Companies Act 1967 (repealed)

(1) An insurance company to which this Act applies, being a company which carries on (whether within or outside Great Britain) general business, shall be deemed for the purposes of section two hundred and twenty-two of the Companies Act 1948 (which authorises the court to wind up a company unable to pay its debts), to be unable to pay its debts if, at any time in its first financial year, the value of its assets does not exceed the amount of its liabilities by £50,000, or if, at any time after the expiration of that year, the value of its assets does not exceed the amount of its liabilities by the amount which is the relevant amount for the purposes of section 62(1)(a) of the Companies Act 1967 ; and the provisions of this Act as to winding up shall have effect accordingly

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• (2) Subject to the provisions of the following subsection, the Board of Trade may, at any time before the expiration of the period of two years beginning with the day on which this Act is passed, direct that, until the expiration of such period (expiring not later than the expiration of the period aforesaid) as may be specified in the direction, the subsection substituted by the foregoing subsection shall, in its application to an insurance company so specified, being one which, immediately before the passing of this Act, was carrying on (whether within or outside Great Britain) business which then constituted general business for the purposes of the principal Act, have effect subject to such relaxative modifications as may be so specified.

• (3) The power conferred by the last foregoing subsection on the Board of Trade shall not be exercisable in relation to a company so long as a petition to wind it up is before the court.

Provision for securing that a company's solvency is maintained.

80

• (1) If it appears to the appropriate authority that the business of an insurance company to which the principal Act applies is being so conducted that there is a risk of the company's becoming insolvent, that authority may impose on the company all or any of the following requirements, namely:—

• (a) a requirement that the company shall not make investments of a specified class and shall, before the expiration of a specified period (or such longer period as the appropriate authority may allow), realise investments of that class held by it immediately before the requirement is imposed;

• (b) a requirement that assets of the company to a value not less at any time than the amount of its domestic liabilities at that time shall be maintained in the United Kingdom;

• (c) a requirement that assets of the company of a specified description, free from any mortgage or charge and to a value not less at any time than whichever is the greater of the following amounts, that is to say, the amount of a specified proportion of the domestic liabilities of the company, society or body at that time and £50,000, shall be maintained in the United Kingdom and that those assets, or, in the case of any of them to which there are documents of title, those documents, shall be held in the custody of a person approved for the purposes of this section by the appropriate authority ;

• (d) a requirement that the company shall take all such steps as are requisite to secure that the aggregate of the premiums to be received by it in consideration of the undertaking by it, during a specified period beginning not earlier than twenty-eight clear days after the requirement is imposed, of liabilities in the course of carrying on business of a specified class (being one of the classes relevant for the purposes of this Part of this Act) shall not exceed a specified amount;

• (e) a requirement that the company shall, at specified times or intervals, furnish to the appropriate authority information about specified matters, being, if that authority so require, information verified in a specified manner.

• (2) Subsections (2) and (3) of section 65 of this Act shall have effect for the purposes of this section subject to the modifications that, in the said subsection (2), for the reference to paragraph (b) or (c) of section 65(1), there shall be substituted a reference to paragraph (b) or (c) of subsection (1) of this section, and, for the reference to the Board of Trade, there shall be substituted a reference to the appropriate authority, and, in the said subsection (3), for the reference to paragraph (c) of section 65(1), there shall be substituted a reference to paragraph (c) of subsection (1) of this section ; and section 66 of this Act shall have effect where a requirement is imposed by virtue of paragraph (c) of subsection (1) above as it does where a requirement is imposed by virtue of paragraph (c) of section 65(1) of this Act, subject to the modifications that, for any reference to paragraph (c) of the said section 65(1), there shall be substituted a reference to paragraph (c) of subsection (1) of this section, and for the reference to the Board of Trade, there shall be substituted a reference to the appropriate authority.

• (3) In relation to a company which carries on in Great Britain no insurance business other than industrial assurance business, paragraph (d) of subsection (1) above shall have effect with the substitution, for the words " business of a specified class (being one of the classes relevant for the purposes of this Part of this Act) " , of the words " industrial assurance business ".

• (4) A requirement imposed under this section may be rescinded by the appropriate authority if it appears to it that it is no longer necessary for the requirement to continue in force.

• (5) When the appropriate authority imposes under subsection (1)(c) of this section a requirement on a company or rescinds a requirement so imposed, it shall forthwith serve—

• (a) except where the requirement is one imposed on a registered society (other than one registered in Northern Ireland), on the registrar of companies ;

• (b) in the said excepted case, on the appropriate registrar as defined by section 73(1) of the Industrial and Provident Societies Act 1965;

written notice stating that fact and, in the case of a notice of the imposition of a requirement, setting out the terms of the requirement and, in the case of a notice of the rescission of a requirement, identifying the requirement.

• (6) Subsections (7) and (8) of section 65 of this Act shall have effect for the purposes of this section subject to the modification that, for any reference to a notice served in pursuance of subsection (6) of that section, there shall be substituted a reference to a notice served in pursuance of the last foregoing subsection.

• (7) In this section, " appropriate authority ", in relation to a company, means—

• (a) except in the case of a company which carries on in Great Britain no insurance business other than industrial assurance business, the Board of Trade ; and

• (b) in the said excepted case, the Industrial Assurance Commissioner;

and " domestic liabilities " shall be construed in accordance with section 65(9) of this Act.

Board of Trade's powers to petition for winding up of insurance company.

81

For subsection (2) of section 15 of the principal Act (which empowers the Board of Trade, with the leave of the court, to present a petition for the winding up, in accordance with the Companies Act 1948, of an insurance company subject to be Wound up under that Act, on the ground that it is unable to pay its debts or that an investigation under section 14 of the principal Act by an inspector appointed by the Board has been obstructed), there shall be substituted the following subsection:—

(2) The Board of Trade may present a petition for the winding up, in accordance with the Companies Act 1948, of an insurance company to which this Act applies, being a company which may be wound up by the court under the provisions of the said Act of 1948, on the ground— (a) that the company is unable to pay its debts within the meaning of sections two hundred and twenty-two and two hundred and twenty-three of the said Act of 1948 ; or (b) that the company has failed to satisfy an obligation to which it is subject by virtue of section four, five or seven of this Act or that there has, in the case of the company, been a failure to comply with subsection (1), (3), (5) or (6) of section eight of this Act or with section nine of this Act or any provision applied by regulations made for the purposes of that section ; or (c) that the company, being under the obligation imposed by section one hundred and forty-seven of the said Act of 1948 with respect to the keeping of proper books of account, has failed to satisfy that obligation or to produce books kept in satisfaction of that obligation and that the Board of Trade are unable to ascertain the financial position of the company

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Obligation to notify Changes in Officers and Control of Company and holding Company

Obligation of insurance company to notify Board of Trade of changes in officers and control of company and holding company.

82

• (1) Every insurance company to which the principal Act applies which is a body corporate shall, upon a person's becoming or ceasing to be, an officer of the company, or acquiring or relinquishing control of the company, be under obligation to notify the Board of Trade in writing of that fact and of his name, and every insurance company to which the principal Act applies which is not a body corporate shall, upon a person's becoming or ceasing to be, an officer of the company, be under a corresponding obligation.

• (2) Every insurance company to which the principal Act applies, being a body corporate which is the subsidiary of another such body, shall upon a person's becoming, or ceasing to be, an officer of, or acquiring or relinquishing control of, a body corporate which is its holding company (within the meaning of the Companies Act 1948), be under obligation to notify the Board of Trade in writing of that fact and of his name.

• (3) An obligation imposed on a company by this section must be fulfilled before the expiration of the period of fourteen days beginning with the day next following that on which both the fact of its being under the obligation and the identity of the person whose name must be notified in discharge of it are first known to the company.

• (4) For the purposes of this section a person shall be taken to be in control of a company if he is entitled to exercise, or control the exercise, of one third or more of the voting power at any general meeting of the company.

Obligation of person who acquires or relinquishes control of insurance company or insurance company's holding company to notify it of that fact.

83

• (1) A person who acquires or relinquishes control of an insurance company to which the principal Act applies or, if it is a body corporate, of another body corporate which is its holding company (within the meaning of the Companies Act 1948) shall, before the expiration of the period of seven days beginning with the day next following that on which he does so, notify the company in writing of that fact and, if he fails so to do, shall be liable—

• (a) on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine, or to both;

• (b) on summary conviction, to imprisonment for a term not exceeding three months or to a fine not exceeding £200, or to both.

