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Small Business, Enterprise and Employment Act 2015

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E+W+S+N.I.

Small Business, Enterprise and Employment Act 2015

2015 CHAPTER 26

An Act to make provision about improved access to finance for businesses and individuals; to make provision about regulatory provisions relating to business and certain voluntary and community bodies; to make provision about the exercise of procurement functions by certain public authorities; to make provision for the creation of a Pubs Code and Adjudicator for the regulation of dealings by pub-owning businesses with their tied pub tenants; to make provision about the regulation of the provision of childcare; to make provision about information relating to the evaluation of education; to make provision about the regulation of companies; to make provision about company filing requirements; to make provision about the disqualification from appointments relating to companies; to make provision about insolvency; to make provision about the law relating to employment; and for connected purposes.

[26th March 2015]

Be it enacted by the Queen's most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:—

PART 1 E+W+S+N.I.Access to finance

Assignment of receivablesE+W+S+N.I.

1Power to invalidate certain restrictive terms of business contractsE+W+S+N.I.

(1)The appropriate authority may by regulations make provision for the purpose of securing that any non-assignment of receivables term of a relevant contract—

(a)has no effect;

(b)has no effect in relation to persons of a prescribed description;

(c)has effect in relation to persons of a prescribed description only for such purposes as may be prescribed.

(2)A “non-assignment of receivables term” of a contract is a term which prohibits or imposes a condition, or other restriction, on the assignment (or, in Scotland, assignation) by a party to the contract of the right to be paid any amount under the contract or any other contract between the parties.

(3)A contract is a relevant contract if—

(a)it is a contract for goods, services or intangible assets (including intellectual property) which is not an excluded financial services contract, and

(b)at least one of the parties has entered into it in connection with the carrying on of a business.

(4)An “excluded financial services contract” is a contract which—

(a)is for financial services (see section 2) or is a regulated agreement within the meaning of the Consumer Credit Act 1974 (see section 189 of that Act); and

(b)is of a prescribed description.

(5)Prescribed” means prescribed by the regulations.

(6)The “appropriate authority” means—

(a)in relation to contracts to which the law of Scotland applies, the Scottish Ministers, and

(b)in relation to other contracts, the Secretary of State.

(7)The power of the Scottish Ministers to make regulations under this section includes power to make such provision as the Scottish Ministers consider appropriate in consequence of the regulations.

(8)The power conferred by subsection (7) includes power—

(a)to make transitional, transitory or saving provision;

(b)to amend, repeal, revoke or otherwise modify any provision made by or under an enactment (including an enactment contained in this Act and any enactment passed or made in the same Session as this Act).

(9)In subsection (8) “enactment” includes an Act of the Scottish Parliament.

(10)Regulations under this section—

(a)if made by the Scottish Ministers, are subject to the affirmative procedure;

(b)if made by the Secretary of State, are subject to affirmative resolution procedure.

2Section 1(4)(a): meaning of “financial services”E+W+S+N.I.

(1)In section 1(4)(a) “financial services” means any service of a financial nature, including (but not limited to)—

(a)insurance-related services consisting of—

(i)direct life assurance;

(ii)direct insurance other than life assurance;

(iii)reinsurance and retrocession;

(iv)insurance intermediation, such as brokerage and agency;

(v)services auxiliary to insurance, such as consultancy, actuarial, risk assessment and claim settlement services;

(b)banking and other financial services consisting of—

(i)accepting deposits and other repayable funds;

(ii)lending (including consumer credit, mortgage credit, factoring and financing of commercial transactions);

(iii)financial leasing;

(iv)payment and money transmission services (including credit, charge and debit cards, travellers' cheques and bankers' drafts);

(v)providing guarantees or commitments;

(vi)financial trading (as defined in subsection (2));

(vii)participating in issues of any kind of securities (including underwriting and placement as an agent, whether publicly or privately) and providing services related to such issues;

(viii)money brokering;

(ix)asset management, such as cash or portfolio management, all forms of collective investment management, pension fund management, custodial, depository and trust services;

(x)settlement and clearing services for financial assets (including securities, derivative products and other negotiable instruments);

(xi)providing or transferring financial information, and financial data processing or related software (but only by suppliers of other financial services);

(xii)providing advisory and other auxiliary financial services in respect of any activity listed in sub-paragraphs (i) to (xi) (including credit reference and analysis, investment and portfolio research and advice, advice on acquisitions and on corporate restructuring and strategy).

(2)In subsection (1)(b)(vi) “financial trading” means trading for own account or for account of customers, whether on an investment exchange, in an over-the-counter market or otherwise, in—

(a)money market instruments (including cheques, bills and certificates of deposit);

(b)foreign exchange;

(c)derivative products (including futures and options);

(d)exchange rate and interest rate instruments (including products such as swaps and forward rate agreements);

(e)transferable securities;

(f)other negotiable instruments and financial assets (including bullion).

Business payment practicesE+W+S+N.I.

3Companies: duty to publish report on payment practices and performanceE+W+S+N.I.

(1)The Secretary of State may by regulations impose a requirement, on such descriptions of companies as may be prescribed, to publish, at such intervals and in such manner as may be prescribed, prescribed information about—

(a)the company's payment practices and policies relating to relevant contracts of a prescribed description, and

(b)the company's performance by reference to those practices and policies.

(2)For the purposes of this section—

  • company” has the meaning given by section 1(1) of the Companies Act 2006 (but see subsection (3));

  • a contract is a “relevant contract” if—

    (a)

    it is a contract for goods, services or intangible assets (including intellectual property), and

    (b)

    the parties to the contract have entered into it in connection with the carrying on of a business;

  • prescribed” means prescribed by the regulations.

(3)The regulations may not impose a requirement on a company in relation to any time during which—

(a)it qualifies as a micro-entity for the purposes of section 384A of the Companies Act 2006,

(b)the small companies regime under that Act applies to it (see section 381 of that Act), or

(c)it qualifies as medium-sized for the purposes of section 465 or 466 of that Act.

(4)“The company's payment practices and policies” has such meaning as may be prescribed and the information which may be prescribed may, in particular, include information—

(a)about the standard payment terms of the company and whether these are part of any code of conduct or code of ethics of the company,

(b)about payment terms of the company which are not standard,

(c)about the processing and payment of invoices,

(d)by reference to such codes of conduct or standards as may be prescribed and as are applicable to companies generally or to companies of a prescribed description,

(e)about disputes relating to the payment of invoices, including any dispute resolution mechanism that the company uses,

(f)about payments owed or paid by the company due to late payment of invoices, whether in respect of interest or otherwise.

(5)The regulations may require that information published in accordance with the regulations must be approved or signed by such description of person as may be prescribed.

(6)The regulations may require such of the information required to be published as may be prescribed to be given, in such form as may be prescribed, to prescribed persons.

(7)The regulations may make provision for a prescribed breach by a prescribed description of person of a requirement imposed by the regulations to be an offence punishable on summary conviction—

(a)in England and Wales, by a fine;

(b)in Scotland or Northern Ireland, by a fine not exceeding level 5 on the standard scale.

(8)Before making regulations under this section the Secretary of State must consult such persons as the Secretary of State considers appropriate.

(9)Regulations under this section are subject to affirmative resolution procedure.

Financial information about businessesE+W+S+N.I.

4Small and medium sized businesses: information to credit reference agenciesE+W+S+N.I.

(1)The Treasury may make regulations that impose—

(a)a duty on designated banks to provide information about their small and medium sized business customers to designated credit reference agencies, and

(b)a duty on designated credit reference agencies to provide information about small and medium sized businesses to finance providers.

(2)The regulations must provide that the duty in subsection (1)(a) only applies where—

(a)a credit reference agency makes a request to a bank, and

(b)the business customer to whom the information relates has agreed to the information being provided to a credit reference agency.

(3)The regulations must provide that the duty in subsection (1)(b) only applies where—

(a)a finance provider makes a request to a credit reference agency, and

(b)the business to whom the information relates has agreed to the information being provided to the finance provider.

(4)The regulations may provide that the duty in subsection (1)(b) only applies where other conditions are met, such as the finance provider—

(a)complying with the credit reference agency's terms and conditions, and

(b)providing information on its small and medium sized business customers to the credit reference agency (subject to the agreement of those customers).

(5)The regulations must describe the information—

(a)to which the duty in subsection (1)(a) applies;

(b)to which the duty in subsection (1)(b) applies;

(c)which may be required as mentioned in subsection (4)(b).

(6)The regulations may make provision about—

(a)how a request for information must be made by a credit reference agency or finance provider;

(b)the time period within which information must be provided following a request;

(c)the form in which information must be provided;

(d)how a business may indicate agreement for the purposes of subsection (2)(b), (3)(b) or (4)(b) (and for the purposes of subsection (2)(b) this may include imposing an obligation on a designated bank to include an appropriate term in its standard terms and conditions or to otherwise seek agreement).

(7)The regulations must make provision for the designation of banks and credit reference agencies by the Treasury, and the regulations may in particular provide for—

(a)conditions that must be met for a bank or credit reference agency to be designated;

(b)considerations that the Treasury may take into account before deciding whether to designate a bank or credit reference agency;

(c)the Treasury to consider the advice of another person before making a designation;

(d)the procedure for designating a bank or credit reference agency;

(e)how the list of designated banks and credit reference agencies must be published;

(f)the revocation of a designation.

5Small and medium sized businesses: information to finance platformsE+W+S+N.I.

(1)Where—

(a)a small or medium sized business has applied to a designated bank for a loan or other credit facility, and

(b)the application has been unsuccessful,

the Treasury may by regulations impose a duty on the bank to provide specified information about the business to designated finance platforms.

(2)The regulations—

(a)must provide that the duty only applies where the business to which the information relates agrees to its information being provided to the designated finance platforms;

(b)may require a bank—

(i)to seek the agreement of a business for the purposes of paragraph (a);

(ii)to ask the business for any of the specified information that the bank does not already have;

(iii)to provide the information to the finance platforms within a specified time period.

(3)The regulations may make further provision about the duty in subsection (1), which may in particular include provision about—

(a)the types of loans and credit facilities that trigger the duty,

(b)the circumstances in which an application is to be considered unsuccessful, and

(c)the finance platforms to which information must be provided.

(4)Where a finance platform has received information by virtue of subsection (1), the Treasury may by regulations—

(a)impose a duty on the finance platform to provide specified information to all finance providers requesting access to the information, and

(b)impose a duty on the finance platform to provide specified information about a particular business to a finance provider where—

(i)the finance provider has requested information about the business, and

(ii)the business has agreed to its information being provided to the finance provider.

(5)Information specified for the purposes of subsection (4)(a) must be in such a form that no individual business, and no person associated with the business, can be identified.

(6)The regulations may provide that the duty in subsection (4)(a) or (b) does not apply unless—

(a)the finance provider or business agrees to the finance platform's terms and conditions;

(b)the finance provider complies with specified requirements about the use and disclosure of the information.

(7)The regulations may make further provision about the duties in subsection (4)(a) and (b), including in particular provision—

(a)requiring the finance platform to provide the information within a specified time period;

(b)setting out how a request by a finance provider must be made to a finance platform;

(c)setting out how a business may indicate agreement for the purposes of subsection (4)(b)(ii);

(d)about the time period for which information must be kept by the finance platform;

(e)about the removal of information from the finance platform.

(8)The regulations may make provision—

(a)prohibiting finance platforms from charging fees to small and medium sized businesses, or

(b)permitting finance platforms to charge fees to small and medium sized businesses.

(9)The regulations must make provision for the designation of banks and finance platforms by the Treasury, and the regulations may in particular provide for—

(a)conditions that must be met for a bank or finance platform to be designated;

(b)considerations that the Treasury may take into account before deciding whether to designate a bank or finance platform;

(c)the Treasury to consider the advice of another person before making a designation;

(d)the procedure for designating a bank or finance platform;

(e)how the list of designated banks and finance platforms must be published;

(f)the revocation of a designation.

(10)In this section “specified” means specified or described in the regulations.

6Sections 4 and 5: supplementaryE+W+S+N.I.

(1)Regulations under sections 4 and 5 may make provision enabling the Financial Conduct Authority to take action for monitoring and enforcing compliance with the regulations.

(2)The regulations may apply, or make provision corresponding to, any of the provisions of the Financial Services and Markets Act 2000 or subordinate legislation made under that Act, with or without modification.

(3)Those provisions include in particular—

(a)provisions about investigations, including powers of entry and search and criminal offences;

(b)provisions for the grant of an injunction (or, in Scotland, an interdict) in relation to a contravention or anticipated contravention;

(c)provisions giving the Financial Conduct Authority powers to impose disciplinary measures (including financial penalties) or to give directions;

(d)provisions giving a Minister of the Crown (within the meaning of the Ministers of the Crown Act 1975) or the Financial Conduct Authority powers to make subordinate legislation;

(e)provisions for the Financial Conduct Authority to charge fees.

(4)Regulations under sections 4 and 5 may make provision that enables complaints about the activities of designated credit reference agencies or designated finance platforms to be dealt with under the scheme established by Part 16 of the Financial Services and Markets Act 2000 (financial ombudsman scheme), and for that purpose the regulations may—

(a)apply, or make provision corresponding to, any of the provisions of that Part or rules made under that Part (with or without modifications);

(b)impose obligations on—

(i)the Financial Conduct Authority;

(ii)the scheme operator (within the meaning of that Part);

(iii)an ombudsman (within the meaning of that Part).

(5)Regulations under section 4 may impose a duty on designated credit reference agencies to provide information received by virtue of section 4(1)(a) or (4)(b) to the Bank of England, and may allow or require the Bank of England to share that information with persons or for purposes specified or described in the regulations; but the regulations must include provision protecting the confidentiality of information so provided.

(6)Regulations under section 4 may provide that a failure to comply with a duty imposed by virtue of section 4(1) may be actionable at the suit of a person who has suffered loss as a result of it (subject to the defences and other incidents applying to actions for breach of statutory duty).

(7)Regulations under section 4 may provide that the following provisions apply to designated credit reference agencies in the same way as they apply to credit reference agencies within the meaning of those provisions—

(a)sections 157 to 160 of the Consumer Credit Act 1974 (duties to disclose and correct information) and regulations made under those sections;

(b)section 7 of the Data Protection Act 1998 (right of access to personal data) and regulations made under that section;

(c)section 9 of the Data Protection Act 1998 (right of access to personal data where data controller is credit reference agency) and regulations made under that section.

(8)Regulations under section 4 may provide a small or medium sized business with the right to apply to a court for an order to rectify, block, erase or destroy data held about the business by a designated credit reference agency.

(9)Regulations under section 5 may impose a duty on designated finance platforms to provide statistical information to the Treasury.

(10)Regulations under section 4 or 5 are subject to affirmative resolution procedure.

7Sections 4 to 6: interpretationE+W+S+N.I.

(1)For the purposes of sections 4 to 6, a business is a small or medium sized business if—

(a)it has an annual turnover of less than £25 million,

(b)it carries out commercial activities,

(c)it does not carry out regulated activities as its principal activity, and

(d)it is not owned or controlled by a public authority.

Regulations under those sections may make further provision for the purposes of determining which businesses they apply to (including provision about the calculation of turnover and the determination of control).

(2)In sections 4 to 6 and this section—

  • designated bank” means a bank that has been designated by the Treasury by virtue of section 4(7) or 5(9);

  • designated credit reference agency” means a credit reference agency that has been designated by the Treasury by virtue of section 4(7);

  • designated finance platform” means a finance platform that has been designated by the Treasury by virtue of section 5(9);

  • finance platform” means a person that provides a service for the exchange of information between finance providers and businesses that require finance;

  • finance provider” means a body corporate that—

    (a)

    lends money or provides credit in the course of a business,

    (b)

    arranges or facilitates the provision of debt or equity finance in the course of a business, or

    (c)

    provides, arranges or facilitates invoice discounting or factoring in the course of a business,

    and regulations under sections 4 and 5 may make further provision for the purpose of determining which finance providers they apply to;

  • public authority” has the same meaning as in the Freedom of Information Act 2000 (see section 3 of that Act);

  • regulated activities” has the same meaning as in the Financial Services and Markets Act 2000 (see section 22 of that Act);

  • subordinate legislation” has the same meaning as in the Interpretation Act 1978 (see section 21 of that Act).

(3)The Treasury may by regulations change the figure for the time being specified in subsection (1)(a).

(4)Before making regulations under subsection (3) the Treasury must consult such persons as they consider appropriate.

(5)Regulations under subsection (3) are subject to affirmative resolution procedure.

8Disclosure of VAT registration informationE+W+S+N.I.

(1)The Commissioners for Her Majesty's Revenue and Customs may disclose to a person (“P”) any of the information included in the VAT registration of another person (“V”) if the disclosure is for the purpose of enabling or assisting P to assess—

(a)V's creditworthiness,

(b)V's compliance with regulatory requirements relating to financial matters, or

(c)the risk of fraud by V.

(2)But subsection (1) does not authorise the Commissioners to disclose any information which is, in the Commissioners' view, financial information relating to any business carried on by V.

(3)If VAT registration information is disclosed to a person in accordance with subsection (1), that person must not further disclose any of the information unless the Commissioners consent to the disclosure.

(4)If VAT registration information is disclosed to a person in accordance with subsection (3) or this subsection, that person must not further disclose any of the information unless the Commissioners consent to the disclosure.

(5)A person does not contravene subsection (3) or (4) by disclosing a financial assessment made wholly or partly in reliance on the VAT registration information, if the financial assessment itself does not include any VAT registration information.

(6)If VAT registration information is disclosed to a person in accordance with subsection (1), (3) or (4), that person must not use that information except for the purposes of making a financial assessment.

(7)A person does not contravene subsection (6) by using, for any purpose, a financial assessment made wholly or partly in reliance on the VAT registration information.

(8)The Commissioners for Her Majesty's Revenue and Customs may make arrangements with any person about disclosures of information to that person (the “recipient”) under subsection (1).

(9)The arrangements may (in particular) provide for—

(a)a fee to be payable by the recipient for the disclosure of information;

(b)conditions to apply to the recipient in relation to information disclosed (including conditions relating to the transfer, holding and processing of the information);

(c)financial penalties to be payable by the recipient for a failure to meet conditions which apply to the recipient under the arrangements.

(10)The Treasury may, by regulations, amend this section so that it authorises the Commissioners to disclose VAT registration information included in a person's VAT registration for additional purposes.

(11)In this section—

  • financial assessment” means an assessment of a kind mentioned in subsection (1)(a), (b) or (c);

  • VAT registration” means registration under the Value Added Tax Act 1994;

  • VAT registration information” means information of the kind that the Commissioners are authorised to disclose under subsection (1) (as read with subsection (2)).

(12)Regulations under this section are subject to affirmative resolution procedure.

9Offences for the purposes of section 8E+W+S+N.I.

(1)A person commits an offence if the person discloses information in contravention of section 8(3) or (4).

(2)It is a defence for a person charged with an offence under subsection (1) to prove that the person reasonably believed that the disclosure of the information was lawful.

(3)A person commits an offence if the person uses information in contravention of section 8(6).

(4)It is a defence for a person charged with an offence under subsection (3) to prove that the person reasonably believed that the use of the information was lawful.

(5)Section 19(4) to (7) of the Commissioners for Revenue and Customs Act 2005 apply to an offence under this section as they apply to an offence under section 19 of that Act.

(6)This section is without prejudice to the pursuit of any remedy or the taking of any action in relation to a contravention of section 8(1), (3), (4) or (6) (whether or not this section applies to the contravention).

ExportsE+W+S+N.I.

10Disclosure of exporter informationE+W+S+N.I.

(1)The Commissioners for Her Majesty's Revenue and Customs may, by regulations, make provision authorising officers of Revenue and Customs to disclose prescribed information about the export of goods from the United Kingdom.

(2)In subsection (1) “prescribed information” means information of a kind that is prescribed in the regulations.

(3)But the regulations may only prescribe the following kinds of information—

(a)the commodity code of goods that have been exported from the United Kingdom (a “prescribed code”);

(b)a description of the category of goods covered by a prescribed code;

(c)the names and addresses of persons who have exported goods covered by a prescribed code;

(d)the years and months in which a particular person has exported goods covered by a prescribed code.

(4)Regulations under this section may make such provision as the Commissioners think appropriate in connection with the provision authorising officers of Revenue and Customs to disclose prescribed information (including provision about the manner in which information may be disclosed).

(5)In this section “commodity code” means a code or other identifier applied to a category of goods in connection with the preparation of statistics on exports from the United Kingdom (whether or not it is also applied for other purposes).

(6)Regulations under this section are subject to affirmative resolution procedure.

11Power of the Secretary of State under section 1 of the EIGA 1991E+W+S+N.I.

(1)Section 1 of the Export and Investment Guarantees Act 1991 (assistance in connection with exports of goods and services) is amended as follows.

(2)For subsections (1) and (1A) substitute—

(1)The Secretary of State may make arrangements under this section which the Secretary of State considers are conducive to supporting or developing (whether directly or indirectly) supplies or potential supplies by persons carrying on business in the United Kingdom of goods, services or intangible assets (including intellectual property) to persons carrying on business outside the United Kingdom.

(3)After subsection (4) insert—

(5)The arrangements that may be made under this section also include the provision of advice or information.

(4)For the heading of the section substitute “ Arrangements for the support and development of supplies, etc.

12EIGA 1991: further amendmentsE+W+S+N.I.

(1)The Export and Investment Guarantees Act 1991 is amended as follows.

(2)In subsection (1) of section 6 (limit on the Secretary of State's commitments under the Act) for paragraphs (a) and (b) substitute “ 67,700 million special drawing rights ”.

(3)In subsection (3) of that section, for paragraphs (a) and (b) substitute “ 26,200 million special drawing rights ”.

(4)In subsection (4) of that section—

(a)in paragraph (a)—

(i)for “either of the limits” substitute “ the limit ”;

(ii)omit “£5,000 million or, as the case may be,”;

(b)in paragraph (b)—

(i)for “either of the limits” substitute “ the limit ”;

(ii)omit “£3,000 million or, as the case may be,”;

(c)omit “but the Secretary of State shall not in respect of any limit exercise the power on more than three occasions”.

(5)At the end of subsection (4) of that section, insert “ after the commencement of section 12 of the Small Business, Enterprise and Employment Act 2015 ”.

(6)After subsection (4) of that section insert—

(4A)The Secretary of State must not in respect of either limit mentioned in subsection (4) exercise the power to make an order on more than three occasions.

(7)In subsection (5) of that section—

(a)omit paragraphs (c) and (d);

(b)in paragraph (e) omit “in foreign currency”.

(8)In subsection (6) of that section, for “(1)(b) or (3)(b)” substitute “ (1) or (3) ”.

(9)In section 7(2) of that Act (reports and returns), leave out “in sterling and in foreign currency”.

(10)In section 13 of that Act (Export Credits Guarantee Department and Export Guarantees Advisory Council), omit subsection (4).

Presentment of cheques etcE+W+S+N.I.

13Electronic paying in of cheques etcE+W+S+N.I.

(1)The Bills of Exchange Act 1882 is amended as follows.

(2)After section 89 insert—

PART 4A E+W+S+N.I.Presentment of cheques and other instruments by electronic means
89APresentment of instruments by electronic means

(1)Presentment for payment of an instrument to which this section applies may be effected by provision of an electronic image of both faces of the instrument, instead of by presenting the physical instrument, if the person to whom presentment is made accepts the presentment as effective.

This is subject to regulations under subsection (2) and to section 89C.

(2)The Treasury may by regulations prescribe circumstances in which subsection (1) does not apply.

(3)Regulations under subsection (2) may in particular prescribe circumstances by reference to—

(a)descriptions of instrument;

(b)arrangements under which presentment is made;

(c)descriptions of persons by or to whom presentment is made;

(d)descriptions of persons receiving payment or on whose behalf payment is received.

(4)Where presentment for payment is made under subsection (1)—

(a)any requirement—

(i)that the physical instrument must be exhibited, presented or delivered on or in connection with presentment or payment (including after presentment or payment or in connection with dishonour for non-payment), or

(ii)as to the day, time or place on or at which presentment of the physical instrument may be or is to be made, and

(b)any other requirement which is inconsistent with subsection (1),

does not apply.

(5)Subsection (4) does not affect any requirement as to the latest time for presentment.

(6)References in subsections (4) and (5) to a requirement are to a requirement or prohibition, whether imposed by or under any enactment, by a rule of law or by the instrument in question.

(7)Where an instrument is presented for payment under this section—

(a)any banker providing the electronic image,

(b)any banker to whom it is provided, and

(c)any banker making payment of the instrument as a result of provision of the electronic image,

are subject to the same duties in relation to collection and payment of the instrument as if the physical instrument had been presented.

This is subject to any provision made by or under this Part.

89BInstruments to which section 89A applies

(1)Subject to subsection (2), section 89A applies to—

(a)a cheque, or

(b)any other bill of exchange or any promissory note or other instrument—

(i)which appears to be intended by the person creating it to enable a person to obtain payment from a banker indicated in it of the sum so mentioned,

(ii)payment of which requires the instrument to be presented, and

(iii)which, but for section 89A, could not be presented otherwise than by presenting the physical instrument.

(2)Section 89A does not apply to any banknote (within the meaning given in section 208 of the Banking Act 2009).

(3)The reference in subsection (1) to the person creating an instrument is—

(a)in the case of a bill of exchange, a reference to the drawer;

(b)in the case of a promissory note, a reference to the maker.

(4)For the purposes of subsection (1)(b)(i) an indication may be by code or number and need not indicate that payment is intended to be obtained from the banker.

89CBanker's obligation in relation to accepting physical instrument for presentment

Provision of an electronic image of an instrument does not constitute presentment of the instrument under section 89A if the arrangements between—

(a)the banker authorised to collect payment of the instrument on behalf of a customer, and

(b)that customer,

do not permit the customer to pay in the physical instrument but instead require an electronic image to be provided (whether to that banker or to any other person).

89DCopies of instruments and evidence of payment

(1)The Treasury may by regulations make provision for—

(a)requiring a copy of an instrument paid as a result of presentment under section 89A to be provided, on request, to the creator of the instrument by the banker who paid the instrument;

(b)a copy of an instrument provided in accordance with the regulations to be evidence of receipt by a person identified in accordance with the regulations of the sum payable by the instrument.

(2)Regulations under subsection (1)(a) may in particular—

(a)prescribe the manner and form in which a copy is to be provided;

(b)require the copy to be certified to be a true copy of the electronic image provided to the banker making the payment on presentment under section 89A;

(c)provide for the copy to be accompanied by prescribed information;

(d)require any copy to be provided free of charge or permit charges to be made for the provision of copies in prescribed circumstances.

(3)The reference in subsection (1)(a) to the creator of the instrument is—

(a)in the case of a bill of exchange, a reference to the drawer;

(b)in the case of a promissory note, a reference to the maker.

89ECompensation in cases of presentment by electronic means

(1)The Treasury may by regulations make provision for the responsible banker to compensate any person for any loss of a kind specified by the regulations which that person incurs in connection with electronic presentment or purported electronic presentment of an instrument.

(2)In this section “electronic presentment or purported electronic presentment of an instrument” includes—

(a)presentment of an instrument to which section 89A applies under that section;

(b)presentment of any other instrument by any means involving provision of an electronic image by which it may be presented for payment;

(c)purported presentment for payment by any means involving provision of an electronic image of an instrument that may not be presented for payment in that way;

(d)provision, in purported presentment for payment, of—

(i)an electronic image that purports to be, but is not, an image of a physical instrument (including an image that has been altered electronically), or

(ii)an electronic image of an instrument which has no legal effect; or

(e)provision, in presentment or purported presentment for payment, of an electronic image which has been stolen.

(3)In this section, the “responsible banker”, in relation to electronic presentment or purported electronic presentment of an instrument, means—

(a)the banker who is authorised to collect payment of the instrument on a customer's behalf, or

(b)if the holder of the instrument is a banker, that banker.

