Clause 29
Company Law Reform Bill [Lords]
4:45 pm
Margaret Hodge (Minister of State (Industry and the Regions), Department of Trade and Industry; Barking, Labour)
I shall address the amendments in the order in which they were spoken to, so I shall deal first with amendment No. 14, which would qualify and limit the meaning of references to “a resolution” in clause 29(1).
The amendment would restrict the information to be provided to the registrar under clause 30, which provides for copies of resolutions and agreements to be forwarded to and recorded by the registrar, and that to be provided to the company’s members under clause 33, which requires companies to provide various constitutional documents to their members free of charge on request—including the types of resolution listed in clause 29. It would also restrict what is to be embodied in or annexed to companies’ articles of association under clause 31.
The amendment would clearly cut down the amount of paper and information that companies would be required to produce when they were required to make available copies of certain resolutions, but the danger of such a restriction is that the recipient of the resolution in question would receive only half the story. When the meat of a resolution is contained in another document, which may be attached to the resolution, that restriction would clearly be undesirable.
A resolution might, for example, refer to two documents: A and B. Document A might set out the provisions altering the effect of the company’s articles, and if that were not supplied with the resolution, there would not be much point in receiving a copy of the resolution. Document B might have no real bearing on the resolution’s meaning, so that not much would be lost if it were not supplied. The amendment would result in companies not being obliged to supply either document, and we would have thrown out the baby with the bathwater.
Would the company be obliged to supply a copy of the irrelevant document B under clause 31 as drafted? If the document were not part of the resolution, the answer would be no. So, on joint venture agreements, if they were part of the resolution, they would have to be supplied; if not, they would not have to be supplied.