§ 63 Insert the following new clause:
§ Provisions supplementary to section (Relaxation of section 42 restrictions for private companies.
§ .—((1) A special resolution required by section (Relexation of section 42 restrictions for private companies) of this Act to be passed by any company approving the giving of any financial assistance must be passed on the date on which the directors of that company made the statutory declaration required by that section in connection with the giving of that assistance or within the week immediately following that date.
§ (2) Where any such special resolution is passed by a company, an application may be made to the court for the cancellation of that resolution—
- (a) by the holders of not less in the aggregate than 10 per cent. in nominal value of the company's issued share capital or any class thereof; or
- (b) if the company is not limited by shares, by not less than 10 per cent. of the company's members;
§ (3) Subsections (4) to (10) of section 11 of the 1980 Act (provisions as to applications for cancellation of resolutions to which that section applies) shall apply in relation to applications made under this section as they apply in relation to applications made under that.
§ (4) A special resolution passed by a company shall not be effective for the purposes of section (Relaxation of section 42 restrictions for private companies) of this Act—
- (a) unless the declaration made in compliance with subsection (7) of that section by the directors of the company, together with the auditors' report annexed thereto, is available for inspection by members of the company at the meeting at which the resolution is passed;
- (b) if it is cancelled by the court on an application under this section.
§ (5) Any statutory declaration made by the directors of any company in compliance with section (Relaxation of section 42 restrictions for private companies) (7) of this Act, together with any auditors' report annexed thereto, shall be delivered to the registrar of companies—
- (a) together with a copy of any special resolution passed by the company in pursuance of section (Relaxation of section 42 restrictions for private companies) (4) or (5) of this Act and delivered to the registrar in compliance with section 143 of the 1948 Act; or
- (b) where no such special resolution is required to be passed, within fifteen days after the making of the declaration.
§ (6) If a company fails to comply with subsection (5) above, the company and every officer of the company who is in default shall be liable on summary conviction to a fine not exceeding the statutory maximum or on conviction after continued contravention to a default fine not exceeding one-fiftieth of the statutory maximum.
§ (7) A director of a company who makes a statutory declaration in pursuance of section (Relaxation of 986 section 42 restrictions for private companies) of this Act without having reasonable grounds for the opinion expressed in that declaration shall be liable—
- (a) on conviction on indictment, to imprisonment for a term not exceeding two years or a fine, or both; and
- (b) on summary conviction, to imprisonment for a term not exceeding six months or a fine not exceeding the statutory maximum, or both.
§ (8) In section (Relaxation of section 42 restrictions for private companies) of this Act, "financial assistance" and "net assets" have the meaning given by subsections (5) and (5C) of section 42 of this Act respectively.").
§ Lord Mackay of Clashfern
My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 63.
§ Moved, That this House doth agree with the Commons in the said amendment.—(Lord Mackay of Clashfern.)
§ As an amendment to Amendment No. 63:
§ 63A Subsection (6) at end insert ("and every such officer and every director who authorised the giving of the financial assistance shall be jointly and severally liable to indemnify any person who has suffered loss by reason of the contravention of subsection (5) above".).
§ Moved, That this House doth agree with the Commons in the amendment to the amendment.—(Lord Charlton of Wedderburn.)
§ On Question, amendment to the amendment negatived.
§ On Question, Motion agreed to.