• (2) Subsection (4) of the last foregoing section shall have effect for the purpose of this section as it has effect for the purposes of that section.

Penalization of furnishing false Information

Penalization of furnishing false information under Part II or the principal Act.

84

• (1) A person who—

• (a) for the purpose of obtaining the issue of an authorisation under section 61 of this Act or in purported compliance with a requirement imposed under section 65 or 80 of this Act to furnish information, furnishes information which he knows to be false in a material particular or recklessly furnishes information which is so false; or

• (b) causes or permits to be included in—

• (i) any account, balance-sheet, abstract or statement whereof copies are, by section 8 of the principal Act, required to be deposited with the Board of Trade;

• (ii) any statement, agreement, deed or report whereof a certified copy is, by section 12 of that Act, required to be so deposited ; or

• (iii) any statement or declaration which is, by the last-mentioned section, required to be so deposited ;

any statement which he knows to be false in a material particular or recklessly causes or permits to be so included any statement which is so false ;

shall be guilty of an offence.

• (2) A person guilty of an offence under this section shall be liable—

• (a) on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine, or to both;

• (b) on summary conviction, to imprisonment for a term not exceeding three months or to a fine not exceeding £200, or to both.

Penalties and legal Proceedings

Penalty for non-compliance with Part II or the principal Act.

85

• (1) An insurance company which makes default in complying with a requirement of this Part of this Act, being a default for which no express penalty is provided, or makes, after the passing of this Act, default in complying with a requirement of the principal Act shall be guilty of an offence and liable, on summary conviction, to a fine not exceeding £200.

• (2) Section 26(2) of the principal Act (default by a company in complying with a requirement of that Act, if continued for three months after notice thereof, to be a ground for winding up the company) shall cease to have effect.

Penalty on industrial assurance company for noncompliance with enactments relating to industrial assurance.

86

• (1) An industrial assurance company (within the meaning of the Industrial Assurance Act 1923) which, after the passing of this Act.—

• (a) contravenes or fails to comply with any of the provisions of the Industrial Assurance Act 1923, the Industrial Assurance and Friendly Societies Act 1948 or Part VI of the Reserve and Auxiliary Forces (Protection of Civil Interests) Act 1951, of regulations made for the purposes of section 8 of the said Act of 1948 or of regulations made under section 57 of the said Act of 1951;

• (b) contravenes or fails to comply with any directions given under the Industrial Assurance Act 1923 by the Industrial Assurance Commissioner;

• (c) contravenes the proviso to section 1(1) of the Industrial Assurance and Friendly Societies Act 1929 (which proviso limits the sums which may be insured or paid for funeral expenses);

• (d) fails to comply with a claim made in accordance with the provisions of subsection (1) of section 3 (rights of owners of certain endowment policies) of the last-mentioned Act; or

• (e) issues such a premium receipt book as is mentioned in subsection (3) of the last-mentioned section which does not comply with the provisions of that subsection;

shall, subject to the next following subsection, be guilty of an offence.

• (2) Such a company shall not be guilty of an offence under this section consisting in its insuring in contravention of subsection (2) of section 2 of the Industrial Assurance and Friendly Societies Act 1948 (power to insure life of parent or grandparent for not more than £30) if it is proved that, owing to any false representation on the part of the proposer, the company did not know that the insurance was in contravention of that subsection.

• (3) A company guilty of an offence under this section shall be liable, on summary conviction, to a fine not exceeding £200.

• (4) So far as regards section 3(1) of the Industrial Assurance and Friendly Societies Act 1929, this section shall not prejudice any liability of a company subsisting otherwise than by virtue of this section.

Penalty on friendly society for offence under Industrial Assurance Act 1923.

87

The maximum penalty that may be inflicted on a society registered under the Friendly Societies Act 1896, being a friendly society within the meaning of that Act, for an offence under the Industrial Assurance Act 1923 committed after the passing of this Act shall, instead of being a fine not exceeding £100 or, in the case of a continuing offence, a fine not exceeding £50 a day during which the offence continues, be a fine not exceeding £200; and, accordingly, section 39(1) of the said Act of 1923 shall, in relation to an offence under that Act so committed by a society so registered, being such a friendly society as aforesaid, have effect with the substitution, for the proviso thereto, of the following proviso:—

Provided that the maximum penalty that may be inflicted for an offence under this Act shall be a fine not exceeding £200

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Proceedings against unincorporated bodies for offences under Part II.

88

• (1) Proceedings for an offence alleged to have been committed under this Part of this Act by an unincorporated body shall be brought in the name of that body (and not in that of any of its members), and for the purposes of any such proceedings, any rules of court relating to the service of documents shall have effect as if that body were a corporation.

• (2) A fine imposed on an unincorporated body on its conviction of an offence under this Part of this Act shall be paid out of the funds of that body.

• (3) Section 33 of the Criminal Justice Act 1925 (as amended by section 15(7) of the Justices of the Peace Act 1949) and Schedule 2 to the Magistrates' Courts Act 1952 (procedure on charge of offence against a corporation) shall have effect in a case in which an unincorporated body is charged in England or Wales with an offence under this Part of this Act in like manner as they have effect in the case of a corporation so charged.

• (4) In relation to any proceedings on indictment in Scotland for an offence alleged to have been committed under this Part of this Act by an unincorporated body, section 40 of the Criminal Justice (Scotland) Act 1949 (proceedings on indictment against bodies corporate) shall have effect as if the said body were a body corporate.

Criminal liability of directors,.

89

• (1) Where an offence under this Part of this Act committed by a body corporate is proved to have been committed with the consent or connivance of, or to be attributable to any neglect on the part of, any director, manager, secretary or other similar officer of the body corporate or any person who was purporting to act in any such capacity, he, as well as the body corporate, shall be guilty of that offence and be liable to be proceeded against and punished accordingly.

• (2) For the purposes of the foregoing subsection, a person shall be deemed to be a director of a body corporate if he is a person in accordance with whose directions or instructions the directors of the body or any of them act.

Application of certain provisions of Part I to summary proceedings in respect of offences under Part II.

90

Subsections (2) to (5) (both inclusive) of section 49 of this Act shall apply to, and in connection with, summary proceedings for offences under this Part of this Act and to informations relating to offences thereunder which are triable summarily as they apply to, and in connection with, such proceedings for offences under the Companies Act 1948 and Part I of this Act and to informations relating to offences thereunder that are triable summarily, but subject to the modification of the inclusion, after the references to the Board of Trade, of references to the Industrial Assurance Commissioner.

Restriction of institution of proceedings in respect of offences under Part II.

91

Proceedings in respect of an offence under this Part of this Act shall not, in England or Wales, be instituted except by, or with the consent of, the Board of Trade, the Industrial Assurance Commissioner or the Director of Public Prosecutions.

Other Matters

Power of Board of Trade to exempt certain companies from sections 4, 5, 7 to 9 and 13 of the principal Act.

92

• (1) Where, on the application of a company, incorporated whether under the Companies Act 1948 or otherwise, of a registered society or of an unincorporated body of persons, the Board of Trade—

• (a) are satisfied that the company, society or body is carrying on in Great Britain, or is about so to carry on, business for the purpose only of insuring persons of a limited class or of insuring persons against risks of a limited category of the class against which insurance may lawfully be undertaken by the company, society or body in the course of carrying on business in Great Britain; and

• (b) are satisfied, as regards any of the following provisions of the principal Act, that is to say, sections 4, 5, 7 to 9 and 13, that, in the case of the company, society or body, that provision is or will be inappropriate or unduly onerous;

the Board may by order direct that, subject to such (if any) conditions as may be specified in the order, that provision shall not apply to the company, society or body, or may so direct that (subject as aforesaid) that provision shall, in its application to the company, society or body, have effect subject to such relaxative modifications as may be so specified.

• (2) An order made under this section may be revoked by the Board of Trade—

• (a) on the application of the company, society or body to which it applies;

• (b) if the Board are satisfied that the benefits accruing to the company, society or body by virtue of the order can no longer be justified ; or

• (c) if the Board are satisfied that a condition specified in the order has not been complied with;

and the Board may, from time to time, amend an order so made.

Power of Board of Trade to adapt section 3 of the principal Act.

93

• (1) The Board of Trade may, on the application or with the consent of an insurance company to which the principal Act applies.—

• (a) by order direct that, for the purposes of section 3 of that Act (separation of funds relating to certain classes of business) in its application to the company, insurance business of a kind specified in the order, not being ordinary long-term insurance business, shall be treated as being such business ; or

• (b) by order direct that, for the purposes of that section in its application to the company, ordinary long-term insurance business of a kind so specified shall be treated as not being such business.

