Companies (Audit, Investigations and Community Enterprise) Act 2004

Defective accountsE+W+S

10Persons authorised to apply to court in connection with defective accountsE+W+S

(1)Section 245C of the Companies Act 1985 (c. 6) (other persons authorised to apply to court) is amended as follows.

(2)After subsection (1) insert—

“(1A)But where the order giving authorisation (see subsection (4)) is to contain any requirements or other provisions specified under subsection (4A), the Secretary of State may not authorise a person unless, in addition, it appears to him that the person would, if authorised, exercise his functions as an authorised person in accordance with any such requirements or provisions.”

(3)After subsection (4) insert—

“(4A)An order under subsection (4) may contain such requirements or other provisions relating to the exercise of functions by the authorised person as appear to the Secretary of State to be appropriate.

(4B)If the authorised person is an unincorporated association, any relevant proceedings may be brought by or against that association in the name of any body corporate whose constitution provides for the establishment of the association.

For this purpose “relevant proceedings” means proceedings brought in, or in connection with, the exercise of any function by the association as an authorised person.”

11Disclosure of tax information by Inland Revenue to facilitate application for declaration that accounts are defectiveE+W+S

(1)After section 245C of the Companies Act 1985 (c. 6) insert—

“245DDisclosure of information held by Inland Revenue to persons authorised to apply to court

(1)Information which is held by or on behalf of the Commissioners of Inland Revenue may be disclosed to a person who is authorised under section 245C of this Act, or under Article 253C of the Companies (Northern Ireland) Order 1986 (S.I. 1986/1032 (N.I. 6)), if the disclosure—

(a)is made for a permitted purpose, and

(b)is made by the Commissioners or is authorised by them.

(2)Such information—

(a)may be so disclosed despite any other restriction on the disclosure of information whether imposed by any statutory provision or otherwise, but

(b)in the case of personal data (within the meaning of the Data Protection Act 1998), may not be disclosed in contravention of that Act.

(3)For the purposes of subsection (1), a disclosure is made for a permitted purpose if it is made for the purpose of facilitating—

(a)the taking of steps by the authorised person to discover whether there are grounds for an application to the court under section 245B of this Act or Article 253B of the Companies (Northern Ireland) Order 1986; or

(b)a determination by the authorised person as to whether or not to make such an application.

(4)The power of the Commissioners to authorise a disclosure under subsection (1)(b) may be delegated (either generally or for a specified purpose) to an officer of the Board of Inland Revenue.

245ERestrictions on use and further disclosure of information disclosed under section 245D

(1)Information that is disclosed to an authorised person under section 245D may not be used except in or in connection with—

(a)taking steps to discover whether there are grounds for an application to the court as mentioned in section 245D(3)(a);

(b)determining whether or not to make such an application; or

(c)proceedings on any such application.

(2)Information that is disclosed to an authorised person under section 245D may not be further disclosed except—

(a)to the person to whom the information relates; or

(b)in or in connection with proceedings on any such application to the court.

(3)A person who contravenes subsection (1) or (2) is guilty of an offence and liable to imprisonment or a fine, or both.

(4)It is a defence for a person charged with an offence under subsection (3) to prove—

(a)that he did not know, and had no reason to suspect, that the information had been disclosed under section 245D; or

(b)that he took all reasonable steps and exercised all due diligence to avoid the commission of the offence.

(5)Sections 732 (restriction on prosecutions), 733(2) and (3) (liability of individuals for corporate default) and 734 (criminal proceedings against unincorporated bodies) apply to offences under this section.”

(2)After Article 253C of the Companies (Northern Ireland) Order 1986 (S.I. 1986/1032 (N.I. 6)) insert—

“253DDisclosure of information held by Inland Revenue to persons authorised to apply to court

(1)Information which is held by or on behalf of the Commissioners of Inland Revenue may be disclosed to a person who is authorised under Article 253C, or under section 245C of the Companies Act 1985, if the disclosure—

(a)is made for a permitted purpose, and

(b)is made by the Commissioners or is authorised by them.

(2)Such information—

(a)may be so disclosed despite any other restriction on the disclosure of information whether imposed by any statutory provision or otherwise, but

(b)in the case of personal data (within the meaning of the Data Protection Act 1998), may not be disclosed in contravention of that Act.

(3)For the purposes of paragraph (1), a disclosure is made for a permitted purpose if it is made for the purpose of facilitating—

(a)the taking of steps by the authorised person to discover whether there are grounds for an application to the court under Article 253B or section 245B of the Companies Act 1985; or

(b)a determination by the authorised person as to whether or not to make such an application.

(4)The power of the Commissioners to authorise a disclosure under paragraph (1)(b) may be delegated (either generally or for a specified purpose) to an officer of the Board of Inland Revenue.

