New clause 28

Company Law Reform Bill [Lords] – in a Public Bill Committee at 1:45 pm on 20th July 2006.

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Requirement of consent of Charity Commission: companies that are charities

‘For section 66 of the Charities Act 1993 (c. 10) substitute—

“66 Consent of Commission required for approval etc by members of charitable companies

(1) Where a company is a charity—

(a) any approval given by the members of the company under any provision of Chapter 4 of Part 10 of the Company Law Reform Act 2006 (transactions with directors requiring approval by members) listed in subsection (2) below, and

(b) any affirmation given by members of the company under section 182 or 198 of that Act (affirmation of unapproved property transactions and loans),

is ineffective without the prior written consent of the Commission.

(2) The provisions are—

(a) section 174 (directors’ long-term service contracts);

(b) section 176 (substantial property transactions with directors etc);

(c) section 183 (loans and quasi-loans to directors etc);

(d) section 185 (credit transactions for benefit of directors etc);

(e) section 187 (related arrangements);

(f) section 201 (payments to directors for loss of office);

(g) section 202 (payments to directors for loss of office: transfer of undertaking etc).

66A Consent of Commission required for certain acts of charitable company

(1) A company that is a charity may not do an act to which this section applies without the prior written consent of the Commission.

(2) This section applies to an act that—

(a) does not require approval under a listed provision of Chapter 4 of Part 10 of the Company Law Reform Act 2006 (transactions with directors) by the members of the company, but

(b) would require such approval but for an exemption in the provision in question that disapplies the need for approval on the part of the members of a body corporate which is a wholly-owned subsidiary of another body corporate.

(3) The reference to a listed provision is a reference to a provision listed in section 66(2) above.

(4) If a company acts in contravention of this section, the exemption referred to in subsection (2)(b) shall be treated as of no effect in relation to the act.”.’.—[Margaret Hodge.]

Brought up, and added to the Bill.