(4)In this section—

(a)references to an instrument include references to an instrument which has no legal effect (whether because it has been fraudulently altered or created, or because it has been discharged, or otherwise);

(b)in relation to an electronic image which is not an image of a physical instrument, references to the instrument are to a purported instrument (of which it purports to be an image); and

(c)in relation to an instrument which is not a bill of exchange or promissory note, references to the holder are to the payee or indorsee of the instrument who is in possession of it or, if it is payable to bearer, the person in possession of it.

(5)Regulations under this section may in particular make provision for—

(a)the responsible banker to be required to pay compensation irrespective of fault;

(b)the amount of compensation to be reduced by virtue of anything done, or any failure to act, by the person to whom compensation is payable.

(6)Nothing in this section or regulations under it is to be taken to—

(a)prevent the responsible banker claiming a contribution from any other person, or

(b)affect any remedy available to the responsible banker in contract or otherwise.

(7)Except so far as regulations under this section provide expressly, nothing in this section or regulations under it is to be taken to affect any liability of the responsible banker which exists apart from this section or any such regulations.

89FSupplementary

(1)Regulations under this Part may—

(a)include incidental, supplementary and consequential provision;

(b)make transitory or transitional provision or savings;

(c)make different provision for different cases or circumstances or for different purposes;

(d)make provision subject to exceptions.

(2)The power to make regulations under this Part is exercisable by statutory instrument.

(3)An instrument containing—

(a)regulations under section 89A or 89D, or

(b)the first regulations to be made under section 89E,

may not be made unless a draft of the instrument has been laid before, and approved by resolution of, each House of Parliament.

(4)An instrument containing any other regulations under section 89E is subject to annulment in pursuance of a resolution of either House of Parliament.

(5)For the purposes of this Part, a banker collects payment of an instrument on behalf of a customer by—

(a)receiving payment of the instrument for the customer, or

(b)receiving payment of the instrument for the banker (but not as holder), having—

(i)credited the customer's account with the amount of the instrument, or

(ii)otherwise given value to the customer in respect of the instrument.

(6)Section 89E(4) applies for the purposes of subsection (5) in its application to section 89E.

(3)In section 52(4) (bills of exchange: duties of holder on presentment and payment), at the beginning insert “ Subject to Part 4A (presentment by electronic means), ”.

(4)Omit sections 74B and 74C (which provide for alternative means of presentment of cheque for payment by banker).

(5)In section 87 (promissory notes: presentment for payment), at the end insert—

(4)This section is subject to Part 4A (presentment by electronic means).

(6)The amendments made by this section have effect in relation to presentment of instruments after it comes into force, including instruments created before that time.

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Commencement Information

I1S. 13 partly in force; s. 13 in force for specified purposes at Royal Assent otherwise in force at 31.7.2016, see s. 164(4)

Payment systemsE+W+S+N.I.

14Powers of the Payment Systems RegulatorE+W+S+N.I.

(1)Part 5 of the Financial Services (Banking Reform) Act 2013 (regulation of payment systems) is amended as follows.

(2)Section 58 (power to require disposal of interest in payment system) is amended as provided in subsections (3) and (4).

(3)In subsection (1), for the words following “interest in” substitute

(a)the operator of a regulated payment system, or

(b)an infrastructure provider in relation to such a system,

to dispose of all or part of that interest.

(4)After subsection (2) insert—

(2A)The reference in subsection (2) to a restriction or distortion of competition includes, in particular, a restriction or distortion of competition—

(a)between different operators of payment systems,

(b)between different payment services providers, or

(c)between different infrastructure providers.

(5)In section 108 (relationship with Part 8 of the Payment Services Regulations 2009), in subsection (1)—

(a)for “this Part” substitute “ sections 54 to 58 ”,

(b)for “obtain access to, or otherwise participate in,” substitute “ obtain direct access to ”, and

(c)for “does not apply” substitute “ applies ”.

PART 2 E+W+S+N.I.Regulatory reform

Streamlined company registrationE+W+S+N.I.

15Target for streamlined company registrationE+W+S+N.I.

(1)The Secretary of State must secure that, by no later than 31 May 2017, a system for streamlined company registration is in place.

(2)For the purposes of this section and section 16, a system for streamlined company registration is a system which enables all of the registration information to be delivered by or on behalf of a person who wishes to form a company after 31 May 2017—

(a)on a single occasion to a single recipient, and

(b)by electronic means.

(3)Registration information” means—

(a)the documents which must be delivered to the registrar under section 9 of the Companies Act 2006 (registration documents) in respect of the formation of a company;

(b)the documents or other information which must or may be delivered to Her Majesty's Revenue and Customs in respect of registration of a company for purposes connected with VAT, corporation tax and PAYE.

(4)In this section—

  • company”, “electronic means” and “the registrar” have the same meanings as in the Companies Acts (see sections 1(1), 1168(4) and 1060 of the Companies Act 2006 respectively);

  • VAT” means value added tax charged in accordance with the Value Added Tax Act 1994.

16Streamlined company registration: duty to report on progressE+W+S+N.I.

(1)The Secretary of State must prepare a report before the end of each reporting period about the progress that has been made during that period towards putting in place a system for streamlined company registration.

(2)The following are reporting periods—

(a)the period beginning with the day on which this section comes into force and ending on 31 March 2016;

(b)the subsequent period of 12 months ending on 31 March 2017.

(3)The first report must set out the steps which the Secretary of State expects will be taken during the next reporting period towards putting the system in place.

(4)Both reports must include the Secretary of State's assessment as to when the system for streamlined company registration will be in place.

(5)The second report must include an assessment of what steps, if any, the Secretary of State expects to take to put in place a system for the streamlining of other information delivery processes relating to businesses.

(6)The Secretary of State must—

(a)publish each report, and

(b)lay each report before Parliament.

Review of business appeals proceduresE+W+S+N.I.

17Review of regulators' complaints and appeals proceduresE+W+S+N.I.

(1)A Minister of the Crown must appoint a person for the purposes of this section in respect of each regulatory function to which this section applies (see section 18).

(2)A person so appointed (a “reviewer”) must, in relation to each regulatory function in respect of which the appointment is made—

(a)review the effectiveness during each reporting period of the procedures (both formal and informal) of the relevant regulator for handling and resolving complaints and appeals made by businesses to the regulator in connection with the exercise by the regulator of the function, and

(b)prepare a report about the findings of the review.

(3)In this section “relevant regulator”, in relation to a regulatory function, means the person who exercises the function.

(4)The report may include in particular—

(a)an assessment of the extent to which the relevant regulator's procedures of the kind mentioned in subsection (2)(a) are accessible and fair to businesses;

(b)recommendations to the relevant regulator about how the procedures, or the way in which they are operated, could be improved;

(c)recommendations to the Minister of the Crown who appointed the reviewer for any change in the law which the reviewer considers would lead to improvements in the procedures or their operation.

(5)The report must not address, and the reviewer must not make any recommendation in relation to, the outcome of any particular case.

(6)For the purposes of this section, each of the following is a reporting period—

(a)the period of 12 months beginning with the day on which the reviewer is appointed;

(b)each subsequent period of 12 months.

(7)The reviewer must send the report to the relevant regulator and (if different) the Minister of the Crown who appointed the reviewer as soon as reasonably practicable after the end of the reporting period.

(8)Before the end of the period of 3 months beginning with the day on which the relevant regulator receives the report, the regulator must—

(a)prepare a response and send it to the reviewer, and

(b)if the relevant regulator is not the Minister of the Crown who appointed the reviewer, send it to the Minister.

(9)The Minister of the Crown must—

(a)publish the report and the response, and

(b)lay them before Parliament.

(10)The reviewer may by notice require the relevant regulator to provide such documents or other information, in such form or manner as the reviewer may direct, as the reviewer may require for the purpose of exercising functions under this section.

(11)Subsection (10) is subject to any express restriction on disclosure imposed by another enactment (ignoring any restriction which allows disclosure if authorised by an enactment).

(12)In this section “Minister of the Crown” has the same meaning as in the Ministers of the Crown Act 1975.

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Commencement Information

I2S. 17 in force at 1.10.2016 by S.I. 2016/321, reg. 7(a)

18Power to specify regulatory functionsE+W+S+N.I.

(1)The Secretary of State may by regulations specify regulatory functions as functions to which section 17 applies.

(2)“Regulatory function” has the same meaning in this section and section 17 as in the Legislative and Regulatory Reform Act 2006 (see section 32(2) to (4) of that Act).

(3)Regulations under this section may, in particular, specify a regulatory function by reference to—

(a)the person who exercises the function;

(b)the enactment under or by virtue of which it was conferred.

(4)Regulations under this section must not specify a regulatory function of the Commission for Equality and Human Rights.

(5)Regulations under this section must not specify a regulatory function which is—

(a)a Scottish devolved function, that is to say a function the exercise of which would be within devolved competence (within the meaning of section 54 of the Scotland Act 1998),

(b)a Northern Ireland devolved function, that is to say a function which could be conferred by provision included in an Act of the Northern Ireland Assembly made without the consent of the Secretary of State (see sections 6 to 8 of the Northern Ireland Act 1998), or

(c)a Welsh devolved function, that is to say a function which could be conferred by provision falling within the legislative competence of the National Assembly for Wales (see section 108 of the Government of Wales Act 2006).

(6)Regulations under this section are subject to affirmative resolution procedure.

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Commencement Information

I3S. 18 in force at 26.5.2015 by S.I. 2015/1329, reg. 2(a)

19Guidance by the Secretary of StateE+W+S+N.I.

(1)The Secretary of State may issue guidance to reviewers as to the exercise of functions under section 17.

(2)A reviewer must, in exercising any of those functions, have regard to any guidance for the time being in force under this section.

(3)The Secretary of State must—

(a)publish any guidance or revised guidance issued under this section, and

(b)lay any such guidance or revised guidance before Parliament.

(4)In this section “reviewer” has the same meaning as in section 17.

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Commencement Information

I4S. 19(1)(3)(4) in force at 26.5.2015 by S.I. 2015/1329, reg. 2(b)

I5S. 19(2) in force at 1.10.2016 by S.I. 2016/321, reg. 7(b)

Report on investigations under financial regulators' complaints schemeE+W+S+N.I.

20Independent Complaints Commissioner: reporting dutyE+W+S+N.I.

In section 87 of the Financial Services Act 2012 (investigation of complaints against regulators), after subsection (9) insert—

(9A)The complaints scheme must provide—

(a)for the investigator to prepare an annual report on its investigations under the scheme, to publish it and send a copy of it to each regulator and to the Treasury;

(b)for each regulator to respond to any recommendations or criticisms relating to it in the report, to publish the response and send a copy of it to the investigator and the Treasury;

(c)for the Treasury to lay the annual report and any response before Parliament.

(9B)The complaints scheme may make provision about the period to which each annual report must relate (“the reporting period”) and the contents of the report and must in particular provide for it to include—

(a)information concerning any general trends emerging from the investigations undertaken during the reporting period;

(b)any recommendations which the investigator considers appropriate as to the steps a regulator should take in response to such trends;

(c)a review of the effectiveness during the reporting period of the procedures (both formal and informal) of each regulator for handling and resolving complaints which have been investigated by the investigator during the reporting period;

(d)an assessment of the extent to which those procedures were accessible and fair, including where appropriate an assessment in relation to different categories of complainant;

(e)any recommendations about how those procedures, or the way in which they are operated, could be improved.

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Commencement Information

I6S. 20 in force at 1.10.2015 by S.I. 2015/1689, reg. 2(a)

Business impact targetE+W+S+N.I.

21Duty on Secretary of State to publish business impact target etcE+W+S+N.I.

(1)Before the end of the period of 12 months beginning with the commencement of a Parliament, the Secretary of State must publish—

(a)a target for the Government in respect of the economic impact on business activities of qualifying regulatory provisions which come into force or cease to be in force during the relevant period, and

(b)an interim target applying at the end of the period of three years beginning with the commencement of the Parliament.

(2)In this section and sections 24 to 26 the target mentioned in subsection (1)(a) is referred to as the “business impact target”.

(3)At the same time as publishing a business impact target and an interim target, the Secretary of State must publish—

(a)a determination under section 22(2), and

(b)a methodology to be used for assessing the economic impact mentioned in subsection (1)(a).

(4)The Secretary of State must lay each thing published under subsection (1) or (3) before Parliament.

(5)Subsection (6) applies when the Secretary of State is—

(a)determining a business impact target for publication under subsection (1)(a), or

(b)making a determination under section 22(2).

(6)The Secretary of State must, in particular, have regard to—

(a)the effect of regulation on economic growth and competitiveness,

(b)the need to minimise any disproportionate impact of regulation on activities carried on by smaller scale businesses or voluntary or community bodies,

(c)the aim of delivering efficiency in regulating business activities while keeping the costs to businesses or voluntary or community bodies to a minimum.

(7)In this section and sections 23 to 26—

  • the “relevant day” means the day after a polling day for a parliamentary general election; and

  • the “relevant period” is the period beginning with the relevant day and ending with the polling day for the next parliamentary general election.

(8)Subsection (7) is to be read in accordance with the Fixed-term Parliaments Act 2011.

(9)This section and sections 22 to 27 (the “target provisions”) apply only where the commencement of a Parliament mentioned in subsection (1) above occurs—

(a)not more than 12 months before the target provisions come into force, or

(b)after the target provisions have come into force.

(10)Subsection (11) applies if an early parliamentary election is to take place in accordance with section 2 of the Fixed-term Parliaments Act 2011 before the end of the period of 12 months beginning with the commencement of a Parliament.

(11)Any duty imposed by the target provisions which would apply at any time before the commencement of the next Parliament is to be disregarded.

22Sections 21 and 23 to 25: “qualifying regulatory provisions” etcE+W+S+N.I.

(1)This section applies for the purposes of sections 21 and 23 to 25.

(2)Qualifying regulatory provisions” means regulatory provisions which the Secretary of State determines are to be qualifying regulatory provisions for the purposes of section 21(1)(a).

(3)A “regulatory provision”, in relation to a business activity, means a statutory provision which—

(a)imposes or amends requirements, restrictions or conditions, or sets or amends standards or gives or amends guidance, in relation to the activity, or

(b)relates to the securing of compliance with, or the enforcement of, requirements, restrictions, conditions, standards or guidance which relate to the activity.

(4)But a “regulatory provision” does not include a statutory provision if or to the extent that—

(a)it makes or amends—

(i)provision imposing, abolishing or varying any tax, duty, levy or other charge, or

(ii)provision in connection with provision falling within sub-paragraph (i);

(b)it makes or amends provision in connection with procurement;

(c)it makes or amends provision in connection with the giving of grants or other financial assistance by or on behalf of a public authority;

(d)it makes or amends provision which is to have effect for a period of less than 12 months.

(5)Where a statutory provision comes into force or ceases to be in force for some but not all purposes, references to regulatory provisions or qualifying regulatory provisions coming into force or ceasing to be in force are to be read as referring to those provisions in so far as they have come into force or ceased to be in force for those purposes.

(6)Subject to subsection (7) a “statutory provision” is—

(a)a provision of an Act,

(b)a provision of subordinate legislation made by a Minister of the Crown, or

(c)any other provision which has effect by virtue of the exercise of a function conferred on a Minister of the Crown[F1or a relevant regulator] by[F2or under] an Act.

(7)A “statutory provision” does not include—

(a)a provision which would be within the legislative competence of the Scottish Parliament if it were contained in an Act of that Parliament (see section 29 of the Scotland Act 1998),

(b)a provision which could be included in an Act of the Northern Ireland Assembly made without the consent of the Secretary of State (see sections 6 to 8 of the Northern Ireland Act 1998), or

(c)a provision falling within the legislative competence of the National Assembly for Wales (see section 108 of the Government of Wales Act 2006).

(8)In this section—

  • Minister of the Crown” has the same meaning as in the Ministers of the Crown Act 1975;

  • public authority” has the same meaning as in the Freedom of Information Act 2000 (see section 3 of that Act); and

  • subordinate legislation” has the same meaning as in the Interpretation Act 1978.

[F3(9) In this section a “ relevant regulator ” means a body or other person specified in regulations made by the Secretary of State.

(10)Regulations under subsection (9) are subject to affirmative resolution procedure.]

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Amendments (Textual)

F1Words in s. 22(6)(c) inserted (4.5.2016 for specified purposes, 4.7.2016 in so far as not already in force) by Enterprise Act 2016 (c. 12), ss. 14(2)(a), 44(1)(b), (2)(a)

F2Words in s. 22(6)(c) inserted (4.5.2016 for specified purposes, 4.7.2016 in so far as not already in force) by Enterprise Act 2016 (c. 12), ss. 14(2)(b), 44(1)(b), (2)(a)

F3S. 22(9)(10) inserted (4.5.2016 for specified purposes, 4.7.2016 in so far as not already in force) by Enterprise Act 2016 (c. 12), ss. 14(3), 44(1)(b), (2)(a) (with s. 14(5)-(10))

Modifications etc. (not altering text)

23Duty on Secretary of State to publish reportsE+W+S+N.I.

(1)The Secretary of State must publish a report in respect of each reporting period during the relevant period.

(2)The report must assess the economic impact on business activities of the qualifying regulatory provisions which have come into force or ceased to be in force during the reporting period.

(3)The report must include—

(a)a list of all the qualifying regulatory provisions which have come into force or ceased to be in force during the reporting period,

(b)an assessment of the economic impact on business activities of each of the qualifying regulatory provisions falling within paragraph (a) made by reference to the methodology published under section 21(3)(b) (but see section 24(2)),

(c)an assessment of the aggregate economic impact on business activities of all of the qualifying regulatory provisions falling within paragraph (a),

(d)if there have been preceding reporting periods during the relevant period, an assessment of the aggregate economic impact on business activities of all of the qualifying regulatory provisions which have come into force or ceased to be in force during the reporting period in question and all of the preceding reporting periods,

(e)an assessment of the contribution of the actions taken by each Government department to the aggregate economic impact mentioned in paragraphs (c) and (d), F4...

(f)a list of all the regulatory provisions (as defined in section 22(3)) [F5which—

(i)have come into force or ceased to be in force during the reporting period,

(ii)fall within section 22(6)(a) or (b), and

(iii)do not fall within paragraph (a),]

[F6(g)a summary of all the regulatory provisions (as defined in section 22(3)) which—

(i)have come into force or ceased to be in force during the reporting period,

(ii)fall within section 22(6)(c), and

(iii)do not fall within paragraph (a).]

[F7(3A)The contribution of qualifying regulatory provisions which have come into force or ceased to be in force during preceding reporting periods to the aggregate economic impact mentioned in subsection (3)(d) is to be assessed by reference to the assessments in relation to those provisions included in reports in respect of those periods under subsection (3)(b).]

(4)The report must describe the actions taken by Government departments to mitigate any disproportionate economic impact on activities carried on by smaller scale businesses or voluntary or community bodies of regulatory provisions (as defined in section 22(3)) which have come into force during the reporting period.

(5)Subsection (6) applies in respect of regulatory provisions (as defined in section 22(3)) which—

(a)have come into force during the reporting period, and

(b)implement an EU obligation or any other international obligation of the United Kingdom.

(6)The report must include—

(a)a description of any provision made in the provisions in question which goes beyond the minimum provision necessary for implementing the obligation, and

(b)the reasons for that provision.

(7)Each of the following is a reporting period—

(a)the period beginning with the relevant day and ending at the end of the period of 12 months beginning with the commencement of the Parliament,

(b)the next successive period of 12 months,

(c)the next successive period of 12 months,

(d)the next successive period of 12 months, and

(e)the period which begins at the end of the period mentioned in paragraph (d) and ends at the end of the relevant period.

(8)But subsection (9) applies if an early parliamentary general election is to take place in accordance with section 2 of the Fixed-term Parliaments Act 2011 during a reporting period mentioned in any of subsection (7)(b) to (d) (the “election reporting period”).

(9)Subsection (7) has effect as if—

(a)any provision relating to the election reporting period and any subsequent reporting periods mentioned in paragraph (c) or (d) were omitted, and

(b)paragraph (e) referred to the period which begins at the beginning of the election reporting period and ends at the end of the relevant period.

(10)A report must be published—

(a)no later than one month after the end of the reporting period, if the report is in respect of a reporting period mentioned in any of subsection (7)(a) to (d);

(b)before the dissolution of Parliament, if the report is in respect of a reporting period mentioned in subsection (7)(e).

(11)Where a report is in respect of a reporting period mentioned in subsection (7)(e), the references to qualifying regulatory provisions or regulatory provisions which have come into force or ceased to be in force during the reporting period include qualifying regulatory provisions or regulatory provisions which are expected to come into force or to cease to be in force during that reporting period.

(12)The Secretary of State must lay any report before Parliament.

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Amendments (Textual)

F4Word in s. 23(3)(e) omitted (4.5.2016 for specified purposes, 4.7.2016 in so far as not already in force) by virtue of Enterprise Act 2016 (c. 12), s. 44(1)(f)(2)(g), Sch. 2 para. 2(2)

F5Words in s. 23(3)(f) substituted (4.5.2016 for specified purposes, 4.7.2016 in so far as not already in force) by Enterprise Act 2016 (c. 12), s. 44(1)(f)(2)(g), Sch. 2 para. 2(3)

F6S. 23(3)(g) inserted (4.5.2016 for specified purposes, 4.7.2016 in so far as not already in force) by Enterprise Act 2016 (c. 12), s. 44(1)(f)(2)(g), Sch. 2 para. 2(4)

24Additional matters to be included in reportsE+W+S+N.I.

(1)This section makes provision supplementary to section 23.

(2)An assessment in respect of a qualifying regulatory provision may be included in a report by virtue of section 23(3)(b) only if the assessment is verified by the body appointed under section 25.

(3)Subsection (4) applies if an assessment in respect of a qualifying regulatory provision is not included in a report in respect of a reporting period mentioned in any of section 23(7)(a) to (d) because of subsection (2) above.

(4)The report in respect of the immediately following reporting period must include an assessment of the economic impact on business activities of that qualifying regulatory provision.

(5)Subsection (6) applies to any report in respect of the reporting period mentioned in section 23(7)(c).

(6)The report must include an assessment of the extent to which the interim target has been met.

(7)Subsection (8) applies to any report in respect of the reporting period mentioned in section 23(7)(e).

(8)The report must include an assessment of the extent to which the business impact target has been met.

[F824ADuty on relevant regulators to assess economic impact etcE+W+S+N.I.

(1)A relevant regulator must publish the required documents in respect of each reporting period during the relevant period.

(2)The required documents are—

(a)a list of all qualifying regulatory provisions which—

(i)have effect by virtue of the exercise of a function conferred on the regulator, and

(ii)have come into force or ceased to be in force during the reporting period;

(b)an assessment verified by the body appointed under section 25 of the economic impact on business activities of each qualifying regulatory provision falling within paragraph (a) made by reference to the methodology published under section 21(3)(b);

(c)a summary of all regulatory provisions (as defined in section 22(3)) which—

(i)have effect by virtue of the exercise of a function conferred on the regulator,

(ii)have come into force or ceased to be in force during the reporting period, and

(iii)do not fall within paragraph (a).

(3)The required documents must be published no later than two weeks after the end of the reporting period, if they are in respect of a reporting period mentioned in any of section 23(7)(a) to (d).

(4)If the required documents are in respect of a reporting period mentioned in section 23(7)(e)—

(a)they must be published at least two weeks before the dissolution of Parliament;

(b)the references to qualifying regulatory provisions or regulatory provisions which have come into force or ceased to be in force during the reporting period include qualifying regulatory provisions or regulatory provisions which are expected to come into force or to cease to be in force during that reporting period.

(5)A relevant regulator must have regard to any guidance issued from time to time by the Secretary of State in relation to the required documents.

(6)The guidance may, in particular, include guidance as to—

(a)information that should be published, or given to the body appointed under section 25, in advance of the publication of a required document;

(b)the time when a required document should be published (subject to subsections (3) and (4)(a));

(c)the form of a required document or the manner in which it should be published.

(7)In this section “relevant regulator” has the same meaning as in section 22 (see subsection (9) of that section).]

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Amendments (Textual)

25Appointment of body to verify assessments and lists in reportsE+W+S+N.I.

(1)The Secretary of State must appoint an independent body to verify—

(a)the assessment to be included in a report by virtue of section 23(3)(b), and

(b)that all of the regulatory provisions in a list included in a report by virtue of section 23(3)(f) are regulatory provisions (as defined in section 22(3)) which—

(i)have come into force or ceased to be in force during the reporting period in respect of which the report is made, and

(ii)do not fall within section 23(3)(a).

(2)The body appointed under this section must publish a statement recording any verification made by virtue of subsection (1)(b).

(3)The appointment of the body must be made before the date on which a business impact target is published in relation to the relevant period.

(4)The appointment of the body must be for the duration of the relevant period.

(5)Independent body” means a body which, in the opinion of the Secretary of State, is independent of the Secretary of State.

(6)The body appointed under this section must have expertise in assessing the likely economic impact of regulation on business activities (including activities carried on by smaller scale businesses or voluntary or community bodies).

(7)Subsection (1)(b) is to be read in accordance with section 23(11).

26Amending the business impact target etcE+W+S+N.I.

(1)Before the end of the relevant period the Secretary of State may amend one or more of—

(a)the business impact target;

(b)the interim target;

(c)the determination under section 22(2);

(d)the methodology to be used for assessing the economic impact mentioned in section 21(1)(a).

(2)Section 21(6) applies when amending the thing mentioned in subsection (1)(a) or (c).

(3)If the Secretary of State amends any of the things mentioned in subsection (1) the Secretary of State must—

(a)publish the thing as amended,

(b)amend any report already published so that it takes account of any amendments, and

(c)lay the thing as amended and any amended report before Parliament.

(4)The requirements in sections 23(2) and (3), 24 and 25(2) apply in relation to an amended report.

[F9(5)If the Secretary of State amends the thing mentioned in subsection (1)(c) a relevant regulator must—

(a)amend anything already published under section 24A or this section so that it takes account of the amendments;

(b)make a back-dated assessment in relation to any regulatory provision which—

(i)is a qualifying regulatory provision by virtue of the amendments,

(ii)has effect by virtue of the exercise of a function conferred on the regulator, and

(iii)came into force or ceased to be in force in a past reporting period;

(c)publish anything amended and any back-dated assessment.

(6)A “back-dated assessment” is an assessment of the economic impact on business activities of a regulatory provision mentioned in subsection (5)(b), in respect of the past reporting period in which the provision came into force or ceased to be in force, made by reference to the methodology published under section 21(3)(b).

(7)If the Secretary of State amends the thing mentioned in subsection (1)(d) a relevant regulator must—

(a)amend any assessment or back-dated assessment already published under section 24A or this section so that it takes account of the amendments;

(b)publish any amended assessment or back-dated assessment.

(8)Each back-dated assessment, amended assessment or amended back-dated assessment is to be verified by the body appointed under section 25 before it is published.

(9)If the Secretary of State amends the thing mentioned in subsection (1)(c) or (d), a relevant regulator must have regard to any guidance issued by the Secretary of State in relation to anything to be published under subsection (5) or (7) (any “updating document”).

(10)The guidance may, in particular, include guidance as to—

(a)information that should be published, or given to the body appointed under section 25, in advance of the publication of an updating document;

(b)the time when an updating document should be published;

(c)the form of an updating document or the manner in which it should be published.

(11)In this section “relevant regulator” has the same meaning as in section 22 (see subsection (9) of that section).]

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Amendments (Textual)

27Sections 21 to 25 etc: interpretationE+W+S+N.I.

(1)This section applies for the purposes of sections 21 to 25 and this section.

(2)Business activities” means any activities carried on—

(a)by a business for the purposes of the business, or

(b)by a voluntary or community body for the purposes of the body.