253ERestrictions on use and further disclosure of information disclosed under Article 253D

(1)Information that is disclosed to an authorised person under Article 253D may not be used except in or in connection with—

(a)taking steps to discover whether there are grounds for an application to the court as mentioned in Article 253D(3)(a);

(b)determining whether or not to make such an application; or

(c)proceedings on any such application.

(2)Information that is disclosed to an authorised person under Article 253D may not be further disclosed except—

(a)to the person to whom the information relates; or

(b)in or in connection with proceedings on any such application to the court.

(3)A person who contravenes paragraph (1) or (2) is guilty of an offence and liable to imprisonment or a fine, or both.

(4)It is a defence for a person charged with an offence under paragraph (3) to prove—

(a)that he did not know, and had no reason to suspect, that the information had been disclosed under Article 253D; or

(b)that he took all reasonable steps and exercised all due diligence to avoid the commission of the offence.

(5)Articles 680 (restriction on prosecutions), 680A (liability of individuals for corporate default) and 680B (criminal proceedings against unincorporated bodies) apply to offences under this Article.”

12Power of person authorised to require documents, information and explanationsE+W+S

(1)After section 245E of the Companies Act 1985 (c. 6) (as inserted by clause 11) insert—

“245FPower of authorised persons to require documents, information and explanations

(1)This section applies where it appears to a person who is authorised under section 245C of this Act that there is, or may be, a question whether the annual accounts of a company comply with the requirements of this Act.

(2)The authorised person may require any of the persons mentioned in subsection (3) to produce any document, or to provide him with any information or explanations, that he may reasonably require for the purpose of—

(a)discovering whether there are grounds for an application to the court under section 245B; or

(b)determining whether or not to make such an application.

(3)Those persons are—

(a)the company;

(b)any officer, employee, or auditor of the company;

(c)any persons who fell within paragraph (b) at a time to which the document or information required by the authorised person relates.

(4)If a person fails to comply with a requirement under subsection (2), the authorised person may apply to the court for an order under subsection (5).

(5)If on such an application the court decides that the person has failed to comply with the requirement under subsection (2), it may order the person to take such steps as it directs for securing that the documents are produced or the information or explanations are provided.

(6)A statement made by a person in response to a requirement under subsection (2) or an order under subsection (5) may not be used in evidence against him in any criminal proceedings.

(7)Nothing in this section compels any person to disclose documents or information in respect of which in an action in the High Court a claim to legal professional privilege, or in an action in the Court of Session a claim to confidentiality of communications, could be maintained.

(8)In this section “document” includes information recorded in any form.

245GRestrictions on further disclosure of information obtained under section 245F

(1)This section applies to information (in whatever form) which—

(a)has been obtained in pursuance of a requirement or order under section 245F, and

(b)relates to the private affairs of an individual or to any particular business.

(2)No such information may, during the lifetime of that individual or so long as that business continues to be carried on, be disclosed without the consent of that individual or the person for the time being carrying on that business.

(3)Subsection (2) does not apply to any disclosure of information which—

(a)is made for the purpose of facilitating the carrying out by a person authorised under section 245C of his functions under section 245B;

(b)is made to a person specified in Part 1 of Schedule 7B;

(c)is of a description specified in Part 2 of that Schedule; or

(d)is made in accordance with Part 3 of that Schedule.

(4)The Secretary of State may by order amend Schedule 7B.

(5)An order under subsection (4) must not—

(a)amend Part 1 of Schedule 7B by specifying a person unless the person exercises functions of a public nature (whether or not he exercises any other function);

(b)amend Part 2 of Schedule 7B by adding or modifying a description of disclosure unless the purpose for which the disclosure is permitted is likely to facilitate the exercise of a function of a public nature;

(c)amend Part 3 of Schedule 7B so as to have the effect of permitting disclosures to be made to a body other than one that exercises functions of a public nature in a country or territory outside the United Kingdom.

(6)An order under subsection (4) shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(7)A person who discloses any information in contravention of this section—

(a)is guilty of an offence, and

(b)is liable on conviction to imprisonment or a fine, or both.

(8)However, it is a defence for a person charged with an offence under subsection (7) to prove—

(a)that he did not know, and had no reason to suspect, that the information had been disclosed under section 245F; or

(b)that he took all reasonable steps and exercised all due diligence to avoid the commission of the offence.

(9)Sections 732 (restriction on prosecutions), 733 (liability of individuals for corporate default) and 734 (criminal proceedings against unincorporated bodies) apply to offences under this section.

(10)This section does not prohibit the disclosure of information if the information is or has been available to the public from any other source.

(11)Nothing in this section authorises the making of a disclosure in contravention of the Data Protection Act 1998.”

(2)Schedule 1 (which inserts Schedule 7B in the Companies Act 1985 (c. 6)) has effect.