Clause 717

Company Law Reform Bill [Lords] – in a Public Bill Committee at 12:30 pm on 4 July 2006.

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Public notice of issue of certificate of incorporation

Question put, That the clause stand part of the Bill.

Photo of Jonathan Djanogly Jonathan Djanogly Shadow Minister (Business, Innovation and Skills), Shadow Solicitor General, Shadow Minister (Justice), Shadow Solicitor General

The clause provides for the possibility of an alternative to publication in the Gazette of the notice of issue of certificates of incorporation. Will the Minister explain why publication in the Gazette is still felt necessary? Could an alternative form of publication be used, or perhaps none at all?

Photo of Vera Baird Vera Baird Parliamentary Under-Secretary, Department for Constitutional Affairs

Clause 15 ensures that the registrar issues a certificate of incorporation to a company when it is formed and there are other stages in a company’s life when a certificate of incorporation can be issued. For example, when a company changes its name it will receive a new certificate. The fact that a company has been duly formed will often be of interest to third parties. The current law requires the registrar to publish  the fact that she has issued a certificate of incorporation by placing a notice in the Gazette. The Bill replicates that requirement, but there are two important changes. The Gazette is a well known and long-standing publication—it is longer standing than the Middlesbrough Evening Gazette, which is my local paper—and users are accustomed to referring to it for accurate information, which is not necessarily the case with some other newspapers, to get news of incorporation. There is no intention that the registrar will stop publishing information in the Gazette in the foreseeable future, but we recognise that over time, particularly as technology develops, it is possible that alternative mechanisms will become useful. In clause 769, the availability of alternative mechanism is registered in the Bill.

There was a second change to the previous law which, the hon. Gentleman may wish to know, was introduced by the Opposition in another place. When publicising certificates of incorporation the registrar merely uses the company’s name, but in future she will state the registered number, which will help users.

I suppose that the hon. Gentleman was asking whether anyone uses the Gazette, whether it is an arcane publication and whether we should do more. There is a power in clause 769, which we will discuss when we come to it, and we could do that as well as or instead of continuing publication in the Gazette, but we should not dispense with the obligation to publish notices in the Gazette without careful consultation about the extent to which it is used. Most of the existing obligations to give notice in the Gazette derive from EC law, and the facility to provide alternative means of publication has only recently been made available. The extent to which it has been used in other member states is unclear, and we should take that into consideration. We should not throw the Gazette away, but we should make available other means of publication. Publication is important because there is often third-party interest in incorporations.

Photo of Jonathan Djanogly Jonathan Djanogly Shadow Minister (Business, Innovation and Skills), Shadow Solicitor General, Shadow Minister (Justice), Shadow Solicitor General

We will come to a debate on the Gazette. I am certainly not questioning its historical validity because it is an ancient and venerable institution, but perhaps we should think about moving on. However, specifically in relation to clause 717, my point was that if a certificate of incorporation was published, many more people would have notice of it if it was put on microfiche at Companies house than if it was placed in the Gazette, which not many peoplelook at.

Photo of Vera Baird Vera Baird Parliamentary Under-Secretary, Department for Constitutional Affairs

I suppose that it is a matter of belt and braces. We are terribly fond of the Gazette and we do not propose to abandon it yet.

There is no concrete argument for abolishing it. I understand the hon. Gentleman’s saying that other ways are available and implicit in the procedure, but does he have a good reason for simply stopping publication in the Gazette?

Photo of Jonathan Djanogly Jonathan Djanogly Shadow Minister (Business, Innovation and Skills), Shadow Solicitor General, Shadow Minister (Justice), Shadow Solicitor General

I think I do, Mr. Illsley. The cost of the Gazette is not insignificant. When we have a fuller debate on the Gazette, it may be helpful if the Government could look up and have ready some facts  and figures about the cost to the state—Companies House—of publishing it as well as the cost to companies because I shall ask about that. However, I am happy to leave the matter for the moment.

Question put and agreed to.

Clause 717 ordered to stand part of the Bill.

Clauses 718 to 720 ordered to stand part of the Bill.