• (2) An order under this section may be revoked at any time by the Board of Trade.

Circumstances in which persons carrying on insurance business of certain classes are to be taken as not carrying on also such business of other classes.

94

• (1) For the purposes of this Part of this Act, a person shall not be taken to carry on liability insurance business by reason only of the incidental inclusion, in a contract of insurance whose principal object is to insure a person against risks of a kind such that the business of effecting and carrying out contracts of insurance against them constitutes property insurance business, of provision whereby he assumes liability against the risk of the person insured incurring liabilities to third parties.

• (2) For the purposes of this Part of this Act, a person shall not be taken to carry on marine, aviation and transport insurance business by reason only of the incidental inclusion, in a contract of insurance whose principal object is to insure a person against risks of a kind such that the business of effecting and carrying out contracts of insurance against them constitutes insurance business of some other class, of provision whereby he assumes a liability of a kind whose assumption by itself in a contract of insurance would make that contract such a one as is mentioned in section 59(4) of this Act.

• (3) For the purposes of this Part of this Act, a person shall not be taken to carry on motor vehicle insurance business by reason only of the fact that goods, merchandise or property upon which a contract of insurance is effected by him (being goods, merchandise or property on board of a vessel or aircraft) consist of, or include, motor vehicles.

• (4) For the purposes of this Part of this Act and of sections 3, 5 and 11 of the principal Act, a person shall not be taken to carry on ordinary long-term insurance business by reason only of the incidental inclusion in a contract of insurance whose principal object is to insure a person against risks of a kind such that the business of effecting and carrying out contracts of insurance against them constitutes marine, aviation and transport insurance business, motor vehicle insurance business or property insurance business, of provision whereby he assumes liability against the happening of personal accidents (whether fatal or not).

• (5) For the purposes of this Part of this Act, a person shall not be taken to carry on pecuniary loss insurance business by reason only of the incidental inclusion, in a contract of insurance whose principal object is to insure a person against risks of a kind such that the business of effecting and carrying out contracts of insurance against them constitutes marine, aviation and transport insurance business, motor vehicle insurance business or property insurance business, of provision whereby he assumes liability against such risks as are mentioned in section 59(7)(c) and (d) of this Act.

• (6) For the purposes of this Part of this Act, a person shall not be taken to carry on personal accident insurance business by reason only of the incidental inclusion, in a contract of insurance whose principal object is to insure a person against risks of a kind such that the business of effecting and carrying out contracts of insurance against them constitutes marine, aviation and transport insurance business, motor vehicle insurance business or property insurance business, of provision whereby he assumes liability against the happening of personal accidents (whether fatal or not).

Exception for bankers.

95

A person who carries on pecuniary loss insurance business solely in the course of carrying on banking business and for the purposes of that business shall be excepted from the operation of section 60 of this Act so far as regards such insurance business, and the principal Act shall not apply to a person by reason only that, in the course of carrying on banking business and for the purposes of that business, he carries on such insurance business.

Power of Industrial Assurance Commissioner to exempt Northern Irish collecting societies from provisions of Industrial Assurance Acts 1923 to 1958.

96

• (1) The Industrial Assurance Commissioner may, on the application of a collecting society registered in Northern Ireland, by order exempt it from any provision of the Industrial Assurance Acts 1923 to 1958 if he is satisfied that the existence of a provision of an enactment of the Parliament of Northern Ireland renders it unnecessary for the first-mentioned provision to apply to the society.

• (2) The Industrial Assurance Commissioner may by order revoke an order made under the foregoing subsection with respect to a society, but the revocation shall not take effect until—

• (a) such period as may be specified in the order (which shall not be less than the four weeks next after the making thereof) has expired ; and

• (b) notice that the order has been made has been published in the London and Edinburgh Gazettes ;

and where he does so he shall, within the three days next after doing so, give written notice to the society that he has done so.

Construction (as to Northern Ireland) of certain references.

97

In section 1(5) of the principal Act and in section 60(1 )(c) of this Act, the expression " Acts " shall include Acts of the Parliament of Northern Ireland, and in sections 60(2)(b) and 87 of this Act and section 1(1A) of the Industrial Assurance Act 1923 references to the Friendly Societies Act 1896 shall include references to that Act as it applies in Northern Ireland and to any enactment of the Parliament of Northern Ireland re-enacting that Act (whether with or without modifications).

Annual report by Board of Trade.

98

The Board of Trade shall cause a general annual report of matters within the principal Act and this Part of this Act to be laid before Parliament.

Amendments (of minor nature or consequential on Part II) of the principal Act and the Industrial Assurance Act 1923.

99

The provisions of the principal Act specified in column 1 of Part I of Schedule 6 to this Act shall have effect subject to the amendments respectively specified in relation thereto in column 2 of that Part of that Schedule, and the provisions of the Industrial Assurance Act 1923 specified in column 1 of Part II of that Schedule shall have effect subject to the amendments respectively specified in relation thereto in column 2 of that Part of that Schedule (being, in each case, amendments of a minor nature or consequential on this Part of this Act).

Repeal of certain provisions of section 18 of the Industrial Assurance Act 1923 and of Schedule 2 thereto.

100

The following provisions of the Industrial Assurance Act 1923 shall cease to have effect, namely.—

• (a) section 18(1)(b) (basis of valuation of liabilities of collecting society or industrial assurance company);

• (b) in section 18(1)(g) (power of Industrial Assurance Commissioner to require collecting society to furnish information additional to that required to be furnished under section 28 of the Friendly Societies Act 1896, and industrial assurance company to furnish information additional to that required to be furnished under the principal Act), the words " all or any of such particulars as are mentioned in the Second Schedule to this Act, and " ; and

• (c) Schedule 2.

Construction of references to enactments contained in the principal Act.

101

Any reference in the principal Act or in an order under Schedule 2 thereto which is in force at the passing of this Act to an enactment contained in that Act which is amended by this Part of this Act shall, unless the context otherwise requires, be construed as referring to that enactment as so amended.

Interpretation of Part II.

102

• (1) Except where the context otherwise requires.—

• (a) any reference in this Part of this Act to a provision of the principal Act which is amended by this Part of this Act shall be taken as referring to that provision as so amended;

• (b) any expression to which a meaning is assigned by the principal Act for the purposes of that Act has that meaning also for the purposes of this Part of this Act.

• (2) In this Part of this Act, " registered society " means a society registered or deemed to be registered under the Industrial and Provident Societies Act 1965 or any corresponding enactment in force in Northern Ireland, " subsidiary " shall be construed in accordance with section 154 of the Companies Act 1948, " officer " includes (except where the context otherwise requires) a director, manager or secretary, and " director " includes any person occupying the position of director, by whatever name called.

• (3) A person shall not be deemed to be within the meaning of any provision of this Part of this Act a person in accordance with whose directions or instructions the directors of a company or other body corporate or any of them are accustomed to act by reason only that the directors of the body act on advice given by him in a professional capacity.

• (4) References in this Part of this Act to a body corporate shall be construed as not including a corporation sole or a Scottish firm but as including a body incorporated outside Great Britain.

Temporary limitations of effect of alteration of scope of the principal Act.

103

Notwithstanding anything in this Act—

• (a) until such day as the Board of Trade may by order (made by statutory instrument) appoint, section 4 of the principal Act shall apply only to companies to which it would have applied had this Act not passed;

• (b) until the expiration of the period of one year beginning with the day on which this Act is passed, section 3 of the principal Act (separation of funds relating to certain classes of business) and section 11 thereof (amalgamations and transfers) shall have effect as if this Act had not passed ; and

• (c) until the expiration of the period of two years beginning with the day on which this Act is passed, section 13 of the principal Act shall have effect as if this Act (with the exception of sections 62 and 79 thereof) had not passed, and the references, in section 68(1)(b) of this Act, to general business shall be construed accordingly;

and nothing in this Act shall have effect in relation to the winding up of an insurance company commenced before the passing of this Act.

Saving for discharge of liabilities lawfully assumed before passing of this Act.

104

A company, society or body shall not be taken to carry on insurance business in contravention of section 60 of this Act by reason only of its carrying on business for the purpose of discharging liabilities lawfully assumed by it before the passing of this Act.

Saving for certain orders under Schedule 2 to the principal Act.

105

An order under paragraph 2, 3 or 11 of Schedule 2 to the principal Act which is in force at the passing of this Act shall have effect by virtue of this section but shall be subject to revocation or amendment as if made under section 92 of this Act.

