Companies Act 2006

(4) A person guilty of an offence under this section is liable— (a) on conviction on indictment, to imprisonment for a term not exceeding two years or a fine (or both); (b) on summary conviction— (i) in England and Wales, to imprisonment for a term not exceeding twelve months or to a fine not exceeding the statutory maximum (or both) and, for continued contravention, a daily default fine not exceeding one-fiftieth of the statutory maximum; (ii) in Scotland or Northern Ireland, to imprisonment for a term not exceeding six months, or to a fine not exceeding the statutory maximum (or both) and, for continued contravention, a daily default fine not exceeding one-fiftieth of the statutory maximum.

Obstruction of rights conferred by a warrant or failure to comply with requirement under section 448

2

• (1) In section 448(7) of the Companies Act 1985 (obstruction of rights conferred by or by virtue of warrant for entry and search of premises) omit the words “and liable to a fine.” to the end.

• (2) After that provision insert—

(7A) A person guilty of an offence under this section is liable— (a) on conviction on indictment, to a fine; (b) on summary conviction, to a fine not exceeding the statutory maximum.

Wrongful disclosure of information to which section 449 applies

3

• (1) Section 449 of the Companies Act 1985 (wrongful disclosure of information obtained in course of company investigation) is amended as follows.

• (2) For subsection (6)(a) and (b) substitute “ is guilty of an offence. ”

• (3) After subsection (6) insert—

(6A) A person guilty of an offence under this section is liable— (a) on conviction on indictment, to imprisonment for a term not exceeding two years or a fine (or both); (b) on summary conviction— (i) in England and Wales, to imprisonment for a term not exceeding twelve months or to a fine not exceeding the statutory maximum (or both); (ii) in Scotland or Northern Ireland, to imprisonment for a term not exceeding six months, or to a fine not exceeding the statutory maximum (or both).

• (4) Omit subsection (7).

Destruction, mutilation etc of company documents

4

• (1) For subsection (3) of section 450 of the Companies Act 1985 (offence of destroying, etc company documents) substitute—

(3) A person guilty of an offence under this section is liable— (a) on conviction on indictment, to imprisonment for a term not exceeding seven years or a fine (or both); (b) on summary conviction— (i) in England and Wales, to imprisonment for a term not exceeding twelve months or to a fine not exceeding the statutory maximum (or both); (ii) in Scotland or Northern Ireland, to imprisonment for a term not exceeding six months, or to a fine not exceeding the statutory maximum (or both).

• (2) Omit subsection (4) of that section.

Provision of false information in purported compliance with section 447

5

• (1) For subsection (2) of section 451 of the Companies Act 1985 (c. 6) (provision of false information in response to requirement under section 447) substitute—

(2) A person guilty of an offence under this section is liable— (a) on conviction on indictment, to imprisonment for a term not exceeding two years or a fine (or both); (b) on summary conviction— (i) in England and Wales, to imprisonment for a term not exceeding twelve months or to a fine not exceeding the statutory maximum (or both); (ii) in Scotland or Northern Ireland, to imprisonment for a term not exceeding six months, or to a fine not exceeding the statutory maximum (or both).

• (2) Omit subsection (3) of that section.

Obstruction of inspector, etc exercising power to enter and remain on premises

6

• (1) Section 453A of the Companies Act 1985 (obstruction of inspector etc exercising power to enter and remain on premises) is amended as follows.

• (2) For subsection (5)(a) and (b) substitute “ is guilty of an offence. ”

• (3) After subsection (5) insert—

(5A) A person guilty of an offence under this section is liable— (a) on conviction on indictment, to a fine; (b) on summary conviction, to a fine not exceeding the statutory maximum.

• (4) Omit subsection (6).

Attempted evasion of restrictions under Part 15

7

• (1) In subsection (1) of section 455 of the Companies Act 1985 (attempted evasion of restrictions under Part 15) for “is liable to a fine if he” substitute “ commits an offence if he ”.

• (2) In subsection (2) of that section for the words “the company” to the end substitute

an offence is committed by— (a) the company, and (b) every officer of the company who is in default.

• (3) After that subsection insert—

(2A) A person guilty of an offence under this section is liable— (a) on conviction on indictment, to a fine; (b) on summary conviction, to a fine not exceeding the statutory maximum.

SCHEDULE 4 — Documents and information sent or supplied to a company

Part 1 — Introduction

Application of Schedule

1

• (1) This Schedule applies to documents or information sent or supplied to a company.

• (2) It does not apply to documents or information sent or supplied by another company (see section 1144(3) and Schedule 5).

Part 2 — Communications in hard copy form

Introduction

2

A document or information is validly sent or supplied to a company if it is sent or supplied in hard copy form in accordance with this Part of this Schedule.

Method of communication in hard copy form

3

• (1) A document or information in hard copy form may be sent or supplied by hand or by post to an address (in accordance with paragraph 4).

• (2) For the purposes of this Schedule, a person sends a document or information by post if he posts a prepaid envelope containing the document or information.

Address for communications in hard copy form

4

A document or information in hard copy form may be sent or supplied—

• (a) to an address specified by the company for the purpose;

• (b) to the company's registered office;

• (c) to an address to which any provision of the Companies Acts authorises the document or information to be sent or supplied.

PART 2A — Communications in electronic form from the registrar or the Secretary of State

4A

• (1) A document or information is validly sent or supplied to a company by the registrar or the Secretary of State if it is sent or supplied in electronic form in accordance with sub-paragraph (2) or (3).

• (2) Where the document or information is sent or supplied by electronic means it may only be sent—

• (a) in the case of a company registered under this Act, to the company’s registered email address;

• (b) in the case of any company, to an address specified by the company for that purpose (generally or specifically).

• (3) Where the document or information is sent or supplied in electronic form by hand or by post, it must be sent or supplied to an address to which it could be validly sent if it were in hard copy form.

Part 3 — Communications in electronic form in other cases

Introduction

5

A document or information is validly sent or supplied to a company by a person other than the registrar or the Secretary of State if it is sent or supplied in electronic form in accordance with this Part of this Schedule.

Conditions for use of communications in electronic form

6

A document or information may only be sent or supplied to a company in electronic form if—

• (a) the company has agreed (generally or specifically) that the document or information may be sent or supplied in that form (and has not revoked that agreement), or

• (b) the company is deemed to have so agreed by a provision in the Companies Acts.

Address for communications in electronic form

7

• (1) Where the document or information is sent or supplied by electronic means, it may only be sent or supplied to an address—

• (a) specified for the purpose by the company (generally or specifically), or

• (b) deemed by a provision in the Companies Acts to have been so specified.

• (2) Where the document or information is sent or supplied in electronic form by hand or by post, it must be sent or supplied to an address to which it could be validly sent if it were in hard copy form.

Part 4 — Other agreed forms of communication

8

A document or information that is sent or supplied to a company otherwise than in hard copy form or electronic form is validly sent or supplied if it is sent or supplied in a form or manner that has been agreed by the company.

