Companies Act 2006 - Resignation

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Section 1036: Resignation, removal and replacement of inspectors

1306. This section inserts new sections 446C and 446D which provide for the resignation or revocation of an inspector’s appointment and the provision to replace an inspector.

1307. New section 446C(1) and (2) provides not only that an inspector may resign but also that the Secretary of State has the power to revoke his appointment.

1308. New section 446D(1) provides that, if an inspector resigns, dies or has his appointment revoked, the Secretary of State has the power to appoint a replacement inspector to continue the investigation. Any appointment which takes place under new subsection (1) will be treated as though it were made under the provision under which the former inspector were appointed (new section 446D(2)).

1309. The Secretary of State is obliged to ensure that at least one inspector continues the investigation (new section 446D(3)) unless such a step would be pointless because he could direct the termination of the investigation in circumstances which would result in a final report not being made (new section 446D(4)).

1310. New section 446D(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).

Section 1037: Power to obtain information from former inspectors etc

1311. Subsection (1) inserts new section 446E into the 1985 Act.

1312. New section 446E(1) provides that, where an inspector resigns or has his appointment revoked or is given a direction under section 446B (termination of an investigation) (new section 446E(2)), the Secretary of State can direct him to hand over documents that he has obtained or generated during the course of his investigation, either to the Secretary of State or to another inspector appointed under this Part (new section 446E(3)).

1313. A requirement under new subsection (3) includes the power to ensure that the production of a copy of the document is made in hard copy or in a form from which a hard copy can be obtained (new section 446E(4)). A document includes information recorded in any form (new section 446E(7)(b)). New section 446E(5) enables the Secretary of State to direct any person to whom this section applies to inform him of any matters that came to that person’s attention as a result of the investigation. New section 446E(6) confirms that a person shall comply with any direction given to him under this section.

1314. New section 446E(7)(a) 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).

1315. Subsections (2) and (3) concern consequential changes to other sections within the 1985 Act.

Section 1038: Power to require production of documents

1316. The 2006 Act introduces a new definition for documents in hard copy form, (see section 1135). This section ensures that there is a consistent approach in existing investigation provisions where there is a requirement to produce documents.

Section 1039: Disqualification orders: consequential amendments

1317. Subsections (a) and (b) extend the Company Directors Disqualification Act 1986 so that decisions on whether to take action to disqualify directors can be taken on the basis of information that was obtained or generated by an inspector (or came to his knowledge) as a result of his investigation, notwithstanding whether such information is or will be included in any formal report. In some cases this may speed up the ability to seek to disqualify directors.

PART 33: UK COMPANIES NOT FORMED UNDER COMPANIES LEGISLATION

1318. The CLR considered the position of unregistered companies in Chapter 9 of Completing the Structure and presented their recommendations in paragraphs 11.34 to 11.37 of the Final Report. The provisions in this Part have been developed with these recommendations in mind.