Revocation of provisions of companies' memorandums of association restricting carrying on of insurance business.

106

Any provision of a company's memorandum of association that expressly precludes it from carrying on insurance business of any class shall cease to have effect.

Extent of Part II and Schedules 5 and 6

Northern Ireland.

107

This Part of this Act, and Schedules 5 and 6 thereto, shall not extend to Northern Ireland.

The Isle of Man and the Channel Islands.

108

• (1) The provisions of this Act specified in subsection (3) below shall extend to the Isle of Man subject to such of the modifications specified in section 103 of the Friendly Societies Act 1896 as are relevant in the circumstances; and, notwithstanding anything in section 11 of the Petty Sessions and Summary Jurisdiction Act 1927 (an Act of Tynwald), a complaint relating to an offence under section 60 or 86 of this Act which is triable by a court of summary jurisdiction in the Isle of Man may be so tried if it is made at any time within three years after the commission of the offence and within twelve months after the date on which evidence sufficient in the opinion of the Attorney General of the Isle of Man to justify the proceedings comes to his knowledge, and for this purpose a certificate of the said Attorney General as to the date on which such evidence as aforesaid came to his knowledge shall be conclusive evidence.

• (2) The provisions of this Act specified in the following subsection shall extend to the Bailiwick of Jersey subject to such of the modifications specified in section 104(1) of the Friendly Societies Act 1896 as are relevant in the circumstances and to the Bailiwick of Guernsey subject to such of the modifications specified in section 104(2) of that Act as are so relevant.

• (3) The provisions of this Act referred to in subsections (1) and (2) above are the following, namely.—

• (a) subsection (3) of section 60 and subsection (4) thereof so far as it relates to carrying on business in contravention of the first-mentioned subsection ;

• (b) sections 86 and 87;

• (c) section 89, so far as it relates to offences under subsection (4) of section 60 consisting in carrying on business in contravention of subsection (3) thereof and offences under section 86;

• (d) section 90, so far as it applies section 49(2) to offences specified in the last foregoing paragraph;

• (e) section 96, so far as it relates to the Industrial Assurance Act 1923 ;

• (f) section 97;

• (g) section 99 and Schedule 6, so far as they relate to the Industrial Assurance Act 1923 ;

• (h) section 100;

• (i) section 102(2), so far as it defines " registered society " and " director ", and section 102(3).

PART III — Inspection of Companies' Books and Papers

Power of Board of Trade to require production of documents.

109

• (1) The Board of Trade may at any time, if they think there is good reason so to do, give directions to any such body as follows, namely.—

• (a) a company formed and registered under the Companies Act 1948;

• (b) an existing company within the meaning of that Act;

• (c) a company to which the said Act of 1948 applies by virtue of section 378 thereof or which is registered under that Act by virtue of Part VIII thereof;

• (d) a body corporate incorporated in, and having a principal place of business in, Great Britain, being a body to which any of the provisions of the said Act of 1948 with respect to prospectuses and allotments apply by virtue of section 435 of that Act;

• (e) a body corporate incorporated outside Great Britain which is carrying on business in Great Britain or has at any time carried on business therein;

• (f) a body other than as aforesaid, and whether incorporated or not, which is, or appears to the Board to be, an insurance company to which the Insurance Companies Act 1958 applies;

requiring the body, at such time and place as may be specified in the directions, to produce such books or papers as may be so specified, or may at any time, if they think there is good reason so to do, authorise any officer of theirs, on producing (if required so to do) evidence of his authority, to require any such body as aforesaid to produce to him forthwith any books or papers which the officer may specify.

• (2) Where by virtue of the foregoing subsection the Board of Trade have, or an officer of the Board has, power to require the production of any books or papers from any body, the Board or officer shall have the like power to require production of those books or papers from any person who appears to the Board or officer to be in possession of them ; but where any such person claims a lien on books or papers produced by him, the production shall be without prejudice to the lien.

• (3) Any power conferred by or by virtue of this section to require a body or other person to produce books or papers shall include power—

• (a) if the books or papers are produced—

• (i) to take copies of them or extracts from them; and

• (ii) to require that person, or any other person who is a present or past officer of, or is or was at any time employed by, the body in question, to provide an explanation of any of them ;

• (b) if the books or papers are not produced, to require the person who was required to produce them to state, to the best of his knowledge and belief, where they are.

• (4) If a requirement to produce books or papers or provide an explanation or make a statement which is imposed by virtue of this section is not complied with, the body or other person on whom the requirement was so imposed shall be guilty of an offence and liable, on summary conviction, to imprisonment for a term not exceeding three months or to a fine not exceeding £200, or to both ; but where a person is charged with an offence under this subsection in respect of a requirement to produce any books or papers, it shall be a defence to prove that they were not in his possession or under his control and that it was not reasonably practicable for him to comply with the requirement.

• (5) A statement made by a person in compliance with a requirement imposed by virtue of this section may be used in evidence against him.

Entry and search of premises.

110

• (1) If a justice of the peace is satisfied on information on oath laid by an officer of the Board of Trade, or laid under the authority of the Board, that there are reasonable grounds for suspecting that there are on any premises any books or papers of which production has been required by virtue of the last foregoing section and which have not been produced in compliance with that requirement, the justice may issue a warrant authorising any constable, together with any other persons named in the warrant and any other constables, to enter the premises specified in the information (using such force as is reasonably necessary for the purpose) and to search the premises and take possession of any books or papers appearing to be such books or papers as aforesaid, or to take, in relation to any books or papers so appearing, any other steps which may appear necessary for preserving them and preventing interference with them.

• (2) Every warrant issued under this section shall continue in force until the end of the period of one month after the date on which it is issued.

• (3) Any books or papers of which possession is taken under this section may be retained for a period of three months or, if within that period there are commenced any such criminal proceedings as are mentioned in subsection (1)(a) or (b) of the next following section (being proceedings to which the books or papers are relevant) until the conclusion of those proceedings.

• (4) A person who obstructs the exercise of a right of entry or search conferred by virtue of a warrant issued under this section, or who obstructs the exercise of a right so conferred to take possession of any books or papers, shall be guilty of an offence and liable, on summary conviction, to imprisonment for a term not exceeding three months, or to a fine not exceeding £200, or to both.

• (5) In the application of this section to Scotland, any reference to a justice of the peace includes a reference to the sheriff and to a magistrate.

Provision for security of information.

111

• (1) No information or document relating to a body which has been obtained under section 109 of this Act or the last foregoing section, or under section 18 (power of Board of Trade to require production of documents) or 19 (entry and search of premises) of the Protection of Depositors Act 1963, shall, without the previous consent in writing of that body, be published or disclosed, except to a competent authority, unless the publication or disclosure is required—

• (a) with a view to the institution of, or otherwise for the purposes of, any criminal proceedings pursuant to, or arising out of, the Companies Act 1948, the Insurance Companies Act 1958, the Protection of Depositors Act 1963 or this Act or any criminal proceedings for an offence entailing misconduct in connection with the management of the body's affairs or misapplication or wrongful retainer of property of its;

• (b) with a view to the institution of, or otherwise for the purposes of, any criminal proceedings pursuant to, or arising out of the Exchange Control Act 1947 ;

• (c) for the purpose of enabling the Board of Trade to consider whether or not they should exercise with respect to the body a power conferred on them by Part II of this Act;

• (d) for the purpose of complying with any requirement, or exercising any power, imposed or conferred by the Companies Act 1948 with respect to reports made by inspectors appointed thereunder by the Board;

• (e) with a view to the institution by the Board under section 37 of this Act of proceedings with reference to the body or otherwise for the purposes of such proceedings instituted by them under that section ;

• (f) with a view to the institution by the Board of proceedings for the winding up under the Companies Act 1948 of the body or otherwise for the purposes of proceedings instituted by them for that purpose; or

• (g) for the purposes of proceedings under the last foregoing section.

• (2) A person who publishes or discloses any information or document in contravention of this section shall be guilty of an offence and liable—

• (a) on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine, or to both;

• (b) on summary conviction, to imprisonment for a term not exceeding three months or to a fine not exceeding £200, or to both.

• (3) For the purposes of this section—

• (a) in relation to information or a document relating to a body other than one carrying on industrial assurance business (as defined by section 1(2) of the Industrial Assurance Act 1923), each of the following shall be a competent authority, namely, the Board of Trade, an officer of theirs, an inspector appointed under the Companies Act 1948 by the Board, the Treasury and an officer of theirs ;

• (b) in relation to information or a document relating to a body carrying on industrial assurance business (as so defined), each of the following shall be a competent authority, namely, the Board of Trade, an officer of theirs, an inspector appointed as aforesaid, the Industrial Assurance Commissioner, an officer of his, the Treasury and an officer of theirs.