SCHEDULE 5 — Communications by a company

Part 1 — Introduction

Application of this Schedule

1

This Schedule applies to documents or information sent or supplied by a company.

Part 2 — Communications in hard copy form

Introduction

2

A document or information is validly sent or supplied by a company if it is sent or supplied in hard copy form in accordance with this Part of this Schedule.

Method of communication in hard copy form

3

• (1) A document or information in hard copy form must be—

• (a) handed to the intended recipient, or

• (b) sent or supplied by hand or by post to an address (in accordance with paragraph 4).

• (2) For the purposes of this Schedule, a person sends a document or information by post if he posts a prepaid envelope containing the document or information.

Address for communications in hard copy form

4

• (1) A document or information in hard copy form may be sent or supplied by the company—

• (a) to an address specified for the purpose by the intended recipient;

• (b) to a company at its registered office;

• (c) to a person in his capacity as a member of the company at his address as shown in the company's register of members;

• (d) to a person in his capacity as a director of the company at his address as shown in the register;

• (e) to an address to which any provision of the Companies Acts authorises the document or information to be sent or supplied.

• (1A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (2) Where the company is unable to obtain an address falling within sub-paragraph (1), the document or information may be sent or supplied to the intended recipient's last address known to the company.

Part 3 — Communications in electronic form

Introduction

5

A document or information is validly sent or supplied by a company if it is sent in electronic form in accordance with this Part of this Schedule.

Agreement to communications in electronic form

6

A document or information may only be sent or supplied by a company in electronic form—

• (a) to a person who has agreed (generally or specifically) that the document or information may be sent or supplied in that form (and has not revoked that agreement), or

• (b) to a company that is deemed to have so agreed by a provision in the Companies Acts.

Address for communications in electronic form

7

• (1) Where the document or information is sent or supplied by electronic means, it may only be sent or supplied to an address—

• (a) specified for the purpose by the intended recipient (generally or specifically), or

• (b) where the intended recipient is a company, deemed by a provision of the Companies Acts to have been so specified.

• (2) Where the document or information is sent or supplied in electronic form by hand or by post, it must be—

• (a) handed to the intended recipient, or

• (b) sent or supplied to an address to which it could be validly sent if it were in hard copy form.

Part 4 — Communications by means of a website

Use of website

8

A document or information is validly sent or supplied by a company if it is made available on a website in accordance with this Part of this Schedule.

Agreement to use of website

9

A document or information may only be sent or supplied by the company to a person by being made available on a website if the person—

• (a) has agreed (generally or specifically) that the document or information may be sent or supplied to him in that manner, or

• (b) is taken to have so agreed under—

• (i) paragraph 10 (members of the company etc), or

• (ii) paragraph 11 (debenture holders),

and has not revoked that agreement.

Deemed agreement of members of company etc to use of website

10

• (1) This paragraph applies to a document or information to be sent or supplied to a person—

• (a) as a member of the company, or

• (b) as a person nominated by a member in accordance with the company's articles to enjoy or exercise all or any specified rights of the member in relation to the company, or

• (c) as a person nominated by a member under section 146 to enjoy information rights.

• (2) To the extent that—

• (a) the members of the company have resolved that the company may send or supply documents or information to members by making them available on a website, or

• (b) the company's articles contain provision to that effect,

a person in relation to whom the following conditions are met is taken to have agreed that the company may send or supply documents or information to him in that manner.

• (3) The conditions are that—

• (a) the person has been asked individually by the company to agree that the company may send or supply documents or information generally, or the documents or information in question, to him by means of a website, and

• (b) the company has not received a response within the period of 28 days beginning with the date on which the company's request was sent.

• (4) A person is not taken to have so agreed if the company's request—

• (a) did not state clearly what the effect of a failure to respond would be, or

• (b) was sent less than twelve months after a previous request made to him for the purposes of this paragraph in respect of the same or a similar class of documents or information.

• (5) Chapter 3 of Part 3 (resolutions affecting a company's constitution) applies to a resolution under this paragraph.

Deemed agreement of debenture holders to use of website

11

• (1) This paragraph applies to a document or information to be sent or supplied to a person as holder of a company's debentures.

• (2) To the extent that—

• (a) the relevant debenture holders have duly resolved that the company may send or supply documents or information to them by making them available on a website, or

• (b) the instrument creating the debenture in question contains provision to that effect,

a debenture holder in relation to whom the following conditions are met is taken to have agreed that the company may send or supply documents or information to him in that manner.

• (3) The conditions are that—

• (a) the debenture holder has been asked individually by the company to agree that the company may send or supply documents or information generally, or the documents or information in question, to him by means of a website, and

• (b) the company has not received a response within the period of 28 days beginning with the date on which the company's request was sent.

• (4) A person is not taken to have so agreed if the company's request—

• (a) did not state clearly what the effect of a failure to respond would be, or

• (b) was sent less than twelve months after a previous request made to him for the purposes of this paragraph in respect of the same or a similar class of documents or information.

• (5) For the purposes of this paragraph—

• (a) the relevant debenture holders are the holders of debentures of the company ranking pari passu for all purposes with the intended recipient, and

• (b) a resolution of the relevant debenture holders is duly passed if they agree in accordance with the provisions of the instruments creating the debentures.

Availability of document or information

12

• (1) A document or information authorised or required to be sent or supplied by means of a website must be made available in a form, and by a means, that the company reasonably considers will enable the recipient—

• (a) to read it, and

• (b) to retain a copy of it.

• (2) For this purpose a document or information can be read only if—

• (a) it can be read with the naked eye, or

• (b) to the extent that it consists of images (for example photographs, pictures, maps, plans or drawings), it can be seen with the naked eye.

Notification of availability

13

• (1) The company must notify the intended recipient of—

• (a) the presence of the document or information on the website,

• (b) the address of the website,

• (c) the place on the website where it may be accessed, and

• (d) how to access the document or information.

• (2) The document or information is taken to be sent—

• (a) on the date on which the notification required by this paragraph is sent, or

• (b) if later, the date on which the document or information first appears on the website after that notification is sent.

Period of availability on website

14

• (1) The company must make the document or information available on the website throughout—

• (a) the period specified by any applicable provision of the Companies Acts, or

• (b) if no such period is specified, the period of 28 days beginning with the date on which the notification required under paragraph 13 is sent to the person in question.

• (2) For the purposes of this paragraph, a failure to make a document or information available on a website throughout the period mentioned in sub-paragraph (1) shall be disregarded if—

• (a) it is made available on the website for part of that period, and

• (b) the failure to make it available throughout that period is wholly attributable to circumstances that it would not be reasonable to have expected the company to prevent or avoid.

Part 5 — Other agreed forms of communication

15

A document or information that is sent or supplied otherwise than in hard copy or electronic form or by means of a website is validly sent or supplied if it is sent or supplied in a form or manner that has been agreed by the intended recipient.

