2006 c. 46

Part 36— Offences under the Companies Acts and financial penalties

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Sections 1121–1133

Liability of officer in default

Section 1121— Liability of officer in default

1.
This section has effect for the purposes of any provision of the Companies Acts to the effect that, in the event of contravention of an enactment in relation to a company, an offence is committed by every officer of the company who is in default.
2.
For this purpose “officer” includes—
1. (a)
  any director, manager or secretary, and
2. (b)
  any person who is to be treated as an officer of the company for the purposes of the provision in question.
3.
An officer is “in default” for the purposes of the provision if he authorises or permits, participates in, or fails to take all reasonable steps to prevent, the contravention.

Section 1122— Liability of company as officer in default

1.
Where a company is an officer of another company, it does not commit an offence as an officer in default unless one of its officers is in default.
2.
Where any such offence is committed by a company the officer in question also commits the offence and is liable to be proceeded against and punished accordingly.
3.
In this section “officer” and “in default” have the meanings given by section 1121.

Section 1123— Application to bodies other than companies

1.
Section 1121 (liability of officers in default) applies to a body other than a company as it applies to a company.
2.
As it applies in relation to a body corporate other than a company—
1. (a)
  the reference to a director of the company shall be read as referring—
  (i)
  where the body's affairs are managed by its members, to a member of the body,
  (ii)
  in any other case, to any corresponding officer of the body, and
2. (b)
  the reference to a manager or secretary of the company shall be read as referring to any manager, secretary or similar officer of the body.
3.
As it applies in relation to a partnership—
1. (a)
  the reference to a director of the company shall be read as referring to a member of the partnership, and
2. (b)
  the reference to a manager or secretary of the company shall be read as referring to any manager, secretary or similar officer of the partnership.
4.
As it applies in relation to an unincorporated body other than a partnership—
1. (a)
  the reference to a director of the company shall be read as referring—
  (i)
  where the body's affairs are managed by its members, to a member of the body,
  (ii)
  in any other case, to a member of the governing body, and
2. (b)
  the reference to a manager or secretary of the company shall be read as referring to any manager, secretary or similar officer of the body.

Offences under the Companies Act 1985

Section 1124— Amendments of the Companies Act 1985

Schedule 3 contains amendments of the Companies Act 1985 (c. 6) relating to offences.

General provisions

Section 1125— Meaning of “daily default fine”

1.
This section defines what is meant in the Companies Acts where it is provided that a person guilty of an offence is liable on summary conviction to a fine not exceeding a specified amount “and, for continued contravention, a daily default fine” not exceeding a specified amount.
2.
This means that the person is liable on a second or subsequent summary conviction of the offence to a fine not exceeding the latter amount for each day on which the contravention is continued (instead of being liable to a fine not exceeding the former amount).

Section 1126— Consents required for certain prosecutions

1.
This section applies to proceedings for an offence under any of the following provisions— section 458, 460 or 949 of this Act (offences of unauthorised disclosure of information); section 953 of this Act (failure to comply with rules about takeover bid documents); section 448, 449, 450, 451 or 453A of the Companies Act 1985 (c. 6) (offences in connection with company investigations); section 798 of this Act or section 455 of the Companies Act 1985 (offence of attempting to evade restrictions on shares). section 1112 or 1112A of this Act (false statement offences); paragraph 5 or 6 of Schedule 1B to this Act (breach of certain restrictions imposed under that Schedule)
2.
No such proceedings are to be brought in England and Wales except by or with the consent of—
1. (a)
  in the case of an offence under—
  (i)
  section 458, 460 or 949 of this Act,
  (ii)
  section 953 of this Act, ...
  (iii)
  section 448, 449, 450, 451 or 453A of the Companies Act 1985, or
  (iv)
  section 1112 or 1112A of this Act,
  the Secretary of State or the Director of Public Prosecutions;
2. (b)
  in the case of an offence under section 798 of , or paragraph 5 or 6 of Schedule 1B to, this Act or section 455 of the Companies Act 1985, the Secretary of State.
3.
No such proceedings are to be brought in Northern Ireland except by or with the consent of—
1. (a)
  in the case of an offence under—
  (i)
  section 458, 460 or 949 of this Act,
  (ii)
  section 953 of this Act, ...
  (iii)
  section 448, 449, 450, 451 or 453A of the Companies Act 1985, or
  (iv)
  section 1112 or 1112A of this Act,
  the Secretary of State or the Director of Public Prosecutions for Northern Ireland;
2. (b)
  in the case of an offence under section 798 of , or paragraph 5 or 6 of Schedule 1B to, this Act or section 455 of the Companies Act 1985, the Secretary of State.