Consequential cesser of powers under section 14 of the Insurance Companies Act 1958 and section 18 of the Protection of Depositors Act 1963.

112

In consequence of the enactment of the three last foregoing sections, no notice shall be served under subsection (1) off section 14 (investigation of company of doubtful solvency) of the Insurance Companies Act 1958 after the passing of this Act, and no direction shall be given under subsection (1) or authorisation conferred under subsection (2) of section 18 of the Protection of Depositors Act 1963 after the passing of this Act.

Penalization of destruction, mutilation, of company documents.

113

• (1) A person, being an officer of any such body as is mentioned in paragraphs (a) to (e) of section 109(1) of this Act or a body other than as aforesaid, being an insurance company to which the Insurance Companies Act 1958 applies, who destroys, mutilates or falsifies, or is privy to the destruction, mutilation or falsification of a document affecting or relating to the property or affairs of the body, or makes or is privy to the making of a false entry in such a document, shall, unless he proves that he had no intention to conceal the state of affairs of the body or to defeat the law, be guilty of an offence.

• (2) Such a person as aforesaid who fraudulently either parts with, alters or makes an omission in any such document, or who is privy to fraudulent parting with, fraudulent altering or fraudulent making of an omission in, any such document, shall be guilty of an offence.

• (3) A person guilty of an offence under this section shall be liable—

• (a) on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine, or to both ;

• (b) on summary conviction, to imprisonment for a term not exceeding three months or to a fine not exceeding £200, or to both.

Penalization of furnishing false information under Part III.

114

• (1) A person who, in purported compliance with a requirement imposed under section 109 of this Act to provide an explanation or make a statement, provides or makes an explanation or statement which he knows to be false in a material particular or recklessly provides or makes an explanation or statement which is so false shall be guilty of an offence.

• (2) A person guilty of an offence under this section shall be liable—

• (a) on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine, or to both;

• (b) on summary conviction, to imprisonment for a term not exceeding three months or to a fine not exceeding £200, or to both.

Application, for purposes of Part III, of certain provisions of Parts I and II.

115

• (1) Subsections (2) to (5) (both inclusive) of section 49 of this Act shall apply to, and in connection with, summary proceedings for offences under this Part of this Act and to informations relating to offences thereunder which are triable summarily as they apply to, and in connection with, such proceedings for offences under the Companies Act 1948 and Part I of this Act and to informations relating to offences thereunder that are triable summarily.

• (2) Sections 88, 89 (as read with 102(3)) and 91 of this Act shall have effect in relation to offences under this Part of this Act as they have effect in relation to offences under Part II of this Act.

Saving for solicitors and bankers.

116

• (1) Nothing in this Part of this Act shall compel the production by a solicitor of a document containing a privileged communication made by or to him in that capacity or authorise the taking of possession of any such document which is in his possession.

• (2) The Board of Trade shall not, under section 109 of this Act, require, or authorise an officer of theirs to require, the production by a person carrying on the business of banking of a document relating to the affairs of a customer of his unless either it appears to them that it is necessary so to do for the purpose of investigating the affairs of the first-mentioned person or the customer is a person on whom a requirement has been imposed by virtue of that section.

Interpretation of Part III.

117

References in this Part of this Act to books or papers shall be construed as if they were contained in the Companies Act 1948.

Extent of Part III.

118

This Part of this Act shall not extend to Northern Ireland.

PART IV — Partnerships

Exemption from prohibition imposed by section 429 of the Companies Act 1948 of the formation of banking partnerships with more than ten members.

119

Section 429 of the Companies Act 1948 (which prohibits the formation of a company, association or partnership consisting of more than ten persons for the purpose of carrying on the business of banking unless it is registered as a company under the Companies Act 1948, or is formed in pursuance of some other Act, or of letters patent) shall not prohibit the formation of a partnership consisting of not more than twenty persons each of whom is for the time being authorised by the Board of Trade to be a member of a partnership formed for that purpose and consisting of not more than twenty persons.

Exemptions from prohibition imposed by section 434 of the Companies Act 1948 of the formation of other partnerships with more than twenty members.

120

• (1) Section 434 of the Companies Act 1948 (which prohibits the formation of a company, association or partnership consisting of more than twenty persons for the purpose of carrying on a business (other than the business of banking) for gain as therein mentioned unless it is registered as a company under the Companies Act 1948, or is formed in pursuance of some other Act or of letters patent, or is such a company as is therein mentioned working mines within the stannaries) shall not prohibit the formation—

• (a) for the purpose of carrying on practice as solicitors, of a partnership consisting of persons each of whom is a solicitor;

• (b) for the purpose of carrying on practice as accountants, of a partnership consisting of persons each of whom falls within either paragraph (a) or paragraph (h) of section 161(1) of the Companies Act 1948 ;

• (c) for the purpose of carrying on business as members of a recognised stock exchange, of a partnership consisting of persons each of whom is a member of that exchange.

• (2) The Board of Trade may by regulations made by statutory instrument provide that the said section 434 shall not apply to the formation (otherwise than as permitted by virtue of the foregoing subsection), for a purpose specified in the regulations, of a partnership of a description so specified.

• (3) In this section " recognised stock exchange " means any body of persons which is for the time being a recognised stock exchange for the purposes of the Prevention of Fraud (Investments) Act 1958, and " solicitor ", in relation to England and Wales, means solicitor of the Supreme Court, and, in relation to Scotland, means a person enrolled or deemed to have been enrolled as a solicitor in pursuance of the Solicitors (Scotland) Act 1933.

Exemptions from prohibition imposed by section 4 of the Limited Partnerships Act 1907 of limited partnerships with more than twenty members.

121

• (1) So much of section 4(2) of the Limited Partnerships Act 1907 as provides that a limited partnership (other than a partnership carrying on the business of banking) shall not consist of more than twenty persons shall not apply—

• (a) to a partnership carrying on practice as solicitors and consisting of persons each of whom is a solicitor ;

• (b) to a partnership carrying on practice as accountants and consisting of persons each of whom falls within either paragraph (a) or paragraph (b) of section 161(1) of the Companies Act 1948;

• (c) to a partnership carrying on business as members of a recognised stock exchange and consisting of persons each of whom is a member of that exchange.

• (2) The Board of Trade may by regulations made by statutory instrument provide that so much of section 4(2) of the said Act of 1907 as provides that a limited partnership (other than a partnership carrying on the business of banking) shall not consist of more than twenty persons shall not apply to a partnership (other than one permitted by virtue of the foregoing subsection) carrying on business of a description specified in the regulations, being a partnership of a description so specified.

• (3) In this section " recognised stock exchange " and " solicitor " have the same meanings respectively as in the last foregoing section.

Extent of Part IV.

122

This Part of this Act shall not extend to Northern Ireland.

PART V — Moneylenders

Board of Trade's certificate that a person is a banker to be conclusive evidence of that fact for the purposes of the Moneylenders Acts 1900 to 1927.

123

• (1) A certificate given by the Board of Trade that they are satisfied that a person can properly be treated for the purposes of the Moneylenders Acts 1900 to 1927 as being a person bona fide carrying on the business of banking shall, for those purposes, be conclusive evidence that he is so carrying on that business.

• (2) If, upon an application (made before the expiration of the period of six months beginning with the day on which this Act is passed) for the issue of a certificate under the foregoing subsection, the applicant satisfies the Board of Trade that he can, as respects a period before the issue of the certificate (whether beginning before or after the passing of this Act), properly be treated for the purposes of the said Acts as having been a person who was bona fide carrying on the business of banking, they may certify that they are so satisfied (specifying the period in question), and the certificate shall, for those purposes, be conclusive evidence that, as respects that period, he was so carrying on that business.

• (3) A certificate given under subsection (1) above with respect to a person may be revoked by the Board of Trade if they cease to be satisfied as respects him as mentioned in that subsection, but the revocation shall be without prejudice to the effect of the certificate as respects any period before the revocation.

Repeal of section 1 of Money-lenders Act 1911.

124

Section 1 of the Money-lenders Act 1911 (which, so far as it is in force in Great Britain, relates only to agreements made with, or security taken by, moneylenders before 1st January 1928 and to transfers of money or property made on the faith of the validity of agreements made with moneylenders before that day) shall cease to have effect.