Part 6 — Supplementary provisions

Joint holders of shares or debentures

16

• (1) This paragraph applies in relation to documents or information to be sent or supplied to joint holders of shares or debentures of a company.

• (2) Anything to be agreed or specified by the holder must be agreed or specified by all the joint holders.

• (3) Anything authorised or required to be sent or supplied to the holder may be sent or supplied either—

• (a) to each of the joint holders, or

• (b) to the holder whose name appears first in the register of members or the relevant register of debenture holders.

• (3A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (4) This paragraph has effect subject to anything in the company's articles.

Death or bankruptcy of holder of shares

17

• (1) This paragraph has effect in the case of the death or bankruptcy of a holder of a company's shares.

• (2) Documents or information required or authorised to be sent or supplied to the member may be sent or supplied to the persons claiming to be entitled to the shares in consequence of the death or bankruptcy—

• (a) by name, or

• (b) by the title of representatives of the deceased, or trustee of the bankrupt, or by any like description,

at the address in the United Kingdom supplied for the purpose by those so claiming.

• (3) Until such an address has been so supplied, a document or information may be sent or supplied in any manner in which it might have been sent or supplied if the death or bankruptcy had not occurred.

• (4) This paragraph has effect subject to anything in the company's articles.

• (5) References in this paragraph to the bankruptcy of a person include—

• (a) the sequestration of the estate of a person;

• (b) a person's estate being the subject of a protected trust deed (within the meaning of the Bankruptcy (Scotland) Act 2016).

In such a case the reference in sub-paragraph (2)(b) to the trustee of the bankrupt is to be read as the trustee or interim trustee (under that Act) on the sequestrated estate or, as the case may be, the trustee under the protected deed.

SCHEDULE 6 — Meaning of “subsidiary” etc: supplementary provisions

Introduction

1

The provisions of this Part of this Schedule explain expressions used in section 1159 (meaning of “subsidiary” etc) and otherwise supplement that section.

Voting rights in a company

2

In section 1159(1)(a) and (c) the references to the voting rights in a company are to the rights conferred on shareholders in respect of their shares or, in the case of a company not having a share capital, on members, to vote at general meetings of the company on all, or substantially all, matters.

Right to appoint or remove a majority of the directors

3

• (1) In section 1159(1)(b) the reference to the right to appoint or remove a majority of the board of directors is to the right to appoint or remove directors holding a majority of the voting rights at meetings of the board on all, or substantially all, matters.

• (2) A company shall be treated as having the right to appoint to a directorship if—

• (a) a person's appointment to it follows necessarily from his appointment as director of the company, or

• (b) the directorship is held by the company itself.

• (3) A right to appoint or remove which is exercisable only with the consent or concurrence of another person shall be left out of account unless no other person has a right to appoint or, as the case may be, remove in relation to that directorship.

Rights exercisable only in certain circumstances or temporarily incapable of exercise

4

• (1) Rights which are exercisable only in certain circumstances shall be taken into account only—

• (a) when the circumstances have arisen, and for so long as they continue to obtain, or

• (b) when the circumstances are within the control of the person having the rights.

• (2) Rights which are normally exercisable but are temporarily incapable of exercise shall continue to be taken into account.

Rights held by one person on behalf of another

5

Rights held by a person in a fiduciary capacity shall be treated as not held by him.

6

• (1) Rights held by a person as nominee for another shall be treated as held by the other.

• (2) Rights shall be regarded as held as nominee for another if they are exercisable only on his instructions or with his consent or concurrence.

Rights attached to shares held by way of security

7

Rights attached to shares held by way of security shall be treated as held by the person providing the security—

• (a) where apart from the right to exercise them for the purpose of preserving the value of the security, or of realising it, the rights are exercisable only in accordance with his instructions, and

• (b) where the shares are held in connection with the granting of loans as part of normal business activities and apart from the right to exercise them for the purpose of preserving the value of the security, or of realising it, the rights are exercisable only in his interests.

Rights attributed to holding company

8

• (1) Rights shall be treated as held by a holding company if they are held by any of its subsidiary companies.

• (2) Nothing in paragraph 6 or 7 shall be construed as requiring rights held by a holding company to be treated as held by any of its subsidiaries.

• (3) For the purposes of paragraph 7 rights shall be treated as being exercisable in accordance with the instructions or in the interests of a company if they are exercisable in accordance with the instructions of or, as the case may be, in the interests of—

• (a) any subsidiary or holding company of that company, or

• (b) any subsidiary of a holding company of that company.

Disregard of certain rights

9

The voting rights in a company shall be reduced by any rights held by the company itself.

Supplementary

10

References in any provision of paragraphs 5 to 9 to rights held by a person include rights falling to be treated as held by him by virtue of any other provision of those paragraphs but not rights which by virtue of any such provision are to be treated as not held by him.

SCHEDULE 7 — Parent and subsidiary undertakings: supplementary provisions

Introduction

1

The provisions of this Schedule explain expressions used in section 1162 (parent and subsidiary undertakings) and otherwise supplement that section.

Voting rights in an undertaking

2

• (1) In section 1162(2)(a) and (d) the references to the voting rights in an undertaking are to the rights conferred on shareholders in respect of their shares or, in the case of an undertaking not having a share capital, on members, to vote at general meetings of the undertaking on all, or substantially all, matters.

• (2) In relation to an undertaking which does not have general meetings at which matters are decided by the exercise of voting rights the references to holding a majority of the voting rights in the undertaking shall be construed as references to having the right under the constitution of the undertaking to direct the overall policy of the undertaking or to alter the terms of its constitution.

Right to appoint or remove a majority of the directors

3

• (1) In section 1162(2)(b) the reference to the right to appoint or remove a majority of the board of directors is to the right to appoint or remove directors holding a majority of the voting rights at meetings of the board on all, or substantially all, matters.

• (2) An undertaking shall be treated as having the right to appoint to a directorship if—

• (a) a person's appointment to it follows necessarily from his appointment as director of the undertaking, or

• (b) the directorship is held by the undertaking itself.

• (3) A right to appoint or remove which is exercisable only with the consent or concurrence of another person shall be left out of account unless no other person has a right to appoint or, as the case may be, remove in relation to that directorship.

Right to exercise dominant influence

4

• (1) For the purposes of section 1162(2)(c) an undertaking shall not be regarded as having the right to exercise a dominant influence over another undertaking unless it has a right to give directions with respect to the operating and financial policies of that other undertaking which its directors are obliged to comply with whether or not they are for the benefit of that other undertaking.

• (2) A “control contract” means a contract in writing conferring such a right which—

• (a) is of a kind authorised by the articles of the undertaking in relation to which the right is exercisable, and

• (b) is permitted by the law under which that undertaking is established.

• (3) This paragraph shall not be read as affecting the construction of section 1162(4)(a).