(3)References to a business or a voluntary or community body do not include a business or a voluntary or community body which—

(a)is controlled by a public authority, or

(b)is acting on behalf of a public authority in carrying out the activities.

(4)The Secretary of State must publish a statement as to how it is to be determined whether a business or a voluntary or community body is controlled by a public authority.

(5)Each of the following is a “voluntary or community body”—

(a)a trade union;

(b)an unincorporated body which does not distribute any surplus it makes to its members;

(c)a charity;

(d)a company limited by guarantee which does not distribute any surplus it makes to its members;

(e)a registered society within the meaning given by section 1 of the Co-operative and Community Benefit Societies Act 2014;

(f)a society registered or deemed to be registered under the Industrial and Provident Societies Act (Northern Ireland) 1969 (c. 24 (N.I.));

(g)a community interest company;

(h)a charitable incorporated organisation within the meaning of Part 11 of the Charities Act 2011 or within the meaning of the Charities Act (Northern Ireland) 2008 (c. 12 (N.I.));

(i)a Scottish charitable incorporated organisation within the meaning of Chapter 7 of Part 1 of the Charities and Trustee Investment (Scotland) Act 2005 (asp 10).

(6)In this section—

  • public authority” has the same meaning as in the Freedom of Information Act 2000 (see section 3 of that Act); and

  • trade union” has the meaning given by section 1 of the Trade Union and Labour Relations (Consolidation) Act 1992 or Article 3 of the Industrial Relations (Northern Ireland) Order 1992 (S.I. 1992/807 (N.I. 5)).

Secondary legislation: duty to reviewE+W+S+N.I.

28Duty to review regulatory provisions in secondary legislationE+W+S+N.I.

(1)This section applies where—

(a)an Act confers a power or duty on a Minister of the Crown to make secondary legislation, and

(b)the Minister exercises the power or duty so as to—

(i)make regulatory provision in relation to any qualifying activity (see sections 29 and 32), or

(ii)amend regulatory provision made in relation to any qualifying activity.

(2)The Minister must—

(a)make provision for review in the secondary legislation in which the regulatory provision is made (see section 30), or

(b)publish a statement that it is not appropriate in the circumstances to make provision for review in that legislation (see section 31).

(3)This section does not apply if or to the extent that the power or duty is to be exercised so as to—

(a)make or amend—

(i)provision imposing, abolishing or varying any tax, duty, levy or other charge, or

(ii)provision in connection with provision falling within sub-paragraph (i);

(b)make or amend provision in connection with procurement;

(c)make or amend provision in connection with the giving of grants or other financial assistance by or on behalf of a public authority;

(d)make or amend provision which is to cease to have effect before the end of the period of 5 years beginning with the commencement date; or

(e)make or amend provision which is subject to review by virtue of existing provision in the secondary legislation.

(4)In this section and section 29 “public authority” has the same meaning as in the Freedom of Information Act 2000 (see section 3 of that Act).

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Commencement Information

I7S. 28 in force at 1.7.2015 by S.I. 2015/1329, reg. 5

29Section 28(1)(b): interpretationE+W+S+N.I.

(1)This section applies for the purposes of section 28(1)(b).

(2)Qualifying activity” means any activity carried on—

(a)by a business for the purposes of the business, or

(b)by a voluntary or community body for the purposes of the body.

(3)For the purposes of subsection (2) the references to a business or a voluntary or community body do not include a business or a voluntary or community body which—

(a)is controlled by a public authority, or

(b)is acting on behalf of a public authority in carrying out the activity.

(4)The Secretary of State must publish a statement as to how it is to be determined whether a business or a voluntary or community body is controlled by a public authority.

(5)Voluntary or community body” has the meaning given in section 27.

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Commencement Information

I8S. 29 in force at 1.7.2015 by S.I. 2015/1329, reg. 5

30Section 28(2)(a): “provision for review”E+W+S+N.I.

(1)This section applies for the purposes of section 28(2)(a).

(2)Provision for review”, in relation to any regulatory provision, is provision requiring the Minister to—

(a)carry out a review of the regulatory provision, and

(b)publish a report setting out the conclusions of the review.

(3)A review of any regulatory provision which implements an EU obligation or any other international obligation of the United Kingdom must [F10so far as is reasonable] have regard to how the obligation is implemented in F11... other Member States or countries which are subject to the obligation.

(4)A report must, in particular—

(a)set out the objectives intended to be achieved by the regulatory provision,

(b)assess the extent to which those objectives are achieved,

(c)assess whether those objectives remain appropriate, and

(d)if those objectives remain appropriate, assess the extent to which they could be achieved in another way which involves less onerous regulatory provision.

(5)The first report must be published before the end of the period of 5 years beginning with the commencement date.

(6)Subsequent reports must be published at intervals not exceeding 5 years.

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Amendments (Textual)

F10Words in s. 30(3) inserted (1.10.2016) by Enterprise Act 2016 (c. 12), ss. 19(a), 44(5); S.I. 2016/695, art. 3(b)

F11Word in s. 30(3) omitted (1.10.2016) by virtue of Enterprise Act 2016 (c. 12), ss. 19(b), 44(5); S.I. 2016/695, art. 3(b)

Commencement Information

I9S. 30 in force at 1.7.2015 by S.I. 2015/1329, reg. 5

31Section 28(2)(b): appropriateness of making provision for reviewE+W+S+N.I.

(1)This section applies for the purposes of section 28(2)(b).

(2)The circumstances in which the Minister may determine that it is not appropriate to make provision for review include those in which—

(a)a review would be disproportionate taking into account the economic impact of the regulatory provision on the qualifying activity, and

(b)a review would be undesirable for particular policy reasons (such as there being an exceptionally high need for certainty in the longer term).

(3)The Secretary of State may publish guidance about the factors to be taken into account in determining whether it is appropriate to make provision for review.

(4)The Minister must have regard to any guidance.

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Commencement Information

I10S. 31 in force at 1.7.2015 by S.I. 2015/1329, reg. 5

32Sections 28 to 31 etc: supplementaryE+W+S+N.I.

(1)This section applies for the purposes of sections 28 to 31 and this section.

(2)Commencement date” means the date on which the secondary legislation making or amending the regulatory provision comes into force for any purpose.

(3)Minister of the Crown” has the same meaning as in the Ministers of the Crown Act 1975.

(4)Regulatory provision”, in relation to any qualifying activity, means—

(a)provision imposing requirements, restrictions or conditions, or setting standards, in relation to the activity, or

(b)provision which relates to the securing of compliance with, or the enforcement of, requirements, restrictions, conditions or standards which relate to the activity.

(5)But where any of section 30(2), (3), (4)(a) or 31(2) applies by virtue of section 28(1)(b)(ii), the references to regulatory provision are to the regulatory provision as amended by the secondary legislation made by the Minister.

(6)Secondary legislation” means orders, regulations or rules made under any Act.

(7)The validity of any secondary legislation is not to be affected by any question as to whether a Minister of the Crown complied with section 28(2).

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Commencement Information

I11S. 32 in force at 1.7.2015 by S.I. 2015/1329, reg. 5

Definitions of small and micro businessE+W+S+N.I.

33Definitions of small and micro businessE+W+S+N.I.

(1)This section applies where any subordinate legislation made by a Minister of the Crown (the “underlying provision”)—

(a)uses the term “small business” or “micro business”, and

(b)defines that term by reference to this section.

(2)In the underlying provision “small business” means an undertaking other than a micro business (see subsection (3)) which meets the following conditions (“the small business size conditions”)—

(a)it has a headcount of staff of less than 50, and

(b)it has—

(i)a turnover, or

(ii)a balance sheet total,

of an amount less than or equal to the small business threshold.

(3)In the underlying provision “micro business” means an undertaking which meets the following conditions (“the micro business size conditions”)—

(a)it has a headcount of staff of less than 10, and

(b)it has—

(i)a turnover, or

(ii)a balance sheet total,

of an amount less than or equal to the micro business threshold.

(4)The Secretary of State may by regulations (referred to as “the small and micro business regulations”) make further provision about the meanings of “small business” and “micro business”.

(5)This section and the small and micro business regulations are to be read subject to any modifications made by the underlying provision in any particular case.

(6)In this section—

  • “balance sheet total”, “headcount of staff”, “micro business threshold”, “small business threshold” and “turnover” have such meanings as may be prescribed by the small and micro business regulations;

  • Minister of the Crown” has the same meaning as in the Ministers of the Crown Act 1975;

  • subordinate legislation” has the same meaning as in the Interpretation Act 1978 (see section 21 of that Act);

  • undertaking” means—

    (a)

    a person carrying on one or more businesses;

    (b)

    a voluntary or community body within the meaning given by section 27;

    (c)

    a body which is formed or recognised under the law of a country or territory outside the United Kingdom and which is equivalent in nature to a body falling within the definition of voluntary or community body.

(7)The small and micro business regulations are subject to negative resolution procedure.

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Modifications etc. (not altering text)

C2S. 33(3)(6) modified (1.4.2017) by S.I. 2009/2268, reg. 3A(5) (as inserted (E.W.S.) (with application in accordance with reg. 2 of the amending S.I.) by The Non-Domestic Rating (Alteration of Lists and Appeals) (England) (Amendment) Regulations 2017 (S.I. 2017/155), regs. 1(2), 6 (with reg. 22))

Commencement Information

I12S. 33(4)(6)(7) in force at 26.5.2015 by S.I. 2015/1329, reg. 2(c)

34Small and micro business regulations: further provisionE+W+S+N.I.

(1)The small and micro business regulations may make provision—

(a)about the calculation of the headcount of staff, turnover and balance sheet total of an undertaking, including provision about the period (“assessment period”) in respect of which they are to be calculated;

(b)for the headcount of staff, turnover and balance sheet total, or a proportion of such, of any undertaking which satisfies such conditions as may be prescribed in relation to another undertaking (the “principal undertaking”) to be treated as part of the principal undertaking's headcount of staff, turnover and balance sheet total.

(2)Conditions which may be prescribed under subsection (1)(b) include, in particular, conditions relating to—

(a)the extent of ownership (whether direct or indirect) of one undertaking by one or more other undertakings;

(b)the degree of control exercised (whether directly or indirectly) by one or more undertakings over another.

(3)The small and micro business regulations may make provision about—

(a)the assessment period or periods in respect of which an undertaking must meet the small business size conditions or the micro business size conditions in order to be a small business or (as the case may be) micro business;

(b)the circumstances in which an undertaking which has been established for less than a complete assessment period is to be regarded as meeting the small business size conditions or the micro business size conditions.

(4)Provision made by virtue of subsection (3) may, in particular, provide that—

(a)an undertaking is a small business or a micro business if it meets the relevant size conditions in respect of each of its two most recent assessment periods;

(b)where there has been only one complete assessment period since an undertaking was established, the undertaking is a small business or a micro business if it meets the relevant size conditions in respect of that period;

(c)an undertaking which is a small business or a micro business does not cease to be such unless it fails to meet the relevant size conditions in respect of two consecutive assessment periods.

(5)The small and micro business regulations may make provision for one undertaking (“undertaking A”) which satisfies such conditions as may be prescribed in relation to another undertaking (“undertaking B”), to be treated as being undertaking B (whether or not undertaking B is still in existence) for such purposes as may be prescribed.

(6)Conditions which may be prescribed under subsection (5) include, in particular, conditions relating to—

(a)the transfer of a business from undertaking B to undertaking A;

(b)the carrying on by undertaking A of a business on undertaking B ceasing to carry on the activities, or most of the activities, of which the business consists in consequence of arrangements involving both undertakings;

(c)the existence of some other connection between undertaking A and undertaking B.

(7)The purposes which may be prescribed under subsection (5) include, in particular—

(a)determining the date on which undertaking A was established (and so the number of assessment periods there have been since it was established);

(b)determining which periods are assessment periods in respect of undertaking A;

(c)calculating the headcount of staff, turnover and balance sheet total of undertaking A.

(8)The small and micro business regulations may provide that an undertaking of such description as may be prescribed is not a small business or a micro business even if it falls within the relevant definition.

(9)In this section—

  • micro business size conditions”, “small business size conditions” and “undertaking” have the same meanings as in section 33;

  • prescribed” means prescribed in the small and micro business regulations.

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Commencement Information

I13S. 34 in force at 26.5.2015 by S.I. 2015/1329, reg. 2(d)

Home businessesE+W+S+N.I.

35Exclusion of home businesses from Part 2 of the Landlord and Tenant Act 1954E+W+S+N.I.

(1)Part 2 of the Landlord and Tenant Act 1954 (security of tenure for business, professional and other tenants) is amended as follows.

(2)In section 23(4) (tenancies to which Part 2 applies) at the beginning insert “ Subject to subsection (5), ”.

(3)After section 23(4) insert—

(5)Where the tenant's breach of a prohibition (however expressed) of use for business purposes which subsists under the terms of the tenancy and extends to the whole of that property consists solely of carrying on a home business, this Part of this Act does not apply to the tenancy, even if the immediate landlord or the immediate landlord's predecessor in title has consented to the breach or the immediate landlord has acquiesced in the breach.

(6)In subsection (5) “home business” has the same meaning as in section 43ZA.

(4)After section 43 (tenancies excluded from Part 2), insert—

43ZAFurther exclusion of home business tenancies from Part 2

(1)This Part of this Act does not apply to a home business tenancy.

(2)A home business tenancy is a tenancy under which—

(a)a dwelling-house is let as a separate dwelling,

(b)the tenant or, where there are joint tenants, each of them, is an individual, and

(c)the terms of the tenancy—

(i)require the tenant or, where there are joint tenants, at least one of them, to occupy the dwelling-house as a home (whether or not as that individual's only or principal home),

(ii)permit a home business to be carried on in the dwelling-house, or permit the immediate landlord to give consent for a home business to be carried on in the dwelling-house, and

(iii)do not permit a business other than a home business to be carried on in the dwelling-house.

(3)The terms of a tenancy permit the carrying on of a home business if they permit the carrying on of a particular home business, a particular description of home business or any home business.

(4)A “home business” is a business of a kind which might reasonably be carried on at home.

(5)A business is not to be treated as a home business if it involves the supply of alcohol for consumption on licensed premises which form all or part of the dwelling-house.

(6)The appropriate national authority may by regulations prescribe cases in which businesses are, or are not, to be treated as home businesses.

(7)Regulations under this section—

(a)may include transitional or saving provision,

(b)may make different provision for different purposes,

(c)are to be made by statutory instrument,

(d)may not be made unless—

(i)in the case of regulations made by the Secretary of State, a draft of the statutory instrument containing the regulations has been laid before Parliament and approved by a resolution of each House of Parliament,

(ii)in the case of regulations made by the Welsh Ministers, a draft of the statutory instrument containing the regulations has been laid before, and approved by a resolution of, the National Assembly for Wales.

(8)For the purposes of this section, a dwelling-house which is let for mixed residential and business use is capable of being let as a dwelling.

(9)If, under a tenancy, a dwelling-house is let together with other land, then, for the purposes of this section—

(a)if the main purpose of the letting is the provision of a home for the tenant, the other land is to be treated as part of the dwelling-house, and

(b)if the main purpose of the letting is not as mentioned in paragraph (a), the tenancy is to be treated as not being one under which a dwelling-house is let as a separate dwelling.

(10)In this section—

  • the appropriate national authority” means—

    (a)

    in relation to England, the Secretary of State, and

    (b)

    in relation to Wales, the Welsh Ministers;

  • “dwelling-house” may be a house or part of a house;

  • let” includes sub-let;

  • licensed premises” has the same meaning as in the Licensing Act 2003 (see section 193 of that Act);

  • supply of alcohol” has the same meaning as in the Licensing Act 2003 (see section 14 of that Act).

(5)Subsections (1) to (4) do not apply to—

(a)a tenancy which is entered into before the day on which this section comes into force;

(b)a tenancy which is entered into on or after the day on which this section comes into force, pursuant to a contract made before that day;

(c)a tenancy which arises by operation of any enactment or other law when a tenancy mentioned in paragraph (a) or (b) comes to an end.

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Commencement Information

I14S. 35 in force at 1.10.2015 for W. by S.I. 2015/1710, art. 2(a)

I15S. 35 in force at 1.10.2015 for E. by S.I. 2015/1689, reg. 2(b)

36Section 35: supplementary and consequential provisionE+W+S+N.I.

(1)In section 41 of the Landlord and Tenant Act 1954 (trusts), after subsection (2) insert—

(3)Where a tenancy is held on trust, section 43ZA(2) has effect as if—

(a)paragraph (b) were omitted, and

(b)the condition in paragraph (c)(i) were a condition that the terms of the tenancy require at least one individual who is a trustee or a beneficiary under the trust to occupy the dwelling-house as a home (whether or not as that individual's only or principal home).

(2)A dwelling-house which is let under a home business tenancy is to be regarded as being “let as a separate dwelling” for the purposes of—

(a)section 1 of the Rent Act 1977 (protected tenancies),

(b)section 79 of the Housing Act 1985 (secure tenancies),

(c)section 1 of the Housing Act 1988 (assured tenancies), and

(d)any other England and Wales enactment relating to protected, secure or assured tenancies.

(3)Subsections (1) and (2) do not apply to the tenancies mentioned in section 35(3)(5).

(4)Subsections (2) and (3) do not limit the circumstances in which a dwelling-house which is let under a home business tenancy is to be regarded as “let as a separate dwelling”.

(5)In this section—

  • enactment” includes provision made—

    (a)

    under an Act, or

    (b)

    by or under a Measure or Act of the National Assembly for Wales,

  • England and Wales enactment” means any enactment so far as it forms part of the law of England and Wales,

  • home business tenancy” has the same meaning as in section 43ZA of the Landlord and Tenant Act 1954.

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Annotations are used to give authority for changes and other effects on the legislation you are viewing and to convey editorial information. They appear at the foot of the relevant provision or under the associated heading. Annotations are categorised by annotation type, such as F-notes for textual amendments and I-notes for commencement information (a full list can be found in the Editorial Practice Guide). Each annotation is identified by a sequential reference number. For F-notes, M-notes and X-notes, the number also appears in bold superscript at the relevant location in the text. All annotations contain links to the affecting legislation.

Commencement Information

I16S. 36 in force at 1.10.2015 for E. by S.I. 2015/1689, reg. 2(b)

I17S. 36 in force at 1.10.2015 for W. by S.I. 2015/1710, art. 2(b)

CMA recommendationsE+W+S+N.I.

37CMA to publish recommendations on proposals for Westminster legislationE+W+S+N.I.

(1)Section 7 of the Enterprise Act 2002 (provision by CMA of information and advice to Ministers etc) is amended as follows.

(2)After subsection (1) insert—

(1A)The CMA may, in particular, carry out the function under subsection (1)(a) by making a proposal in the form of a recommendation to a Minister of the Crown about the potential effect of a proposal for Westminster legislation on competition within any market or markets in the United Kingdom for goods or services.

(1B)The CMA must publish such a recommendation in such manner as the CMA considers appropriate for bringing the subject matter of the recommendation to the attention of those likely to be affected by it.

(3)After subsection (2) insert—

(3)In this section—

  • market in the United Kingdom” includes—

    (a)

    so far as it operates in the United Kingdom or a part of the United Kingdom, any market which operates there and in another country or territory or in a part of another country or territory; and

    (b)

    any market which operates only in a part of the United Kingdom;

    and the reference to a market for goods or services includes a reference to a market for goods and services; and

  • Westminster legislation” means—

    (a)

    an Act of Parliament, or

    (b)

    subordinate legislation (within the meaning given by section 21 of the Interpretation Act 1978).

Liability of bodies concerned with accounting standardsE+W+S+N.I.

38Exemption from liability for bodies concerned with accounting standards etcE+W+S+N.I.

(1)After section 18 of the Companies (Audit, Investigations and Community Enterprise) Act 2004 insert—

18APower to confer exemption from liability

(1)The Secretary of State may by order or regulations provide for the exemption from liability in subsections (3) and (4) to apply to specified bodies or persons (referred to in this section as “exempt persons”).

(2)The order or regulations may provide for the exemption to apply subject to specified conditions or for a specified period.

(3)Neither the exempt person, nor any person who is (or is acting as) a member, officer or member of staff of the exempt person, is to be liable in damages for anything done, or omitted to be done, for the purposes of or in connection with—

(a)the carrying on of those section 16(2) activities of the exempt person that are specified in relation to that person, or

(b)the purported carrying on of any such activities.

(4)Subsection (3) does not apply—

(a)if the act or omission is shown to have been in bad faith, or

(b)so as to prevent an award of damages in respect of the act or omission on the grounds that it was unlawful as a result of section 6(1) of the Human Rights Act 1998 (acts of public authorities incompatible with Convention rights).

(5)In this section—

  • section 16(2) activities” means activities concerned with any of the matters within section 16(2);

  • specified” means specified in an order or regulations under this section.

(6)Orders and regulations under this section—

(a)are to be made by statutory instrument;

(b)may make different provision for different cases;

(c)may make transitional provision and savings.

(7)A statutory instrument containing an order or regulations under this section is subject to annulment in pursuance of a resolution of either House of Parliament, subject to subsection (8).

(8)An order or regulations under this section may be included in a statutory instrument which may not be made unless a draft of the instrument is laid before, and approved by a resolution of, each House of Parliament.

(2)Omit section 18 of that Act (exemption from liability for bodies to whom grants are paid).

(3)In section 66(2) of that Act (provisions extending to Northern Ireland) for “18” substitute “ 18A ”.

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Annotations are used to give authority for changes and other effects on the legislation you are viewing and to convey editorial information. They appear at the foot of the relevant provision or under the associated heading. Annotations are categorised by annotation type, such as F-notes for textual amendments and I-notes for commencement information (a full list can be found in the Editorial Practice Guide). Each annotation is identified by a sequential reference number. For F-notes, M-notes and X-notes, the number also appears in bold superscript at the relevant location in the text. All annotations contain links to the affecting legislation.

Commencement Information

I18S. 38 in force at 1.1.2016 for specified purposes by S.I. 2015/2029, reg. 3(a)

I19S. 38 in force at 1.6.2016 in so far as not already in force by S.I. 2016/532, reg. 4(1) (with reg. 4(2))

PART 3 E+W+S+N.I.Public sector procurement

39Regulations about procurementE+W+S+N.I.

(1)The Minister for the Cabinet Office or the Secretary of State may by regulations impose on a contracting authority duties in respect of the exercise of its functions relating to procurement.

(2)For the purposes of this section “the exercise of functions relating to procurement” includes the exercise of functions in preparation for entering into contracts and in the management of contracts.

(3)Subject to subsection (4), “contracting authority” has the same meaning as in regulation 2 of the Public Contracts Regulations 2015 (S.I. 2015/102), or any regulation replacing that regulation, as from time to time amended.

(4)But such an authority is not a contracting authority for the purposes of this section if its functions are wholly or mainly devolved functions, namely—

(a)Scottish devolved functions, that is to say functions the exercise of which would be within devolved competence (within the meaning of section 54 of the Scotland Act 1998);

(b)Northern Ireland devolved functions, that is to say functions which could be conferred by provision included in an Act of the Northern Ireland Assembly made without the consent of the Secretary of State (see sections 6 to 8 of the Northern Ireland Act 1998), or

(c)Welsh devolved functions, that is to say functions which could be conferred by provision falling within the legislative competence of the National Assembly for Wales (as defined in section 108 of the Government of Wales Act 2006).

(5)Regulations under this section may, in particular, impose—

(a)duties to exercise functions relating to procurement in an efficient and timely manner;

(b)duties relating to the process by which contracts are entered into (including timescales and the extent and manner of engagement with potential parties to a contract);

(c)duties to make available without charge—

(i)information or documents;

(ii)any process required to be completed in order to bid for a contract;

(d)duties relating to the acceptance of invoices by electronic means (including a prohibition on the charging of fees for processing such invoices, the publication of reports relating to the number of such invoices received or the electronic systems that must be used by a contracting authority);

(e)duties to publish reports about compliance with the regulations.

(6)A person making regulations under this section must before making the regulations undertake such consultation as the person considers appropriate.

(7)The Minister for the Cabinet Office or the Secretary of State may issue guidance relating to regulations under this section.

(8)A contracting authority must have regard to any guidance for the time being in force under this section.

(9)Guidance or revised guidance given under this section must be published.

(10)Regulations under this section are subject to affirmative resolution procedure.

40Investigation of procurement functionsE+W+S+N.I.

(1)In this section “a Minister” means the Minister for the Cabinet Office or the Secretary of State.

(2)A Minister may investigate the exercise by a contracting authority of relevant functions relating to procurement.

(3)A Minister may by notice require a contracting authority to provide such documents or other information, in such form or manner as the Minister may direct, as the Minister may require for the purposes of an investigation under this section.

(4)A contracting authority must—

(a)give a Minister such assistance with an investigation as is reasonable in all the circumstances of the case;

(b)comply with a notice under subsection (3) before the end of the period of 30 days beginning with the day on which the notice is given.

(5)In this section—

  • contracting authority” has the same meaning as in section 39, but does not include a Minister of the Crown or a government department;

  • “a relevant function relating to procurement” is a function to which—

    (a)

    the Public Contracts Regulations 2006 (S.I. 2006/5) apply, disregarding for this purpose the operation of regulation 8 (thresholds),

    (b)

    the Defence and Security Public Contracts Regulations 2011 (S.I. 2011/1848) apply, disregarding for this purpose the operation of regulation 9 (thresholds),

    (c)

    the [F12Public Contracts (Scotland) Regulations 2015] apply, disregarding for this purpose the operation of [F13regulation 5] (thresholds), or

    (d)

    the Public Contracts Regulations 2015 (S.I. 2015/102) apply, disregarding for this purpose the operation of any financial threshold provided for by those regulations;

    a reference to regulations includes a reference to any regulations replacing those regulations, as from time to time amended.

(6)An investigation under this section may also include an investigation of—

(a)preparations for the exercise of a relevant function relating to procurement, and

(b)the management of a contract entered into in the exercise of such a function.

(7)But the exercise of a function—

(a)by—

(i)the governing body of a maintained school (see section 19 of the of the Education Act 2002), or

(ii)a person who is the proprietor of an Academy (see section 17(4) of the Academies Act 2010 and section 579(1) of the Education Act 1996), or

(b)which is regulated by the National Health Service (Procurement, Patient Choice and Competition) (No. 2) Regulations 2013 (S.I. 2013/500) (functions relating to the procurement of health care services for the purposes of the NHS),

may not be investigated under this section.

(8)A person conducting an investigation under this section may publish the results of the investigation.

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Amendments (Textual)

PART 4 E+WThe Pubs Code Adjudicator and the Pubs Code

The Pubs Code AdjudicatorE+W

41The AdjudicatorE+W

(1)A Pubs Code Adjudicator is established.

(2)Part 1 of Schedule 1 makes provision about the Adjudicator.

(3)Part 2 of that Schedule contains the Adjudicator's powers to require information.

(4)Part 3 of that Schedule contains amendments consequential on the establishment of the Adjudicator.

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Annotations are used to give authority for changes and other effects on the legislation you are viewing and to convey editorial information. They appear at the foot of the relevant provision or under the associated heading. Annotations are categorised by annotation type, such as F-notes for textual amendments and I-notes for commencement information (a full list can be found in the Editorial Practice Guide). Each annotation is identified by a sequential reference number. For F-notes, M-notes and X-notes, the number also appears in bold superscript at the relevant location in the text. All annotations contain links to the affecting legislation.

Commencement Information

I20S. 41 in force at 2.5.2016 by S.I. 2016/532, reg. 2(a)

Pubs CodeE+W

42Pubs CodeE+W

(1)The Secretary of State must, before the end of the period of one year beginning with the day on which this section comes into force, make regulations about practices and procedures to be followed by pub-owning businesses in their dealings with their tied pub tenants.

(2)In this Part the regulations are referred to as “the Pubs Code”.