Extent of Part V.

125

This Part of this Act shall not extend to Northern Ireland.

PART VI — Miscellaneous and General

Functions of Board of Trade under Acts relating to moneylenders and companies.

126

Anything required or authorised by or under the Moneylenders Act 1900, the Companies Act 1948, the Insurance Companies Act 1958 or this Act to be done by, to or before the Board of Trade may be done by, to or before the President of the Board, any Minister of State with duties concerning the affairs of the Board, any secretary, under-secretary or assistant secretary of the Board or any person authorised in that behalf by the President.

Amendment of Protection of Depositors Act 1963.

127

• (1) The Protection of Depositors Act 1963 shall be amended as follows.

• (2) In sections 2(2) and 25(2), the words " within the meaning of paragraph 23 of Schedule 8 to the Companies Act 1948 " (which there qualify " banking or discount company ") shall be omitted.

• (3) In section 27(1) (general interpretation), for the definition of " audited accounts ", there shall be substituted the following definitions:—

• ' audited accounts ', in relation to a company, means accounts audited by a person who is qualified for appointment as auditor of that company, other than a person so qualified by virtue of section 13 of the Companies Act 1967;
• ' banking or discount company ' means a company which satisfies the Board of Trade that it ought to be treated for the purposes of this Act as a banking company or as a discount company

.

• (4) This section shall come into operation at the expiration of the period of six months beginning with the day on which this Act is passed.

Repeal of provisions of Civil Aviation Act 1949 as to compulsory third-party insurance.

128

The following provisions of the Civil Aviation Act 1949 shall cease to have effect, namely, sections 43 to 46, section 49(1) and Schedule 6.

Cesser of spent or obsolete enactments.

129

• (1) The enactments specified in columns 1 and 2 of Schedule 7 to this Act (which, to the extent specified in column 3 of that Schedule, are spent or obsolete) shall cease to have effect to that extent.

• (2) This section, and Schedule 7 to this Act, so far as they relate to the Industrial Assurance Acts 1923 to 1948, shall extend to the Isle of Man and the Channel Islands.

Short title, citation and repeal.

130

• (1) This Act may be cited as the Companies Act 1967.

• (2) The Companies Act 1948, the Companies (Floating Charges) (Scotland) Act 1961 and Part I of, and Schedules 1 to 4 (both inclusive) to, this Act may be cited together as the Companies Acts 1948 to 1967.

• (3) The Insurance Companies Act 1958 and Part II of this Act, Schedule 5 to this Act and Part I of Schedule 6 thereto may be cited together as the Insurance Companies Acts 1958 to 1967.

• (4) In consequence of the foregoing provisions of this Act—

• (a) each of the provisions of the Industrial Assurance Act 1923 specified in column 1 of Part I of Schedule 8 to this Act shall, to the extent specified in relation to it in column 2 of that Part, be repealed at the time so specified in column 3 thereof;

• (b) the provision of the Industrial Assurance and Friendly Societies Act 1929 specified in column 1 of Part II of that Schedule shall, to the extent specified in column 2 of that Part, be repealed at the time specified in column 3 thereof;

• (c) each of the provisions of the Companies Act 1948 specified in column 1 of Part III of that Schedule to this Act shall, to the extent specified in relation to it in column 2 of that Part, be repealed at the time so specified in column 3 thereof;

• (d) the provision of the Industrial Assurance and Friendly Societies Act 1948 specified in column 1 of Part IV of that Schedule shall, to the extent specified in column 2 of that Part, be repealed at the time specified in column 3 thereof;

• (e) the provision of the Reserve and Auxiliary Forces (Protection of Civil Interests) Act 1951 specified in column 1 of Part V of that Schedule shall, to the extent specified in column 2 of that Part be repealed at the time specified in column 3 thereof;

• (f) each of the provisions of the Insurance Companies Act 1958 specified in column 1 of Part VI of that Schedule shall, to the extent specified in relation to it in column 2 of that Part, be repealed at the time so specified in column 3 thereof;

• (g) each of the provisions of the Protection of Depositors Act 1963 specified in column 1 of Part VII of that Schedule shall, to the extent specified in relation to it in column 2 of that Part, be repealed at the time so specified in column 3 thereof;

• (h) the provision of the Trading Stamps Act 1964 specified in column 1 of Part VIII of that Schedule shall, to the extent specified in column 2 of that Part, be repealed at the times specified in column 3 thereof;

• (i) each of the provisions of the Administration of Justice Act 1965 specified in column 1 of Part IX of that Schedule shall, to the extent specified in relation to it in column 2 of that part, be repealed at the time so specified in column 3 thereof;

and this subsection and Schedule 8 to this Act, so far as they relate to the Industrial Assurance Acts 1923 to 1948 and to the Reserve and Auxiliary Forces (Protection of Civil Interests) Act 1951, shall extend to the Isle of Man and the Channel Islands.

SCHEDULE 1

Amendment of preliminary Matter

1

In paragraph 1, after the word " holding ", there shall be inserted the words " or subsidiary ".

Amendments of Balance Sheet Provisions

2

In paragraph 2(a), for the words " and the earliest date on which the company has power to redeem those shares ", there shall be substituted the words " the earliest and latest dates on which the company has power to redeem those shares, whether those shares must be redeemed in any event or are liable to be redeemed at the option of the company and whether any (and, if so, what) premium is payable on redemption ".

3

In paragraph 4, in sub-paragraph (1), for the words " fixed and current assets ", there shall be substituted the word " assets " , and for sub-paragraph (2) there shall be substituted the following sub-paragraph :—

(2) Fixed assets, current assets and assets that are neither fixed nor current shall be separately identified

.

4

In paragraph 5(2), for head (c), there shall be substituted the following:—

(c) to any quoted investments or to any unquoted investments of which the value as estimated by the directors is shown either as the amount of the investments or by way of note ; or

.

5

After paragraph 5, there shall be inserted the following paragraph :—

(5A) In the case of unquoted investments consisting in equity share capital (as defined by subsection (5) of section 154 of this Act) of other bodies corporate (other than any whose values as estimated by the directors are separately shown, either individually or collectively or as to some individually and as to the rest collectively, and are so shown either as the amount thereof or by way of note), the matters referred to in the following heads shall, if not otherwise shown, be stated by way of note or in a statement or report annexed:— (a) the aggregate amount of the company's income for the financial year that is ascribable to the investments; (b) the amount of the company's share before taxation, and the amount of that share after taxation, of the net aggregate amount of the profits of the bodies in which the investments are held, being profits for the several periods to which accounts sent by them during the financial year to the company related, after deducting those bodies' losses for those periods (or vice versa); (c) the amount of the company's share of the net aggregate amount of the undistributed profits accumulated by the bodies in which the investments are held since the time when the investments were acquired, after deducting the losses accumulated by them since that time (or vice versa); (d) the manner in which any losses incurred by the said bodies have been dealt with in the company's accounts

.

6

In paragraph 6, for the words " The aggregate amounts respectively of capital reserves, revenue reserves and provisions ", there shall be substituted the words " The aggregate amounts respectively of reserves and provisions " ; and in paragraph (a) of the proviso, for the words " any of the said three amounts ", there shall be substituted the words " either of the said amounts ".

7

• (1) In paragraph 7(1), in head (a), for the words " the amount of the capital reserves, of the revenue reserves or of the provisions ", there shall be substituted the words " the amount of the reserves or of the provisions ",

and in head (b)(i), for the words " the amount of the capital reserves or of the revenue reserves ", there shall be substituted the words " the amount of the reserves ".

• (2) In paragraph 7(2), for the words " any of the reserves or provisions aforesaid ", there shall be substituted the words " the reserves or any of the provisions aforesaid ".

8

After paragraph 7, there shall be inserted the following paragraph:—

(7A) If an amount is set aside for the purpose of its being used to prevent undue fluctuations in charges for taxation, it shall be stated

.

9

• (1) Paragraph 8 shall be amended as follows.

• (2) For head (a) of sub-paragraph (1), there shall be substituted the following:—

(a) the aggregate amounts respectively of the company's quoted investments and unquoted investments

.

• (3) For head (d) of sub-paragraph (1), there shall be substituted the following:—

(d) the aggregate amount of bank loans and overdrafts and the aggregate amount of loans made to the company which— (i) are repayable otherwise than by instalments and fall due for repayment after the expiration of the period of five years beginning with the day next following the expiration of the financial year; or (ii) are repayable by instalments any of which fall due for payment after the expiration of that period ; not being, in either case, bank loans or overdrafts

• (4) In head (e) of sub-paragraph (1), for the words " net aggregate amount (after deduction of income tax)", there shall be substituted the words " aggregate amount (before deduction of income tax) ".

