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Company Law Reform Bill [HL]

moved Amendment No. A189:"Page 332, line 44, at end insert—" ““(   )   A document that is replaced under this section is treated, for the purposes of any enactment relating to its delivery, as having been delivered when the replacement document is delivered.”” The noble Lord said: The purpose of the amendment is to clarify the effect of delivery of a replacement document so far as concerns compliance with time limits and other requirements for proper delivery prescribed by the Companies Acts. Clause 688 allows the registrar to require a company to replace a filed document which does not meet the statutory requirements set out in Clause 684(1) if it is not corrected under Clause 685 or replaced voluntarily under Clause 686. The clause does not specify how the filing of a replacement document is to be treated for the purposes of, for example, late filing penalties or, perhaps more importantly, for validity purposes. An example of late filing would be the penalty for late filing of accounts. If the accounts originally filed were non-compliant and replacement compliant accounts were filed after the permitted date for filing accounts, would a penalty be incurred? An example of the validity issue would be the invalidity of a mortgage or charge requiring registration under Section 395 of the Companies Act 1985. If particulars of the charge and the instrument creating it are not delivered to the registrar within 21 days of the creation of the charge, it is invalid—that is, unless the court orders otherwise—against a liquidator or administrator and any creditor of the company concerned. If the particulars are duly delivered but the registrar, on the 20th day after the creation of the charge, decides they are non-compliant and gives notice to the company under this clause, will the charge be invalid if the company subsequently, but after the 21-day period has elapsed, delivers compliant particulars? In each case, the position needs to be made clear to avoid uncertainty and possible litigation, potentially involving the registrar. It is useful to compare Clause 685(6), which makes specific provision in relation to the informal correction of documents by the registrar. In July 2005, the DTI published for comment clauses corresponding to the clauses in the Bill relating to the registrar. Clause L17(4) in those draft clauses—““Registrar’s notice to remedy defective delivery””—provided:"““If a replacement document is delivered within the period specified, it shall be treated for the purposes of the Companies Acts as if it had been delivered when the original document was delivered””." This clause is not repeated in the Bill. We think that it is desirable, mainly because of the problems with time limits under Section 395 of the Companies Act 1985 and the validity of charges under that section, as outlined above. However, the lack of any such clause gives rise to uncertainty and we suggest that the position should be clarified. Amendment No. A193 deals with the same issue so far as concerns Clause 704, where the registrar may require a company to resolve an inconsistency between a document delivered to the registrar and other information already held by the registrar. The clause does not specify how the filing of a replacement document is to be treated for the purposes of, for example, late filing penalties or validity. What I have said in regard to Amendment No. A189 applies equally here. I beg to move.