Rights exercisable only in certain circumstances or temporarily incapable of exercise

5

• (1) Rights which are exercisable only in certain circumstances shall be taken into account only—

• (a) when the circumstances have arisen, and for so long as they continue to obtain, or

• (b) when the circumstances are within the control of the person having the rights.

• (2) Rights which are normally exercisable but are temporarily incapable of exercise shall continue to be taken into account.

Rights held by one person on behalf of another

6

Rights held by a person in a fiduciary capacity shall be treated as not held by him.

7

• (1) Rights held by a person as nominee for another shall be treated as held by the other.

• (2) Rights shall be regarded as held as nominee for another if they are exercisable only on his instructions or with his consent or concurrence.

Rights attached to shares held by way of security

8

Rights attached to shares held by way of security shall be treated as held by the person providing the security—

• (a) where apart from the right to exercise them for the purpose of preserving the value of the security, or of realising it, the rights are exercisable only in accordance with his instructions, and

• (b) where the shares are held in connection with the granting of loans as part of normal business activities and apart from the right to exercise them for the purpose of preserving the value of the security, or of realising it, the rights are exercisable only in his interests.

Rights attributed to parent undertaking

9

• (1) Rights shall be treated as held by a parent undertaking if they are held by any of its subsidiary undertakings.

• (2) Nothing in paragraph 7 or 8 shall be construed as requiring rights held by a parent undertaking to be treated as held by any of its subsidiary undertakings.

• (3) For the purposes of paragraph 8 rights shall be treated as being exercisable in accordance with the instructions or in the interests of an undertaking if they are exercisable in accordance with the instructions of or, as the case may be, in the interests of any group undertaking.

Disregard of certain rights

10

The voting rights in an undertaking shall be reduced by any rights held by the undertaking itself.

Supplementary

11

References in any provision of paragraphs 6 to 10 to rights held by a person include rights falling to be treated as held by him by virtue of any other provision of those paragraphs but not rights which by virtue of any such provision are to be treated as not held by him.

