Company and Business Names (Amendment) (No. 2) Regulations 2007

I have a sense of having been hit repeatedly over the head with a rather heavy hammer. I thank the Minister for that extremely thorough explanation of this technical piece of company law. The noble Lord, Lord Razzall, and I are Companies Act 2006 freaks. We spent 14 or 15 happy days in this room. This presumably now moves into the 2006 Act. It is referred to here as Section 29(1) of the Companies Act 1985. I assume that there is a schedule of derivations and destinations which will tell us where it ends up in the 2006 Act. Can the Minister tell us where this information ends up in the 2006 Act? It would be very helpful if the Minister’s officials could send an updated list of derivations and destinations to those of us who are participating today. We shall return to these issues in future debates and it would help us to produce sensible questions and comments for the Minister if we could have that information. That having been said, it is clearly sensible that there should be a power to stop individuals and companies being set up in a way that gives greater weight to them or implies associations that do not in fact exist. I also understand the pre-prohibition requirement to stop the unscrupulous dashing in during the gap between the regulations being published and coming into force. My only surprise is that we have got as far as this without the words ““Government”” and ““NHS”” being on the list. I know that ““royal”” and ““national”” are on the list because I was once involved, along with the Bank of England, in setting up a company with the word ““national”” in its title. It took an inordinate amount of time to unravel it, even though the Bank was keen on the formation of the particular company. I have one query on the detail of the regulation. Paragraph 2.3 of the Explanatory Memorandum states: "““The Regulations will not affect any company that already has a name including ‘Government’ or ‘HPSS’, ‘HSC’ or ‘NHS’””." The same goes for any business. There is no retrospective effect in these regulations. Am I right in believing that if an organisation has such a name in its title, it has got it? I ask this because if it is retrospective, that is another issue. The paragraph goes on to state: "““There is a transitional provision for those to whom such a business is transferred””." ““Transferred”” is an interesting word. What does it mean, because transfer can occur in several ways? It could be an outright sale of the business that carries the name, a change of owner with a new beneficial owner taking over the assets of the business, or it could just be part of a corporate reorganisation whereby a body is transferred from one subsidiary of the group to another with no effective change in ownership or control. It seems unfair because a company’s name is an asset acquired in good faith and therefore possibly capable of sale, but certainly to prohibit a transfer within a group of companies with no change in ownership would be unduly restrictive. Perhaps the Minister could explain the background to this and give details of the proposed length of any transitional period. I do not see the length of the transitional period set out in the Explanatory Memorandum, although I may have missed it. Before I conclude, I want to stray a fraction wider. We are considering here a regulation which is going to be administered by Companies House. There is, of course, some controversy about Companies House and its ability to handle its existing duties under the Companies Act 2006. The Minister will have seen the Financial Times of 8 November reporting that: "““Companies Act put on hold until 2009””." A large measure of that is that Companies House, despite the fact that we have been considering the changes arising from that Act for something between seven to nine years, is unable to meet the timetable that the Government originally gave. That is not an academic point, because when we considered the Companies Bill in Committee, we learnt of scams from overseas boilerhouses, which got hold of lists of private shareholders and cold-called them to sell them shares in one company or another. It is unsatisfactory that people should be able to prey on the unsophisticated and the vulnerable, and, as I said we received a number of examples of that during Committee consideration of the Bill. It is disappointing that we will not be ready to make the appropriate changes until 2009. As 2009 will be 365 days long, perhaps the Minister can tell us whether he thinks that it will be January 2009 or December 2009, because there is quite a big difference. I appreciate that that is outside the exact detail of the regulation, so if he wants to write to me, I shall be delighted, but we need to keep the pressure up on that point. If the Minister is going to write, he will be aware that a number of other issues about the implementation of the Act are starting to cause major concern within the legal community. I should be extraordinarily grateful if he could respond on the issue of the chairman’s casting vote, which is apparently disappearing; the question of limited liability, where the new model articles apparently do not contain a reference to limited liability, which is required to make a company limited under the new Act; and, most technically, the interplay between Sections 152 and 323, which appears to prohibit a custodian from voting shares for which he or she is responsible both for and against. If he or she is acting for more one investor, one investor may say, ““Please vote for this””, and another may say, ““Please vote against””. The way in which the Act is now being interpreted is that it is not possible to do that, you can vote only one way. That is one problem that we have with the proposal to require institutions to explain how they have voted. I will not weary the Committee with the detail of that rather technical point, but there was an article in the Times on 6 November headlined, "““Investor protest as ‘simplified’ company law prevents free votes at AGM””." I have had a couple of letters from major institutions explaining their concerns about that. Time is of the essence as the juggernaut of implementation rolls on, so if the Minister were able to give us a little more visibility on those other issues, that would be extremely helpful. We have no problem with the regulations as they stand; we understand why it has had to have been done post-event; but it would be helpful if he could say something about the issue of transfer and what that means precisely.