• (5) In sub-paragraph (3), the words " other than trade investments " shall be omitted.

• (6) At the end of the paragraph, there shall be added the following sub-paragraph:—

(4) In relation to each loan falling within head (d) of sub-paragraph (1) of this paragraph (other than a bank loan or overdraft), there shall be stated by way of note (if not otherwise stated) the terms on which it is repayable and the rate at which interest is payable thereon: Provided that if the number of loans is such that, in the opinion of the directors, compliance with the foregoing requirement would result in a statement of excessive length, it shall be sufficient to give a general indication of the terms on which the loans are repayable and the rates at which interest is payable thereon

.

10

• (1) Paragraph II shall be amended as follows.

• (2) At the end of sub-paragraph (6), there shall be added the words " and, where practicable, the aggregate amount or estimated amount, if it is material, of capital expenditure authorised by the directors which has not been contracted for ".

• (3) After sub-paragraph (6) there shall be inserted the following sub-paragraphs:—

(6A) In the case of fixed assets under any heading whose amount is required to be arrived at in accordance with paragraph 5(1) of this Schedule (other than unquoted investments) and is so arrived at by reference to a valuation, the years (so far as they are known to the directors) in which the assets were severally valued and the several values, and, in the case of assets that have been valued during the financial year, the names of the persons who valued them or particulars of their qualifications for doing so and (whichever is stated) the bases of valuation used by them. (6B) If there are included amongst fixed assets under any heading (other than investments) assets that have been acquired during the financial year, the aggregate amount of the assets acquired as determined for the purpose of making up the balance sheet, and if during that year any fixed assets included under a heading in the balance sheet made up with respect to the immediately preceding financial year (other than investments) have been disposed of or destroyed, the aggregate amount thereof as determined for the purpose of making up that balance sheet. (6C) Of the amount of fixed assets consisting of land, how much is ascribable to land of freehold tenure and how much to land of leasehold tenure, and, of the latter, how much is ascribable to land held on long lease and how much to land held on short lease

.

• (4) In sub-paragraph (8), the words " other man trade investments " shall be omitted.

• (5) After sub-paragraph (8). there shall be inserted the following sub-paragraphs:—

(8A) If a sum set aside for the purpose of its being used to prevent undue fluctuations in charges for taxation has been used during the financial year for another purpose, the amount thereof and the fact that it has been so used. (8B) If the amount carried forward for stock in trade or work in progress is material for the appreciation by its members of the company's state of affairs or of its profit or loss for the financial year, the manner in which that amount has been computed

.

• (6) In sub-paragraph (10), for the words " income tax ", there shall be substituted the words " corporation tax ".

Amendments of Profit and Loss Account Provisions

11

• (1) Paragraph 12 shall be amended as follows.

• (2) In sub-paragraph (1), for heads (b) and (c), there shall be substituted the following:—

(b) the amount of the interest on loans of the following kinds made to the company (whether on the security of debentures or not), namely, bank loans, overdrafts and loans which, not being bank loans or overdrafts.— (i) are repayable otherwise than by instalments and fall due for repayment before the expiration of the period of five years beginning with the day next following the expiration of the financial year ; or (ii) are repayable by instalments the last of which falls due for payment before the expiration of that period; and the amount of the interest on loans of other kinds so made (whether on the security of debentures or not); (c) the amount of the charge to revenue for United Kingdom corporation tax and, if that amount would have been greater but for relief from double taxation, the amount which it would have been but for such relief, the amount of the charge for United Kingdom income tax and the amount of the charge for taxation imposed outside the United Kingdom of profits, income and (so far as charged to revenue) capital gains

.

• (3) In sub-paragraph (1), for head (g), there shall be substituted the following:—

(g) the amounts respectively of income from quoted investments and income from unquoted investments ; (ga) if a substantial part of the company's revenue for the financial year consists in rents from land, the amount thereof (after deduction of ground-rents, rates and other outgoings); (gb) the amount, if material, charged to revenue in respect of sums payable in respect of the hire of plant and machinery

.

• (4) In sub-paragraph (1)(h), after the word " amount ", there shall be inserted the words " (before deduction of income tax) ".

• (5) At the end of the paragraph, there shall be added the following sub-paragraphs:—

(3) If, in the case of any assets in whose case an amount is charged to revenue by way of provision for depreciation or diminution in value, an amount is also so charged by way of provision for renewal thereof, the last-mentioned amount shall be shown separately. (4) If the amount charged to revenue by way of provision for depreciation or diminution in value of any fixed assets (other than investments) has been determined otherwise than by reference to the amount of those assets as determined for the purpose of making up the balance sheet, that fact shall be stated

.

12

After paragraph 12, there shall be inserted the following paragraph:—

(12A) The amount of any charge arising in consequence of the occurrence of an event in a preceding financial year and of any credit so arising shall, if not included in a heading relating to other matters, be stated under a separate heading

.

13

In paragraph 13, for the words "If the remuneration of the auditors is not fixed by the company in general meeting, the amount thereof ", there shall be substituted the words " The amount of the remuneration of the auditors ".

14

After paragraph 13, there shall be inserted the following paragraph:—

(13A) (1) The matters referred to in sub-paragraphs (2) to (4) below shall be stated by way of note, if not otherwise shown. (2) The turnover for the financial year, except in so far as it is attributable to the business of banking or discounting or to business of such other class as may be prescribed for the purposes of this sub-paragraph. (3) If some or all of the turnover is omitted by reason of its being attributable as aforesaid, the fact that it is so omitted. (4) The method by which turnover stated is arrived at. (5) A company shall not be subject to the requirements of this paragraph if it is neither a holding company nor a subsidiary of another body corporate and the turnover which, apart from this sub-paragraph, would be required to be stated does not exceed £50,000

.

15

• (1) Paragraph 14 shall be amended as follows.

• (2) In sub-paragraph (3), after the words " charge for ", there shall be inserted the words " United Kingdom corporation tax and ".

• (3) After sub-paragraph (3), there shall be inserted the following sub-paragraph:—

(3A) Any special circumstances which affect liability in respect of taxation of profits, income or capital gains for the financial year or liability in respect of taxation of profits, income or capital gains for succeeding financial years

.

• (4) Sub-paragraph (4) shall be omitted.

Amendments of Provisions as to Modifications of and Additions to Requirements as to Company's Accounts where it is a holding or subsidiary Company

16

In paragraph 15(2)(a), after the word " investments ", there shall be inserted the words " (except those in paragraphs 11 (6B) and 12(4)) ".

17

At the end of paragraph 16(1), there shall be added the words " and the aggregate amount of assets consisting of shares in fellow subsidiaries ".

18

In paragraph 18, after the words " this Act " there shall be inserted the words " and the Companies Act 1967 ".

19

In paragraph 19, after the words " this Act " there shall be inserted the words " and sections four and six to eight of the Companies Act 1967 ".

Amendments of exceptive Provisions

20

In paragraph 23, in sub-paragraph (1), for heads (a) and (b) there shall be substituted the following:—

(a) as respects its balance sheet, those of paragraphs 2 and 3, paragraph 4 (so far as it relates to assets), paragraph 8 (except sub-paragraphs (1)(d) and (4)), paragraphs 9 and 10 and paragraph 11 (except sub-paragraphs (6A), (6B), (6C), (8) and (8A)) ; and (b) as respects its profit and loss account, those of sub-paragraph (1)(ga) and (h) of paragraph 12, paragraphs 12a and 13 and sub-paragraphs (1) and (5) of paragraph 14

;

and for the words " capital reserves, revenue reserves " and the words " such a reserve or provision ", there shall be substituted respectively the word " reserves " and the words " a reserve or such a provision ".

21

• (1) Paragraph 24 shall be amended as follows.

• (2) For so much of sub-paragraph (1) as precedes the proviso, there shall be substituted the following :—

An insurance company to which the Insurance Companies Act 1958 applies shall not be subject to the following requirements of Part I of this Schedule, that is to say— (a) as respects its balance sheet, those of paragraphs 4 to 7 (both inclusive), sub-paragraphs (1)(a) and (3) of paragraph 8 and sub-paragraphs (4), (5) and (6A) to (8) (both inclusive) of paragraph 11 ; (b) as respects its profit and loss account, those of paragraph 12 (except sub-paragraph (1)(b), (c), (d) and (h)) and paragraph 14(2); but, where in its balance sheet reserves or provisions (other than provisions for depreciation, renewals or diminution in value of assets) are not stated separately, any heading stating an amount arrived at after taking into account a reserve or such a provision shall be so framed or marked as to indicate that fact, and its profit and loss account shall indicate by appropriate words the manner in which the amount stated for the company's profit or loss has been arrived at

.

