---

Company Law Reform Bill [HL]

I have my notes. They are not copious: I am afraid that I am going to disappoint my noble friend Lord Lea because they are quite short. The fundamental point is that it has not been the practice of the courts to adopt what I might term a single enterprise approach in treating different companies, albeit within the same group, as if they were a single company. On the whole, the separate incorporation of the individual companies has been respected. As a matter of law, it is a fundamental legal principle that each company is a separate legal entity, and a number of things flow from that. We do not believe that it is necessary, or that it would be helpful, to change the law in this area. The directors of a holding company are subject to the same duties when exercising the company’s rights as shareholder as in anything else they do. That produces some of the effect that my noble friend is seeking. However, to go further to create a direct link to the activities of a subsidiary would muddy the distinction between the responsibilities as directors and the role of a company as shareholder. I suspect that in certain cases it would not have the beneficial effect that my noble friend wants. I hope that those notes, while not copious, will be enough to explain to my noble friend why I cannot accept his amendment.