Section 1127— Summary proceedings: venue

1.
Summary proceedings for any offence under the Companies Acts may be taken—
1. (a)
  against a body corporate, at any place at which the body has a place of business, and
2. (b)
  against any other person, at any place at which he is for the time being.
2.
This is without prejudice to any jurisdiction exercisable apart from this section.

Section 1128— Summary proceedings: time limit for proceedings

1.
An information relating to an offence under the Companies Acts that is triable by a magistrates' court in England and Wales may be so tried if it is laid—
1. (a)
  at any time within three years after the commission of the offence, and
2. (b)
  within twelve months after the date on which evidence sufficient in the opinion of the Director of Public Prosecutions or the Secretary of State (as the case may be) to justify the proceedings comes to his knowledge.
2.
Summary proceedings in Scotland for an offence under the Companies Acts—
1. (a)
  must not be commenced after the expiration of three years from the commission of the offence;
2. (b)
  subject to that, may be commenced at any time—
  (i)
  within twelve months after the date on which evidence sufficient in the Lord Advocate's opinion to justify the proceedings came to his knowledge, or
  (ii)
  where such evidence was reported to him by the Secretary of State, within twelve months after the date on which it came to the knowledge of the latter.
Section 136(3) of the Criminal Procedure (Scotland) Act 1995 (c. 46) (date when proceedings deemed to be commenced) applies for the purposes of this subsection as for the purposes of that section.
3.
A magistrates' court in Northern Ireland has jurisdiction to hear and determine a complaint charging the commission of a summary offence under the Companies Acts provided that the complaint is made—
1. (a)
  within three years from the time when the offence was committed, and
2. (b)
  within twelve months from the date on which evidence sufficient in the opinion of the Director of Public Prosecutions for Northern Ireland or the Secretary of State (as the case may be) to justify the proceedings comes to his knowledge.
4.
For the purposes of this section a certificate of the Director of Public Prosecutions, the Lord Advocate, the Director of Public Prosecutions for Northern Ireland or the Secretary of State (as the case may be) as to the date on which such evidence as is referred to above came to his notice is conclusive evidence.

Section 1129— Legal professional privilege

In proceedings against a person for an offence under the Companies Acts, nothing in those Acts is to be taken to require any person to disclose any information that he is entitled to refuse to disclose on grounds of legal professional privilege (in Scotland, confidentiality of communications).

Section 1130— Proceedings against unincorporated bodies

1.
Proceedings for an offence under the Companies Acts alleged to have been committed by an unincorporated body must be brought in the name of the body (and not in that of any of its members).
2.
For the purposes of such proceedings—
1. (a)
  any rules of court relating to the service of documents have effect as if the body were a body corporate, and
2. (b)
  the following provisions apply as they apply in relation to a body corporate—
  (i)
  in England and Wales, section 33 of the Criminal Justice Act 1925 (c. 86) and Schedule 3 to the Magistrates' Courts Act 1980 (c. 43),
  (ii)
  in Scotland, sections 70 and 143 of the Criminal Procedure (Scotland) Act 1995 (c. 46),
  (iii)
  in Northern Ireland, section 18 of the Criminal Justice Act (Northern Ireland) 1945 (c. 15 (N.I.)) and Article 166 of and Schedule 4 to the Magistrates' Courts (Northern Ireland) Order 1981 (S.I. 1981/1675 (N.I. 26)).
3.
A fine imposed on an unincorporated body on its conviction of an offence under the Companies Acts must be paid out of the funds of the body.