SCHEDULE 8 — Index of defined expressions

. . .	. . .
accounting reference date and accounting reference period	section 391
accounting standards (in Part 15)	section 464
accounts meeting	section 437(3)
acquisition, in relation to a non-cash asset	section 1163(2)
address
— generally in the Companies Acts	section 1142
— in the company communications provisions	section 1148(1)
affirmative resolution procedure, in relation to regulations and orders	section 1290
allotment (time of)	section 558
allotment of equity securities (in Chapter 3 of Part 17)	section 560(2)(3)
allotted share capital and allotted shares	section 546(1)(b) and (2)
annual accounts (in Part 15)	section 471
annual accounts and reports (in Part 15)	section 471
annual general meeting	section 336
. . .	. . .
appropriate audit authority (in sections 522, 523 and 524)	section 525(1)
appropriate rate of interest
— in Chapter 5 of Part 17	section 592
— in Chapter 6 of Part 17	section 609
approval after being made, in relation to regulations and orders	section 1291
arrangement
— in Part 26	section 616(1)
—in Part 26A	section 901A(4)
— in Chapter 7 of Part 17	section 895(2)
articles	section 18
associate (in Chapter 3 of Part 28)	section 988
associated bodies corporate and associated company (in Part 10)	section 256
Audit Regulation	section 1173(1)
authenticated, in relation to a document or information sent or supplied to a company	section 1146
authorised corporate service provider	section 1098A
authorised group, of members of a company (in Part 14)	section 370(3)
authorised insurance company	section 1165(2)
authorised minimum (in relation to share capital of public company)	section 763
available profits (in Chapter 5 of Part 18)	sections 711 and 712
banking company and banking group	section 1164
body corporate	section 1173(1)
called-up share capital	section 547
capital redemption reserve	section 733
capitalisation in relation to a company's profits (in Part 23)	section 853(3)
cash (in relation to paying up or allotting shares)	section 583
cause of action, in relation to derivative proceedings (in Chapter 2 of Part 11)	section 265(7)
. . .	. . .
charge (in Chapter A1 of Part 25)	section 859A(7)
circulation date, in relation to a written resolution (in Part 13)	section 290
class of shares	section 629
the Companies Acts	section 2
Companies Act accounts	sections 395(1)(a) and 403(2)(a)
Companies Act group accounts	section 403(2)(a)
Companies Act individual accounts	section 395(1)(a)
companies involved in the division (in Part 27)	section 919(2)
company
— generally in the Companies Acts	section 1
— in Chapter 7 of Part 17	section 616(1)
— in Chapter A1 of Part 25	section 859A(7)
. . .	. . .
— in Part 26	section 895(2)
—in Schedule 1C (see Chapter 1 of Part 28)	paragraph 21 of Schedule 1C
—in Part 26A	section 901A(4)
— in Chapter 3 of Part 28	section 991(1)
— in the company communications provisions	section 1148(1)
the company communications provisions	section 1143
the company law provisions of this Act	section 2(2)
company records (in Part 37)	section 1134
the competent authority	section 1173(1)
confirmation date (in Part 24)	section 853A(3)
confirmation period (in Part 24)	section 853A(3)
confirmation statement	section 853A(1)
connected with, in relation to a director (in Part 10)	sections 252 to 254
constitution, of a company
— generally in the Companies Acts	section 17
— in Part 10	section 257
contributory	section 1170B
controlling, of a body corporate by a director (in Part 10)	section 255
corporate governance statement and separate corporate governance statement
— in Part 15	section 472A
— in Part 16	section 538A
corporation	section 1173(1)
the court	section 1156
credit institution	section 1173(1)
credit transaction (in Chapter 4 of Part 10)	section 202
creditor (in Chapter 1 of Part 31)	section 1011
daily default fine	section 1125
the data protection legislation	section 1173(1)
date of the offer (in Chapter 3 of Part 28)	section 991(1)
debenture	section 738
derivative claim (in Chapter 1 of Part 11)	section 260
derivative proceedings (in Chapter 2 of Part 11)	section 265
. . .	. . .
director
— generally in the Companies Acts	section 250
— in Chapter 8 of Part 10	section 240(3)
— in Chapter 1 of Part 11	section 260(5)
— in Chapter 2 of Part 11	section 265(7)
— in Part 14	section 379(1)
directors' remuneration policy (in Chapter 4A of Part 10)	section 226A(1)
directors' remuneration report	section 420
directors' report	section 415
disqualified under the directors disqualification legislation	section 159A(2)
distributable profits
— in Chapter 2 of Part 18	section 683(1)
—elsewhere in Part 18	section 736
distribution
— in Chapter 2 of Part 18	section 683(1)
— in Part 23	section 829
division (in Part 27)	section 919
document
— in Part 35	section 1114(1)
— in the company communications provisions	section 1148(1)
dormant, in relation to a company or other body corporate	section 1169
DTR5 issuer (in Part 24)	section 853E(6)
EEA State and related expressions	section 1170
electronic form, electronic copy, electronic means
— generally in the Companies Acts	section 1168(3) and (4)
— in relation to communications to a company	Part 3 of Schedule 4
— in relation to communications by a company	Part 3 of Schedule 5
eligible members, in relation to a written resolution	section 289
e-money issuer
— in Part 15	section 474(1)
— in Part 16	section 539
employees' share scheme	section 1166
employer and employee (in Chapter 1 of Part 18)	section 676
enactment	section 1293
enhanced disclosure documents	section 1078
equity securities (in Chapter 3 of Part 17)	section 560(1)
equity share capital	section 548
equity shares (in Chapter 7 of Part 17)	section 616(1)
establishment of an overseas company (in Part 35)	section 1067(6)
EU regulated market	section 1173(1)
exempt reasons, in relation to an auditor of a company ceasing to hold office (in Chapter 4 of Part 16)	section 519A
existing company (in Part 27)	section 902(2)
fellow subsidiary undertakings	section 1161(4)
financial assistance (in Chapter 2 of Part 18)	section 677
financial institution	section 1173(1)
financial year, of a company	section 390
firm	section 1173(1)
fixed assets (in Part 23)	section 853
the former Companies Acts	section 1171
the Gazette	section 1173(1)
group (in Part 15)	section 474(1)
group undertaking	section 1161(5)
hard copy form and hard copy
— generally in the Companies Acts	section 1168(2)
— in relation to communications to a company	Part 2 of Schedule 4
— in relation to communications by a company	Part 2 of Schedule 5
hire-purchase agreement	section 1173(1)
holder of shares (in Chapter 3 of Part 17)	section 574
holding company	section 1159 (and see section 1160 and Schedule 6)
IAS accounts	sections 395(1)(b) and 403(1) and (2)(b)
IAS group accounts	section 403(1) and (2)(b)
IAS individual accounts	section 395(1)(b)
. . .	. . .
identity is verified	section 1110A
included in the consolidation, in relation to group accounts (in Part 15)	section 474(1)
individual accounts	section 394
information rights (in Part 9)	section 146(3)
insurance company	section 1165(3)
insurance group	section 1165(5)
insurance market activity	section 1165(7)
interest in shares (for the purposes of Part 22)	sections 820 to 825
international accounting standards (in Part 15)	section 474(1)
investment company (in Part 23)	section 833
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
issued share capital and issued shares	section 546(1)(a) and (2)
the issuing company (in Chapter 7 of Part 17)	section 610(6)
the Joint Stock Companies Acts	section 1171
liabilities (in Part 27)	section 941
legal entity (in Part 21A)	section 790C(5)
liability, references to incurring, reducing or discharging (in Chapter 2 of Part 18)	section 683(2)
limited by guarantee	section 3(3)
limited by shares	section 3(2)
limited company	section 3
the main register (of members) (in Chapter 3 of Part 8)	section 131(1)
. . .	. . .
market purchase, by a company of its own shares (in Chapter 4 of Part 18)	section 693(4)
member, of a company
— generally in the Companies Acts	section 112
— in Chapter 1 of Part 11	section 260(5)
— in Chapter 2 of Part 11	section 265(7)
memorandum of association	section 8
merger (in Part 27)	section 904
merging companies (in Part 27)	section 904(2)
merger by absorption (in Part 27)	section 904(1)(a)
merger by formation of a new company (in Part 27)	section 904(1)(b)
“MiFID investment firm
—in Part 15	section 474(1).
—in Part 16	section 539
negative resolution procedure, in relation to regulations and orders	section 1289
net assets (in Part 7)	section 92
new company (in Part 27)	section 902(2)
non-cash asset	section 1163
. . .	. . .
non-public interest company (in Chapter 4 of Part 16)	section 519A
non-voting shares (in Chapter 3 of Part 28)	section 991(1)
number, in relation to shares	section 540(4)(b)
off-market purchase, by a company of its own shares (in Chapter 4 of Part 18)	section 693(2)
offer period (in Chapter 2 of Part 28)	section 971(1)
offer to the public (in Chapter 1 of Part 20)	section 756
offeror
—in Schedule 1C (see Chapter 1 of Part 28)	paragraph 20(1) of Schedule 1C
— in Chapter 2 of Part 28	section 971(1)
— in Chapter 3 of Part 28	section 991(1)
officer, in relation to a body corporate	section 1173(1)
officer in default	section 1121
official seal, of registrar	section 1062
opted-in company (in Chapter 2 of Part 28)	section 971(1)
opting-in resolution (in Chapter 2 of Part 28)	section 966(1)
opting-out resolution (in Chapter 2 of Part 28)	section 966(5)
ordinary resolution	section 282
ordinary shares (in Chapter 3 of Part 17)	section 560(1)
organisation (in Part 14)	section 379(1)
other relevant transactions or arrangements (in Chapter 4 of Part 10)	section 210
overseas company	section 1044
overseas branch register	section 129(1)
paid up	section 583
the Panel (in Part 28)	section 942
parent company	section 1173(1)
parent undertaking	section 1162 (and see Schedule 7)
payment for loss of office (in Chapter 4 of Part 10)	section 215
payment for loss of office (in Chapter 4A of Part 10)	section 226A(1)
. . .	. . .
pension scheme (in Chapter 1 of Part 18)	section 675
period for appointing auditors, in relation to a private company	section 485(2)
period for filing, in relation to accounts and reports for a financial year	section 442
permissible capital payment (in Chapter 5 of Part 18)	section 710
political donation (in Part 14)	section 364
political expenditure (in Part 14)	section 365
political organisation (in Part 14)	section 363(2)
prescribed	section 1167
private company	section 4
profit and loss account (in Part 15)	section 474(1) and (2)
profits and losses (in Part 23)	section 853(2)
profits available for distribution (for the purposes of Part 23)	section 830(2)
property (in Part 27)	section 941
protected information (in Chapter 8 of Part 10)	section 240
provision for entrenchment, in relation to a company's articles	section 22
public company	section 4
public interest company (in Chapter 4 of Part 16)	section 519A
publication, in relation to accounts and reports (in sections 433 to 435)	section 436
qualified, in relation to an auditor’s report etc
-in Part 15	section 474(1)
-in Part 16	section 539
qualifying shares (in Chapter 6 of Part 18)	section 724(2)
qualifying third party indemnity provision (in Chapter 7 of Part 10)	section 234
qualifying pension scheme indemnity provision (in Chapter 7 of Part 10)	section 235
quasi-loan (in Chapter 4 of Part 10)	section 199
quoted company
— in Chapter 4A of Part 10	section 226A(1)
— in Part 13	section 361
— in Part 15	section 385
— in Chapter 5 of Part 16	section 531 (and section 385)
realised profits and losses (in Part 23)	section 853(4)
receiver or manager (and certain related references)	section 1170A
redeemable shares	section 684(1)
redenominate	section 622(1)
redenomination reserve	section 628
the register	section 1080
. . .	. . .
. . .	. . .
. . .	. . .
. . .	. . .
. . .	. . .
register of members	section 113
. . .	. . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
registered number, of a company (or an overseas company)	section 1066 (and section 1059A(5))
registered number, of a UK establishment of an overseas company	section 1067
registered office, of a company	section 86
registrable person (in Part 21A)	section 790C(4)
registrable relevant legal entity (in Part 21A)	section 790C(8)
registrar and registrar of companies	section 1060
registrar's index of company names	section 1099
registrar's rules	section 1117
registration in a particular part of the United Kingdom	section 1060(4)
regulated activity
— generally in the Companies Acts	section 1173(1)
— in Part 15	section 474(1)
regulated market	section 1173(1)
relevant accounts (in Part 23)	section 836(2)
relevant legal entity (in Part 21A)	section 790C(6)
relevant market (in Part 24)	section 853E(6)
remuneration payment (in Chapter 4A of Part 10)	section 226A(1)
requirements for proper delivery (in Part 35)	section 1072 (and see section 1073)
requirements of this Act	section 1172
. . .	. . .
review period (in Part 24)	section 853A(5) and (6)
section 172(1) statement	section 414CZA(1)
securities (and related expressions)
— in Chapter 1 of Part 20	section 755(5)
— in Chapter 2 of Part 21	section 783
senior statutory auditor	section 504
sent or supplied, in relation to documents or information (in the company communications provisions)	section 1148(2) and (3)
service address	section 1141
service contract, of a director (in Part 10)	section 227
shadow director	section 251
share
— generally in the Companies Acts	section 540 (and see section 1161(2))
— in Part 22	section 792
— in section 1162 and Schedule 7	section 1162(7)
share capital, company having a	section 545
share exchange ratio
— in Chapter 2 of Part 27	section 905(2)
— in Chapter 3 of Part 27	section 920(2)
share premium account	section 610(1)
share warrant	section 779(1)
small companies exemption (in relation to directors' report)	section 415A
significant control (in Part 21A)	section 790C(2)
small companies regime, for (for accounts)	section 381
solvency statement (in sections 641 to 644)	section 643
special notice, in relation to a resolution	section 312
special resolution	section 283
statutory accounts	section 434(3)
subsidiary	section 1159 (and see section 1160 and Schedule 6)
subsidiary undertaking	section 1162 (and see Schedule 7)
. . .	. . .
takeover bid
—in section 943	section 943(7)
—in Schedule 1C	paragraph 20(1) of Schedule 1C
—in section 953	section 953(9)
—in Chapter 2 of Part 28	section 971(1)
takeover offer (in Chapter 3 of Part 28)	section 974
. . .
...	. . .
...	. . .
traded company
- in Part 13	section 360C
- in Part 15	section 474(1)
. . .	. . .
trading certificate	section 761(1)
transfer, in relation to a non-cash asset	section 1163(2)
transferable securities	section 1173(1)
treasury shares	section 724(5)
turnover
— in Part 15	section 474(1)
— in Part 16	section 539
UCITS management company
— in Part 15	section 474(1)
— in Part 16	section 539
UK-adopted international accounting standards (in Part 15)	section 474(1)
UK establishment of an overseas company (in Part 35)	section 1067(6)
UK-registered company	section 1158
UK regulated market	section 1173(1)
uncalled share capital	section 547
unconditional, in relation to a contract to acquire shares (in Chapter 3 of Part 28)	section 991(2)
undistributable reserves	section 831(4)
undertaking	section 1161(1)
unique identifier	section 1082
unlimited company	section 3
unquoted company (in Part 15)	section 385
. . .	. . .
voting rights
—in Schedule 1C (see Chapter 1 of Part 28)	paragraph 20(1) of Schedule 1C
— in Chapter 2 of Part 28	section 971(1)
— in Chapter 3 of Part 28	section 991(1)
— in section 1159 and Schedule 6	paragraph 2 of Schedule 6
— in section 1162 and Schedule 7	paragraph 2 of Schedule 7
voting shares
— in Chapter 2 of Part 28	section 971(1)
— in Chapter 3 of Part 28	section 991(1)
website, communication by a company by means of	Part 4 of Schedule 5
Welsh company	section 88
wholly-owned subsidiary	section 1159(2) (and see section 1160 and Schedule 6)
working day, in relation to a company	section 1173(1)
written resolution	section 288