• (3) After sub-paragraph (2) there shall be inserted the following sub-paragraph:—

(2A) The accounts of a company shall not be deemed, by reason only of the fact that they do not comply with any requirement of Part I of this Schedule from which the company is exempt by virtue of this paragraph, not to give the true and fan-view required by this Act

.

• (4) In the proviso to sub-paragraph (1) and in sub-paragraphs (2) and (3), for the word " assurance " (wherever occurring) there shall be substituted the word " insurance ".

22

• (1) Paragraph 25 shall be amended as follows.

• (2) For sub-paragraph (1) there shall be substituted the following sub-paragraph:—

(1) A shipping company shall not be subject to the following requirements of Part I of this Schedule, that is to say— (a) as respects its balance sheet, those of paragraph 4 (except so far as it relates to assets), paragraphs 5, 6 and 7 and sub-paragraphs (6A) and (6B) of paragraph 11; (b) as respects its profit and loss account, those of sub-paragraph (1)(a), (e) and (f) and sub-paragraphs (3) and (4) of paragraph 12 and paragraph 13a

.

• (3) For sub-paragraph (3) there shall be substituted the following sub-paragraph:—

(3) In this paragraph the expression ' shipping company' means a company which, or a subsidiary of which, owns ships or includes amongst its activities the management or operation of ships, being a company which satisfies the Board of Trade that, in the national interest, it ought to be treated for the purposes of this paragraph as a shipping company

.

Amendments of interpretative Provisions

23

In paragraph 27(1), at the end of head (b) there shall be added the words " or any sum set aside for the purpose of its being used to prevent undue fluctuations in charges for taxation " , and head (c) shall be omitted.

24

At the end of the Schedule, there shall be added the following paragraphs:—

(29) For the purposes aforesaid, the expression ' long lease ' means a lease in the case of which the portion of the term for which it was granted remaining unexpired at the end of the financial year is not less than fifty years, the expression ' short lease ' means a lease which is not a long lease and the expression ' lease ' includes an agreement for a lease. (30) For the purposes aforesaid, a loan shall be deemed to fall due for repayment, and an instalment of a loan shall be deemed to fall due for payment, on the earliest date on which the lender could require repayment or, as the case may be, payment if he exercised all options and rights available to him. (31) In the application of this Schedule to Scotland, 'land of freehold tenure' means land in respect of which the company is the proprietor of the dominium utile or, in the case of land not held on feudal tenure, is the owner ; ' land of leasehold tenure ' means land of which the company is the tenant under a lease; and the reference to ground-rents, rates and other outgoings includes a reference to feu-duty and ground annual

.

SCHEDULE 2

Accounts — Preliminary

1

Paragraphs 2 to 11 of this Schedule apply to the balance sheet and 12 to 14 to the profit and loss account, and are subject to the exceptions and modifications provided for by Part II of this Schedule in the case of a holding or subsidiary company and by Part III thereof in the case of companies of the classes there mentioned ; and this Schedule has effect in addition to the provisions of sections one hundred and ninety-six and one hundred and ninety-seven of this Act.

PART I — General Provisions as to Balance Sheet and Profit and Loss Account

Balance Sheet

2

The authorised share capital, issued share capital, liabilities and assets shall be summarised, with such particulars as are necessary to disclose the general nature of the assets and liabilities, and there shall be specified—

• (a) any part of the issued capital that consists of redeemable preference shares, the earliest and latest dates on which the company has power to redeem those shares, whether those shares must be redeemed in any event or are liable to be redeemed at the option of the company and whether any (and, if so, what) premium is payable on redemption ;

• (b) so far as the information is not given in the profit and loss account, any share capital on which interest has been paid out of capital during the financial year, and the rate at which interest has been so paid ;

• (c) the amount of the share premium account;

• (d) particulars of any redeemed debentures which the company has power to reissue.

3

There shall be stated under separate headings, so far as they are not written off.—

• (a) the preliminary expenses ;

• (b) any expenses incurred in connection with any issue of share capital or debentures;

• (c) any sums paid by way of commission in respect of any shares or debentures;

• (d) any sums allowed by way of discount in respect of any debentures; and

• (e) the amount of the discount allowed on any issue of shares at a discount.

4

• (1) The reserves, provisions, liabilities and assets shall be classified under headings appropriate to the company's business:

Provided that—

• (a) where the amount of any class is not material, it may be included under the same heading as some other class; and

• (b) where any assets of one class are not separable from assets of another class, those assets may be included under the same heading.

• (2) Fixed assets, current assets and assets that are neither fixed nor current shall be separately identified.

• (3) The method or methods used to arrive at the amount of the fixed assets under each heading shall be stated.

5

• (1) The method of arriving at the amount of any fixed asset shall, subject to the next following sub-paragraph, be to take the difference between—

• (a) its cost or, if it stands in the company's books at a valuation, the amount of the valuation ; and

• (b) the aggregate amount provided or written off since the date of acquisition or valuation, as the case may be, for depreciation or diminution in value ;

and for the purposes of this paragraph the net amount at which any assets stand in the company's books at the commencement of this Act (after deduction of the amounts previously provided or written off for depreciation or diminution in value) shall, if the figures relating to the period before the commencement of this Act cannot be obtained without unreasonable expense or delay, be treated as if it were the amount of a valuation of those assets made at the commencement of this Act and, where any of those assets are sold, the said net amount less the amount of the sales shall be treated as if it were the amount of a valuation so made of the remaining assets.

• (2) The foregoing sub-paragraph shall not apply—

• (a) to assets for which the figures relating to the period beginning with the commencement of this Act cannot be obtained without unreasonable expense or delay; or

• (b) to assets the replacement of which is provided for wholly or partly—

• (i) by making provision for renewals and charging the cost of replacement against the provision so made ; or

• (ii) by charging the cost of replacement direct to revenue; or

• (c) to any quoted investments or to any unquoted investments of which the value as estimated by the directors is shown either as the amount of the investments or by way of note ; or

• (d) to goodwill, patents or trade marks.

• (3) For the assets under each heading whose amount is arrived at in accordance with sub-paragraph (1) of this paragraph, there shall be shown—

• (a) the aggregate of the amounts referred to in paragraph (a) of that sub-paragraph ; and

• (b) the aggregate of the amounts referred to in paragraph (b) thereof.

• (4) As respects the assets under each heading whose amount is not arrived at in accordance with the said sub-paragraph (1) because their replacement is provided for as mentioned in sub-paragraph (2)(b) of this paragraph, there shall be stated—

• (a) the means by which their replacement is provided for; and

• (b) the aggregate amount of the provision (if any) made for renewals and not used.

5A

In the case of unquoted investments consisting in equity share capital (as defined by subsection (5) of section 154 of this Act) of other bodies corporate (other than any whose values as estimated by the directors are separately shown, either individually or collectively or as to some individually and as to the rest collectively, and are so shown either as the amount thereof, or by way of note), the matters referred to in the following heads shall, if not otherwise shown, be stated by way of note or in a statement or report annexed:—

• (a) the aggregate amount of the company's income for the financial year that is ascribable to the investments;

• (b) the amount of the company's share before taxation, and the amount of that share after taxation, of the net aggregate amount of the profits of the bodies in which the investments are held, being profits for the several periods to which accounts sent by them during the financial year to the company related, after deducting those bodies' losses for those periods (or vice versa);

• (c) the amount of the company's share of the net aggregate amount of the undistributed profits accumulated by the bodies in which the investments are held since the time when the investments were acquired, after deducting the losses accumulated by them since that time (or vice versa);

• (d) the manner in which any losses incurred by the said bodies have been dealt with in the company's accounts.

6

The aggregate amounts respectively of reserves and provisions (other than provisions for depreciation, renewals or diminution in value of assets) shall be stated under separate headings:

7

• (1) There shall also be shown (unless it is shown in the profit and loss account or a statement or report annexed thereto, or the amount involved is not material)—

• (a) where the amount of the reserves or of the provisions (other than provisions for depreciation, renewals or diminution in value of assets) shows an increase as compared with the amount at the end of the immediately preceding financial year, the source from which the amount of the increase has been derived ; and

• (b) where—