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Clause 45

Company Law Reform Bill [Lords] – in a Public Bill Committee at 6:00 pm on 20th June 2006.

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Common seal

Photo of Margaret Hodge Margaret Hodge Minister of State (Industry and the Regions) 6:15 pm, 20th June 2006

I beg to move amendment No. 97, in clause 45, page 19, line 25, at end insert—

‘(6) This section does not form part of the law of Scotland.'.

Photo of John Bercow John Bercow Conservative, Buckingham

With this it will be convenient to discuss Government amendments Nos. 98 and 99.

Photo of Margaret Hodge Margaret Hodge Minister of State (Industry and the Regions)

This group of amendments relates to the formalities of companies doing business. Clause 45 provides that a company may, if it wishes, have a company seal. The amendment to the clause makes it clear that that does not apply to the law in Scotland, because the comparable provision for the law of Scotland is found in a further clause, clause 49. That is our first amendment.

Clause 46 provides for the manner in which companies are to execute documents that are to be deeds. Although a deed is now only necessary for certain transactions, they are important; for example, the conveyance of land or the granting of a power of attorney. One party to such a transaction may insist on a deed. It is therefore essential that every company is able formally to execute the deed. The clause replicates section 36AA, which was inserted into the 1985 Act by the Regulatory Reform (Execution of Deeds and Documents) Order 2005. The order implemented the recommendations of the Law Commission, making clear that there are two separate steps in the execution of a deed. The first is the execution of a document, creating the deed, and the second is the delivery of that deed. The steps may or may not be simultaneous. The clause provides that the document is presumed to be delivered upon execution, unless a contrary contention is proven. I am told that the delivery is thus a rebuttal presumption, which means that it has occurred unless it is proven that it has not. The amendment simply ensures that the clause also applies to the law in Northern Ireland.

The amendment to clause 47 is needed so that under the law of England and Wales and of Northern Ireland a company may appoint an attorney whether or not it has a common seal. All the amendments are technical, and are needed to assure the appropriateness and efficacy of the Bill.

Amendment agreed to.

Clause 45, as amended, ordered to stand part of the Bill.