Clause 102

Part of Company Law Reform Bill [Lords] – in a Public Bill Committee at 2:30 pm on 22 June 2006.

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Photo of Jonathan Djanogly Jonathan Djanogly Shadow Minister (Business, Innovation and Skills), Shadow Solicitor General, Shadow Minister (Justice), Shadow Solicitor General 2:30, 22 June 2006

This is a rerun of the debate in the House of Lords. I shall not read out what Lord Hodgson said, but shall instead quote what Lord McKenzie said and comment on it. Lord McKenzie said:

“The Bill reflects existing companies legislation in preventing this practice, and the Company Law Review considered carefully whether the bar should be maintained or removed. It concluded that it should be retained to prevent companies taking short-term advantage of a merely temporary change of status. The Company Law Review does not seem to have believed that this has placed any obstacle in the way of legitimate market developments; nor are the Government aware of any evidence to that effect. I therefore support the CLR’s conclusion that the bar should remain.

I should add that we are currently considering whether the condition in Clause 102(2)(b), which prevents a company beginning life as limited, re-registering as unlimited, then re-registering as limited and finally re-registering as unlimited again”— complicated stuff, this—

“is strictly necessary given that Clause 105(2) prevents a limited company which has re-registered as unlimited reverting to limited status.”

I hope that people are with me so far. Lord McKenzie continued:

“These highly technical issues are complicated by the need to consider possible multiple re-registrations under earlier legislation. We are considering whether any change is needed.”—[Official Report, House of Lords, 1 February 2006; Vol. 678,cc. GC140-141.]

It is appropriate for me to ask whether the Minister can provide an update on the Government’s thinking on the issue.