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Company Law Reform Bill [HL]

moved Amendment No. A197:"Page 350, line 13, after ““if”” insert ““knowingly and wilfully””" The noble Lord said: I have tabled Amendment No. A197 on the basis of advice from the Law Society. Its purpose is to ensure that an officer cannot unwittingly be in default and therefore liable for offences under the Act. The existing Section 130 of the Companies Act 1985, which this clause replaces, requires, for an offence to be committed by an officer, that the officer knowingly and willingly authorises or permits the relevant offence. The proposed new test is that the officer authorises or permits, participates in or fails to take reasonable steps to prevent the contravention. There is no test of knowledge or wilfulness. Therefore, an officer could in theory permit a contravention by being ignorant of its commission and therefore be unable to take steps to prevent it. Hence we propose that either the words ““authorises or permits”” be deleted from the clause, in which event permitting or authorising events of which the officer has knowledge would be caught by the words ““fails to take reasonable steps to prevent””, or, as this amendment proposes, the test of knowledge and wilfulness be reinstated. I beg to move.