Companies (Audit, Investigations and Community Enterprise) Act 2004 - Explanatory Notes

1. Introduction

2. Summary and Background

3. Overview of the Act

4. Territorial Application

5. Commentary on Sections

   1. Part 1:  Auditors, Accounts, Directors' Liabilities and Investigations

      1. Summary and Background

         Chapter 1: Auditors

         1. Recognised supervisory bodies

            1. Sections 1 and 2 - Additional requirements for recognition of supervisory bodies; arrangements to which additional requirements for recognition relate

         2. Delegation of Secretary of State's functions in relation to auditors

            1. Sections 3 to 5 - Delegation of functions by Secretary of State to new or existing body; circumstances in which Secretary of State may delegate functions to existing body; supplementary provisions about delegation orders

         3. Auditors' qualifications

            1. Section 6  – Approval of overseas qualifications for auditors

         4. Services provided by auditors

            1. Section 7  - Disclosure of services provided by auditors and related remuneration

      2. Chapter 2: Accounts and Reports

         1. Auditing of accounts

            1. Section 8 - Auditors' rights to information

            2. Section 9 - Statement in directors' report as to disclosure of information to auditors

         2. Defective accounts

            1. Summary and background

               1. Section 10 - Persons authorised to apply to court in connection with defective accounts

               2. Section 11 - Disclosure of tax information by Inland Revenue to facilitate application for declaration that accounts are defective

               3. Section 12 -  Power of person authorised to require documents,  information and explanations; and Schedule 1 -  New Schedule 7B to the Companies Act 1985

         3. Directors' reports

            1. Section 13 - Power to specify bodies who may issue reporting standards

         4. Supervision of accounts and reports

            1. Section 14 – Supervision of periodic accounts and reports of issuers of listed securities

            2. Section 15 - Application of provisions inserted by sections 11 and 12 to bodies appointed under section 14

         5. Bodies concerned with accounting standards

            1. Section 16 - Grants to bodies concerned with accounting standards

            2. Section 17 -  Levy to pay expenses of bodies concerned with accounting standards

            3. Section 18 – Exemption from liability

      3. Chapter 3: Directors' liabilities

         1. Background

            1. The nature of directors’ potential liabilities

            2. The Department’s consultation on directors’ liability

         2. Summary

            1. Section 19 - Relaxation of prohibition on provisions protecting directors from liability

            2. Section 20 - Funding of director’s expenditure on defending proceedings

      4. Chapter 4: Investigations

         1. Summary and Background

         2. Powers to investigate

         3. Changes made by the Act

            1. Section 21 - Power to require documents and information

            2. Section 22 - Protection in relation to certain disclosures

            3. Section 23 -  Power to enter and remain on premises

            4. Section 24 -  Failure to comply with certain requirements

            5. Section 25 – Minor and consequential amendments; and Schedule 2 - Minor and consequential amendments relating to Part 1

            6. Schedule 2, Part 1 - Amendments relating to auditors

            7. Schedule 2, Part 2 - Amendments relating to accounts and reports

            8. Schedule 2, Part 3 - Amendments relating to investigations

   2. Part 2: Community Interest Companies

      1. Summary and background

         1. Introductory

            1. Section 26 - Community interest companies

            2. Section 27 - Regulator; and Schedule 3 - Regulator of Community Interest Companies

            3. Section 28 - Appeal Officer; and Schedule 4 - Appeal Officer for Community Interest Companies

            4. Section 29 - Official Property Holder; and Schedule 5 - Official Property Holder for Community Interest Companies

         2. Requirements

            1. Section 30 -  Cap on distributions and interest

            2. Section 31 - Distribution of assets on winding up

            3. Section 32 - Memorandum and articles

            4. Section 33 - Names; and Schedule 6 - Community interest companies: names

            5. Section 34 - Community interest company reports

            6. Section 35 - Community interest test and excluded companies

         3. Becoming a community interest company

            1. Section 36 - New companies

            2. Section 37 - Existing companies: requirements

            3. Section 38 - Existing companies: decisions

            4. Section 39 - Existing companies: charities

            5. Section 40 - Existing companies: Scottish charities

         4. Supervision by Regulator

            1. Section 41 - Conditions for exercise of supervisory powers

            2. Section 42 - Investigation; and Schedule 7 - Community interest companies: investigations

            3. Section 43 - Audit

            4. Section 44 - Civil proceedings

            5. Section 45 - Appointment of director

            6. Section 46 - Removal of director

            7. Section 47 - Appointment of manager

            8. Section 48 - Property

            9. Section 49 - Transfer of shares

            10. Section 50 - Petition for winding up

            11. Section 51 - Dissolution and striking off

         5. Change of status

            1. Section 52  - Re-registration

            2. Section 53 - Ceasing to be a community interest company

            3. Section 54 - Becoming a charity or a Scottish charity: requirements

            4. Section 55 - Becoming a charity or a Scottish charity:  decisions

            5. Section 56 - Becoming an industrial and provident society

         6. Supplementary

            1. Section 57 - Fees

            2. Section 58 - Extension of provisions about registrar

            3. Section 59 - Information

            4. Section 60 - Offences

            5. Section 61 - Orders made by Regulator

            6. Section 62 - Regulations

6. Commencement Dates

7. Hansard References