Restoration to the register: supplementary provisions
Section 1033: Company’s name on restoration
1284. This section establishes the fundamental position that a company is restored to the register with the name it had before it was struck off, but also makes new provision for circumstances where restoration of a company would have the effect that two companies with the same or very similar names would appear in the registrar’s index. There is a procedure for the restored company to change its name.
Section 1034: Effect of restoration to the register where property has vested a bona vacantia
1285. This section replaces section 655 of the 1985 Act with little change of substance. However, it makes new provision (subsection (3)) that, where a company’s property has passed to the Crown and been disposed of, the Crown, in reimbursing the newly restored company, may deduct the reasonable costs of sale which were incurred.
PART 32: COMPANY INVESTIGATIONS: AMENDMENTS
Powers to appoint inspectors
1286. The 1985 Act gives the Secretary of State the power to appoint competent inspectors to carry out inspections, and report the result to him, in a number of circumstances. There are three categories of inspections at present:
• investigations into the affairs of companies;
• investigations into the membership or control of companies; and
• investigations of dealings in share options by company directors and their families and failure to disclose interests in shares.
1287. Investigations by inspectors into the affairs of companies and certain other bodies corporate can be initiated under sections 431 and 432. Such inspections can be launched on the application of a company or a proportion of its members, or on the Secretary of State’s own initiative, and must be carried out where the court orders it.
1288. Investigations by inspectors into the membership or control of companies can be initiated under section 442. The Secretary of State can launch such an inspection on his own initiative under section 442(1), and is obliged to do so where the requisite number of members of a company apply.
1289. Inspections in the third category, under section 446, relate to suspected contraventions of certain provisions of Part 10 of the 1985 Act. The 2006 Act repeals the relevant provisions of Part 10 (see section 1177) and section 446 is repealed in consequence.
1290. Two inspectors are generally appointed to carry out an inspection – usually a QC and a partner in one of the leading accountancy firms.
1291. Inspectors are appointed to investigate and to report the results of their investigations to the Secretary of State. At the end of an inspection, the inspectors generally have a duty to make a final report to the Secretary of State. The inspectors may also make interim reports during the course of the inspection, and the Secretary of State can direct them to do so.
1292. Unless the appointment was made under section 432 of the 1985 Act on terms that any report is not for publication (section 432(2A)) interim and final reports are publishable; the Secretary of State has discretion to publish an interim or final report under section 437(3). The availability of a published report is a crucial aspect of the inspection system.
Changes brought in by the 2006 Act
1293. The 2006 Act confers new powers on the Secretary of State to bring to an end an investigation when it is no longer in the public interest to continue with it, to revoke the appointment of an inspector and to issue directions about the scope of an investigation, its duration and certain other matters.
1294. The main purpose of these sections is to give the Secretary of State power to take appropriate action where an investigation appears to be taking too long. The sections also provide for situations not currently explicitly provided for, such as the resignation or death of inspectors, and the ability to appoint replacement inspectors.
1295. The details of these changes and the circumstances in which the changes will apply are set out below.
Section 1035: Powers of Secretary of State to give directions to inspectors
1296. Subsection (1) inserts new sections 446A and 446B into the 1985 Act, which provide new powers for the Secretary of State to give directions to inspectors with which they are obliged to comply (new sections 446A(1) and 446B(5)).
1297. The power in new section 446A(2) is exercisable by the Secretary of State in relation to inspectors appointed under sections 431, 432(2) and 442(1). Directions under new section 446A(2) can either relate to the investigation itself or the inspectors’ reports of the results of their investigations. Regarding the former, such directions can take two forms:
• a direction as to the subject matter of an investigation (whether by reference to a specified area of a company’s operation, a specified transaction, a period of time or otherwise); or
• a direction which requires an inspector to take or not to take a specified step in his investigation.
1298. As regards inspectors’ reports the Secretary of State will have a power to secure that any report (new section 446A(3)):
• includes the inspector’s views on a specified matter;
• does not include any reference to a specified matter;
• is made in a specified form or manner; or
• is made by a specified date.
1299. New section 446A(4) enables directions by the Secretary of State to be capable of being given on an inspector’s appointment. It also provides that directions may vary or revoke a direction previously given and may be given at the request of an inspector.
1300. New section 446A(5) confirms that the scope of the term “investigation” will include any investigation undertaken under section 433(1) into the affairs of the company’s holding company or subsidiary (or a subsidiary of its holding company or a holding company of its subsidiary).
1301. New section 446B(1) will give the Secretary of State power to direct an inspector to take no further steps in an investigation, and the inspector shall comply with any direction given to him under this section (new section 446B(5)). However, if the appointment of inspectors is one that the Secretary of State is obliged to make (either because a court orders that a company’s affairs ought to be so investigated or because the requisite number of its members has applied for an investigation into its ownership), such a direction can only be given if matters have come to light in the course of the investigation which suggest that a criminal offence has been committed and those matters have been referred to the appropriate prosecuting authority (new section 446B(2)).
1302. Under new section 446B(3), any direction given to the inspector under section 437(1) to produce an interim report, and any direction under new section 446A(3) in relation such a report, shall cease to have effect.
1303. If the Secretary of State directs an inspector to take no further steps in an investigation then the inspector shall not make a final report to him unless:
• the requisite number of a company’s members has applied for an investigation into its ownership, matters have come to light in the course of the investigation which suggest that a criminal offence has been committed, those matters have been referred to the appropriate prosecuting authority and the Secretary of State directs the inspectors to make a final report; or
• the inspector was appointed following a court order that a company’s affairs ought to be investigated (new section 446B(4)).
1304. New section 446B(6) confirms that the scope of the term “investigation” will include any investigation undertaken under section 433(1) into the affairs of the company’s holding company or subsidiary (or a subsidiary of its holding company or a holding company of its subsidiary).
1305. Subsections (2) to (5) concern consequential changes to other sections within the 1985 Act.