(3)The Secretary of State must seek to ensure that the Pubs Code is consistent with—

(a)the principle of fair and lawful dealing by pub-owning businesses in relation to their tied pub tenants;

(b)the principle that tied pub tenants should not be worse off than they would be if they were not subject to any product or service tie.

(4)The Pubs Code may, in particular—

(a)contain requirements as to the provision of information by pub-owning businesses to their tied pub tenants;

(b)require pub-owning businesses, in specified circumstances, to provide the following assessments in relation to their tied pub tenants—

(i)rent assessments, or

(ii)assessments of money payable by the tenant in lieu of rent;

(c)make provision about the information that such assessments must contain and how they are to be calculated and presented;

(d)specify that such assessments must be conducted in accordance with provisions of documents specified in the Pubs Code;

(e)where any document is specified for the purposes of paragraph (d), refer to the provisions of the document as amended from time to time;

(f)impose other obligations on pub-owning businesses in relation to their tied pub tenants.

(5)The Pubs Code may require pub-owning businesses to provide parallel rent assessments in relation to their tied pub tenants in specified circumstances, and in connection with such provision may —

(a)confer on the Adjudicator functions in relation to parallel rent assessments,

(b)require the payment of a fee by tied pub tenants to the Adjudicator in connection with the exercise of those functions, and

(c)make provision corresponding to that mentioned in subsection (4)(c), (d) and (e).

43Pubs Code: market rent only optionE+W

(1)The Pubs Code must require pub-owning businesses to offer their tied pub tenants falling within section 70(1)(a) a market rent only option in specified circumstances.

(2)A “market rent only option” means the option for the tied pub tenant—

(a)to occupy the tied pub under a tenancy or licence which is MRO-compliant, and

(b)to pay in respect of that occupation—

(i)such rent as may be agreed between the pub-owning business and the tied pub tenant in accordance with the MRO procedure (see section 44), or

(ii)failing such agreement, the market rent.

(3)The Pubs Code may specify—

(a)circumstances in which a market rent only option must or may be an option to occupy under a tenancy;

(b)circumstances in which a market rent only option must or may be an option to occupy under a licence.

(4)A tenancy or licence is MRO-compliant if—

(a)taken together with any other contractual agreement entered into by the tied pub tenant with the pub-owning business in connection with the tenancy or licence it—

(i)contains such terms and conditions as may be required by virtue of subsection (5)(a),

(ii)does not contain any product or service tie other than one in respect of insurance in connection with the tied pub, and

(iii)does not contain any unreasonable terms or conditions, and

(b)it is not a tenancy at will.

(5)The Pubs Code may specify descriptions of terms and conditions—

(a)which are required to be contained in a tenancy or licence for it to be MRO-compliant;

(b)which are to be regarded as reasonable or unreasonable for the purposes of subsection (4).

(6)Provision made under subsection (1) must include provision requiring a pub-owning business to offer a tied pub tenant a market rent only option—

(a)in connection with the renewal of any of the pub arrangements;

(b)in connection with a rent assessment or assessment of money payable by the tenant in lieu of rent [F14(whether or not it results in a proposal that the rent, or amount of money payable, should increase)];

(c)in connection with a significant increase in the price at which any product or service which is subject to a product or service tie is supplied to the tied pub tenant where the increase was not reasonably foreseeable—

(i)when the tenancy or licence was granted, or

(ii)if there has been an assessment of a kind mentioned in paragraph (b), when the last assessment was concluded;

(d)after a trigger event has occurred.

(7)The Pubs Code may specify what “renewal” means in relation to a tenancy or a licence for the purposes of subsection (6).

(8)In subsection (6) “pub arrangements”, in relation to a tied pub, means—

(a)the tenancy or licence under which the tied pub is occupied, and

(b)any other contractual agreement which contains an obligation by virtue of which condition D in section 68 is met in relation to the premises.

(9)In this Part a “trigger event”, in relation to a tied pub tenant, means an event which—

(a)is beyond the control of the tied pub tenant,

(b)was not reasonably foreseeable as mentioned in subsection (6)(c),

(c)has a significant impact on the level of trade that could reasonably be expected to be achieved at the tied pub, and

(d)is of a description specified in the Pubs Code.

(10)In this Part “market rent”, in relation to the occupation of particular premises under a tenancy or licence which is MRO-compliant, means the estimated rent which it would be reasonable to pay in respect of that occupation on the following assumptions—

(a)that the tenancy or licence concerned is entered into—

(i)on the date on which the determination of the estimated rent is made,

(ii)in an arm's length transaction,

(iii)after proper marketing, and

(iv)between parties each of whom has acted knowledgeably, prudently and willingly, and

(b)that condition B in section 68 continues to be met.

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Amendments (Textual)

44Market rent only option: procedureE+W

(1)The Pubs Code may—

(a)make provision about the procedure to be followed in connection with an offer of a market rent only option (referred to in this Part as “the MRO procedure”);

(b)confer functions on the Adjudicator in connection with that procedure.

(2)Provision made under subsection (1) may, in particular—

(a)make provision for the tied pub tenant to give notice to the pub-owning business that the tenant—

(i)considers that circumstances are such that the pub-owning business is required to offer the tenant a market rent only option, and

(ii)wishes to receive such an offer;

(b)specify a reasonable period (“the negotiation period”) during which the pub-owning business and the tied pub tenant may seek to agree the rent to be payable in respect of the tied pub tenant's occupation of the premises concerned under the proposed MRO-compliant tenancy or licence;

(c)require the appointment of a person (referred to in this Part as an “independent assessor”) to determine the market rent of the premises concerned in a case where, at the end of the negotiation period, the pub-owning business and the tied pub tenant have not reached agreement as mentioned in paragraph (b);

(d)require that appointment to be made by the pub-owning business and the tied pub tenant acting jointly or (where they cannot agree on a person to appoint) by the Adjudicator;

(e)require the Adjudicator to set criteria which a person must satisfy in order to be appointed as an independent assessor;

(f)require that the market rent must be determined by the independent assessor within a specified reasonable period;

(g)specify that the determination of the market rent by the independent assessor must be conducted in accordance with provisions of documents specified in the Pubs Code;

(h)where any document is specified for the purposes of paragraph (g), refer to the provisions of the document as amended from time to time.

(3)The Pubs Code may make provision for—

(a)the tenancy or licence under which the tied pub is occupied, and

(b)any other contractual agreement entered into by the tied pub tenant with the pub-owning business in connection with the tenancy or licence,

as they are in force when a notice is given by virtue of subsection (2)(a), to continue to have effect until such time as the MRO procedure has come to an end (regardless of whether any of the agreements would or could otherwise cease to have effect before that time).

(4)The Pubs Code may, for the purposes of subsection (3), specify the circumstances in which the MRO procedure is to be treated as having come to an end.

45Market rent only option: disputesE+W

(1)The Secretary of State may by regulations confer functions on the Adjudicator in connection with the resolution of disputes relating to the offer of a market rent only option.

(2)The regulations may, in particular, make provision concerning the resolution of disputes about whether—

(a)circumstances are such that a pub-owning business is required to offer a tied pub tenant a market rent only option;

(b)a proposed tenancy or licence is MRO-compliant;

(c)a determination of the market rent of a tenancy or licence made by an independent assessor has been made in accordance with the Pubs Code;

(d)any other requirement of the MRO procedure has been complied with.

(3)The regulations may, in particular, confer on the Adjudicator the function of determining the market rent of a tenancy or licence in such circumstances as may be specified in the regulations.

(4)Nothing in sections 48 to 52 applies in relation to provision made by virtue of section 43 or 44 but the regulations may include provision which is similar to that contained in or made under those sections.

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Commencement Information

I21S. 45 in force at 6.4.2016 for specified purposes by S.I. 2016/321, reg. 4(a)

I22S. 45 in force at 21.7.2016 in so far as not already in force by S.I. 2016/532, reg. 3

46Review of Pubs CodeE+W

(1)The Secretary of State must review the operation of the Pubs Code for each review period.

(2)The first review period is the period beginning on the date on which the Pubs Code comes into force and ending 2 years after the following 31 March.

(3)Subsequent review periods are each successive period of 3 years after the first review period.

(4)As soon as practicable after a review period, the Secretary of State must—

(a)publish a report of the findings of the review for that period, and

(b)lay a copy of the report before Parliament.

(5)In particular, the report must set out—

(a)the extent to which, in the Secretary of State's opinion, the Pubs Code is consistent with the principles set out in section 42(3), and

(b)any revisions of the Pubs Code which, in the Secretary of State's opinion, would enable the Pubs Code to reflect more fully those principles.

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Annotations are used to give authority for changes and other effects on the legislation you are viewing and to convey editorial information. They appear at the foot of the relevant provision or under the associated heading. Annotations are categorised by annotation type, such as F-notes for textual amendments and I-notes for commencement information (a full list can be found in the Editorial Practice Guide). Each annotation is identified by a sequential reference number. For F-notes, M-notes and X-notes, the number also appears in bold superscript at the relevant location in the text. All annotations contain links to the affecting legislation.

Commencement Information

I23S. 46 in force at 21.7.2016 by S.I. 2016/532, reg. 3

47Inconsistency with Pubs Code etcE+W

(1)The Secretary of State may by regulations make provision about terms of a tenancy or other agreement between a pub-owning business and a tied pub tenant—

(a)which are inconsistent with the Pubs Code,

(b)which purport to penalise the tenant for requiring the business to act, or not act, in accordance with any provision of the Pubs Code with which the business is bound to comply,

(c)which purport to provide that a rent assessment or assessment of money payable by the tenant in lieu of rent in relation to the tied pub—

(i)may be initiated only by the business, or

(ii)may only determine that the rent or money payable in lieu of rent is to be increased.

(2)The regulations may include provision about the effect of a term of a tenancy or other agreement being void or unenforceable as a result of the regulations.

(3)Regulations under subsection (1) may make provision about terms of tenancies or other agreements entered into before the date on which the regulations come into force.

(4)A term of any agreement between a pub-owning business and a tied pub tenant is void to the extent that it purports to—

(a)prevent the tenant from referring a dispute to the Adjudicator for arbitration in accordance with regulations under section 45 or in accordance with section 48, or

(b)penalise the tenant for making such a referral.

(5)A term of an arbitration agreement between a pub-owning business and a tied pub tenant is unenforceable to the extent that it is inconsistent with—

(a)regulations under section 45,

(b)section 50,

(c)section 51, or

(d)regulations under section 51(7).

(6)Subsections (4) and (5) apply to agreements entered into before the date on which those subsections come into force, as well as those entered into on or after that date.

(7)The Secretary of State may by regulations make provision about the effect of a term of an agreement being void or unenforceable as a result of subsection (4) or (5).

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Commencement Information

I24S. 47 in force at 6.4.2016 for specified purposes by S.I. 2016/321, reg. 4(b)

I25S. 47 in force at 21.7.2016 in so far as not already in force by S.I. 2016/532, reg. 3

Arbitration by AdjudicatorE+W

48Referral for arbitration by tied pub tenantsE+W

(1)In accordance with the following provisions of this section and section 49, a tied pub tenant may refer a dispute between the tenant and the pub-owning business concerned to the Adjudicator for arbitration.

(2)If the Pubs Code specifies that particular provisions of the Pubs Code are arbitrable, a dispute may be referred to the Adjudicator only to the extent that it relates to an allegation by the tenant that the pub-owning business has failed to comply with an arbitrable provision of the Pubs Code.

(3)If the Pubs Code specifies that particular provisions of the Pubs Code are not arbitrable, a dispute may be referred to the Adjudicator only to the extent that it relates to an allegation by the tenant that the pub-owning business has failed to comply with any other provision of the Pubs Code.

(4)If the Pubs Code does not specify whether any of its provisions are arbitrable or not arbitrable, a dispute may be referred to the Adjudicator only to the extent that it relates to an allegation by the tenant that the pub-owning business has failed to comply with any provision of the Pubs Code.

(5)Where a dispute is referred for arbitration under this section, the Adjudicator must either—

(a)arbitrate the dispute, or

(b)appoint another person to arbitrate the dispute.

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Commencement Information

I26S. 48 in force at 21.7.2016 by S.I. 2016/532, reg. 3

49Timing of referral for arbitration by tied pub tenantsE+W

(1)This section makes provision as to the period within which a tied pub tenant may refer a dispute to the Adjudicator in accordance with section 48.

(2)Except in the case mentioned in subsection (3), the dispute may not be referred until after the expiry of the period of 21 days beginning with the date on which the tenant notifies the pub-owning business of the alleged non-compliance.

(3)Where the Pubs Code requires a pub-owning business to provide a parallel rent assessment within a period of time specified by the Adjudicator, a dispute which relates to an allegation that the pub-owning business has failed to comply with that requirement may not be referred until the day after the day on which the specified period ends.

(4)In all cases, a dispute may not be referred after the expiry of the period of 4 months beginning with the first date on which the dispute could have been referred.

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Commencement Information

I27S. 49 in force at 21.7.2016 by S.I. 2016/532, reg. 3

50Arbitration commenced by pub-owning businessesE+W

(1)This section applies where—

(a)there is an arbitration agreement between a tied pub tenant and a pub-owning business, and

(b)the business commences arbitral proceedings about a matter which is, or which includes, a Pubs Code dispute between the business and the tenant.

(2)In this section a “Pubs Code dispute” means a dispute—

(a)which relates to an allegation by the tied pub tenant that the pub-owning business has failed to comply with a provision of the Pubs Code, and

(b)which the tenant would have been able to refer for arbitration by the Adjudicator in accordance with section 48 (were it not for the commencement of arbitral proceedings by the business).

(3)Subsection (4) applies where—

(a)in accordance with the arbitration agreement, the Adjudicator is appointed to arbitrate the Pubs Code dispute, or

(b)the tied pub tenant wishes the Adjudicator to be appointed to arbitrate that dispute, and has given notice to that effect in accordance with subsections (5) to (7).

(4)The Adjudicator must either—

(a)arbitrate the Pubs Code dispute, or

(b)appoint another person to arbitrate that dispute.

(5)Notice under subsection (3)(b) must be given in writing to—

(a)the pub-owning business, and

(b)the Adjudicator.

(6)In a case where the arbitration agreement provides for the arbitrator to be appointed by a person other than the pub-owning business or the tied pub tenant, notice under subsection (3)(b) must be given within 21 days beginning with the date on which that person notifies the tenant of the person proposed to be appointed as arbitrator.

(7)In any other case, notice under subsection (3)(b) must be given within 21 days beginning with the date on which arbitral proceedings commenced.

(8)Section 14 of the Arbitration Act 1996 makes provision about the commencement of arbitral proceedings.

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Commencement Information

I28S. 50 in force at 21.7.2016 by S.I. 2016/532, reg. 3

51Arbitration: supplementaryE+W

(1)Subsection (2) applies where a tied pub tenant—

(a)refers a dispute to the Adjudicator under section 48, or

(b)gives notice as mentioned in section 50(3)(b) that the tenant wishes the Adjudicator to be appointed to arbitrate a dispute.

(2)The tenant must pay a fee to the Adjudicator of an amount prescribed in regulations made by the Secretary of State (except in specified cases as mentioned in subsection (3)(b)).

(3)The regulations may make further provision as to the fee, and may in particular—

(a)specify when the fee must be paid,

(b)specify cases in which the tenant is not required to pay the fee,

(c)specify cases in which the fee is to be refunded to the tenant.

(4)The following subsections apply in all cases where the Adjudicator or a person appointed by the Adjudicator arbitrates a dispute.

(5)Except where this Part makes different provision, the arbitration must be conducted in accordance with—

(a)the rules regarding arbitrations issued from time to time by the Chartered Institute of Arbitrators, or

(b)the rules of another dispute resolution body nominated by the arbitrator.

(6)The pub-owning business concerned must pay the reasonable fees and expenses of the arbitrator in respect of the arbitration, except where—

(a)the arbitration follows a referral by the tenant under section 48, and

(b)the arbitrator concludes that the referral was vexatious.

(7)The Secretary of State may by regulations make provision in relation to the costs payable by a tied pub tenant in respect of the arbitration, and the regulations may in particular—

(a)provide that those costs are limited to an amount prescribed in, or to be determined in accordance with, the regulations, and

(b)specify circumstances in which the arbitrator may make an award requiring the tenant to pay costs exceeding that amount.

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Commencement Information

I29S. 51 in force at 6.4.2016 for specified purposes by S.I. 2016/321, reg. 4(c)

I30S. 51 in force at 21.7.2016 in so far as not already in force by S.I. 2016/532, reg. 3

52Information about arbitrationE+W

(1)If the Adjudicator appoints another person as arbitrator under section 48(5)(b) or 50(4)(b), the Adjudicator may require the arbitrator, or the pub-owning business and tied pub tenant concerned, to provide information to assist the Adjudicator in carrying out functions under this Part.

(2)The Adjudicator may enforce the requirement to provide information by bringing civil proceedings to obtain an injunction.

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Commencement Information

I31S. 52 in force at 21.7.2016 by S.I. 2016/532, reg. 3

Investigations by AdjudicatorE+W

53InvestigationsE+W

(1)The Adjudicator may investigate whether a pub-owning business has failed to comply with the Pubs Code if the Adjudicator has reasonable grounds to suspect that—

(a)the business has failed to comply with the Pubs Code, or

(b)the business has failed to follow a recommendation made under section 56.

(2)The Adjudicator may not carry out an investigation until the guidance required by section 61(1) has been published.

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Commencement Information

I32S. 53 in force at 21.7.2016 by S.I. 2016/532, reg. 3

54Investigation reportsE+W

(1)Following an investigation, the Adjudicator must—

(a)publish a report on the outcome of the investigation, and

(b)consider whether to use any of the enforcement powers mentioned in section 55.

(2)An investigation report must, in particular, specify—

(a)any findings that the Adjudicator has made,

(b)any action that the Adjudicator has taken or proposes to take, and

(c)the reasons for the findings and any action taken or proposed.

(3)An investigation report need not identify the pub-owning business concerned.

(4)If a pub-owning business is identified in a report, the business must have been given a reasonable opportunity to comment on a draft of the report before publication.

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Commencement Information

I33S. 54 in force at 21.7.2016 by S.I. 2016/532, reg. 3

55Forms of enforcementE+W

(1)If, as a result of an investigation, the Adjudicator is satisfied that a pub-owning business has failed to comply with the Pubs Code, or has failed to follow a recommendation made under section 56, the Adjudicator may take one or more of the following enforcement measures—

(a)make recommendations;

(b)require information to be published;

(c)impose financial penalties.

(2)Where an investigation concerns two or more pub-owning businesses, the Adjudicator may decide—

(a)to take different enforcement measures against different businesses,

(b)not to take any enforcement measures against one or more of the businesses.

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Commencement Information

I34S. 55 in force at 21.7.2016 by S.I. 2016/532, reg. 3

56RecommendationsE+W

(1)If the Adjudicator chooses to enforce through making recommendations, that means recommending what the pub-owning business should do in order to comply with the Pubs Code, and specifying the time by which the business should do it.

(2)The Adjudicator must monitor whether a recommendation has been followed.

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Commencement Information

I35S. 56 in force at 21.7.2016 by S.I. 2016/532, reg. 3

57Requirements to publish informationE+W

(1)If the Adjudicator chooses to enforce through requiring information to be published, that means requiring the pub-owning business to publish information relating to the investigation.

(2)The publication requirement is imposed by giving the pub-owning business written notice specifying—

(a)what information is to be published,

(b)how it must be published, and

(c)the time by which it must be published.

(3)The Adjudicator may enforce the requirement to publish information by bringing civil proceedings to obtain an injunction or any other appropriate remedy or relief.

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Commencement Information

I36S. 57 in force at 21.7.2016 by S.I. 2016/532, reg. 3

58Financial penaltiesE+W

(1)If the Adjudicator chooses to enforce through imposing financial penalties, that means imposing a penalty on the pub-owning business of an amount not exceeding the permitted maximum (see subsection (6)).

(2)The financial penalty is imposed by giving the pub-owning business written notice specifying—

(a)the grounds for imposing the penalty,

(b)the amount of the penalty,

(c)the period within which it must be paid, and

(d)how it must be paid.

(3)The pub-owning business may appeal to the High Court against—

(a)the imposition of a financial penalty, or

(b)its amount.

(4)Financial penalties under this section are recoverable by the Adjudicator as a debt.

(5)Financial penalties received by the Adjudicator must be paid into the Consolidated Fund.

(6)The Secretary of State must make regulations—

(a)specifying the permitted maximum, or

(b)specifying how the permitted maximum is to be determined.

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Commencement Information

I37S. 58 in force at 6.4.2016 for specified purposes by S.I. 2016/321, reg. 4(d)

I38S. 58 in force at 21.7.2016 in so far as not already in force by S.I. 2016/532, reg. 3

59Recovery of investigation costsE+W

(1)The Adjudicator may require a pub-owning business to pay some or all of the costs of an investigation (including any costs incurred in exercising the enforcement powers) if satisfied that—

(a)the business has failed to comply with the Pubs Code, or

(b)the business has failed to follow a recommendation made under section 56.

(2)The Adjudicator may require a person to pay some or all of the costs of an investigation if—

(a)the Adjudicator carried out the investigation as a result of a complaint by the person, and

(b)the Adjudicator is satisfied that the complaint was vexatious or wholly without merit.

(3)A requirement to pay costs is imposed by giving written notice specifying—

(a)the grounds for imposing the requirement to pay costs,

(b)how much is to be paid,

(c)by when the costs are to be paid, and

(d)how they are to be paid.

(4)A person required to pay costs under this section may appeal to the High Court against—

(a)the imposition of the requirement, or

(b)the amount to which it relates.

(5)Costs required to be paid under this section are recoverable by the Adjudicator as a debt.

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Commencement Information

I39S. 59 in force at 21.7.2016 by S.I. 2016/532, reg. 3

Advice and guidance by AdjudicatorE+W

60AdviceE+W

The Adjudicator may give advice on any matter relating to the Pubs Code to—

(a)tied pub tenants,

(b)any organisation representing the interests of tied pub tenants,

(c)pub-owning businesses,

(d)any organisation representing the interests of pub-owning businesses.

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Commencement Information

I40S. 60 in force at 21.7.2016 by S.I. 2016/532, reg. 3

61GuidanceE+W

(1)The Adjudicator must publish guidance about—

(a)the criteria that the Adjudicator intends to adopt in deciding whether to carry out investigations,

(b)the practices and procedures that the Adjudicator intends to adopt in carrying out investigations,

(c)the criteria that the Adjudicator intends to adopt in choosing whether to use the enforcement powers and which ones, and

(d)the criteria that the Adjudicator intends to adopt in deciding the amount of any financial penalty under section 58.

(2)In addition, the Adjudicator may publish guidance about the practices and procedures that the Adjudicator intends to adopt in carrying out other functions.

(3)The Adjudicator may publish guidance about—

(a)the application of any provision of the Pubs Code;

(b)steps that pub-owning businesses need to take in order to comply with the Pubs Code;

(c)any other matter relating to the Pubs Code.

(4)Before publishing guidance under this section, the Adjudicator must consult any persons the Adjudicator thinks appropriate.

(5)The Adjudicator must publish the first guidance under subsection (1)(a), (b), (c) and (d) within 6 months beginning with the day on which section 41 comes into force.

(6)Where there is any guidance in force under this section, the Adjudicator must take account of it in carrying out functions.

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Commencement Information

I41S. 61 in force at 21.7.2016 by S.I. 2016/532, reg. 3

Adjudicator's reporting requirementsE+W

62Annual reportE+W

(1)After the end of each reporting period, the Adjudicator must prepare and publish a report describing what the Adjudicator has done during the period.

(2)The report must include a summary of—

(a)arbitrations conducted by the Adjudicator,

(b)investigations carried out by the Adjudicator,

(c)cases in which the Adjudicator has taken the enforcement measures mentioned in section 55, and

(d)cases in which the Adjudicator has exercised functions in relation to the offer of a market rent only option or the provision of parallel rent assessments.

(3)If the Adjudicator has made recommendations under section 56, the report must include an assessment of whether they have been followed.

(4)As well as publishing the report, the Adjudicator must send a copy to the Secretary of State.

(5)The Secretary of State must lay a copy of the report before Parliament.

(6)In this section “reporting period” means—

(a)the period beginning with the day on which section 41 comes into force and ending with the following 31 March, and

(b)each successive period of 12 months.

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Commencement Information

I42S. 62 in force at 21.7.2016 by S.I. 2016/532, reg. 3

Funding of AdjudicatorE+W

63Levy fundingE+W

(1)The Adjudicator may require pub-owning businesses to pay in each financial year a levy towards the Adjudicator's expenses.

(2)Before imposing a levy, the Adjudicator must obtain the Secretary of State's consent.

(3)In deciding the amount of a levy, the Adjudicator must take into account any sums received or expected to be received from other sources.

(4)The Adjudicator may take into account estimated as well as actual expenses.

(5)The Adjudicator may require different pub-owning businesses or different descriptions of pub-owning businesses to pay different amounts of levy, but any differences must be based on criteria broadly intended to reflect the expense and time that the Adjudicator expects to spend in dealing with matters relating to different pub-owning businesses.

(6)The Adjudicator must inform each pub-owning business of—

(a)the amount of any levy payable by the business,

(b)when payments are due, and

(c)how the levy is to be paid.

(7)A levy required to be paid under this section is recoverable by the Adjudicator as a debt.

(8)The Adjudicator must publish details of levies and an explanation of how the amounts have been decided (including any criteria under subsection (5)).

(9)If the Adjudicator has a surplus, the Adjudicator may repay some or all of it to pub-owning businesses.

(10)In subsection (9) “surplus” means money held by the Adjudicator at the end of a financial year less liabilities shown in the Adjudicator's statement of accounts for that financial year.

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Commencement Information

I43S. 63 in force at 2.5.2016 by S.I. 2016/532, reg. 2(b)

64Loans by Secretary of StateE+W

The Secretary of State may make loans to the Adjudicator.

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Commencement Information

I44S. 64 in force at 2.5.2016 by S.I. 2016/532, reg. 2(c)

Supervision of AdjudicatorE+W

65Review of Adjudicator and guidance from Secretary of StateE+W

(1)The Secretary of State must review the Adjudicator's performance for each review period.

(2)The first review period is the period beginning on the day on which section 41 comes into force and ending 2 years after the following 31 March.

(3)Subsequent review periods are each successive period of 3 years after the first review period.

(4)A review must, in particular, assess how effective the Adjudicator has been in enforcing the Pubs Code.

(5)A review may consider whether it would be desirable to amend or replace any regulations for the time being in force under section 51(2) or (7) or 58(6).

(6)As soon as practicable after a review period, the Secretary of State must—

(a)publish a report of the findings of the review for that period, and

(b)lay a copy of the report before Parliament.

(7)As a result of the findings of a review, the Secretary of State may give guidance to the Adjudicator about any matter relating to the Adjudicator's functions.

(8)The Adjudicator must take account of the guidance in carrying out functions.

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Commencement Information

I45S. 65 in force at 2.5.2016 by S.I. 2016/532, reg. 2(d)

66Abolition of AdjudicatorE+W

(1)The Secretary of State may by regulations abolish the Adjudicator—

(a)if, as a result of the findings of a review, the Secretary of State is satisfied that the Adjudicator has not been sufficiently effective in securing compliance with the Pubs Code to justify the continued existence of an Adjudicator,

(b)if, as a result of the findings of a review, the Secretary of State is satisfied that it is no longer necessary for there to be an Adjudicator to secure compliance with the Pubs Code, or

(c)if the Pubs Code is revoked and not replaced.

(2)The regulations may include provision transferring the Adjudicator's property, rights and liabilities.

(3)For the purpose of giving effect to the abolition of the Adjudicator, the regulations may amend or repeal this Part or any other enactment, including an enactment comprised in subordinate legislation within the meaning of the Interpretation Act 1978.

