body or Department has any objection to the proposed name.
It is interesting to note that while in many other fields within the Bill, there is a concept of e-government and filing by electronic means, in this circumstance communication has to be in writing, rather than by other means. Perhaps that can be addressed in due course.
To my mind, the weakness of the provision is that there is no compulsion on the relevant Department or body to do anything or to respond. There does not appear to be anything in the clause that says what happens if there is no reply, or if there is undue delay. It does not seem acceptable that an applicant wishing to trade under a corporate name in that way could be left to wait for months without an answer. It does not seem to be a particularly onerous requirement on the Department to respond. As Lord McKenzie of Luton said in another place, we are considering some 90 words such as “charity”, “European”, “dental”, “nurse”, “royal” and “trade union”.
The fact that a relevant body is not prepared to respond in a timely manner would suggest that the issue is unlikely to be of concern, and that the applicant seeking to change its name should be able to proceed without further delay. Amendment No. 118 therefore seeks to impose a time scale on the process by adding a provision to the effect that, in the absence of a response within 30 days of receipt of a relevant request, the Department or body will be deemed to have raised no objection. Amendments Nos. 119 and 120 seek to make consequential amendments to the remaining parts of the clause.
Given that the Bill is aimed at making things easier for business and at being deregulatory, I hope that the Minister will use this opportunity to demonstrate that intention, and that the amendments will therefore find favour. I note in closing that the clause largely reflects the language in section 29 of the 1985 Act, but the matter deserves further reflection and some updating of the wording. It would be helpful for all parties to gain some clarity and certainty in this context.