SCHEDULE 9 — Removal of special provisions about accounts and audit of charitable companies

Part 1 — The Companies Act 1985 (c. 6)

1

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2

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3

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4

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5

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7

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8

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Part 2 — The Companies (Northern Ireland) Order 1986 (S.I. 1986/1032 (N.I. 6)

9

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10

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11

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12

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13

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14

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15

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16

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SCHEDULE 10 — Recognised supervisory bodies

Part 1 — Grant and revocation of recognition of a supervisory body

Application for recognition of supervisory body

1

• (1) A supervisory body may apply to the Secretary of State for an order declaring it to be a recognised supervisory body for the purposes of this Part of this Act (“a recognition order”).

• (2) Any such application must be—

• (a) made in such manner as the Secretary of State may direct, and

• (b) accompanied by such information as the Secretary of State may reasonably require for the purpose of determining the application.

• (3) At any time after receiving an application and before determining it the Secretary of State may require the applicant to furnish additional information.

• (4) The directions and requirements given or imposed under sub-paragraphs (2) and (3) may differ as between different applications.

• (5) The Secretary of State may require any information to be furnished under this paragraph to be in such form or verified in such manner as he may specify.

• (6) Every application must be accompanied by—

• (a) a copy of the applicant's rules, and

• (b) a copy of any guidance issued by the applicant in writing.

• (7) The reference in sub-paragraph (6)(b) to guidance issued by the applicant is a reference to any guidance or recommendation—

• (a) issued or made by it to all or any class of its members or persons seeking to become members,

• (b) relevant for the purposes of this Part, and

• (c) intended to have continuing effect,

including any guidance or recommendation relating to the admission or expulsion of members of the body, so far as relevant for the purposes of this Part.

Grant and refusal of recognition

2

• (1) The Secretary of State may, on an application duly made in accordance with paragraph 1 and after being furnished with all such information as he may require under that paragraph, make or refuse to make a recognition order in respect of the applicant.

• (2) The Secretary of State may make a recognition order only if it appears to him, from the information furnished by the body and having regard to other information in his possession, that—

• (a) the requirements of Part 2 of this Schedule are satisfied in the case of that body,

• (b) the body is able to perform all of the tasks which can be delegated by the competent authority under regulation 3 of the Statutory Auditors and Third Country Auditors Regulations 2016, and

• (c) the body is organised in such a way that conflicts of interest are avoided.

• (3) The Secretary of State may refuse to make a recognition order in respect of a body if he considers that its recognition is unnecessary having regard to the existence of one or more other bodies which—

• (a) maintain and enforce rules as to the appointment and conduct of statutory auditors, and

• (b) have been or are likely to be recognised.