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Commencement Information

I46S. 66 in force at 21.7.2016 by S.I. 2016/532, reg. 3

67Information to Secretary of StateE+W

The Secretary of State may require the Adjudicator to provide information to assist the Secretary of State in carrying out functions under this Part.

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Commencement Information

I47S. 67 in force at 21.7.2016 by S.I. 2016/532, reg. 3

SupplementaryE+W

68“Tied pub”E+W

(1)In this Part a “tied pub” means premises in relation to which conditions A to D are met.

(2)Condition A is that the premises have a premises licence authorising the retail sale of alcohol for consumption on the premises.

(3)Condition B is that the main activity or one of the main activities carried on at the premises is the retail sale of alcohol to members of the public for consumption on the premises.

(4)Condition C is that the premises are occupied under a tenancy or licence.

(5)Condition D is that the tenant or licensee of the premises is subject to a contractual obligation that some or all of the alcohol to be sold at the premises is supplied by—

(a)the landlord or a person who is a group undertaking in relation to the landlord, or

(b)a person nominated by the landlord or by a person who is a group undertaking in relation to the landlord.

(6)But condition D is not met if the contractual obligation is a stocking requirement.

(7)The contractual obligation is a stocking requirement if—

(a)it relates only to beer or cider (or both) produced by the landlord or by a person who is a group undertaking in relation to the landlord,

(b)it does not require the tied pub tenant to procure the beer or cider from any particular supplier, and

(c)it does not prevent the tied pub tenant from selling at the premises beer or cider produced by a person not mentioned in paragraph (a) (whether or not it restricts such sales).

(8)In subsection (7), “beer” and “cider” have the same meanings as in the Alcoholic Liquor Duties Act 1979 (see section 1 of that Act).

(9)In this section—

  • alcohol” has the meaning given by section 191 of the Licensing Act 2003;

  • premises licence” has the same meaning as in that Act.

69“Pub-owning business”E+W

(1)A person is a “pub-owning business” for the purposes of this Part—

(a)in the period beginning with the day on which the Pubs Code comes into force and ending with the following 31 March, if immediately before the Pubs Code comes into force the person was the landlord of 500 or more tied pubs;

(b)in any subsequent financial year, if for a period of at least 6 months in the previous financial year the person was the landlord of 500 or more tied pubs.

(2)For the purposes of calculating the number of tied pubs of which a person (“L”) is the landlord, any tied pub the landlord of which is a person who is a group undertaking in relation to L is treated as a tied pub of which L is the landlord.

(3)A person not falling within subsection (1) and who is the landlord of a tied pub occupied by a tied pub tenant who has extended protection in relation to that tied pub is also a pub-owning business for the purposes of this Part in relation to that occupation.

(4)A tied pub tenant has “extended protection in relation to a tied pub” if—

(a)the tenant occupies the tied pub under a tenancy or licence at a time when the landlord is a person who is a pub-owning business by virtue of subsection (1), and

(b)before the end of that tenancy or licence the landlord is no longer such a person (whether because of a transfer of title or because the landlord ceases to fall within subsection (1)).

(5)But a tied pub tenant ceases to have “extended protection in relation to a tied pub” on the earlier of—

(a)the end of the tenancy or licence concerned, and

(b)the conclusion of the first rent assessment or assessment of money payable in lieu of rent to be provided after the landlord is no longer a person who is a pub-owning business by virtue of subsection (1).

(6)The Secretary of State may for the purposes of subsections (4) and (5) by regulations specify—

(a)when a tenancy or licence ends;

(b)when a rent assessment or assessment of money payable in lieu of rent is concluded.

(7)Nothing in sections 43 to 45 and sections 53 to 59 has effect in relation to a person who is a pub-owning business by virtue of subsection (3).

(8)The Secretary of State may by regulations specify circumstances in which a person who is a group undertaking in relation to a pub-owning business—

(a)is to be treated, or

(b)may if the Adjudicator so determines be treated,

as a pub-owning business (as well as or instead of any other person) for the purposes of any provision of or made under this Part.

(9)The Secretary of State may by regulations—

(a)amend subsection (1)(a) or (b) so as to substitute a different number of tied pubs, or a different period, from the number or period for the time being specified there,

(b)make provision in relation to the calculation of the number of tied pubs, whether by amending subsection (2) or otherwise.

70“Tied pub tenant”, “landlord”, “tenancy” and “licence”E+W

(1)In this Part a “tied pub tenant” means a person—

(a)who is the tenant or licensee of a tied pub, or

(b)who is a party to negotiations relating to the prospective tenancy of or licence to occupy premises which are, or on completion of the negotiations are expected to be, a tied pub.

(2)In this Part—

  • landlord” means—

    (a)

    in relation to a tied pub occupied under a tenancy, the immediate landlord, or

    (b)

    in relation to a tied pub occupied under a licence, the licensor;

  • licence” means a licence to occupy premises; and “licensee” is to be construed accordingly;

  • tenancy” means a tenancy created either immediately or derivatively out of the freehold, whether—

    (a)

    by a lease or sub-lease,

    (b)

    by an agreement for a lease or sub-lease,

    (c)

    by a tenancy agreement or sub-tenancy agreement, or

    (d)

    in pursuance of a provision of, or made under, an Act,

    and includes a tenancy at will.

(3)Where two or more persons jointly constitute either the landlord or the tied pub tenant, any reference in this Part to the landlord or to the tied pub tenant is a reference to both or all of the persons who jointly constitute the landlord or the tied pub tenant, as the case may require.

71Power to grant exemptions from Pubs CodeE+W

(1)The Secretary of State may by regulations provide that the Pubs Code does not, or specified provisions of the Pubs Code do not, apply in relation to—

(a)the dealings of pub-owning businesses—

(i)with tied pub tenants of a specified description, or

(ii)in relation to tied pubs of a specified description;

(b)the dealings of a specified pub-owning business or pub-owning businesses of a specified description—

(i)with their tied pub tenants or tied pub tenants of a specified description, or

(ii)in relation to their tied pubs or tied pubs of a specified description.

(2)Regulations under subsection (1) may, in particular, specify a description of pub-owning businesses or tied pub tenants by reference to—

(a)the nature of the tenancy or licence, or

(b)the nature of any other contractual agreement entered (or to be entered) into by the tied pub tenant with the pub-owning business, or a person nominated by that business, in connection with the tenancy or licence.

(3)The regulations may provide for circumstances in which a tied pub of a specified description is to be disregarded for the purposes of determining under section 69 whether a person is a pub-owning business.

(4)In this section “specified” means specified in regulations.

[F1571AReports on avoidanceE+W

(1)The Adjudicator must report to the Secretary of State on cases of pub-owning businesses engaging in business practices which are, in the Adjudicator's opinion, unfair business practices.

(2)A report under subsection (1) must include recommendations as to—

(a)actions to be taken to prevent pub-owning businesses from engaging in the business practices reported on, and

(b)how to provide redress for tied pub tenants affected by those practices.

(3)The Secretary of State must issue a statement within three months of receiving a report under subsection (1) setting out—

(a)action which the Secretary of State intends to take to protect tied pub tenants affected by the business practices reported on, or

(b)if the Secretary of State does not intend to take such action, the reasoning for that decision.

(4)In this section “unfair business practice” means a business practice which—

(a)is engaged in by a pub-owning business at any time after the passing of this Act in order to avoid, to the detriment of tied pub tenants, the operation of provision made by or under this Part, and

(b)is unfair.]

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Amendments (Textual)

72Interpretation: other provisionE+W

(1)In this Part—

  • the Adjudicator” means the Pubs Code Adjudicator;

  • arbitration agreement” has the same meaning as in section 6 of the Arbitration Act 1996;

  • financial year” means a period of 12 months beginning with 1 April and ending with 31 March;

  • group undertaking” has the meaning given by section 1161 of the Companies Act 2006;

  • independent assessor” has the meaning given by section 44;

  • “market rent” and “market rent only option” have the meanings given by section 43;

  • MRO procedure” has the meaning given by section 44;

  • MRO-compliant”, in relation to a tenancy or licence, has the meaning given by section 43;

  • “parallel rent assessment” has such meaning as may be prescribed in regulations made by the Secretary of State;

  • product or service tie” means a product tie or a service tie;

  • product tie” means any contractual obligation, other than a stocking requirement, of a tied pub tenant that a product to be sold at the tied pub must be supplied by—

    (a)

    the landlord of the tied pub or a person who is a group undertaking in relation to the landlord, or

    (b)

    a person nominated by the landlord or by a person who is group undertaking in relation to the landlord;

  • the Pubs Code” means the regulations under section 42;

  • service tie” means any contractual obligation of a tied pub tenant to receive a service supplied by—

    (a)

    the landlord of the tied pub or a person who is a group undertaking in relation to the landlord, or

    (b)

    a person nominated by the landlord or by a person who is a group undertaking in relation to the landlord;

  • stocking requirement” has the meaning given by section 68.

(2)In this Part, references to “rent”, in relation to a licence to occupy, are to be read as references to the fee payable in respect of the licence.

73Regulations under this PartE+W

(1)Subject to subsection (2), regulations under this Part are subject to affirmative resolution procedure.

(2)Regulations under section 66(1)(c) are subject to negative resolution procedure.

(3)If a draft of an instrument containing regulations under section 71 would, apart from this subsection, be treated for the purposes of the Standing Orders of either House of Parliament as a hybrid instrument, it is to proceed as if it were not such an instrument.

PART 5 E+W+S+N.I.Childcare and schools

74Funding for free of charge early years provisionE+W+S+N.I.

(1)In section 13A of the Childcare Act 2006 (supply of information: free of charge early years provision)—

(a)in subsection (3), after “provision” insert “ or for funding related to free of charge early years provision ”;

(b)in subsection (6), after “provision” insert “ or for funding related to free of charge early years provision ”.

(2)In section 13B of that Act (unauthorised disclosure of information received under section 13A), in subsection (2)(b), after “provision” insert “ or for funding related to free of charge early years provision ”.

75Exemption from requirement to register as early years providerE+W+S+N.I.

(1)In section 34(2) of the Childcare Act 2006 (requirement to register: other early years providers) for “three” substitute “ two ”.

(2)In section 40(1)(b) of that Act (duty to implement Early Years Foundation Stage) for “3” substitute “ 2 ”.

(3)In section 63(3) of that Act (applications for registration on the general register)—

(a)in the words before paragraph (a), for “three” substitute “ two ”;

(b)in paragraph (c) (as it has effect prior to the coming into force of paragraph 35(4) of Schedule 1 to the Education and Skills Act 2008) for “three” substitute “ two ”.

(4)In section 99(1)(b) of that Act (provision of information about young children: England) for “3” substitute “ 2 ”.

(5)In section 94(5)(b) of the Education and Skills Act 2008 (independent educational institution standards) for “three” substitute “ two ”.

76Childminding other than on domestic premisesE+W+S+N.I.

(1)Section 96 of the Childcare Act 2006 (meaning of early years and later years provision etc.) is amended in accordance with subsections (2) to (5).

(2)In subsection (4) (definition of “early years childminding”)—

(a)omit “on domestic premises”, and

(b)after “reward” insert “ , where at least half of the provision is on domestic premises ”.

(3)In subsection (5) (exception to subsection (4))—

(a)for “on domestic premises for reward” substitute “ which would otherwise fall within subsection (4) ”, and

(b)omit “on the premises”.

(4)In subsection (8) (definition of “later years childminding”)—

(a)omit “on domestic premises”, and

(b)after “reward” insert “ , where at least half of the provision is on domestic premises ”.

(5)In subsection (9) (exception to subsection (8))—

(a)for “on domestic premises for reward” substitute “ which would otherwise fall within subsection (8) ”, and

(b)omit “on the premises”.

(6)In section 34 of that Act (requirement to register: other early years providers)—

(a)after subsection (1) insert—

(1ZA)Subsection (1) does not apply in relation to early years provision—

(a)if it is early years childminding in respect of which the person providing it is required to be registered under section 33(1), or

(b)if it would be early years childminding but for section 96(5) and in respect of which the person providing it is required to be registered under subsection (1A)., and

(b)in subsection (1A) omit “on domestic premises”.

(7)In section 53 of that Act (requirement to register: other later years providers)—

(a)after subsection (1) insert—

(1ZA)Subsection (1) does not apply in relation to later years provision—

(a)if it is later years childminding in respect of which the person providing it is required to be registered under section 52(1), or

(b)if it would be later years childminding but for section 96(9) and in respect of which the person providing it is required to be registered under subsection (1A)., and

(b)in subsection (1A) omit “on domestic premises”.

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Commencement Information

I48S. 76 in force at 1.1.2016 by S.I. 2015/1329, reg. 6(a)

77Registration of childcare: premisesE+W+S+N.I.

Schedule 2 makes amendments for the purpose of removing the requirement for certain childcare providers to be registered under the Childcare Act 2006 in respect of each premises from which they operate.

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Annotations are used to give authority for changes and other effects on the legislation you are viewing and to convey editorial information. They appear at the foot of the relevant provision or under the associated heading. Annotations are categorised by annotation type, such as F-notes for textual amendments and I-notes for commencement information (a full list can be found in the Editorial Practice Guide). Each annotation is identified by a sequential reference number. For F-notes, M-notes and X-notes, the number also appears in bold superscript at the relevant location in the text. All annotations contain links to the affecting legislation.

Commencement Information

I49S. 77 in force at 15.6.2015 for specified purposes by S.I. 2015/1329, reg. 4

I50S. 77 in force at 1.1.2016 for specified purposes by S.I. 2015/1329, reg. 6(b)

PART 6 E+W+S+N.I.Education evaluation

78Assessments of effectivenessE+W+S+N.I.

(1)Part 3 of the Education and Skills Act 2008 is amended as follows.

(2)In section 87 (benefit and training information)—

(a)in each of subsections (2)(a) and (3)(a) omit “who has attained the age of 19”;

(b)in subsection (3)(c) omit “(whether before or after the individual attained the age of 19)”;

(c)in subsection (4)(a) omit “provided for persons who have attained the age of 19”;

(d)in subsection (4)(b) and (c) omit “such”, in each place.

(3)Omit section 91(6) (references to training or education do not include references to higher education).

(4)In consequence of the amendments made by subsections (1) to (3)—

(a)for the Part heading substitute “ Assessments of effectiveness of education and training etc ”;

(b)omit the italic heading before section 87.

79QualificationsE+W+S+N.I.

(1)After section 253 of the Apprenticeships, Skills, Children and Learning Act 2009 insert—

QualificationsE+W+S+N.I.

253AQualifications

(1)A person in England may, in prescribed circumstances, provide student information of a prescribed description to—

(a)the Secretary of State,

(b)an information collator,

(c)a prescribed person, or

(d)a person falling within a prescribed category.

(2)A person in Wales may, in prescribed circumstances, provide student information of a prescribed description to—

(a)the Welsh Ministers,

(b)an information collator,

(c)a prescribed person, or

(d)a person falling within a prescribed category.

(3)In subsection (2) “prescribed” means prescribed in regulations made by the Welsh Ministers.

(4)Subject to subsection (5)(a), information received under or by virtue of this section is not to be published in any form which identifies the individual to whom it relates.

(5)This section—

(a)does not affect any power to provide or publish information which exists apart from this section, and

(b)is subject to any express restriction on the provision of information imposed by another enactment.

(6)In this section—

  • information collator” means any body which, for the purposes of or in connection with functions of the Secretary of State or the Welsh Ministers, is responsible for collating or checking information relating to regulated qualifications or relevant qualifications;

  • regulated qualification” has the meaning given by section 130(1);

  • relevant qualification” has the meaning given by section 30(5) of the Education Act 1997;

  • student information” means information (whether obtained under this section or otherwise) relating to an individual who is seeking or has sought to obtain, or has obtained, a regulated qualification or a relevant qualification.

(2)In section 262 of the Apprenticeships, Skills, Children and Learning Act 2009 (orders and regulations)—

(a)in subsection (1) (orders and regulations to be made by statutory instrument etc) after “Part 3 or 4” insert “ , or section 253A ”, and

(b)in subsection (9) (statutory instruments which are subject to annulment in pursuance of a resolution of the National Assembly for Wales if containing regulations etc made by the Welsh Ministers) for “or 107” substitute “ , 107 or 253A ”.

80DestinationsE+W+S+N.I.

Before section 50 of the Further and Higher Education Act 1992 insert—

49BDestinations

(1)The Secretary of State may provide destination information to the governing body of an institution in England within the further education sector.

(2)The Welsh Ministers may provide destination information to the governing body of an institution in Wales within the further education sector.

(3)In this section “destination information”, in relation to an institution, means information which—

(a)relates to a former student of the institution, and

(b)includes information as to prescribed activities of the former student after leaving the institution.

(4)Regulations under subsection (3)(b) which prescribe activities as to which the Welsh Ministers may provide information are to be made by the Welsh Ministers.

(5)Subject to subsection (6)(a), information received under this section is not to be published in any form which identifies the individual to whom it relates.

(6)This section—

(a)does not affect any power to provide or publish information which exists apart from this section, and

(b)is subject to any express restriction on the provision of information imposed by another enactment.

PART 7 E+W+S+N.I.Companies: Transparency

Register of people with significant controlE+W+S+N.I.

81Register of people with significant controlE+W+S+N.I.

Schedule 3 amends the Companies Act 2006 to require companies to keep a register of people who have significant control over the company.

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Commencement Information

I51S. 81 in force at 26.5.2015 for specified purposes by S.I. 2015/1329, reg. 3(a)

I52S. 81 in force at 6.4.2016 for specified purposes and with application in accordance with S.I. 2015/2029, regs. 4(a), 5

I53S. 81 in force at 30.6.2016 in so far as not already in force by S.I. 2015/2029, regs. 4(a), 5

82Review of provisions about PSC registersE+W+S+N.I.

(1)The Secretary of State must before the end of the review period—

(a)carry out a review of Part 21A of the Companies Act 2006 (inserted by Schedule 3 to this Act) and of other provisions of the Companies Act 2006 inserted by this Act that relate to that Part, and

(b)prepare and publish a report setting out the conclusions of the review.

(2)The report must in particular—

(a)set out the objectives intended to be achieved by the provisions of the Companies Act 2006 mentioned in subsection (1)(a),

(b)assess the extent to which those objectives have been achieved, and

(c)assess whether those objectives remain appropriate and, if so, the extent to which they could be achieved in another way that imposed less regulation.

(3)The Secretary of State must lay the report before Parliament.

(4)The “review period” is the period of 3 years beginning with the day on which section 92 (duty to deliver confirmation statement instead of annual return) comes into force.

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Commencement Information

I54S. 82 in force at 6.4.2016 by S.I. 2015/2029, reg. 4(b)

Register of interests disclosedE+W+S+N.I.

83Amendment of section 813 of the Companies Act 2006E+W+S+N.I.

In section 813 of the Companies Act 2006 (register of interests disclosed: refusal of inspection or default in providing copy), in subsection (1), for the words “an order of the court” substitute “ section 812 ”.

Abolition of share warrants to bearerE+W+S+N.I.

84Abolition of share warrants to bearerE+W+S+N.I.

(1)In section 779 of the Companies Act 2006 (issue and effect of share warrant to bearer), after subsection (3) insert—

(4)No share warrant may be issued by a company (irrespective of whether its articles purport to authorise it to do so) on or after the day on which section 84 of the Small Business, Enterprise and Employment Act 2015 comes into force.

(2)For the heading of that section substitute “ Prohibition on issue of new share warrants and effect of existing share warrants ”.

(3)Schedule 4—

(a)makes provision for arrangements by which share warrants issued before this section comes into force are to be converted into registered shares or cancelled, and

(b)makes amendments consequential on that provision.

85Amendment of company's articles to reflect abolition of share warrantsE+W+S+N.I.

(1)This section applies in the case of a company limited by shares if, immediately before the day on which section 84 comes into force, the company's articles contain provision authorising the company to issue share warrants (“the offending provision”).

(2)The company may amend its articles for the purpose of removing the offending provision—

(a)without having passed a special resolution as required by section 21 of the Companies Act 2006;

(b)without complying with any provision for entrenchment which is relevant to the offending provision (see section 22 of that Act).

(3)Section 26 of the Companies Act 2006 sets out the duty of a company to send the registrar a copy of its articles where they have been amended.

(4)Expressions defined for the purposes of the Companies Act 2006 have the same meaning in this section as in that Act.

86Review of section 84E+W+S+N.I.

(1)The Secretary of State must, as soon as reasonably practicable after the end of the period of 5 years beginning with the day on which section 84 comes into force—

(a)carry out a review of section 84, and

(b)prepare and publish a report setting out the conclusions of the review.

(2)The report must in particular—

(a)set out the objectives intended to be achieved by the section, and

(b)assess the extent to which those objectives have been achieved.

(3)The Secretary of State must lay the report before Parliament.

Prospective

Corporate directorsE+W+S+N.I.

87Requirement for all company directors to be natural personsE+W+S+N.I.

(1)The Companies Act 2006 is amended as follows.

(2)Omit section 155 (companies required to have at least one director who is a natural person).

(3)In section 156 (direction requiring company to make appointment)—

(a)in subsection (1), for “section 155” substitute “ provision by virtue of section 156B(4) ”;

(b)in subsection (4), for “of section 154 or 155” substitute “ as mentioned in subsection (1) ”.

(4)Before section 157 (and after the preceding cross-heading) insert—

156AEach director to be a natural person

(1)A person may not be appointed a director of a company unless the person is a natural person.

(2)Subsection (1) does not prohibit the holding of the office of director by a natural person as a corporation sole or otherwise by virtue of an office.

(3)An appointment made in contravention of this section is void.

(4)Nothing in this section affects any liability of a person under any provision of the Companies Acts or any other enactment if the person—

(a)purports to act as director, or

(b)acts as shadow director,

although the person could not, by virtue of this section, be validly appointed as a director.

(5)This section has effect subject to section 156B (power to provide for exceptions from requirement that each director be a natural person).

(6)If a purported appointment is made in contravention of this section, an offence is committed by—

(a)the company purporting to make the appointment,

(b)where the purported appointment is of a body corporate or a firm that is a legal person under the law by which it is governed, that body corporate or firm, and

(c)every officer of a person falling within paragraph (a) or (b) who is in default.

For this purpose a shadow director is treated as an officer of a company.

(7)A person guilty of an offence under this section is liable on summary conviction—

(a)in England and Wales, to a fine;

(b)in Scotland or Northern Ireland, to a fine not exceeding level 5 on the standard scale.

156BPower to provide for exceptions from requirement that each director be a natural person

(1)The Secretary of State may make provision by regulations for cases in which a person who is not a natural person may be appointed a director of a company.

(2)The regulations must specify the circumstances in which, and any conditions subject to which, the appointment may be made.

(3)Provision made by virtue of subsection (2) may in particular include provision that an appointment may be made only with the approval of a regulatory body specified in the regulations.

(4)The regulations must include provision that a company must have at least one director who is a natural person (and for this purpose the requirement is met if the office of director is held by a natural person as a corporation sole or otherwise by virtue of an office).

(5)Regulations under this section may amend section 164 so as to require particulars relating to exceptions to be contained in a company's register of directors.

(6)The regulations may make different provision for different parts of the United Kingdom.

This is without prejudice to the general power to make different provision for different cases.

(7)Regulations under this section are subject to affirmative resolution procedure.

156CExisting director who is not a natural person

(1)In this section “the relevant day” is the day after the end of the period of 12 months beginning with the day on which section 156A comes into force.

(2)Where—

(a)a person appointed a director of a company before section 156A comes into force is not a natural person, and

(b)the case is not one excepted from that section by regulations under section 156B,

that person ceases to be a director on the relevant day.

(3)The company must—

(a)make the necessary consequential alteration in its register of directors, and

(b)give notice to the registrar of the change in accordance with section 167.

(4)If an election is in force under section 167A in respect of the company, the company must, in place of doing the things required by subsection (3), deliver to the registrar in accordance with section 167D the information of which the company would otherwise have been obliged to give notice under subsection (3).

(5)If it appears to the registrar that—

(a)a notice should have, but has not, been given in accordance with subsection (3)(b), or

(b)information should have, but has not, been delivered in accordance with subsection (4),

the registrar must place a note in the register recording the fact.

88Review of section 87E+W+S+N.I.

(1)The Secretary of State must, before the end of each review period—

(a)carry out a review of section 87, and

(b)prepare and publish a report setting out the conclusions of the review.

(2)The report must in particular—

(a)set out the objectives intended to be achieved by the section,

(b)assess the extent to which those objectives have been achieved, and

(c)assess whether those objectives remain appropriate and, if so, the extent to which they could be achieved in another way which imposed less regulation.

(3)The Secretary of State must lay the report before Parliament.

(4)Each of the following is a review period for the purposes of this section—

(a)the period of 5 years beginning with the day on which section 87 comes into force (whether wholly or partly), and

(b)each successive period of 5 years.

Shadow directorsE+W+S+N.I.

89Application of directors' general duties to shadow directorsE+W+S+N.I.

(1)In section 170 of the Companies Act 2006 (scope and nature of general duties of directors) for subsection (5) substitute—

(5)The general duties apply to a shadow director of a company where and to the extent that they are capable of so applying.

(2)The Secretary of State may by regulations make provision about the application of the general duties of directors to shadow directors.

(3)The regulations may, in particular, make provision—

(a)for prescribed general duties of directors to apply to shadow directors with such adaptations as may be prescribed;

(b)for prescribed general duties of directors not to apply to shadow directors.

(4)In this section—

  • director” and “shadow director” have the same meanings as in the Companies Act 2006;

  • general duties of directors” means the duties specified in sections 171 to 177 of that Act;

  • prescribed” means prescribed in regulations.

(5)Regulations under this section are subject to affirmative resolution procedure.

90Shadow directors: definitionE+W+S+N.I.

(1)In section 251 of the Insolvency Act 1986 (expressions used generally), in the definition of “shadow director”, for the words from “(but” to the end substitute , but so that a person is not deemed a shadow director by reason only that the directors act—

(a)on advice given by that person in a professional capacity;

(b)in accordance with instructions, a direction, guidance or advice given by that person in the exercise of a function conferred by or under an enactment (within the meaning given by section 1293 of the Companies Act 2006);

(c)in accordance with guidance or advice given by that person in that person's capacity as a Minister of the Crown (within the meaning of the Ministers of the Crown Act 1975).

(2)In section 22(5) of the Company Directors Disqualification Act 1986 (definition of “shadow director”) for the words from “(but” to the end substitute “, but so that a person is not deemed a shadow director by reason only that the directors act—

(a)on advice given by that person in a professional capacity;

(b)in accordance with instructions, a direction, guidance or advice given by that person in the exercise of a function conferred by or under an enactment;

(c)in accordance with guidance or advice given by that person in that person's capacity as a Minister of the Crown (within the meaning of the Ministers of the Crown Act 1975)”.

(3)In section 251(2) of the Companies Act 2006 (definition of “shadow director”) for the words “on advice given by him in a professional capacity” substitute

(a)on advice given by that person in a professional capacity;

(b)in accordance with instructions, a direction, guidance or advice given by that person in the exercise of a function conferred by or under an enactment;

(c)in accordance with guidance or advice given by that person in that person's capacity as a Minister of the Crown (within the meaning of the Ministers of the Crown Act 1975).

(4)In section 1293 of the Companies Act 2006 (meaning of “enactment”) after paragraph (a) insert—

(aa)an enactment contained in, or in an instrument made under, a Measure or Act of the National Assembly for Wales,.

91Shadow directors: provision for Northern IrelandE+W+S+N.I.

