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'.

The clause relates to sections 382, 383 and 386 of the 1985 Act and is a fairly redundant carry-over provision from it. The theory is that, when printing articles in hard copy, copies of every resolution should be attached, but the practice is slightly different. Large public companies with company secretarial departments will usually spend some time updating the company’s printed memorandum and articles, for example, after changes made at the annual general meeting. However, the average company officer for small, mainly private, companies would probably not have much of a clue about what we were talking about in with this provision and would generally see it as an utter waste of time. It could be said that that is no excuse for them being ignorant of the law. Unusually, however, in this instance I disagree, because every item is already part of the public record. If they have not filed the resolution, it is important that that is corrected. However, hardly anyone asks companies for hard copies of the memorandum and articles of association. Practitioners will always go to the public record for such information.

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

I know that we are about simplifying and modernising, but the provision refers to a requirement of company law going back to 1862, which arose at that time because there was a danger  that, without the information contained in the document, somebody reading just the company’s articles would not get a complete picture of its constitutional arrangements. As the hon. Member for Huntingdon said, that provision has been incorporated into the 1985 Act and no doubt some of its predecessors.

Under the amendment, the clause would apply only to public companies. Although I can see that that would reduce the paperwork that private companies needed to produce in what the hon. Gentleman says would be a few cases, there is a danger that it would short-change those who are supplied with copies of a company’s articles.

I accept that the resolutions and agreements caught by clause 31 also have to be provided to the registrar under clause 30 and, as such, will be made available to members of the public. I think that that was the hon. Gentleman’s main point. However, we cannot see why private companies should be subject to lesser standards of constitutional transparency and accuracy or why members of private companies should be required to go to the registrar of companies and pay for copies of their documents to which they are currently entitled. If anything, to the extent that internal affairs of private companies may otherwise be less visible than those of public companies, the need for the provision may be even greater in the case of private companies. However, although we do not agree that it is appropriate to disapply clause 31(1) for private companies, the thrust of the hon. Gentleman’s amendment has caused us to look again at whether the clause could be more deregulatory. We believe that there is room for improvement. For instance, if a resolution or agreement merely changes the text of a provision in the articles, it might not be necessary to provide a copy of the resolution with those of the articles issued after the change.

It might therefore be worth modifying the language in clause 31 so as to clarify that point and the position of documents that record constitutional changes made by legislation or court order. I hope that that explanation and the possibility of a little more deregulation on Report will be sufficient to induce the hon. Gentleman to withdraw his amendment.

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

I am certainly heartened by the Minister’s response and grateful for her offer to look again at the clause. We feel that further deregulation could apply in order to lessen red tape for small private companies. On that basis, I beg to ask leave to withdraw the amendment.