• (4) Where the Secretary of State refuses an application for a recognition order he must give the applicant a written notice to that effect—

• (a) specifying which requirements, in the opinion of the Secretary of State, are not satisfied, or

• (b) stating that the application is refused on the ground mentioned in sub-paragraph (3).

• (5) A recognition order must state the date on which it takes effect.

Revocation of recognition

3

• (1) A recognition order in respect of a body may be revoked by a further order made by the Secretary of State if at any time it appears to him—

• (a) that any requirement of Part 2 of this Schedule, other than a requirement relating to a task delegated to the body under regulation 3 of the Statutory Auditors and Third Country Auditors Regulations 2016, is not satisfied in the case of the body,

• (b) that the body has failed to comply with any obligation imposed on it by or by virtue of this Part of this Act, other than an obligation relating to a task delegated to the body under regulation 3 of the Statutory Auditors and Third Country Auditors Regulations 2016, or

• (c) that the continued recognition of the body is undesirable having regard to the existence of one or more other bodies which have been or are to be recognised.

• (1A) A recognition order in respect of a body may be revoked by a further order made by the Secretary of State if at any time—

• (a) one or more tasks delegated to the body under regulation 3 of the Statutory Auditors and Third Country Auditors Regulations 2016 has been reclaimed by the competent authority, and

• (b) it appears to the Secretary of State that the continued recognition of the body is undesirable having regard to the circumstances in which the task or tasks were reclaimed.

• (2) An order revoking a recognition order must state the date on which it takes effect, which must be after the period of three months beginning with the date on which the revocation order is made.

• (3) Before revoking a recognition order the Secretary of State must—

• (a) give written notice of his intention to do so to the recognised body,

• (b) take such steps as he considers reasonably practicable for bringing the notice to the attention of the members of the body, and

• (c) publish the notice in such manner as he thinks appropriate for bringing it to the attention of any other persons who are in his opinion likely to be affected.

• (4) A notice under sub-paragraph (3) must—

• (a) state the reasons for which the Secretary of State proposes to act, and

• (b) give particulars of the rights conferred by sub-paragraph (5).

• (5) A person within sub-paragraph (6) may, within the period of three months beginning with the date of service or publication of the notice under sub-paragraph (3) or such longer period as the Secretary of State may allow, make written representations to the Secretary of State and, if desired, oral representations to a person appointed for that purpose by the Secretary of State.

• (6) The persons within this sub-paragraph are—

• (a) the recognised body on which a notice is served under sub-paragraph (3),

• (b) any member of the body, and

• (c) any other person who appears to the Secretary of State to be affected.

• (7) The Secretary of State must have regard to any representations made in accordance with sub-paragraph (5) in determining whether to revoke the recognition order.

• (8) If in any case the Secretary of State considers it essential to do so in the public interest he may revoke a recognition order without regard to the restriction imposed by sub-paragraph (2), even if—

• (a) no notice has been given or published under sub-paragraph (3), or

• (b) the period of time for making representations in pursuance of such a notice has not expired.

• (9) An order revoking a recognition order may contain such transitional provision as the Secretary of State thinks necessary or expedient.

• (10) A recognition order may be revoked at the request or with the consent of the recognised body and any such revocation is not subject to—

• (a) the restrictions imposed by sub-paragraphs (1) , (1A) and (2), or

• (b) the requirements of sub-paragraphs (3) to (5) and (7).

• (11) On making an order revoking a recognition order in respect of a body the Secretary of State must—

• (a) give written notice of the making of the order to the body,

• (b) take such steps as he considers reasonably practicable for bringing the making of the order to the attention of the members of the body, and

• (c) publish a notice of the making of the order in such manner as he thinks appropriate for bringing it to the attention of any other persons who are in his opinion likely to be affected.

Transitional provision

4

A recognition order made and not revoked under—

• (a) paragraph 2(1) of Schedule 11 to the Companies Act 1989 (c. 40), or

• (b) paragraph 2(1) of Schedule 11 to the Companies (Northern Ireland) Order 1990 (S.I. 1990/593 (N.I. 5)),

before the commencement of this Chapter of this Part of this Act is to have effect after the commencement of this Chapter as a recognition order made under paragraph 2(1) of this Schedule.

Orders not statutory instruments

5

Orders under this Part of this Schedule shall not be made by statutory instrument.

Part 2 — Requirements for recognition of a supervisory body

Delegation etc. of tasks by competent authority

5A

The body (“B”) must have rules providing that—

• (a) in circumstances where and to the extent that a task delegated to B is reclaimed by the competent authority under regulation 3 of the Statutory Auditors and Third Country Auditors Regulations 2016, the competent authority may apply rules (and may vary the rules it applies) made by B in accordance with the requirements of this Part of this Schedule,

• (b) in circumstances where and to the extent that a task delegated to B is reclaimed by the competent authority under regulation 3 of the Statutory Auditors and Third Country Auditors Regulations 2016 and is delegated to another recognised supervisory body, the other recognised supervisory body may apply rules (and may vary the rules it applies) made by B in accordance with the requirements of this Part of the Schedule, and

• (c) in circumstances where and to the extent that a task is not delegated to B by the competent authority under regulation 3 of the Statutory Auditors and Third Country Auditors Regulations 2016, the competent authority may apply rules (and may vary the rules it applies) made by B in accordance with the requirements of paragraphs 12 to 16 of this Schedule.

Consultation

5B

The body must consult with the competent authority and with other recognised supervisory bodies in making or varying rules in accordance with the requirements of this Schedule.

Holding of appropriate qualification

6

• (1) The body must have rules to the effect that a person is not eligible for appointment as a statutory auditor unless—

• (a) in the case of an individual other than a third country auditor, he holds an appropriate qualification,

• (aa) in the case of an individual who is a third country auditor—

• (i) he holds an appropriate qualification,

• (ii) he has been authorised on or before 5 April 2008 to practise the profession of company auditor pursuant to the European Communities (Recognition of Professional Qualifications) (First General System) Regulations 2005 ( S.I. 2005/18) and has fulfilled any requirements imposed pursuant to regulation 6 of those Regulations, or

• (iii) he meets the requirements of sub-paragraph (1A).

• (b) in the case of a firm ...—

• (i) each individual responsible for statutory audit work on behalf of the firm is eligible for appointment as a statutory auditor, and

• (ii) the firm is controlled by qualified persons (see paragraph 7 below).

• (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (1A) The requirements of this sub-paragraph are that—

• (a) the individual holds a professional qualification which covers all the subjects that are covered by a recognised professional qualification and that are subjects of which knowledge is essential for the pursuit of the profession of statutory auditor, ...