(1)In Article 5(1) of the Insolvency (Northern Ireland) Order 1989 (S.I. 1989/2405 (N.I. 19)) (interpretation), in the definition of “shadow director”, for the words from “(but” to the end substitute , but so that a person is not deemed a shadow director by reason only that the directors act—

(a)on advice given by that person in a professional capacity;

(b)in accordance with instructions, a direction, guidance or advice given by that person in the exercise of a function conferred by or under a statutory provision;

(c)in accordance with guidance or advice given by that person in that person's capacity as a Minister of the Crown (within the meaning of the Ministers of the Crown Act 1975).

(2)In Article 2(2) of the Company Directors Disqualification (Northern Ireland) Order 2002 (S.I. 2002/3150 (N.I. 4)) (interpretation), in the definition of “shadow director”, for the words from “(but” to the end substitute , but so that a person is not deemed a shadow director by reason only that the directors act—

(a)on advice given by that person in a professional capacity;

(b)in accordance with instructions, a direction, guidance or advice given by that person in the exercise of a function conferred by or under a statutory provision;

(c)in accordance with guidance or advice given by that person in that person's capacity as a Minister of the Crown (within the meaning of the Ministers of the Crown Act 1975).

PART 8 E+W+S+N.I.Company filing requirements

Annual return reformE+W+S+N.I.

92Duty to deliver confirmation statement instead of annual returnE+W+S+N.I.

For Part 24 of the Companies Act 2006 (annual return) substitute—

PART 24 E+W+S+N.I.Annual confirmation of accuracy of information on register
853ADuty to deliver confirmation statements

(1)Every company must, before the end of the period of 14 days after the end of each review period, deliver to the registrar—

(a)such information as is necessary to ensure that the company is able to make the statement referred to in paragraph (b), and

(b)a statement (a “confirmation statement”) confirming that all information required to be delivered by the company to the registrar in relation to the confirmation period concerned under any duty mentioned in subsection (2) either—

(i)has been delivered, or

(ii)is being delivered at the same time as the confirmation statement.

(2)The duties are—

(a)any duty to notify a relevant event (see section 853B);

(b)any duty under sections 853C to 853I.

(3)In this Part “confirmation period”—

(a)in relation to a company's first confirmation statement, means the period beginning with the day of the company's incorporation and ending with the date specified in the statement (“the confirmation date”);

(b)in relation to any other confirmation statement of a company, means the period beginning with the day after the confirmation date of the last such statement and ending with the confirmation date of the confirmation statement concerned.

(4)The confirmation date of a confirmation statement must be no later than the last day of the review period concerned.

(5)For the purposes of this Part, each of the following is a review period—

(a)the period of 12 months beginning with the day of the company's incorporation;

(b)each period of 12 months beginning with the day after the end of the previous review period.

(6)But where a company delivers a confirmation statement with a confirmation date which is earlier than the last day of the review period concerned, the next review period is the period of 12 months beginning with the day after the confirmation date.

(7)For the purpose of making a confirmation statement, a company is entitled to assume that any information has been properly delivered to the registrar if it has been delivered within the period of 5 days ending with the date on which the statement is delivered.

(8)But subsection (7) does not apply in a case where the company has received notice from the registrar that such information has not been properly delivered.

853BDuties to notify a relevant event

The following duties are duties to notify a relevant event—

(a)the duty to give notice of a change in the address of the company's registered office (see section 87);

(b)in the case of a company in respect of which an election is in force under section 128B (election to keep membership information on central register), the duty to deliver anything as mentioned in section 128E;

(c)the duty to give notice of a change as mentioned in section 167 (change in directors or in particulars required to be included in register of directors or register of directors' residential addresses);

(d)in the case of a company in respect of which an election is in force under section 167A (election to keep information in register of directors or register of directors' residential addresses on central register), the duty to deliver anything as mentioned in section 167D;

(e)in the case of a private company with a secretary or a public company, the duty to give notice of a change as mentioned in section 276 (change in secretary or joint secretaries or in particulars required to be included in register of secretaries);

(f)in the case of a private company with a secretary in respect of which an election is in force under section 279A (election to keep information in register of secretaries on central register), the duty to deliver anything as mentioned in section 279D;

(g)in the case of a company in respect of which an election is in force under section 790X (election to keep information in PSC register on central register), the duty to deliver anything as mentioned in section 790ZA;

(h)in the case of a company which, in accordance with regulations under section 1136, keeps any company records at a place other than its registered office, any duty under the regulations to give notice of a change in the address of that place.

853CDuty to notify a change in company's principal business activities

(1)This section applies where—

(a)a company makes a confirmation statement, and

(b)there has been a change in the company's principal business activities during the confirmation period concerned.

(2)The company must give notice to the registrar of the change at the same time as it delivers the confirmation statement.

(3)The information as to the company's new principal business activities may be given by reference to one or more categories of any prescribed system of classifying business activities.

853DDuty to deliver statement of capital

(1)This section applies where a company having a share capital makes a confirmation statement.

(2)The company must deliver a statement of capital to the registrar at the same time as it delivers the confirmation statement.

(3)Subsection (2) does not apply if there has been no change in any of the matters required to be dealt with by the statement of capital since the last such statement was delivered to the registrar.

(4)The statement of capital must state with respect to the company's share capital at the confirmation date—

(a)the total number of shares of the company,

(b)the aggregate nominal value of those shares,

(c)the aggregate amount (if any) unpaid on those shares (whether on account of their nominal value or by way of premium), and

(d)for each class of shares—

(i)prescribed particulars of the rights attached to the shares,

(ii)the total number of shares of that class, and

(iii)the aggregate nominal value of shares of that class.

853EDuty to notify trading status of shares

(1)This section applies where a company having a share capital makes a confirmation statement.

(2)The company must deliver to the registrar a statement dealing with the matters mentioned in subsection (4) at the same time as it delivers the confirmation statement.

(3)Subsection (2) does not apply if and to the extent that the last statement delivered to the registrar under this section applies equally to the confirmation period concerned.

(4)The matters are—

(a)whether any of the company's shares were, at any time during the confirmation period concerned, shares admitted to trading on a relevant market or on any other market which is outside the United Kingdom, and

(b)if so, whether both of the conditions mentioned in subsection (5) were satisfied throughout the confirmation period concerned.

(5)The conditions are that—

(a)there were shares of the company which were shares admitted to trading on a relevant market;

(b)the company was a DTR5 issuer.

(6)In this Part—

  • DTR5 issuer” means an issuer to which Chapter 5 of the Disclosure Rules and Transparency Rules sourcebook made by the Financial Conduct Authority (as amended or replaced from time to time) applies;

  • relevant market” means any of the markets mentioned in article 4(1) of the Financial Services and Markets Act 2000 (Prescribed Markets and Qualifying Investments) Order 2001.

853FDuty to deliver shareholder information: non-traded companies

(1)This section applies where—

(a)a non-traded company makes a confirmation statement, and

(b)there is no election in force under section 128B in respect of the company.

(2)A “non-traded company” is a company none of whose shares were, at any time during the confirmation period concerned, shares admitted to trading on a relevant market or on any other market which is outside the United Kingdom.

(3)The company must deliver the information falling within subsection (5) to the registrar at the same time as it delivers the confirmation statement.

(4)Subsection (3) does not apply if and to the extent that the information most recently delivered to the registrar under this section applies equally to the confirmation period concerned.

(5)The information is—

(a)the name (as it appears in the company's register of members) of every person who was at any time during the confirmation period a member of the company,

(b)the number of shares of each class held at the end of the confirmation date concerned by each person who was a member of the company at that time,

(c)the number of shares of each class transferred during the confirmation period concerned by or to each person who was a member of the company at any time during that period, and

(d)the dates of registration of those transfers.

(6)The registrar may impose requirements about the form in which information of the kind mentioned in subsection (5)(a) is delivered for the purpose of enabling the entries on the register relating to any given person to be easily found.

853GDuty to deliver shareholder information: certain traded companies

(1)This section applies where a traded company makes a confirmation statement.

(2)A “traded company” is a company any of whose shares were, at any time during the confirmation period concerned, shares admitted to trading on a relevant market or on any other market which is outside the United Kingdom.

(3)But a company is not a traded company if throughout the confirmation period concerned—

(a)there were shares of the company which were shares admitted to trading on a relevant market, and

(b)the company was a DTR5 issuer.

(4)The company must deliver the information falling within subsection (6) to the registrar at the same time as it delivers the confirmation statement.

(5)Subsection (4) does not apply if and to the extent the information most recently delivered to the registrar under this section applies equally to the confirmation period concerned.

(6)The information is—

(a)the name and address (as they appear in the company's register of members) of each person who, at the end of the confirmation date concerned, held at least 5% of the issued shares of any class of the company, and

(b)the number of shares of each class held by each such person at that time.

853HDuty to deliver information about exemption from Part 21A

(1)This section applies where a company—

(a)which is not a DTR5 issuer, and

(b)to which Part 21A does not apply (information about people with significant control, see section 790B),

makes a confirmation statement.

(2)The company must deliver to the registrar a statement of the fact that it is a company to which Part 21A does not apply at the same time as it delivers the confirmation statement.

(3)Subsection (2) does not apply if the last statement delivered to the registrar under this section applies equally to the confirmation period concerned.

853IDuty to deliver information about people with significant control

(1)This section applies where—

(a)a company to which Part 21A (information about people with significant control) applies makes a confirmation statement, and

(b)there is no election in force under section 790X in respect of the company.

(2)The company must deliver the information stated in its PSC register to the registrar at the same time as it delivers the confirmation statement.

(3)Subsection (2) does not apply if and to the extent that the information most recently delivered to the registrar under this section applies equally to the confirmation period concerned.

(4)PSC register” has the same meaning as in Part 21A (see section 790C).

853JPower to amend duties to deliver certain information

(1)The Secretary of State may by regulations make provision about the duties on a company in relation to the delivery of information falling within section 853E(4), 853F(5), 853G(6), 853H(2) or 853I(2) (referred to in this section as “relevant information”).

(2)The regulations may, in particular, make provision requiring relevant information to be delivered—

(a)on such occasions as may be prescribed;

(b)at such intervals as may be prescribed.

(3)The regulations may amend or repeal the provisions of sections 853A, 853B and 853E to 853I.

(4)The regulations may provide—

(a)that where a company fails to comply with any duty to deliver relevant information an offence is committed by—

(i)the company,

(ii)every director of the company,

(iii)in the case of a private company with a secretary or a public company, every secretary of the company, and

(iv)every other officer of the company who is in default;

(b)that a person guilty of such an offence is liable on summary conviction—

(i)in England and Wales, to a fine and, for continued contravention, a daily default fine not exceeding the greater of £500 and one-tenth of level 4 on the standard scale;

(ii)in Scotland or Northern Ireland, to a fine not exceeding level 5 on the standard scale and, for continued contravention, a daily default fine not exceeding one-tenth of level 5 on the standard scale;

(c)that, in the case of continued contravention, an offence is also committed by every officer of the company who did not commit an offence under provision made under paragraph (a) in relation to the initial contravention but who is in default in relation to the continued contravention;

(d)that a person guilty of such an offence is liable on summary conviction—

(i)in England and Wales, to a fine not exceeding the greater of £500 and one-tenth of level 4 on the standard scale for each day on which the contravention continues and the person is in default;

(ii)in Scotland or Northern Ireland, to a fine not exceeding one-tenth of level 5 on the standard scale for each day on which the contravention continues and the person is in default.

(5)The regulations may provide that, for the purposes of any provision made under subsection (4), a shadow director is to be treated as a director.

(6)Regulations under this section are subject to affirmative resolution procedure.

853KConfirmation statements: power to make further provision by regulations

(1)The Secretary of State may by regulations make further provision as to the duties to deliver information to the registrar to which a confirmation statement is to relate.

(2)The regulations may—

(a)amend or repeal the provisions of sections 853A to 853I, and

(b)provide for exceptions from the requirements of those sections as they have effect from time to time.

(3)Regulations under this section which provide that a confirmation statement must relate to a duty to deliver information not for the time being mentioned in section 853A(2) are subject to affirmative resolution procedure.

(4)Any other regulations under this section are subject to negative resolution procedure.

853LFailure to deliver confirmation statement

(1)If a company fails to deliver a confirmation statement before the end of the period of 14 days after the end of a review period an offence is committed by—

(a)the company,

(b)every director of the company,

(c)in the case of a private company with a secretary or a public company, every secretary of the company, and

(d)every other officer of the company who is in default.

For this purpose a shadow director is treated as a director.

(2)A person guilty of an offence under subsection (1) is liable on summary conviction—

(a)in England and Wales to a fine, and, for continued contravention, a daily default fine not exceeding the greater of £500 and one-tenth of level 4 on the standard scale;

(b)in Scotland or Northern Ireland, to a fine not exceeding level 5 on the standard scale and, for continued contravention, a daily default fine not exceeding one-tenth of level 5 on the standard scale.

(3)The contravention continues until such time as a confirmation statement specifying a confirmation date no later than the last day of the review period concerned is delivered by the company to the registrar.

(4)It is a defence for a director or secretary charged with an offence under subsection (1)(b) or (c) to prove that the person took all reasonable steps to avoid the commission or continuation of the offence.

(5)In the case of continued contravention, an offence is also committed by every officer of the company who did not commit an offence under subsection (1) in relation to the initial contravention but who is in default in relation to the continued contravention.

(6)A person guilty of an offence under subsection (5) is liable on summary conviction—

(a)in England and Wales, to a fine not exceeding the greater of £500 and one-tenth of level 4 on the standard scale for each day on which the contravention continues and the person is in default;

(b)in Scotland or Northern Ireland, to a fine not exceeding one-tenth of level 5 on the standard scale for each day on which the contravention continues and the person is in default.

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Commencement Information

I55S. 92 in force at 1.5.2016 for specified purposes by S.I. 2016/321, reg. 5 (with Sch. para. 5)

I56S. 92 in force at 30.6.2016 in so far as not already in force by S.I. 2016/321, reg. 6(a) (with Sch. paras. 7-11)

93Section 92: related amendmentsE+W+S+N.I.

(1)The Companies Act 2006 is amended as follows.

(2)In section 9 (registration documents), in subsection (5)—

(a)omit the “and” after paragraph (a), and

(b)after paragraph (b) insert ; and

(c)a statement of the type of company it is to be and its intended principal business activities.

(3)Also in section 9, after subsection (5) insert—

(5A)The information as to the company's type must be given by reference to the classification scheme prescribed for the purposes of this section.

(5B)The information as to the company's intended principal business activities may be given by reference to one or more categories of any prescribed system of classifying business activities.

(4)In section 108 (statement of capital required where company re-registering as a limited company already has share capital), in subsection (2), for paragraph (b) substitute—

(b)(if different) the last statement of capital sent by the company.

(5)In section 1078 (documents subject to Directive disclosure requirements), in subsection (2)—

(a)for the heading “Accounts, reports and returns” substitute “ Accounts and reports etc ”, and

(b)under that heading, for “The company's annual return” substitute “ Any confirmation statement delivered by the company under section 853A. ”

(6)In section 1169 (dormant companies), in subsection (3)(b)(iv), for “an annual return” substitute “ a confirmation statement ”.

(7)In Schedule 8 (index of defined expressions)—

(a)omit the entries for “annual return”, “non-traded company” and “return period”, and

(b)in the appropriate places insert—

confirmation date (in Part 24)section 853A(3),
confirmation period (in Part 24)section 853A(3),
confirmation statementsection 853A(1),
DTR5 issuer (in Part 24)section 853E(6),
relevant market (in Part 24)section 853E(6), and
review period (in Part 24)section 853A(5) and (6).
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Commencement Information

I57S. 93(1)(2)(4)-(7) in force at 30.6.2016 by S.I. 2016/321, reg. 6(b)

I58S. 93(3) in force at 1.1.2016 for specified purposes by S.I. 2015/2029, reg. 3(b)

I59S. 93(3) in force at 30.6.2016 in so far as not already in force by S.I. 2016/321, reg. 6(b)

Additional information on the registerE+W+S+N.I.

94Option for companies to keep information on central registerE+W+S+N.I.

Schedule 5 amends the Companies Act 2006 to give private companies the option of keeping certain information on the register kept by the registrar instead of keeping it on their own registers.

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Commencement Information

I60S. 94 in force at 30.6.2016 by S.I. 2016/321, reg. 6(c)

95Recording of optional information on registerE+W+S+N.I.

(1)After section 1084 of the Companies Act 2006 insert—

1084ARecording of optional information on register

(1)The Secretary of State may make provision by regulations authorising a company or other body to deliver optional information of a prescribed description to the registrar.

(2)In this section “optional information”, in relation to a company or other body, means information about the company or body which, but for the regulations, the company or body would not be obliged or authorised under any enactment to deliver to the registrar.

(3)The regulations may, in particular, include provision—

(a)imposing requirements on a company or other body in relation to keeping any of its optional information recorded on the register up to date;

(b)about the consequences of a company or other body failing to do so.

(4)Regulations under this section are subject to affirmative resolution procedure.

(2)In section 1059A of that Act (scheme of Part 35), in subsection (2), after the entry in the list for section 1083 insert— “ section 1084A (recording optional information on register), ”.

Information about dates of birthE+W+S+N.I.

96Protection of information about a person's date of birthE+W+S+N.I.

(1)Part 35 of the Companies Act 2006 (the registrar of companies) is amended as follows.

(2)In section 1087 (material not available for public inspection), in subsection (1), after paragraph (d) insert—

(da)information falling within section 1087A(1) (information about a person's date of birth);.

(3)After that section insert—

1087AInformation about a person's date of birth

(1)Information falls within this subsection at any time (“the relevant time”) if—

(a)it is DOB information,

(b)it is contained in a document delivered to the registrar that is protected at the relevant time as regards that information,

(c)the document is one in which such information is required to be stated, and

(d)if the document has more than one part, the part in which the information is contained is a part in which such information is required to be stated.

(2)“DOB information” is information as to the day of the month (but not the month or year) on which a relevant person was born.

(3)A “relevant person” is an individual—

(a)who is a director of a company, or

(b)whose particulars are stated in a company's PSC register as a registrable person in relation to that company (see Part 21A).

(4)A document delivered to the registrar is “protected” at any time unless—

(a)it is an election period document,

(b)subsection (7) applies to it at the time, or

(c)it was registered before this section comes into force.

(5)As regards DOB information about a relevant person in his or her capacity as a director of the company, each of the following is an “election period document”—

(a)a statement of the company's proposed officers delivered under section 9 in circumstances where the subscribers gave notice of election under section 167A (election to keep information on central register) in respect of the company's register of directors when the statement was delivered;

(b)a document delivered by the company under section 167D (duty to notify registrar of changes while election in force).

(6)As regards DOB information about a relevant person in his or her capacity as someone whose particulars are stated in the company's PSC register, each of the following is an “election period document”—

(a)a statement of initial significant control delivered under section 9 in circumstances where the subscribers gave notice of election under section 790X in respect of the company when the statement was delivered;

(b)a document containing a statement or updated statement delivered by the company under section 790X(6)(b) or (7) (statement accompanying notice of election made after incorporation);

(c)a document delivered by the company under section 790ZA (duty to notify registrar of changes while election in force).

(7)This subsection applies to a document if—

(a)the DOB information relates to the relevant person in his or her capacity as a director of the company,

(b)an election under section 167A is or has previously been in force in respect of the company's register of directors,

(c)the document was delivered to the registrar at some point before that election took effect,

(d)the relevant person was a director of the company when that election took effect, and

(e)the document was either—

(i)a statement of proposed officers delivered under section 9 naming the relevant person as someone who was to be a director of the company, or

(ii)notice given under section 167 of the relevant person having become a director of the company.

(8)Information about a person does not cease to fall within subsection (1) when he or she ceases to be a relevant person and, to that extent, references in this section to a relevant person include someone who used to be a relevant person.

(9)Nothing in subsection (1) obliges the registrar to check other documents or (as the case may be) other parts of the document to ensure the absence of DOB information.

1087BDisclosure of DOB information

(1)The registrar must not disclose restricted DOB information unless—

(a)the same information about the relevant person (whether in the same or a different capacity) is made available by the registrar for public inspection as a result of being contained in another description of document in relation to which no restriction under section 1087 applies (see subsection (2) of that section), or

(b)disclosure of the information by the registrar is permitted by subsection (2) or another provision of this Act.

(2)The registrar may disclose restricted DOB information—

(a)to a public authority specified for the purposes of this subsection by regulations made by the Secretary of State, or

(b)to a credit reference agency.

(3)Subsections (3) to (8) of section 243 (permitted use or disclosure of directors' residential addresses etc by the registrar) apply for the purposes of subsection (2) as for the purposes of that section (reading references there to protected information as references to restricted DOB information).

(4)This section does not apply to restricted DOB information about a relevant person in his or her capacity as someone whose particulars are stated in the company's PSC register if an application under regulations made under section 790ZG (regulations for protecting PSC particulars) has been granted with respect to that information and not been revoked.

(5)Restricted DOB information” means information falling within section 1087A(1).

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Commencement Information

I61S. 96 in force at 26.5.2015 for specified purposes by S.I. 2015/1329, reg. 3(b)

I62S. 96 in force at 10.10.2015 for specified purposes by S.I. 2015/1689, reg. 4(a)

I63S. 96 in force at 30.6.2016 in so far as not already in force by S.I. 2016/321, reg. 6(d)

Statements of capital etcE+W+S+N.I.

97Contents of statements of capitalE+W+S+N.I.

Schedule 6 amends the Companies Act 2006 to alter the content of statements of capital required under various provisions of that Act.

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Annotations are used to give authority for changes and other effects on the legislation you are viewing and to convey editorial information. They appear at the foot of the relevant provision or under the associated heading. Annotations are categorised by annotation type, such as F-notes for textual amendments and I-notes for commencement information (a full list can be found in the Editorial Practice Guide). Each annotation is identified by a sequential reference number. For F-notes, M-notes and X-notes, the number also appears in bold superscript at the relevant location in the text. All annotations contain links to the affecting legislation.

Commencement Information

I64S. 97 in force at 30.6.2016 by S.I. 2016/321, reg. 6(e) (with Sch. para. 11)

98Public companies: information about aggregate amount paid up on sharesE+W+S+N.I.

(1)The Companies Act 2006 is amended as follows.

(2)In section 94 (application for re-registration as a public company), in subsection (2)—

(a)omit the “and” at the end of paragraph (c), and

(b)after paragraph (d) insert ; and

(e)a statement of the aggregate amount paid up on the shares of the company on account of their nominal value.

(3)In section 762 (procedure for a public company to obtain a trading certificate), in subsection (1)—

(a)omit the “and” at the end of paragraph (c), and

(b)after paragraph (d), insert , and

(e)be accompanied by a statement of the aggregate amount paid up on the shares of the company on account of their nominal value.

(4)In section 1078 (documents subject to Directive disclosure requirements)—

(a)in subsection (3), under the heading “Share capital”, after the entry numbered 11 insert—

12Any statement delivered under section 762(1)(e) (statement of the aggregate amount paid up on shares on account of their nominal value)., and

(b)after subsection (3) insert—

(3A)In the case of a private company which applies to re-register as a public company, the statement delivered under section 94(2)(e) (statement of the aggregate amount paid up on shares on account of their nominal value).

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Commencement Information

I65S. 98 in force at 30.6.2016 by S.I. 2016/321, reg. 6(f)

Registered office disputesE+W+S+N.I.

99Address of company registered officeE+W+S+N.I.

(1)After section 1097 of the Companies Act 2006 insert—

1097ARectification of register relating to company registered office

(1)The Secretary of State may make provision by regulations requiring the registrar, on application, to change the address of a company's registered office if the registrar is satisfied that the company is not authorised to use the address.

(2)The applicant and the company must provide such information as the registrar may require for the purposes of determining such an application.

(3)The regulations may make provision as to—

(a)who may make an application,

(b)the information to be included in and documents to accompany an application,

(c)the notice to be given of an application and of its outcome,

(d)the period in which objections to an application may be made,

(e)how an application is to be determined, including in particular the evidence, or descriptions of evidence, which the registrar may without further enquiry rely on to be satisfied that the company is authorised to use the address,

(f)the referral of the application, or any question relating to the application, by the registrar for determination by the court,

(g)the registrar requiring a company to provide an address to be the company's registered office,

(h)the nomination by the registrar of an address (a “default address”) to be the company's registered office,

(i)the effect of the registration of any change.

(4)Subject to further provision which may be made by virtue of subsection (3)(i), the change takes effect upon it being registered by the registrar, but until the end of the period of 14 days beginning with the date on which it is registered a person may validly serve any document on the company at the address previously registered.

(5)Provision made by virtue of subsection (3)(i) may in particular include provision, in relation to the registration of a default address—

(a)for the suspension, for up to 28 days beginning with the date on which it is registered, of duties of the company under this Act relating to the inspection of company records or to the provision, disclosure or display of information,

(b)that the default address may not be used for the purpose of keeping the company's registers, indexes or other documents,

(c)for there to be no requirement that documents delivered to the default address for the company must be opened,

(d)for the collection of such documents by the company, or the forwarding of such documents to the company,

(e)for the circumstances in which, and the period of time after which, such documents may be destroyed,

(f)about evidence, or descriptions of evidence, that the registrar may require a company to provide if giving notice to the registrar to change the address of its registered office from a default address.

(6)The applicant or the company may appeal the outcome of an application under this section to the court.

(7)On an appeal, the court must direct the registrar to register such address as the registered office of the company as the court considers appropriate in all the circumstances of the case.

(8)The regulations may make further provision about an appeal and in particular—

(a)provision about the time within which an appeal must be brought and the grounds on which an appeal may be brought,

(b)provision for the suspension, pending the outcome of an appeal, of duties of the company under this Act relating to the inspection of company records or to the provision, disclosure or display of information,

(c)further provision about directions by virtue of subsection (7).

(9)The regulations may include such provision applying (including applying with modifications), amending or repealing an enactment contained in this Act as the Secretary of State considers necessary or expedient in consequence of any provision made by the regulations.

(10)Regulations under this section are subject to affirmative resolution procedure.

(2)In section 1087(1) of that Act (material not available for public inspection), after paragraph (g) insert—

(ga)any application or other document delivered to the registrar under section 1097A (rectification of company registered office) other than an order or direction of the court;.

Director disputesE+W+S+N.I.

100Company filing requirements: consent to act as director or secretaryE+W+S+N.I.

(1)The Companies Act 2006 is amended as follows.

(2)In section 12 (statement of proposed officers), for the first sentence of subsection (3) substitute—

The statement must also include a statement by the subscribers to the memorandum of association that each of the persons named as a director, as secretary or as one of the joint secretaries has consented to act in the relevant capacity.

(3)In section 95 (statement of proposed secretary), for the first sentence of subsection (3) substitute—

The statement must also include a statement by the company that the person named as secretary, or each of the persons named as joint secretaries, has consented to act in the relevant capacity.

(4)In section 167 (duty to notify registrar of changes), in subsection (2), for paragraph (b) substitute—

(b)be accompanied by a statement by the company that the person has consented to act in that capacity.

(5)In section 276 (duty to notify registrar of changes), in subsection (2), for “consent by that person” substitute “ statement by the company that the person has consented ”.

(6)The amendments made by this section do not apply if the statement of proposed officers, statement of the company's proposed secretary or notice under section 167 or 276 of the Companies Act 2006 was received by the registrar before this section comes into force.

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Commencement Information

I66S. 100 in force at 10.10.2015 by S.I. 2015/1689, reg. 4(b)

101Registrar's duty to inform new directors of entry in registerE+W+S+N.I.

(1)In Part 35 of the Companies Act 2006 (the registrar of companies), after section 1079A insert—

Notice of receipt of documents about new directorsE+W+S+N.I.
1079BDuty to notify directors

(1)This section applies whenever the registrar registers either of the following documents—

(a)the statement of proposed officers required on formation of a company, or

(b)notice under section 167 or 167D of a person having become a director of a company.