Section 1131— Imprisonment on summary conviction in England and Wales: transitory provision

1.
This section applies to any provision of the Companies Acts that provides that a person guilty of an offence is liable on summary conviction in England and Wales to imprisonment for a term not exceeding the general limit in a magistrates’ court.
2.
In relation to an offence committed before 2 May 2022, for “the general limit in a magistrates’ court” substitute “six months”.

Production and inspection of documents

Section 1132— Production and inspection of documents where offence suspected

1.
An application under this section may be made—
1. (a)
  in England and Wales, to a judge of the High Court by the Director of Public Prosecutions, the Secretary of State or a chief officer of police;
2. (b)
  in Scotland, to one of the Lords Commissioners of Justiciary by the Lord Advocate;
3. (c)
  in Northern Ireland, to the High Court by the Director of Public Prosecutions for Northern Ireland, the Department of Enterprise, Trade and Investment or a chief superintendent of the Police Service of Northern Ireland.
2.
If on an application under this section there is shown to be reasonable cause to believe—
1. (a)
  that any person has, while an officer of a company, committed an offence in connection with the management of the company's affairs, and
2. (b)
  that evidence of the commission of the offence is to be found in any documents in the possession or control of the company,
an order under this section may be made.
3.
The order may—
1. (a)
  authorise any person named in it to inspect the documents in question, or any of them, for the purpose of investigating and obtaining evidence of the offence, or
2. (b)
  require the secretary of the company, or such other officer of it as may be named in the order, to produce the documents (or any of them) to a person named in the order at a place so named.
4.
This section applies also in relation to documents in the possession or control of a person carrying on the business of banking, so far as they relate to the company's affairs, as it applies to documents in the possession or control of the company, except that no such order as is referred to in subsection (3)(b) may be made by virtue of this subsection.
5.
The decision under this section of a judge of the High Court, any of the Lords Commissioners of Justiciary or the High Court is not appealable.
6.
In this section “document” includes information recorded in any form.

Financial penalties

Section 1132A— Power to make provision for financial penalties

1.
The Secretary of State may by regulations make provision conferring power on the registrar to impose a financial penalty on a person if satisfied, beyond reasonable doubt, that the person has engaged in conduct amounting to a relevant offence under this Act.
2.
“Relevant offence under this Act” means any offence under this Act other than an offence under a provision contained in—
1. (a)
  Part 12 (company secretaries);
2. (b)
  Part 13 (resolutions and meetings);
3. (c)
  Part 16 (audit).
3.
The regulations may include provision—
1. (a)
  about the procedure to be followed in imposing penalties;
2. (b)
  about the amount of penalties;
3. (c)
  for the imposition of interest or additional penalties for late payment;
4. (d)
  conferring rights of appeal against penalties;
5. (e)
  about the enforcement of penalties.
4.
Provision made under subsection (3)(b) must ensure that the maximum financial penalty that may be imposed does not exceed £10,000.
5.
The regulations must provide that—
1. (a)
  no financial penalty may be imposed under the regulations on a person in respect of conduct amounting to an offence if—
  (i)
  proceedings have been brought against the person for that offence in respect of that conduct and the proceedings are ongoing, or
  (ii)
  the person has been convicted of that offence in respect of that conduct, and
2. (b)
  no proceedings may be brought against a person in respect of conduct amounting to an offence if the person has been given a financial penalty under the regulations in respect of that conduct.
6.
Amounts recovered by the registrar under the regulations are to be paid into the Consolidated Fund.
7.
Regulations under this section are subject to affirmative resolution procedure.
8.
In this section “conduct” means an act or omission.

Supplementary

Section 1133— Transitional provision

The provisions of this Part except section 1132 do not apply to offences committed before the commencement of the relevant provision.