We are now dealing with part 28 of the Bill and overseas companies. The definition of an overseas company is wider in the clause than in section 744 of the Companies Act 1985, which it replaces. It changes “Great Britain” to “United Kingdom”. That is consistent with the rest of the Bill’s changes to company law to bring Northern Ireland in line with the rest of the country. However, the explanatory notes explain that this part
“will replace the provisions made by Part 23 and Schedules 21A-D of the 1985 Act. Regulations made under this Part will continue to implement the requirements of the Eleventh Company Law Directive (89/666/EEC), which imposes disclosure requirements on overseas companies that set up branches in the UK.”
It might be helpful if the Under-Secretary put on record why it is thought that the existing regimes need to be changed.
As the hon. Gentleman said, the clause replaces the definition of an overseas company in section 744 of the 1985 Act, which refers to companies incorporated outside Great Britain that establish a place of business in Great Britain. Clause 699 takes a different approach by defining an overseas company simply as a company incorporated outside the UK. The various provisions of part 28 to which the hon. Gentleman referred or the regulations made under them will then state to which overseas companies they apply. For example, regulations under clause 700 must require an overseas company to register with the registrar if it opens a branch in the UK. Clause 705 enables regulations to impose trading disclosure requirements on overseas companies carrying on business in the UK. I think that that explanation is reasonably self-sufficient. We think that the different format is advantageous.
My question was basically why the Government think that it is more advantageous.
Presumably, the new format allows for more detailed consideration of regulations in relation to the separate headings set down in the appropriate clauses. Under one clause, regulations will be made that deal with a company that has a branch in the UK. Regulations under another clause will deal with a company that is carrying on business in the UK. That seems to provide maximum flexibility. I cannot see that there is anything more to be said about it, but I am getting wisdom even as I speak. Strangely, that often happens here. The company law review made a number of recommendations about overseas companies and proposed that the current regimes should be replaced with a single one based on the existing concept of a place of business, and that complies with the requirements of the 11th company law directive. I hope that that explanation assists the hon. Gentleman.