(2)As soon as reasonably practicable after registering the document, the registrar must notify—

(a)in the case of a statement of proposed officers, the person or each person named in the statement as a director of the company, or

(b)in the case of a notice under section 167 or 167D, the person named in the document as having become a director of the company.

(3)The notice must—

(a)state that the person is named in the document as a director of the company, and

(b)include such information relating to the office and duties of a director (or such details of where information of that sort can be found) as the Secretary of State may from time to time direct the registrar to include.

(4)The notice may be sent in hard copy or electronic form to any address for the person that the registrar has received from either the subscribers or the company.

(2)The amendment made by this section does not apply if the statement of proposed officers or notice under section 167 or 167D of the Companies Act 2006 was received by the registrar before this section comes into force.

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Commencement Information

I67S. 101 in force at 10.10.2015 by S.I. 2015/1689, reg. 4(b)

102Removal from register of material about directorsE+W+S+N.I.

(1)In section 1095 of the Companies Act 2006 (rectification of register on application to registrar), after subsection (4) insert—

(4A)Subsections (4B) and (4C) apply, in place of subsection (4), in a case where—

(a)the material specified in the application is material naming a person—

(i)in a statement of a company's proposed officers as a person who is to be a director of the company, or

(ii)in a notice given by a company under section 167 or 167D as a person who has become a director of the company, and

(b)the application is made by or on behalf of the person named and is accompanied by a statement that the person did not consent to act as director of the company.

(4B)If the company provides the registrar with the necessary evidence within the time required by the regulations, the registrar must not remove the material from the register.

(4C)If the company does not provide the registrar with the necessary evidence within that time—

(a)the material is conclusively presumed for the purposes of this section to be derived from something that is factually inaccurate, and

(b)the registrar must accept the applicant's statement as sufficient evidence that the material should be removed from the register.

(4D)“The necessary evidence” is—

(a)evidence sufficient to satisfy the registrar that the person did consent to act as director of the company, plus

(b)a statement by the company that the evidence provided by it is true and is not misleading or deceptive in any material particular.

(2)The amendment made by this section does not apply to material contained in a statement of proposed officers or notice given under section 167 or 167D of the Companies Act 2006 if the statement or notice was received by the registrar before this section comes into force.

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Commencement Information

I68S. 102 in force at 6.4.2016 by S.I. 2016/321, reg. 3(a)

Accelerated strike-offE+W+S+N.I.

103Reduction in notice periods etc for striking off companiesE+W+S+N.I.

(1)Chapter 1 of Part 31 of the Companies Act 2006 (striking off) is amended as follows.

(2)In section 1000 (power to strike off company not carrying on business or in operation)—

(a)in subsection (2)—

(i)for “one month of sending” substitute “ 14 days of sending ”,

(ii)for “that month” substitute “ that period ”, and

(iii)in paragraph (b), for “one month” substitute “ 14 days ”, and

(b)in subsection (3)—

(i)in paragraph (b), for “one month” substitute “ 14 days ”, and

(ii)for “three months” substitute “ 2 months ”.

(3)In section 1001 (duty to act in case of company being wound up), in subsection (1), for “three months” substitute “ 2 months ”.

(4)In section 1003 (striking off on application by company), in subsection (3), for “three months” substitute “ 2 months ”.

(5)The amendments made by subsection (2) do not apply in cases where the communication mentioned in section 1000(1) of the Companies Act 2006 has already been sent before this section comes into force.

(6)The amendment made by subsection (3) does not apply in cases where the notice mentioned in section 1001(1) of that Act has already been published in the Gazette before this section comes into force.

(7)The amendment made by subsection (4) does not apply in cases where the application under section 1003(1) of that Act has already been made before this section comes into force.

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Commencement Information

I69S. 103 in force at 10.10.2015 by S.I. 2015/1689, reg. 4(c)

PART 9 E+W+S+N.I.Directors' disqualification etc

New grounds for disqualificationE+W+S+N.I.

104Convictions abroadE+W+S+N.I.

(1)After section 5 of the Company Directors Disqualification Act 1986 insert—

5ADisqualification for certain convictions abroad

(1)If it appears to the Secretary of State that it is expedient in the public interest that a disqualification order under this section should be made against a person, the Secretary of State may apply to the court for such an order.

(2)The court may, on an application under subsection (1), make a disqualification order against a person who has been convicted of a relevant foreign offence.

(3)A “relevant foreign offence” is an offence committed outside Great Britain—

(a)in connection with—

(i)the promotion, formation, management, liquidation or striking off of a company (or any similar procedure),

(ii)the receivership of a company's property (or any similar procedure), or

(iii)a person being an administrative receiver of a company (or holding a similar position), and

(b)which corresponds to an indictable offence under the law of England and Wales or (as the case may be) an indictable offence under the law of Scotland.

(4)Where it appears to the Secretary of State that, in the case of a person who has offered to give a disqualification undertaking—

(a)the person has been convicted of a relevant foreign offence, and

(b)it is expedient in the public interest that the Secretary of State should accept the undertaking (instead of applying, or proceeding with an application, for a disqualification order),

the Secretary of State may accept the undertaking.

(5)In this section—

  • company” includes an overseas company;

  • the court” means the High Court or, in Scotland, the Court of Session.

(6)The maximum period of disqualification under an order under this section is 15 years.

(2)Section 5A(2) and (4) of the Company Directors Disqualification Act 1986, as inserted by this section, applies in relation to a conviction of a relevant foreign offence which occurs on or after the day on which this section comes into force regardless of whether the act or omission which constituted the offence occurred before that day.

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Commencement Information

I70S. 104 in force at 26.5.2015 for specified purposes by S.I. 2015/1329, reg. 3(c)

I71S. 104 in force at 1.10.2015 in so far as not already in force by S.I. 2015/1689, reg. 2(c) (with Sch. para. 3)

105Persons instructing unfit directorE+W+S+N.I.

After section 8 of the Company Directors Disqualification Act 1986 insert—

Persons instructing unfit directorsE+W+S+N.I.
8ZAOrder disqualifying person instructing unfit director of insolvent company

(1)The court may make a disqualification order against a person (“P”) if, on an application under section 8ZB, it is satisfied—

(a)either—

(i)that a disqualification order under section 6 has been made against a person who is or has been a director (but not a shadow director) of a company, or

(ii)that the Secretary of State has accepted a disqualification undertaking from such a person under section 7(2A), and

(b)that P exercised the requisite amount of influence over the person.

That person is referred to in this section as “the main transgressor”.

(2)For the purposes of this section, P exercised the requisite amount of influence over the main transgressor if any of the conduct—

(a)for which the main transgressor is subject to the order made under section 6, or

(b)in relation to which the undertaking was accepted from the main transgressor under section 7(2A),

was the result of the main transgressor acting in accordance with P's directions or instructions.

(3)But P does not exercise the requisite amount of influence over the main transgressor by reason only that the main transgressor acts on advice given by P in a professional capacity.

(4)Under this section the minimum period of disqualification is 2 years and the maximum period is 15 years.

(5)In this section and section 8ZB “the court” has the same meaning as in section 6; and subsection (3B) of section 6 applies in relation to proceedings mentioned in subsection (6) below as it applies in relation to proceedings mentioned in section 6(3B)(a) and (b).

(6)The proceedings are proceedings—

(a)for or in connection with a disqualification order under this section, or

(b)in connection with a disqualification undertaking accepted under section 8ZC.

8ZBApplication for order under section 8ZA

(1)If it appears to the Secretary of State that it is expedient in the public interest that a disqualification order should be made against a person under section 8ZA, the Secretary of State may—

(a)make an application to the court for such an order, or

(b)in a case where an application for an order under section 6 against the main transgressor has been made by the official receiver, direct the official receiver to make such an application.

(2)Except with the leave of the court, an application for a disqualification order under section 8ZA must not be made after the end of the period of 3 years beginning with the day on which the company in question became insolvent (within the meaning given by section 6(2)).

(3)Subsection (4) of section 7 applies for the purposes of this section as it applies for the purposes of that section.

8ZCDisqualification undertaking instead of an order under section 8ZA

(1)If it appears to the Secretary of State that it is expedient in the public interest to do so, the Secretary of State may accept a disqualification undertaking from a person (“P”) if—

(a)any of the following is the case—

(i)a disqualification order under section 6 has been made against a person who is or has been a director (but not a shadow director) of a company,

(ii)the Secretary of State has accepted a disqualification undertaking from such a person under section 7(2A), or

(iii)it appears to the Secretary of State that such an undertaking could be accepted from such a person (if one were offered), and

(b)it appears to the Secretary of State that P exercised the requisite amount of influence over the person.

That person is referred to in this section as “the main transgressor”.

(2)For the purposes of this section, P exercised the requisite amount of influence over the main transgressor if any of the conduct—

(a)for which the main transgressor is subject to the disqualification order made under section 6,

(b)in relation to which the disqualification undertaking was accepted from the main transgressor under section 7(2A), or

(c)which led the Secretary of State to the conclusion set out in subsection (1)(a)(iii),

was the result of the main transgressor acting in accordance with P's directions or instructions.

(3)But P does not exercise the requisite amount of influence over the main transgressor by reason only that the main transgressor acts on advice given by P in a professional capacity.

(4)Subsection (4) of section 7 applies for the purposes of this section as it applies for the purposes of that section.

8ZDOrder disqualifying person instructing unfit director: other cases

(1)The court may make a disqualification order against a person (“P”) if, on an application under this section, it is satisfied—

(a)either—

(i)that a disqualification order under section 8 has been made against a person who is or has been a director (but not a shadow director) of a company, or

(ii)that the Secretary of State has accepted a disqualification undertaking from such a person under section 8(2A), and

(b)that P exercised the requisite amount of influence over the person.

That person is referred to in this section as “the main transgressor”.

(2)The Secretary of State may make an application to the court for a disqualification order against P under this section if it appears to the Secretary of State that it is expedient in the public interest for such an order to be made.

(3)For the purposes of this section, P exercised the requisite amount of influence over the main transgressor if any of the conduct—

(a)for which the main transgressor is subject to the order made under section 8, or

(b)in relation to which the undertaking was accepted from the main transgressor under section 8(2A),

was the result of the main transgressor acting in accordance with P's directions or instructions.

(4)But P does not exercise the requisite amount of influence over the main transgressor by reason only that the main transgressor acts on advice given by P in a professional capacity.

(5)Under this section the maximum period of disqualification is 15 years.

(6)In this section “the court” means the High Court or, in Scotland, the Court of Session.

8ZEDisqualification undertaking instead of an order under section 8ZD

(1)If it appears to the Secretary of State that it is expedient in the public interest to do so, the Secretary of State may accept a disqualification undertaking from a person (“P”) if—

(a)any of the following is the case—

(i)a disqualification order under section 8 has been made against a person who is or has been a director (but not a shadow director) of a company,

(ii)the Secretary of State has accepted a disqualification undertaking from such a person under section 8(2A), or

(iii)it appears to the Secretary of State that such an undertaking could be accepted from such a person (if one were offered), and

(b)it appears to the Secretary of State that P exercised the requisite amount of influence over the person.

That person is referred to in this section as “the main transgressor”.

(2)For the purposes of this section, P exercised the requisite amount of influence over the main transgressor if any of the conduct—

(a)for which the main transgressor is subject to the disqualification order made under section 8,

(b)in relation to which the disqualification undertaking was accepted from the main transgressor under section 8(2A), or

(c)which led the Secretary of State to the conclusion set out in subsection (1)(a)(iii),

was the result of the main transgressor acting in accordance with P's directions or instructions.

(3)But P does not exercise the requisite amount of influence over the main transgressor by reason only that the main transgressor acts on advice given by P in a professional capacity.

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Commencement Information

I72S. 105 in force at 26.5.2015 for specified purposes by S.I. 2015/1329, reg. 3(c)

I73S. 105 in force at 1.10.2015 in so far as not already in force by S.I. 2015/1689, reg. 2(c) (with Sch. para. 1)

Determining unfitnessE+W+S+N.I.

106Determining unfitness and disqualifications: matters to be taken into accountE+W+S+N.I.

(1)The Company Directors Disqualification Act 1986 is amended as follows.

(2)In section 6 (duty of court to disqualify unfit directors of insolvent companies)—

(a)in subsection (1)(b), for “any other company or companies” substitute “ one or more other companies or overseas companies ”,

(b)after subsection (1) insert—

(1A)In this section references to a person's conduct as a director of any company or overseas company include, where that company or overseas company has become insolvent, references to that person's conduct in relation to any matter connected with or arising out of the insolvency.,

(c)in subsection (2), omit the words from “and references” to the end, and

(d)after subsection (2) insert—

(2A)For the purposes of this section, an overseas company becomes insolvent if the company enters into insolvency proceedings of any description (including interim proceedings) in any jurisdiction.

(3)In section 8 (disqualification where expedient in public interest)—

(a)in subsection (2), after “the company” insert “ (either taken alone or taken together with his conduct as a director or shadow director of one or more other companies or overseas companies) ”,

(b)in subsection (2A)(a), after “shadow director” insert “ (either taken alone or taken together with his conduct as a director or shadow director of one or more other companies or overseas companies) ”, and

(c)after subsection (2A) insert—

(2B)Subsection (1A) of section 6 applies for the purposes of this section as it applies for the purposes of that section.

(4)Omit section 9 (matters for determining unfitness of directors).

(5)After section 12B insert—

12CDetermining unfitness etc: matters to be taken into account

(1)This section applies where a court must determine—

(a)whether a person's conduct as a director of one or more companies or overseas companies makes the person unfit to be concerned in the management of a company;

(b)whether to exercise any discretion it has to make a disqualification order under any of sections 2 to 4, 5A, 8 or 10;

(c)where the court has decided to make a disqualification order under any of those sections or is required to make an order under section 6, what the period of disqualification should be.

(2)But this section does not apply where the court in question is one mentioned in section 2(2)(b) or (c).

(3)This section also applies where the Secretary of State must determine—

(a)whether a person's conduct as a director of one or more companies or overseas companies makes the person unfit to be concerned in the management of a company;

(b)whether to exercise any discretion the Secretary of State has to accept a disqualification undertaking under section 5A, 7 or 8.

(4)In making any such determination in relation to a person, the court or the Secretary of State must—

(a)in every case, have regard in particular to the matters set out in paragraphs 1 to 4 of Schedule 1;

(b)in a case where the person concerned is or has been a director of a company or overseas company, also have regard in particular to the matters set out in paragraphs 5 to 7 of that Schedule.

(5)In this section “director” includes a shadow director.

(6)Subsection (1A) of section 6 applies for the purposes of this section as it applies for the purposes of that section.

(7)The Secretary of State may by order modify Schedule 1; and such an order may contain such transitional provision as may appear to the Secretary of State to be necessary or expedient.

(8)The power to make an order under this section is exercisable by statutory instrument.

(9)An order under this section may not be made unless a draft of the instrument containing it has been laid before, and approved by a resolution of, each House of Parliament.

(6)For Schedule 1 (matters determining unfitness of directors) substitute—

Section 12C

SCHEDULE 1E+W+S+N.I.Determining unfitness etc: matters to be taken into account
Matters to be taken into account in all casesE+W+S+N.I.

1The extent to which the person was responsible for the causes of any material contravention by a company or overseas company of any applicable legislative or other requirement.

2Where applicable, the extent to which the person was responsible for the causes of a company or overseas company becoming insolvent.

3The frequency of conduct of the person which falls within paragraph 1 or 2.

4The nature and extent of any loss or harm caused, or any potential loss or harm which could have been caused, by the person's conduct in relation to a company or overseas company.

Additional matters to be taken into account where person is or has been a directorE+W+S+N.I.

5Any misfeasance or breach of any fiduciary duty by the director in relation to a company or overseas company.

6Any material breach of any legislative or other obligation of the director which applies as a result of being a director of a company or overseas company.

7The frequency of conduct of the director which falls within paragraph 5 or 6.

InterpretationE+W+S+N.I.

8Subsections (1A) to (2A) of section 6 apply for the purposes of this Schedule as they apply for the purposes of that section.

9In this Schedule “director” includes a shadow director.

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Commencement Information

I74S. 106 in force at 26.5.2015 for specified purposes by S.I. 2015/1329, reg. 3(c)

I75S. 106 in force at 1.10.2015 in so far as not already in force by S.I. 2015/1689, reg. 2(d) (with Sch. para. 2)

107Reports of office-holders on conduct of directors of insolvent companiesE+W+S+N.I.

(1)The Company Directors Disqualification Act 1986 is amended in accordance with subsections (2) to (4).

(2)After section 7 insert—

7AOffice-holder's report on conduct of directors

(1)The office-holder in respect of a company which is insolvent must prepare a report (a “conduct report”) about the conduct of each person who was a director of the company—

(a)on the insolvency date, or

(b)at any time during the period of 3 years ending with that date.

(2)For the purposes of this section a company is insolvent if—

(a)the company is in liquidation and at the time it went into liquidation its assets were insufficient for the payment of its debts and other liabilities and the expenses of the winding up,

(b)the company has entered administration, or

(c)an administrative receiver of the company has been appointed;

and subsection (1A) of section 6 applies for the purposes of this section as it applies for the purpose of that section.

(3)A conduct report must, in relation to each person, describe any conduct of the person which may assist the Secretary of State in deciding whether to exercise the power under section 7(1) or (2A) in relation to the person.

(4)The office-holder must send the conduct report to the Secretary of State before the end of—

(a)the period of 3 months beginning with the insolvency date, or

(b)such other longer period as the Secretary of State considers appropriate in the particular circumstances.

(5)If new information comes to the attention of an office-holder, the office-holder must send that information to the Secretary of State as soon as reasonably practicable.

(6)“New information” is information which an office-holder considers should have been included in a conduct report prepared in relation to the company, or would have been so included had it been available before the report was sent.

(7)If there is more than one office-holder in respect of a company at any particular time (because the company is insolvent by virtue of falling within more than one paragraph of subsection (2) at that time), subsection (1) applies only to the first of the office-holders to be appointed.

(8)In the case of a company which is at different times insolvent by virtue of falling within one or more different paragraphs of subsection (2)—

(a)the references in subsection (1) to the insolvency date are to be read as references to the first such date during the period in which the company is insolvent, and

(b)subsection (1) does not apply to an office-holder if at any time during the period in which the company is insolvent a conduct report has already been prepared and sent to the Secretary of State.

(9)The “office-holder” in respect of a company which is insolvent is—

(a)in the case of a company being wound up by the court in England and Wales, the official receiver;

(b)in the case of a company being wound up otherwise, the liquidator;

(c)in the case of a company in administration, the administrator;

(d)in the case of a company of which there is an administrative receiver, the receiver.

(10)The “insolvency date”—

(a)in the case of a company being wound up by the court, means the date on which the court makes the winding-up order (see section 125 of the Insolvency Act 1986);

(b)in the case of a company being wound up by way of a members' voluntary winding up, means the date on which the liquidator forms the opinion that the company will be unable to pay its debts in full (together with interest at the official rate) within the period stated in the directors' declaration of solvency under section 89 of the Insolvency Act 1986;

(c)in the case of a company being wound up by way of a creditors' voluntary winding up where no such declaration under section 89 of that Act has been made, means the date of the passing of the resolution for voluntary winding up;

(d)in the case of a company which has entered administration, means the date the company did so;

(e)in the case of a company in respect of which an administrative receiver has been appointed, means the date of that appointment.

(11)For the purposes of subsection (10)(e), any appointment of an administrative receiver to replace an administrative receiver who has died or vacated office pursuant to section 45 of the Insolvency Act 1986 is to be ignored.

(12)In this section—

  • court” has the same meaning as in section 6;

  • director” includes a shadow director.

(3)In section 7 (disqualification order or undertaking and reporting provisions), omit subsection (3).

(4)For the heading of section 7 substitute “ Disqualification orders under section 6: applications and acceptance of undertakings ”.

(5)In consequence of the repeal made by subsection (3), in Schedule 17 to the Enterprise Act 2002, omit paragraph 42.

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Commencement Information

I76S. 107 in force at 26.5.2015 for specified purposes by S.I. 2015/1329, reg. 3(c)

I77S. 107 in force at 6.4.2016 by S.I. 2016/321, reg. 3(b) (with Sch. paras. 1, 2)

Director disqualification: other amendmentsE+W+S+N.I.

108Unfit directors of insolvent companies: extension of period for applying for disqualification orderE+W+S+N.I.

(1)In section 7(2) of the Company Directors Disqualification Act 1986 (period within which application may be made for disqualification order against unfit director of insolvent company), for “2 years” substitute “ 3 years ”.

(2)Subsection (1) applies only to an application relating to a company which has become insolvent after the commencement of that subsection.

(3)Section 6(2) of the 1986 Act (meaning of “becoming insolvent”) applies for the purposes of subsection (2) as it applies for the purposes of section 6 of that Act.

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Commencement Information

I78S. 108 in force at 26.5.2015 for specified purposes by S.I. 2015/1329, reg. 3(c)

I79S. 108 in force at 1.10.2015 in so far as not already in force by S.I. 2015/1689, reg. 2(e)

109Directors: removal of restriction on application for disqualification orderE+W+S+N.I.

(1)In section 8 of the Company Directors Disqualification Act 1986 (disqualification of director after investigation of company)—

(a)in subsection (1), omit “from investigative material”,

(b)omit subsection (1A), and

(c)in subsection (2A), omit “from such report, information or documents”.

(2)For the heading of that section substitute “ Disqualification of director on finding of unfitness ”.

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Commencement Information

I80S. 109 in force at 26.5.2015 for specified purposes by S.I. 2015/1329, reg. 3(c)

I81S. 109 in force at 1.10.2015 in so far as not already in force by S.I. 2015/1689, reg. 2(e)

Compensation awardsE+W+S+N.I.

110Compensation orders and undertakingsE+W+S+N.I.

After section 15 of the Company Directors Disqualification Act 1986 insert—

Compensation orders and undertakingsE+W+S+N.I.
15ACompensation orders and undertakings

(1)The court may make a compensation order against a person on the application of the Secretary of State if it is satisfied that the conditions mentioned in subsection (3) are met.

(2)If it appears to the Secretary of State that the conditions mentioned in subsection (3) are met in respect of a person who has offered to give the Secretary of State a compensation undertaking, the Secretary of State may accept the undertaking instead of applying, or proceeding with an application, for a compensation order.

(3)The conditions are that—

(a)the person is subject to a disqualification order or disqualification undertaking under this Act, and

(b)conduct for which the person is subject to the order or undertaking has caused loss to one or more creditors of an insolvent company of which the person has at any time been a director.

(4)An “insolvent company” is a company that is or has been insolvent and a company becomes insolvent if—

(a)the company goes into liquidation at a time when its assets are insufficient for the payment of its debts and other liabilities and the expenses of the winding up,

(b)the company enters administration, or

(c)an administrative receiver of the company is appointed.

(5)The Secretary of State may apply for a compensation order at any time before the end of the period of two years beginning with the date on which the disqualification order referred to in paragraph (a) of subsection (3) was made, or the disqualification undertaking referred to in that paragraph was accepted.

(6)In the case of a person subject to a disqualification order under section 8ZA or 8ZD, or a disqualification undertaking under section 8ZC or 8ZE, the reference in subsection (3)(b) to conduct is a reference to the conduct of the main transgressor in relation to which the person has exercised the requisite amount of influence.

(7)In this section and sections 15B and 15C “the court” means—

(a)in a case where a disqualification order has been made, the court that made the order,

(b)in any other case, the High Court or, in Scotland, the Court of Session.

15BAmounts payable under compensation orders and undertakings

(1)A compensation order is an order requiring the person against whom it is made to pay an amount specified in the order—

(a)to the Secretary of State for the benefit of—

(i)a creditor or creditors specified in the order;

(ii)a class or classes of creditor so specified;

(b)as a contribution to the assets of a company so specified.

(2)A compensation undertaking is an undertaking to pay an amount specified in the undertaking—

(a)to the Secretary of State for the benefit of—

(i)a creditor or creditors specified in the undertaking;

(ii)a class or classes of creditor so specified;

(b)as a contribution to the assets of a company so specified.

(3)When specifying an amount the court (in the case of an order) and the Secretary of State (in the case of an undertaking) must in particular have regard to—

(a)the amount of the loss caused;

(b)the nature of the conduct mentioned in section 15A(3)(b);

(c)whether the person has made any other financial contribution in recompense for the conduct (whether under a statutory provision or otherwise).

(4)An amount payable by virtue of subsection (2) under a compensation undertaking is recoverable as if payable under a court order.

(5)An amount payable under a compensation order or compensation undertaking is provable as a bankruptcy debt.

15CVariation and revocation of compensation undertakings

(1)The court may, on the application of a person who is subject to a compensation undertaking—

(a)reduce the amount payable under the undertaking, or

(b)provide for the undertaking not to have effect.

(2)On the hearing of an application under subsection (1), the Secretary of State must appear and call the attention of the court to any matters which the Secretary of State considers relevant, and may give evidence or call witnesses.

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Commencement Information

I82S. 110 in force at 26.5.2015 for specified purposes by S.I. 2015/1329, reg. 3(c)

I83S. 110 in force at 1.10.2015 in so far as not already in force by S.I. 2015/1689, reg. 2(f) (with Sch. para. 4)

Consequential amendments and corresponding provision for Northern IrelandE+W+S+N.I.

111Sections 104 to 110: consequential and related amendmentsE+W+S+N.I.

Schedule 7 makes amendments to the Company Directors Disqualification Act 1986, and other enactments, which are consequential on or related to the amendments made to that Act by the preceding provisions of this Part.

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Commencement Information

I84S. 111 in force at 26.5.2015 for specified purposes by S.I. 2015/1329, reg. 3(c)

I85S. 111 in force at 1.10.2015 in so far as not already in force by S.I. 2015/1689, reg. 2(g)

112Provision for Northern Ireland corresponding to sections 104 to 111E+W+S+N.I.

Schedule 8 makes provision for Northern Ireland which corresponds to that made by sections 104 to 111.

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Commencement Information

I86S. 112 in force for specified purposes at 1.10.2015 by S.I. 2015/1689, reg. 2(h)

I87S. 112 in force at 6.4.2016 in so far as not already in force by S.I. 2016/321, reg. 3(c) (with Sch. paras. 3, 4)

Bankruptcy: Scotland and Northern IrelandE+W+S+N.I.

113Disqualification as director: bankruptcy, etc in Scotland and Northern IrelandE+W+S+N.I.

(1)For subsections (1) and (2) of section 11 of the Company Directors Disqualification Act 1986 (undischarged bankrupts) substitute—

(1)It is an offence for a person to act as director of a company or directly or indirectly to take part in or be concerned in the promotion, formation or management of a company, without the leave of the court, at a time when any of the circumstances mentioned in subsection (2) apply to the person.

(2)The circumstances are—

(a)the person is an undischarged bankrupt—

(i)in England and Wales or Scotland, or

(ii)in Northern Ireland,

(b)a bankruptcy restrictions order or undertaking is in force in respect of the person under—

(i)the Bankruptcy (Scotland) Act 1985 or the Insolvency Act 1986, or

(ii)the Insolvency (Northern Ireland) Order 1989,

(c)a debt relief restrictions order or undertaking is in force in respect of the person under—

(i)the Insolvency Act 1986, or

(ii)the Insolvency (Northern Ireland) Order 1989,

(d)a moratorium period under a debt relief order applies in relation to the person under—

(i)the Insolvency Act 1986, or

(ii)the Insolvency (Northern Ireland) Order 1989.

(2A)In subsection (1) “the court” means—

(a)for the purposes of subsection (2)(a)(i)—

(i)the court by which the person was adjudged bankrupt, or

(ii)in Scotland, the court by which sequestration of the person's estate was awarded or, if awarded other than by the court, the court which would have jurisdiction in respect of sequestration of the person's estate,

(b)for the purposes of subsection (2)(b)(i)—

(i)the court which made the order,

(ii)in Scotland, if the order has been made other than by the court, the court to which the person may appeal against the order, or

(iii)the court to which the person may make an application for annulment of the undertaking,

(c)for the purposes of subsection (2)(c)(i)—

(i)the court which made the order, or

(ii)the court to which the person may make an application for annulment of the undertaking,

(d)for the purposes of subsection (2)(d)(i), the court to which the person would make an application under section 251M(1) of the Insolvency Act 1986 (if the person were dissatisfied as mentioned there),

(e)for the purposes of paragraphs (a)(ii), (b)(ii), (c)(ii) and (d)(ii) of subsection (2), the High Court of Northern Ireland.

(2)In section 24 of that Act (extent), for subsection (2) substitute—

(2)Subsections (1) to (2A) of section 11 also extend to Northern Ireland.

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Commencement Information

I88S. 113 in force at 1.10.2015 by S.I. 2015/1689, reg. 2(i) (with Sch. para. 11)

114Company Directors Disqualification (Northern Ireland) Order 2002: bankruptcy, etc in England and Wales or ScotlandE+W+S+N.I.

For paragraph (1) of Article 15 of the Company Directors Disqualification (Northern Ireland) Order 2002 (S.I. 2002/3150 (N.I. 4)) (undischarged bankrupts) substitute—

(1)It is an offence for a person to act as director of a company or directly or indirectly to take part in or be concerned in the promotion, formation or management of a company, without the leave of the court, at a time when any of the circumstances mentioned in paragraph (1A) apply to the person.

(1A)The circumstances are—

(a)the person is an undischarged bankrupt—

(i)in Northern Ireland, or

(ii)in England and Wales or Scotland,

(b)a bankruptcy restrictions order or undertaking is in force in respect of the person under—

(i)the Insolvency (Northern Ireland) Order 1989, or

(ii)the Bankruptcy (Scotland) Act 1985 or the Insolvency Act 1986,

(c)a debt relief restrictions order or undertaking is in force in respect of the person under—

(i)the Insolvency (Northern Ireland) Order 1989, or

(ii)the Insolvency Act 1986,

(d)a moratorium period under a debt relief order applies in relation to the person under—

(i)the Insolvency (Northern Ireland) Order 1989, or

(ii)the Insolvency Act 1986.

(1B)In paragraph (1) “the court” means—

(a)for the purposes of sub-paragraphs (a)(i), (b)(i), (c)(i) and (d)(i) of paragraph (1A), the High Court,

(b)for the purposes of paragraph (1A)(a)(ii)—

(i)the court by which the person was adjudged bankrupt, or

(ii)in Scotland, the court by which sequestration of the person's estate was awarded or, if awarded other than by the court, the court which would have jurisdiction in respect of sequestration of the person's estate,

(c)for the purposes of paragraph (1A)(b)(ii)—

(i)the court which made the order,

(ii)in Scotland, if the order has been made other than by the court, the court to which the person may appeal against the order, or

(iii)the court to which the person may make an application for annulment of the undertaking,

(d)for the purposes of paragraph (1A)(c)(ii)—

(i)the court which made the order, or

(ii)the court to which the person may make an application for annulment of the undertaking,

(e)for the purposes of paragraph (1A)(d)(ii), the court to which the person would make an application under section 251M(1) of the Insolvency Act 1986 (if the person were dissatisfied as mentioned there).

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Commencement Information

I89S. 114 in force at 1.10.2015 by S.I. 2015/1689, reg. 2(i) (with Sch. para. 12)

115Disqualification as insolvency practitioner: bankruptcy, etc in Scotland or Northern IrelandE+W+S+N.I.

In section 390 of the Insolvency Act 1986 (persons not qualified to act as insolvency practitioners)—

(a)in subsection (4)—

(i)in paragraph (a), after “bankrupt” insert “ under this Act or the Insolvency (Northern Ireland) Order 1989 ”;

(ii)in paragraph (aa), after “a debt relief order” insert “ under this Act or the Insolvency (Northern Ireland) Order 1989 ”;

(b)for subsection (5) substitute—

(5)A person is not qualified to act as an insolvency practitioner while there is in force in respect of that person—

(a)a bankruptcy restrictions order under this Act, the Bankruptcy (Scotland) Act 1985 or the Insolvency (Northern Ireland) Order 1989, or

(b)a debt relief restrictions order under this Act or that Order.

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Commencement Information

I90S. 115 in force at 1.10.2015 by S.I. 2015/1689, reg. 2(i) (with Sch. para. 13)

116Disqualification as insolvency practitioner in Northern Ireland: bankruptcy, etc in England and Wales or ScotlandE+W+S+N.I.

(1)Article 349 of the Insolvency (Northern Ireland) Order 1989 (S.I. 1989/2405 (N.I. 19)) (persons not qualified to act as insolvency practitioners) is amended as follows.

(2)In paragraph (4)—

(a)in sub-paragraph (a), after “bankrupt” insert “ under this Order or the 1986 Act ”;

(b)in sub-paragraph (aa), after “a debt relief order” insert “ under this Order or the 1986 Act ”.

(3)For paragraph (5) substitute—

(5)A person is not qualified to act as an insolvency practitioner while there is in force in respect of that person—

(a)a bankruptcy restrictions order under this Order, the 1986 Act or the Bankruptcy (Scotland) Act 1985, or

(b)a debt relief restrictions order under this Order or the 1986 Act.

(6)In this Article “the 1986 Act” means the Insolvency Act 1986.

(4)In consequence of the amendment made by subsection (3), omit—

(a)paragraph 4 of Schedule 6 to the Insolvency (Northern Ireland) Order 2005 (S.I. 2005/1455 (N.I. 10));

(b)paragraph 4(9)(b) of the Schedule to the Debt Relief Act (Northern Ireland) 2010 (c. 16 (N.I.)).

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Commencement Information

I91S. 116 in force at 1.10.2015 by S.I. 2015/1689, reg. 2(i) (with Sch. para. 14)

PART 10 E+W+S+N.I.Insolvency

Office-holder actionsE+W+S+N.I.

117Power for administrator to bring claim for fraudulent or wrongful tradingE+W+S+N.I.

(1)The Insolvency Act 1986 is amended as follows.

(2)After section 246 insert—

Administration: penalisation of directors etcE+W+S+N.I.
246ZAFraudulent trading: administration

(1)If while a company is in administration it appears that any business of the company has been carried on with intent to defraud creditors of the company or creditors of any other person, or for any fraudulent purpose, the following has effect.

(2)The court, on the application of the administrator, may declare that any persons who were knowingly parties to the carrying on of the business in the manner mentioned in subsection (1) are to be liable to make such contributions (if any) to the company's assets as the court thinks proper.

246ZBWrongful trading: administration

(1)Subject to subsection (3), if while a company is in administration it appears that subsection (2) applies in relation to a person who is or has been a director of the company, the court, on the application of the administrator, may declare that that person is to be liable to make such contribution (if any) to the company's assets as the court thinks proper.

(2)This subsection applies in relation to a person if—

(a)the company has entered insolvent administration,

(b)at some time before the company entered administration, that person knew or ought to have concluded that there was no reasonable prospect that the company would avoid entering insolvent administration or going into insolvent liquidation, and

(c)the person was a director of the company at that time.

(3)The court must not make a declaration under this section with respect to any person if it is satisfied that, after the condition specified in subsection (2)(b) was first satisfied in relation to the person, the person took every step with a view to minimising the potential loss to the company's creditors as (on the assumption that the person had knowledge of the matter mentioned in subsection (2)(b)) the person ought to have taken.

(4)For the purposes of subsections (2) and (3), the facts which a director of a company ought to know or ascertain, the conclusions which the director ought to reach and the steps which the director ought to take are those which would be known or ascertained, or reached or taken, by a reasonably diligent person having both—

(a)the general knowledge, skill and experience that may reasonably be expected of a person carrying out the same functions as are carried out by that director in relation to the company, and

(b)the general knowledge, skill and experience that that director has.

(5)The reference in subsection (4) to the functions carried out in relation to a company by a director of the company includes any functions which the director does not carry out but which have been entrusted to the director.

(6)For the purposes of this section—

(a)a company enters insolvent administration if it enters administration at a time when its assets are insufficient for the payment of its debts and other liabilities and the expenses of the administration;

(b)a company goes into insolvent liquidation if it goes into liquidation at a time when its assets are insufficient for the payment of its debts and other liabilities and the expenses of the winding up.

(7)In this section “director” includes shadow director.

(8)This section is without prejudice to section 246ZA.

246ZCProceedings under section 246ZA or 246ZB

Section 215 applies for the purposes of an application under section 246ZA or 246ZB as it applies for the purposes of an application under section 213 but as if the reference in subsection (1) of section 215 to the liquidator was a reference to the administrator.

(3)In section 214 (wrongful trading)—

(a)in subsection (2)(b), after “liquidation” insert “ or entering insolvent administration ”,

(b)in subsection (3), for the words from “assuming” to “liquidation” substitute “ on the assumption that he had knowledge of the matter mentioned in subsection (2)(b) ”, and

(c)after subsection (6) insert—

(6A)For the purposes of this section a company enters insolvent administration if it enters administration at a time when its assets are insufficient for the payment of its debts and other liabilities and the expenses of the administration.

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Commencement Information

I92S. 117 in force at 1.10.2015 by S.I. 2015/1689, reg. 2(j) (with Sch. para. 15)

118Power for liquidator or administrator to assign causes of actionE+W+S+N.I.

After section 246ZC of the Insolvency Act 1986 (inserted by section 117) insert—

Power to assign certain causes of actionE+W+S+N.I.
246ZDPower to assign

(1)This section applies in the case of a company where—

(a)the company enters administration, or

(b)the company goes into liquidation;

and “the office-holder” means the administrator or the liquidator, as the case may be.

(2)The office-holder may assign a right of action (including the proceeds of an action) arising under any of the following—

(a)section 213 or 246ZA (fraudulent trading);

(b)section 214 or 246ZB (wrongful trading);

(c)section 238 (transactions at an undervalue (England and Wales));

(d)section 239 (preferences (England and Wales));

(e)section 242 (gratuitous alienations (Scotland));

(f)section 243 (unfair preferences (Scotland));

(g)section 244 (extortionate credit transactions).

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Annotations are used to give authority for changes and other effects on the legislation you are viewing and to convey editorial information. They appear at the foot of the relevant provision or under the associated heading. Annotations are categorised by annotation type, such as F-notes for textual amendments and I-notes for commencement information (a full list can be found in the Editorial Practice Guide). Each annotation is identified by a sequential reference number. For F-notes, M-notes and X-notes, the number also appears in bold superscript at the relevant location in the text. All annotations contain links to the affecting legislation.

Commencement Information

I93S. 118 in force at 1.10.2015 by S.I. 2015/1689, reg. 2(j) (with Sch. para. 16)

119Application of proceeds of office-holder claimsE+W+S+N.I.

After section 176ZA of the Insolvency Act 1986 insert—

176ZBApplication of proceeds of office-holder claims

(1)This section applies where—

(a)there is a floating charge (whether created before or after the coming into force of this section) which relates to property of a company which—

(i)is in administration, or

(ii)has gone into liquidation; and

(b)the administrator or the liquidator (referred to in this section as “the office-holder”) has—

(i)brought a claim under any provision mentioned in subsection (3), or

(ii)made an assignment (or, in Scotland, assignation) in relation to a right of action under any such provision under section 246ZD.

(2)The proceeds of the claim or assignment (or, in Scotland, assignation) are not to be treated as part of the company's net property, that is to say the amount of its property which would be available for satisfaction of claims of holders of debentures secured by, or holders of, any floating charge created by the company.

(3)The provisions are—

(a)section 213 or 246ZA (fraudulent trading);

(b)section 214 or 246ZB (wrongful trading);

(c)section 238 (transactions at an undervalue (England and Wales));

(d)section 239 (preferences (England and Wales));

(e)section 242 (gratuitous alienations (Scotland));

(f)section 243 (unfair preferences (Scotland));

(g)section 244 (extortionate credit transactions).

(4)Subsection (2) does not apply to a company if or in so far as it is disapplied by—

(a)a voluntary arrangement in respect of the company, or

(b)a compromise or arrangement agreed under Part 26 of the Companies Act 2006 (arrangements and reconstructions).

Annotations: Help about Annotation
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Annotations are used to give authority for changes and other effects on the legislation you are viewing and to convey editorial information. They appear at the foot of the relevant provision or under the associated heading. Annotations are categorised by annotation type, such as F-notes for textual amendments and I-notes for commencement information (a full list can be found in the Editorial Practice Guide). Each annotation is identified by a sequential reference number. For F-notes, M-notes and X-notes, the number also appears in bold superscript at the relevant location in the text. All annotations contain links to the affecting legislation.

Commencement Information

I94S. 119 in force at 1.10.2015 by S.I. 2015/1689, reg. 2(j) (with Sch. para. 17)

Removing requirements to seek sanctionE+W+S+N.I.

120Exercise of powers by liquidator: removal of need for sanctionE+W+S+N.I.

(1)The Insolvency Act 1986 is amended as follows.

(2)In section 165 (voluntary winding up: powers of liquidator), for subsections (2) and (3) substitute—

(2)The liquidator may exercise any of the powers specified in Parts 1 to 3 of Schedule 4.

(3)In section 167 (winding up by the court: powers of liquidator), for subsection (1) substitute—

(1)Where a company is being wound up by the court, the liquidator may exercise any of the powers specified in Parts 1 to 3 of Schedule 4.

(4)In section 169 (supplementary powers (Scotland)), omit subsection (1).

(5)In Part 2 of Schedule 3 (appeals from orders in Scotland: orders which take effect until matter disposed of by Inner House), omit the entry relating to orders under section 167 or 169.

(6)In Schedule 4 (powers of liquidator in a winding up)—

(a)in paragraph 3, omit “In the case of a winding up in Scotland,”,

(b)omit paragraph 6A, and

(c)omit the headings for each of Parts 1 to 3.

121Exercise of powers by trustee in bankruptcy: removal of need for sanctionE+W+S+N.I.

(1)The Insolvency Act 1986 is amended as follows.

(2)In section 314 (bankruptcy: powers of trustee)—

(a)for subsection (1) substitute—

(1)The trustee may exercise any of the powers specified in Parts 1 and 2 of Schedule 5.,

(b)in subsection (2), omit “With the permission of the creditors' committee or the court,”, and

(c)omit subsections (3) and (4).

(3)In Schedule 5 (powers of trustee in bankruptcy), omit the headings for each of Parts 1 to 3.

Position of creditorsE+W+S+N.I.

122Abolition of requirements to hold meetings: company insolvencyE+W+S+N.I.

(1)The Insolvency Act 1986 is amended as follows.

(2)After section 246ZD (as inserted by section 118) insert—

Decisions by creditors and contributoriesE+W+S+N.I.
246ZEDecisions by creditors and contributories: general

(1)This section applies where, for the purposes of this Group of Parts, a person (“P”) seeks a decision about any matter from a company's creditors or contributories.

(2)The decision may be made by any qualifying decision procedure P thinks fit, except that it may not be made by a creditors' meeting or (as the case may be) a contributories' meeting unless subsection (3) applies.

(3)This subsection applies if at least the minimum number of creditors or (as the case may be) contributories make a request to P in writing that the decision be made by a creditors' meeting or (as the case may be) a contributories' meeting.

(4)If subsection (3) applies P must summon a creditors' meeting or (as the case may be) a contributories' meeting.

(5)Subsection (2) is subject to any provision of this Act, the rules or any other legislation, or any order of the court—

(a)requiring a decision to be made, or prohibiting a decision from being made, by a particular qualifying decision procedure (other than a creditors' meeting or a contributories' meeting);

(b)permitting or requiring a decision to be made by a creditors' meeting or a contributories' meeting.

(6)Section 246ZF provides that in certain cases the deemed consent procedure may be used instead of a qualifying decision procedure.

(7)For the purposes of subsection (3) the “minimum number” of creditors or contributories is any of the following—

(a)10% in value of the creditors or contributories;

(b)10% in number of the creditors or contributories;

(c)10 creditors or contributories.

(8)The references in subsection (7) to creditors are to creditors of any class, even where a decision is sought only from creditors of a particular class.

(9)In this section references to a meeting are to a meeting where the creditors or (as the case may be) contributories are invited to be present together at the same place (whether or not it is possible to attend the meeting without being present at that place).

(10)Except as provided by subsection (8), references in this section to creditors include creditors of a particular class.

(11)In this Group of Parts “qualifying decision procedure” means a procedure prescribed or authorised under paragraph 8A of Schedule 8.

246ZFDeemed consent procedure

(1)The deemed consent procedure may be used instead of a qualifying decision procedure where a company's creditors or contributories are to make a decision about any matter, unless—

(a)a decision about the matter is required by virtue of this Act, the rules, or any other legislation to be made by a qualifying decision procedure, or

(b)the court orders that a decision about the matter is to be made by a qualifying decision procedure.

(2)If the rules provide for a company's creditors or contributories to make a decision about the remuneration of any person, they must provide that the decision is to be made by a qualifying decision procedure.

(3)The deemed consent procedure is that the relevant creditors (other than opted-out creditors) or (as the case may be) the relevant contributories are given notice of—

(a)the matter about which they are to make a decision,

(b)the decision that the person giving the notice proposes should be made (the “proposed decision”),

(c)the effect of subsections (4) and (5), and

(d)the procedure for objecting to the proposed decision.

(4)If less than the appropriate number of relevant creditors or (as the case may be) relevant contributories object to the proposed decision in accordance with the procedure set out in the notice, the creditors or (as the case may be) the contributories are to be treated as having made the proposed decision.

(5)Otherwise—

(a)the creditors or (as the case may be) the contributories are to be treated as not having made a decision about the matter in question, and

(b)if a decision about that matter is again sought from the creditors or (as the case may be) the contributories, it must be sought using a qualifying decision procedure.

(6)For the purposes of subsection (4) the “appropriate number” of relevant creditors or relevant contributories is 10% in value of those creditors or contributories.

(7)Relevant creditors” means the creditors who, if the decision were to be made by a qualifying decision procedure, would be entitled to vote in the procedure.

(8)Relevant contributories” means the contributories who, if the decision were to be made by a qualifying decision procedure, would be entitled to vote in the procedure.

(9)In this section references to creditors include creditors of a particular class.

(10)The rules may make further provision about the deemed consent procedure.

246ZGPower to amend sections 246ZE and 246ZF

(1)The Secretary of State may by regulations amend section 246ZE so as to change the definition of—

(a)the minimum number of creditors;

(b)the minimum number of contributories.

(2)The Secretary of State may by regulations amend section 246ZF so as to change the definition of—

(a)the appropriate number of relevant creditors;

(b)the appropriate number of relevant contributories.

(3)Regulations under this section may define the minimum number or the appropriate number by reference to any one or more of—

(a)a proportion in value,

(b)a proportion in number,

(c)an absolute number,

and the definition may include alternative, cumulative or relative requirements.

(4)Regulations under subsection (1) may define the minimum number of creditors or contributories by reference to all creditors or contributories, or by reference to creditors or contributories of a particular description.

(5)Regulations under this section may make provision that will result in section 246ZE or 246ZF having different definitions for different cases, including—

(a)for creditors and for contributories,

(b)for different kinds of decisions.

(6)Regulations under this section may make transitional provision.

(7)The power of the Secretary of State to make regulations under this section is exercisable by statutory instrument.

(8)A statutory instrument containing regulations under this section may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament.

(3)In Schedule 8 (provisions which may be included in company insolvency rules), after paragraph 8 insert—

8A(1)Provision about the making of decisions by creditors and contributories, including provision—

(a)prescribing particular procedures by which creditors and contributories may make decisions;

(b)authorising the use of other procedures for creditors and contributories to make decisions, if those procedures comply with prescribed requirements.

(2)Provision under sub-paragraph (1) may in particular include provision about—

(a)how creditors and contributories may request that a creditors' meeting or a contributories' meeting be held,

(b)the rights of creditors, contributories and others to be given notice of, and participate in, procedures,

(c)creditors' and contributories' rights to vote in procedures,

(d)the period within which any right to participate or vote is to be exercised,

(e)the proportion of creditors or contributories that must vote for a proposal for it to be approved,

(f)how the value of any debt or contribution should be determined,

(g)the time at which decisions taken by a procedure are to be treated as having been made.

(4)In section 251 (interpretation of first Group of Parts)—

(a)after the definition of “the court” insert—

deemed consent procedure” means the deemed consent procedure provided for by section 246ZF;;

(b)after the definition of “prescribed” insert—

qualifying decision procedure” has the meaning given by section 246ZE(11);.

Annotations: Help about Annotation
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Annotations are used to give authority for changes and other effects on the legislation you are viewing and to convey editorial information. They appear at the foot of the relevant provision or under the associated heading. Annotations are categorised by annotation type, such as F-notes for textual amendments and I-notes for commencement information (a full list can be found in the Editorial Practice Guide). Each annotation is identified by a sequential reference number. For F-notes, M-notes and X-notes, the number also appears in bold superscript at the relevant location in the text. All annotations contain links to the affecting legislation.

Commencement Information

I95S. 122 in force at 26.5.2015 for specified purposes by S.I. 2015/1329, reg. 3(d)

I96S. 122 in force at 6.4.2017 for E.W. in so far as not already in force by S.I. 2016/1020, reg. 4(a) (with reg. 5) (as amended by S.I. 2017/363, reg. 3)

123Abolition of requirements to hold meetings: individual insolvencyE+W+S+N.I.

(1)The Insolvency Act 1986 is amended as follows.

(2)After section 379 insert—

Creditors' decisionsE+W+S+N.I.
379ZACreditors' decisions: general

(1)This section applies where, for the purposes of this Group of Parts, a person (“P”) seeks a decision from an individual's creditors about any matter.

(2)The decision may be made by any creditors' decision procedure P thinks fit, except that it may not be made by a creditors' meeting unless subsection (3) applies.

(3)This subsection applies if at least the minimum number of creditors request in writing that the decision be made by a creditors' meeting.

(4)If subsection (3) applies, P must summon a creditors' meeting.

(5)Subsection (2) is subject to any provision of this Act, the rules or any other legislation, or any order of the court—

(a)requiring a decision to be made, or prohibiting a decision from being made, by a particular creditors' decision procedure (other than a creditors' meeting);

(b)permitting or requiring a decision to be made by a creditors' meeting.

(6)Section 379ZB provides that in certain cases the deemed consent procedure may be used instead of a creditors' decision procedure.

(7)For the purposes of subsection (3) the “minimum number” of creditors is any of the following—

(a)10% in value of the creditors;

(b)10% in number of the creditors;

(c)10 creditors.

(8)The references in subsection (7) to creditors are to creditors of any class, even where a decision is sought only from creditors of a particular class.

(9)In this section references to a meeting are to a meeting where the creditors are invited to be present together at the same place (whether or not it is possible to attend the meeting without being present at that place).

(10)Except as provided by subsection (8), references in this section to creditors include creditors of a particular class.

(11)In this Group of Parts “creditors' decision procedure” means a procedure prescribed or authorised under paragraph 11A of Schedule 9.

379ZBDeemed consent procedure

(1)The deemed consent procedure may be used instead of a creditors' decision procedure where an individual's creditors are to make a decision about any matter, unless—

(a)a decision about the matter is required by virtue of this Act, the rules or any other legislation to be made by a creditors' decision procedure, or

(b)the court orders that a decision about the matter is to be made by a creditors' decision procedure.

(2)If the rules provide for an individual's creditors to make a decision about the remuneration of any person, they must provide that the decision is to be made by a creditors' decision procedure.

(3)The deemed consent procedure is that the relevant creditors (other than opted-out creditors) are given notice of—

(a)the matter about which the creditors are to make a decision,

(b)the decision the person giving the notice proposes should be made (the “proposed decision”),

(c)the effect of subsections (4) and (5), and

(d)the procedure for objecting to the proposed decision.

(4)If less than the appropriate number of relevant creditors object to the proposed decision in accordance with the procedure set out in the notice, the creditors are to be treated as having made the proposed decision.

(5)Otherwise—

(a)the creditors are to be treated as not having made a decision about the matter in question, and

(b)if a decision about that matter is again sought from the creditors, it must be sought using a creditors' decision procedure.

(6)For the purposes of subsection (4) the “appropriate number” of relevant creditors is 10% in value of those creditors.

(7)Relevant creditors” means the creditors who, if the decision were to be made by a creditors' decision procedure, would be entitled to vote in the procedure.

(8)In this section references to creditors include creditors of a particular class.

(9)The rules may make further provision about the deemed consent procedure.

379ZCPower to amend sections 379ZA and 379ZB

(1)The Secretary of State may by regulations amend section 379ZA so as to change the definition of the minimum number of creditors.

(2)The Secretary of State may by regulations amend section 379ZB so as to change the definition of the appropriate number of relevant creditors.

(3)Regulations under this section may define the minimum number or the appropriate number by reference to any one or more of—

(a)a proportion in value,

(b)a proportion in number,

(c)an absolute number,

and the definition may include alternative, cumulative or relative requirements.

(4)Regulations under subsection (1) may define the minimum number of creditors by reference to all creditors, or by reference to creditors of a particular description.

(5)Regulations under this section may make provision that will result in section 379ZA or 379ZB having different definitions for different cases, including for different kinds of decisions.

(6)Regulations under this section may make transitional provision.

(7)The power of the Secretary of State to make regulations under this section is exercisable by statutory instrument.

(8)A statutory instrument containing regulations under this section may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament.

(3)In Schedule 9 (provisions which may be included in individual insolvency rules), after paragraph 11 insert—

11A(1)Provision about the making of decisions by creditors, including provision—

(a)prescribing particular procedures by which creditors may make decisions;

(b)authorising the use of other procedures for creditors to make decisions, if those procedures comply with prescribed requirements.

(2)Provision under sub-paragraph (1) may in particular include provision about—

(a)how creditors may request that a creditors' meeting be held,

(b)the rights of creditors and others to be given notice of, and participate in, procedures,

(c)creditors' rights to vote in procedures,

(d)the period within which any right to participate or vote is to be exercised,

(e)the proportion of creditors that must vote for a proposal for it to be approved,

(f)how the value of any debt should be determined,

(g)the time at which decisions taken by a procedure are to be treated as having been made.

(4)In section 385(1) (miscellaneous definitions relating to individual insolvency)—

(a)after the definition of “the court” insert—

“creditors' decision procedure” has the meaning given by section 379ZA(11);;

(b)after the definition of “debt relief order” insert—

deemed consent procedure” means the deemed consent procedure provided for by section 379ZB;.

Annotations: Help about Annotation
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Annotations are used to give authority for changes and other effects on the legislation you are viewing and to convey editorial information. They appear at the foot of the relevant provision or under the associated heading. Annotations are categorised by annotation type, such as F-notes for textual amendments and I-notes for commencement information (a full list can be found in the Editorial Practice Guide). Each annotation is identified by a sequential reference number. For F-notes, M-notes and X-notes, the number also appears in bold superscript at the relevant location in the text. All annotations contain links to the affecting legislation.

Commencement Information

I97S. 123 in force at 26.5.2015 for specified purposes by S.I. 2015/1329, reg. 3(d)

I98S. 123 in force at 6.4.2017 for E.W. in so far as not already in force by S.I. 2016/1020, reg. 4(b) (with reg. 5) (as amended by S.I. 2017/363, reg. 3)

124Ability for creditors to opt not to receive certain notices: company insolvencyE+W+S+N.I.

(1)The Insolvency Act 1986 is amended as follows.

(2)For the italic heading before section 246B substitute— “ Giving of notices etc by office-holders ”.

(3)After section 246B insert—

246CCreditors' ability to opt out of receiving certain notices

(1)Any provision of the rules which requires an office-holder of a company to give a notice to creditors of the company does not apply, in circumstances prescribed by the rules, in relation to opted-out creditors.

(2)Subsection (1)—

(a)