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Company Law Reform Bill

moved Amendment No. A64A:"Page 266, line 10, leave out ““holders of shares”” and insert ““members””" The noble Lord said: In moving government Amendment No. A64A, I shall speak also to Amendment No. A64B. Clause 557 extends the statutory provisions on variations of class rights which currently apply only to companies having a share capital to companies without a share capital. Companies limited by guarantee, which since December 1980 cannot be formed with a share capital, may for example have different classes of members with different voting rights. Currently there is no statutory provision governing the variation of such rights, which will therefore depend to a large extent on whether provision has been made either in the memorandum or articles for their variation. Subsection (2) refers erroneously to ““holders of shares”” and not to members, as it should. Similarly, subsection (5) should refer to the rights of a class of members rather than to ““rights attached to a class of shares””. The proposed amendments are clearly required to make it clear that Clause 557 applies to companies that do not have a share capital. I beg to move. On Question, amendment agreed to.