TEMPORARY EXTENSION OF POWER TO REQUIRE COMPANY TO CHANGE ITS NAME (Hansard, 19 October 1981)

§ Mr. Eyre
I beg to move, That the clause be read a second time.
Before dealing formally with this and the subsequent clause I should say that these clauses deal with an attempt to alleviate the difficulties of the Civil Service industrial action.
I am pleased to be able to inform the House that the backlog of work at the companies registration offices in both Cardiff and London arising from the recent industrial action in the Civil Service has now been cleared and the normal microfiche search service has been reinstituted.
Additionally, the registrar is now making available for free inspection in the public search rooms a directory of companies in microfilm form which will give certain basic details for each registered company, such as its registered office address and the made-up date of the last annual 81 return and accounts received by the registrar. This should assist searchers to obtain certain key information more easily than at present.
I turn to new clause 34. One of the results of the recent industrial action within the Civil Service was that the index of company names was not updated by the Registrar of Companies between 18 March and 23 August 1981 inclusive and was therefore not available for inspection by members of the public. This index is the present non-statutory version of the index which will be required to be kept under clause 23.
In practice, many companies maintain a close watch over the content of the index and if a new name appears which they feel is "too like" their own they will lodge an objection with a request that the Department exercises its power under section 18(2) of the Companies Act 1948 by issuing a direction against the newly registered company to change its name within six months of the date of its registration. In respect of names registered during the absence of the index, objecting companies may subsequently have, or have had, only a restricted time in which to examine the index and lodge their objections before expiry of the six-month period. We have received representations about this and consider that the absence of the index caused by industrial action may have resulted in companies being registered by names which are "too like" those of existing companies and that, in the circumstances, we are justified in extending the period in which a direction under section 18(2) may be given in respect of names registered in that period.
We propose, therefore, that in relation to company names registered on any day between 18 March and 23 August 1981, that being the period during which an up-to-date index was not available to the public, the power to direct a change under section 18(2) should be extended for a further six months until 23 February 1982. This will allow a full six month period after an up-dated index became available in which to consider whether the name by which a company was registered during that period is "too like" that by which another company was already registered.
7.30 pm
A similar problem, of course, arises in relation to the corporate names of overseas companies which registered under part X of the 1948 Act or changed their names during the period in which an up-to-date index was not available. Subsection (2) of the new clause will enable the Secretary of State to take appropriate immediate action under section 31 of the 1976 Act for a period of six months after the updated index became available.

§ Mr. John Fraser
The Minister said that many companies keep a close watch on the index to see whether a company is registered with a name similar to their own. That simply is not true of the majority of British companies. They have better things to do than to search the register of names every six months or so. Therefore, what the Minister said must apply only to companies that are rich, large or well known and have that sort of facility. Most businesses have far too much to do. They must cope with the recession, high interest rates and other matters. Besides manufacturing a product, they have far too much to occupy their time without having to go to the trouble of searching the register.
The Minister also said that many companies closely watch the register. That is demonstrably not so. But what 82 he said perhaps indicates the inadequacy of the new system, whereby the company must keep a watch on the index rather than on the registrar.
Let me suggest something that could be done on a non-statutory basis. As the Under-Secretary explained, during the period of the Civil Service industrial action the register was not available for inspection. Therefore, if it comes to the registrar's attention that two names are very alike I hope that he will voluntarily draw the attention of the first registered company to the similar name in case that company wishes to make an objection. Britain's manufacturers and producers of services have better things to do than constantly to inspect the register.

§ Mr. Eyre
I am sure that the hon. Gentleman appreciates that the Registrar of Companies could not enter into an obligation to act in the way that he has requested. I am sure also that if the registrar had knowledge of what the hon. Gentleman has described he would be willing to notify another company.
I have always found the registrar to be most helpful in making the system work. I hope that we can leave the matter there. As the hon. Gentleman knows, there will be an updated index. That will be of great help to companies. It will be available and updated regularly, and it will enable a check to be made on the likely names of companies that might become too similar to that of a registered company. It will assist companies to look after their own rights in this respect.