• (b) the individual is an EEA auditor who—

• (i) on or before IP completion day, holds a professional qualification which does not cover all those subjects,

• (ii) on or before IP completion day, has been approved by the body or is in the process of seeking approval from the body, and

• (iii) has met whichever of the requirements of sub-paragraph (1B) is specified in the body's rules , or

• (c) the individual is a specified state auditor who—

• (i) holds professional qualifications obtained in a specified state that are comparable to an appropriate qualification, and

• (ii) has met a requirement to take an aptitude test or to complete an adaptation period, or to undertake both, imposed on the individual by the body in accordance with Part 2 of the Recognition of Professional Qualifications and Implementation of International Recognition Agreements (Amendment) Regulations 2023, if such a requirement is so imposed.

• (1B) For the purposes of sub-paragraph (1A)(b)(iii), the body's rules must specify one of the following requirements—

• (a) a requirement to pass an aptitude test in accordance with sub-paragraph (2),

• (b) a requirement to complete an adaptation period in accordance with sub-paragraphs (2B) and (2C), or

• (c) a requirement either to pass an aptitude test in accordance with sub-paragraph (2) or to complete an adaptation period in accordance with sub-paragraphs (2B) and (2C), according to the choice of the individual.

• (2) The aptitude test—

• (a) must test the person's knowledge of subjects—

• (i) that are covered by a recognised professional qualification,

• (ii) that are not covered by the professional qualification already held by the person, and

• (iii) the knowledge of which is essential for the pursuit of the profession of statutory auditor;

• (b) may test the person's knowledge of rules of professional conduct;

• (c) must not test the person's knowledge of any other matters.

• (2A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (2B) An adaptation period is a period, not exceeding three years, in which the individual (“the applicant”) pursues the profession of statutory auditor under the supervision of an individual who holds an appropriate qualification, subject to an assessment (“the ability assessment”) of the applicant’s ability to pursue the profession of statutory auditor in the United Kingdom.

• (2C) Where the body’s rules specify a requirement that may or must be met by completing an adaptation period—

• (a) the body must have rules governing the adaptation period and the ability assessment, having regard to the circumstances of each applicant and, in particular, to the fact that each applicant is a qualified professional in an EEA State,

• (b) the applicant may be required to undergo further training during the adaptation period,

• (c) the applicant’s performance during the adaptation period must be assessed by the body, and

• (d) the body must determine the applicant’s professional status during the adaptation period.

• (3) A firm which has ceased to comply with the conditions mentioned in sub-paragraph (1)(b) may be permitted to remain eligible for appointment as a statutory auditor for a period of not more than three months.

7

• (1) This paragraph explains what is meant in paragraph 6(1)(b) by a firm being “controlled by qualified persons”.

• (2) In this paragraph references to a person being qualified are—

• (a) in relation to an individual, to that individual's—

• (i) holding an appropriate qualification, or

• (ii) being a third country auditor and meeting the requirements of paragraph 6(1)(aa)(ii) or 6(1A);

• (b) in relation to a firm, to its—

• (i) being eligible for appointment as a statutory auditor, ...

• (ii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (3) A firm is to be treated as controlled by qualified persons if, and only if—

• (a) a majority of the members of the firm are qualified persons, and

• (b) where the firm's affairs are managed by a board of directors, committee or other management body, a majority of that body are qualified persons or, if the body consists of two persons only, at least one of them is a qualified person.

• (4) A majority of the members of a firm means—

• (a) where under the firm's constitution matters are decided upon by the exercise of voting rights, members holding a majority of the rights to vote on all, or substantially all, matters;

• (b) in any other case, members having such rights under the constitution of the firm as enable them to direct its overall policy or alter its constitution.

• (5) A majority of the members of the management body of a firm means—

• (a) where matters are decided at meetings of the management body by the exercise of voting rights, members holding a majority of the rights to vote on all, or substantially all, matters at such meetings;

• (b) in any other case, members having such rights under the constitution of the firm as enable them to direct its overall policy or alter its constitution.

• (6) Paragraphs 5 to 11 of Schedule 7 to this Act (rights to be taken into account and attribution of rights) apply for the purposes of this paragraph.

7A

• (1) The body must have rules and practices governing the adaptation period and the ability assessment referred to in section 1221 (approval of third country qualifications), and the following provisions of this paragraph apply in any case within that section.

• (2) The body must have regard to the circumstances of each applicant in relation to the adaptation period, and the ability assessment, to be required of the applicant.

• (3) The applicant may be required to undergo further training during the adaptation period.

• (4) The applicant’s performance during the adaptation period must be assessed by the body.

• (5) The body must determine the applicant’s professional status during the adaptation period.

Auditors to be fit and proper persons

8

• (1) The body must have adequate rules and practices designed to ensure that the persons eligible under its rules for appointment as a statutory auditor are fit and proper persons to be so appointed.

• (2) The matters which the body may take into account for this purpose in relation to a person must include—

• (a) any matter relating to any person who is or will be employed by or associated with him for the purposes of or in connection with statutory audit work;

• (b) in the case of a body corporate, any matter relating to—

• (i) any director or controller of the body,

• (ii) any other body corporate in the same group, or

• (iii) any director or controller of any such other body; and

• (c) in the case of a partnership, any matter relating to—

• (i) any of the partners,

• (ii) any director or controller of any of the partners,

• (iii) any body corporate in the same group as any of the partners, or

• (iv) any director or controller of any such other body.

• (3) Where the person is a limited liability partnership, in sub-paragraph (2)(b) “director” is to be read as “member”.

• (4) In sub-paragraph (2)(b) and (c) “controller”, in relation to a body corporate, means a person who either alone or with an associate or associates is entitled to exercise or control the exercise of 15% or more of the rights to vote on all, or substantially all, matters at general meetings of the body or another body corporate of which it is a subsidiary.

Professional integrity and independence

9

• (1) The body must have adequate rules and practices designed to ensure that—

• (a) statutory audit work is conducted properly and with integrity, . . .

• (b) persons are not appointed as statutory auditors in circumstances in which they have an interest likely to conflict with the proper conduct of the audit.

• (c) persons appointed as statutory auditors take steps to safeguard their independence in accordance with the standards mentioned in sub-paragraph (3A),

• (d) persons appointed as statutory auditors record the matters required to be recorded in accordance with those standards.

• (e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (1A) The body must have adequate rules and practices designed to ensure that, except where the audited person is a public interest entity—

• (a) an individual who has been appointed as statutory auditor may not be appointed as a director or other officer of the audited person or be concerned in the management of the audited person during a period of not less than one year determined in standards set by the competent authority and commencing on the date on which the individual’s appointment as a statutory auditor ended;

• (b) a key audit partner of a firm which has been appointed as statutory auditor may not be appointed as a director or other officer of the audited person or be concerned in the management of the audited person during a period of not less than one year to be determined in standards set by the competent authority and commencing on the date on which the firm’s appointment as a statutory auditor ended.

• (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (3) The body must also have adequate rules and practices designed to ensure that—

• (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .