Not complying with Companies Act Who proscecutes?
Discussion
I have found that a company has over several years not complied with the rule concerning advising members of their right to a vote, not giving the opportunity of proxy votes and refusing to let a 'shareholder/member to view the membership list as required under sections of the Companies Act 2006
now this is an Act of Parliament and uses the word must, not should or may, MUST comply otherwise penalties will be enforced
When i contacted Companies House on these malpractices I was advised by that i should take legal advice on this, as they are only a registry WHY?
Surely i I do not have to uphold the law, there must be a regulatory body, Police etc who would take this on, or is it just a toothless document?
Any Genuine Solicitors/lawyers out the who could give a quick comment
Thanks
now this is an Act of Parliament and uses the word must, not should or may, MUST comply otherwise penalties will be enforced
When i contacted Companies House on these malpractices I was advised by that i should take legal advice on this, as they are only a registry WHY?
Surely i I do not have to uphold the law, there must be a regulatory body, Police etc who would take this on, or is it just a toothless document?
Any Genuine Solicitors/lawyers out the who could give a quick comment
Thanks
I would suggest calling back and asking to speak to someone more senior. I used to work at companies house years ago and the call centre was outsourced with just a handful of actual DTI personnel working. I'm afraid I don't know the answer to your question, but I do think companies house would be involved.
You may get a more reliable answer by emailing as it's unlikely to be outsourced staff answering those.
You may get a more reliable answer by emailing as it's unlikely to be outsourced staff answering those.
I'd need some more info on this, but I think you'd have to commence a civil case through the Companies Courts. Companies House may impose a penalty if this breach means the company didn't file something properly, but that's about it from their side.
Companies Act does let the directors off the hook if the oversight was accidental though, and also you'd perhaps not get anywhere if your shareholding is too small to have made a difference - if you can show material loss, however, you may have a case.
Not really my field I must admit, so stand to be corrected.
Companies Act does let the directors off the hook if the oversight was accidental though, and also you'd perhaps not get anywhere if your shareholding is too small to have made a difference - if you can show material loss, however, you may have a case.
Not really my field I must admit, so stand to be corrected.
dmitsi
Thanks
just to get you up to speed
I requested a copy of the current articles, which although doesnt give a timescale ( see later) it does specify a fine in failure to do so
So i sent an enquiry to CH and the reply was
If a company has not complied with a request under Section 32 of the Act, please provide us with the company name and number and the date that the request was made, and we will write to the company to seek their response to your complaint. I should make it clear at this stage that our principle in dealing with such complaints is to take all reasonable steps to make the company comply with the requirement. This is because we consider it more important, and in your interests, to give the company the opportunity to comply with the law than to take prosecution action at this stage. If the company and/or directors wilfully and persistently refuse(s) to comply with the requirement, we will consider taking prosecution action. We will consider any such prosecution under the provisions of the Code for Crown Prosecutors.
So havin had that the next complaint against same company was not complying with Rule 325 'in advising members of their rights, proxy voting etc This i might add has been not been adhered to since 2009 and erlier!! All the membe get is a nitice in the 'society Magazine' the
The AGM wqill be held on....,at...... no agenda, not members right proxy voting
In this rule the word must, is used thatthis must be shown 'with reasonable prominance' in fact it is never shown!!
Also in rule 117 they have since Nov last year prevaricated although again the rule states MUST within five days either comply or request a court injuction as wh hey should not. This has been the response to two members
Now There are two rules that have ben broken without question and one that CH will 'have a word with them about.
when i relied giving details of the Meeting non compliance this is the reply i got from the same guy as in reply 1
Thank you for your email. Although Companies House can assist when dealing with breaches of some areas of the Companies Act 2006, primarily we are a registry only and are unable to deal with all aspects of the Companies Act 2006.
If you feel the company in question is in breach of Section 325, I can only suggest you seek your own independent legal advice as this is not a matter in which we can offer any assistance.
so in one they will help, the other two ,more serious breaches, it appears they are telling me to bugger off and start the action myself!!
I will say that i sent them via the 'enquiries' @CH mail and the reply is from a Breache Case Manager
There is another email address complaints@CH i assume i would get a better response from this. I do feel that the reply is 'not interested'
Which is at odds from his first response
Thanks
just to get you up to speed
I requested a copy of the current articles, which although doesnt give a timescale ( see later) it does specify a fine in failure to do so
So i sent an enquiry to CH and the reply was
If a company has not complied with a request under Section 32 of the Act, please provide us with the company name and number and the date that the request was made, and we will write to the company to seek their response to your complaint. I should make it clear at this stage that our principle in dealing with such complaints is to take all reasonable steps to make the company comply with the requirement. This is because we consider it more important, and in your interests, to give the company the opportunity to comply with the law than to take prosecution action at this stage. If the company and/or directors wilfully and persistently refuse(s) to comply with the requirement, we will consider taking prosecution action. We will consider any such prosecution under the provisions of the Code for Crown Prosecutors.
So havin had that the next complaint against same company was not complying with Rule 325 'in advising members of their rights, proxy voting etc This i might add has been not been adhered to since 2009 and erlier!! All the membe get is a nitice in the 'society Magazine' the
The AGM wqill be held on....,at...... no agenda, not members right proxy voting
In this rule the word must, is used thatthis must be shown 'with reasonable prominance' in fact it is never shown!!
Also in rule 117 they have since Nov last year prevaricated although again the rule states MUST within five days either comply or request a court injuction as wh hey should not. This has been the response to two members
Now There are two rules that have ben broken without question and one that CH will 'have a word with them about.
when i relied giving details of the Meeting non compliance this is the reply i got from the same guy as in reply 1
Thank you for your email. Although Companies House can assist when dealing with breaches of some areas of the Companies Act 2006, primarily we are a registry only and are unable to deal with all aspects of the Companies Act 2006.
If you feel the company in question is in breach of Section 325, I can only suggest you seek your own independent legal advice as this is not a matter in which we can offer any assistance.
so in one they will help, the other two ,more serious breaches, it appears they are telling me to bugger off and start the action myself!!
I will say that i sent them via the 'enquiries' @CH mail and the reply is from a Breache Case Manager
There is another email address complaints@CH i assume i would get a better response from this. I do feel that the reply is 'not interested'
Which is at odds from his first response
I am not sure that we live in a society where there is always a regulatory body to look after people - that would be to burden society with huge amounts of red tape... ultimately the legal system is a framework within which we should live and by taking certain actions (such as setting up a company) the directors take on the responsibility of complying...
when they don't then someone who is affected can use that framework to take action, usually legal...
but it wouldn't be right to have a default of an organisation which tracked / dealt with / etc. these issues:
a) those affected already have a framework within which it can be managed (the courts)
b) who would pay for their time
c) what about companies where it is not an issue (e.g. a company owned and run by a couple of mates, they might not be complying with the companies act in sending each other notices of AGMs etc. but does it matter - no of course not...)
so our legal system works at a much gentler level, but provides the strength to those who need it when they do - and to take advantage of that, you need to take legal action... I suspect that an initial legal letter, followed by court would be the route - assuming loss / etc. but I would be very surprised if anyone else will do it for you!
when they don't then someone who is affected can use that framework to take action, usually legal...
but it wouldn't be right to have a default of an organisation which tracked / dealt with / etc. these issues:
a) those affected already have a framework within which it can be managed (the courts)
b) who would pay for their time
c) what about companies where it is not an issue (e.g. a company owned and run by a couple of mates, they might not be complying with the companies act in sending each other notices of AGMs etc. but does it matter - no of course not...)
so our legal system works at a much gentler level, but provides the strength to those who need it when they do - and to take advantage of that, you need to take legal action... I suspect that an initial legal letter, followed by court would be the route - assuming loss / etc. but I would be very surprised if anyone else will do it for you!
Surveyor
no it is a Ltd Co which is also a Charity, which was a large society of like minded people eg a model flying club etc they have already ignored 'guidelines' of the Charity commission following the slavish demands of a peson who objcted to a proposal and got them to change it. But The CC just said sorry,nothing to do with us, and they took money off the public for donations to this scheme and then changed the design, without advising donators of their intentions. In fact thy have lied all the way through this episode.
As regards the non compliance of calling an AGM it could be claimed that by not advisin members of their rights 'as required by law' the AGM could be weighted with all like minded members who would outweight those against any proposals
As the Act specifically states in rule 325 as shown below
325Notice of meeting to contain statement of rights
(1)In every notice calling a meeting of a company there must appear, with reasonable prominence, a statement informing the member of—
(a)his rights under section 324, and
(b)any more extensive rights conferred by the company's articles to appoint more than one proxy.
(2)Failure to comply with this section does not affect the validity of the meeting or of anything done at the meeting.
(3)If this section is not complied with as respects any meeting, an offence is committed by every officer of the company who is in default.
(4)A person guilty of an offence under this section is liable on summary conviction to a fine not exceeding level 3 on the standard scale.
Now read section 4
it mentions summary conviction. surely this would be covered under the same as say being done for drunk driving.
They are guilty and convicted. Where is the difference in the two offences
both offence are covered by an Act of Parliament and in the driving one it would be the CPS via the police
so Would this also apply to the Companies Act non compliance, especially as they have been doing this since 1999 ( date of formation of company) and have aditted in public and at the last AGM they were aware of the problem.
I cannot see why i should have to take out an action in a civil court which may not have the authority to administer the fine.
Perhaps someone who knows about this, rather than guesswork might be able to comment?
no it is a Ltd Co which is also a Charity, which was a large society of like minded people eg a model flying club etc they have already ignored 'guidelines' of the Charity commission following the slavish demands of a peson who objcted to a proposal and got them to change it. But The CC just said sorry,nothing to do with us, and they took money off the public for donations to this scheme and then changed the design, without advising donators of their intentions. In fact thy have lied all the way through this episode.
As regards the non compliance of calling an AGM it could be claimed that by not advisin members of their rights 'as required by law' the AGM could be weighted with all like minded members who would outweight those against any proposals
As the Act specifically states in rule 325 as shown below
325Notice of meeting to contain statement of rights
(1)In every notice calling a meeting of a company there must appear, with reasonable prominence, a statement informing the member of—
(a)his rights under section 324, and
(b)any more extensive rights conferred by the company's articles to appoint more than one proxy.
(2)Failure to comply with this section does not affect the validity of the meeting or of anything done at the meeting.
(3)If this section is not complied with as respects any meeting, an offence is committed by every officer of the company who is in default.
(4)A person guilty of an offence under this section is liable on summary conviction to a fine not exceeding level 3 on the standard scale.
Now read section 4
it mentions summary conviction. surely this would be covered under the same as say being done for drunk driving.
They are guilty and convicted. Where is the difference in the two offences
both offence are covered by an Act of Parliament and in the driving one it would be the CPS via the police
so Would this also apply to the Companies Act non compliance, especially as they have been doing this since 1999 ( date of formation of company) and have aditted in public and at the last AGM they were aware of the problem.
I cannot see why i should have to take out an action in a civil court which may not have the authority to administer the fine.
Perhaps someone who knows about this, rather than guesswork might be able to comment?
silverfoxcc said:
All the membe get is a nitice in the 'society Magazine' the
The AGM wqill be held on....,at...... no agenda, not members right proxy voting
In this rule the word must, is used thatthis must be shown 'with reasonable prominance' in fact it is never shown!!
Is it definitely 'The XXXX Society Ltd/Limited? It may well be one limited by guarantee. It is quite common for Societies and Clubs to use this structure. Proxy/postal voting is not necessarily an absolute requirement. I know of some whose articles require attendance at the AGM in order to cast a vote. What is the exact wording in the AoA of the the one you are talking about?The AGM wqill be held on....,at...... no agenda, not members right proxy voting
In this rule the word must, is used thatthis must be shown 'with reasonable prominance' in fact it is never shown!!
http://www.companylawclub.co.uk/companies-limited-...
You mention a model flying club. Is it a BMFA member? If so, maybe the Association might be able to exert some influence. The possibility of losing affiliation might sharpen a few minds within your Society.
That said, I'm somewhat surprised that such an entity would be a registered charity and soliciting donations from the public. Anything more you can tell us without opening a can of worms?
Red Devil
I have to stay a bit schtum on this at the moment. as to who they are. Not a flying club though.
The AoA is witten under
The Companies Act 1985 and 1989
company limited by guarantee and not having a share capital
The AoA interpretations state
The Act means the companies Act 1985 including any statutory modification or re-enactment thereof for the time being then in force
( I take it that the Companies Act 2006 is now the legislation that covers this)
Rule 5 states the notice shall specify the time and place and the genal nature of the business to be transacted , and in the case of an AGM ,shall specify the meeting as such.
Rule 20 of the AoA states All members shall have one vote
Rule 21 No member shall be allowed to vote unless
They do announce the AGM each year as The AGM will be held at xxx on xxx . And that is it. No mention of trustees standing down nor that all members have a vote to use ( WHICH Rule 325 of The 2006 Act says must be done)and be in a prominant position
Donations from Public
Yep. They put adverts in the press for donations from the public for a memorial and specifically pointed out a certain part of it as being an 'allusion' Then a relative had a b
h about it saying it demeaned the guys memory and to remove it. otherwise the 'club' would lose the 'special relationship' it had with him. This was done, without putting the alteration to the members,especially as the 'club' would make good any shortfall,refusing to do a members poll on what they thought and making so many lies about why it was done,and if the chairman was Pinocchio we could build a channel bridge with his nose. They have not contacted any of the general public giving them the opportunity to claim the money back, except a letter in the speciality magazines, and a note on their website. I know of four donators who are, in effect unaware of the change. and donated as they like th initial design,although they claim to have done so. We have contacted Charities Commission about this as one of their guidelines stating no one person shall dicate to the trustees an what to do.
The CC are such a limp wristed lot. They said as it was a guideline it is an internal matter. Now i am getting the bums rush from Companies house regarding an Act of Parliament. sometimes i really give up on the law and order of this country. nobody in authority wants to uphold the law
I was under the impression that if an Act was broken it was Regina Vs XXXXX. especially as there are fines laid down in the Act covering the failure. I cannot see how i can do it privately and then enforce a fine on behalf of the Government or Monarch. Unless It is now covere under some obscure EU directive!!
I have to stay a bit schtum on this at the moment. as to who they are. Not a flying club though.
The AoA is witten under
The Companies Act 1985 and 1989
company limited by guarantee and not having a share capital
The AoA interpretations state
The Act means the companies Act 1985 including any statutory modification or re-enactment thereof for the time being then in force
( I take it that the Companies Act 2006 is now the legislation that covers this)
Rule 5 states the notice shall specify the time and place and the genal nature of the business to be transacted , and in the case of an AGM ,shall specify the meeting as such.
Rule 20 of the AoA states All members shall have one vote
Rule 21 No member shall be allowed to vote unless
They do announce the AGM each year as The AGM will be held at xxx on xxx . And that is it. No mention of trustees standing down nor that all members have a vote to use ( WHICH Rule 325 of The 2006 Act says must be done)and be in a prominant position
Donations from Public
Yep. They put adverts in the press for donations from the public for a memorial and specifically pointed out a certain part of it as being an 'allusion' Then a relative had a b
h about it saying it demeaned the guys memory and to remove it. otherwise the 'club' would lose the 'special relationship' it had with him. This was done, without putting the alteration to the members,especially as the 'club' would make good any shortfall,refusing to do a members poll on what they thought and making so many lies about why it was done,and if the chairman was Pinocchio we could build a channel bridge with his nose. They have not contacted any of the general public giving them the opportunity to claim the money back, except a letter in the speciality magazines, and a note on their website. I know of four donators who are, in effect unaware of the change. and donated as they like th initial design,although they claim to have done so. We have contacted Charities Commission about this as one of their guidelines stating no one person shall dicate to the trustees an what to do.The CC are such a limp wristed lot. They said as it was a guideline it is an internal matter. Now i am getting the bums rush from Companies house regarding an Act of Parliament. sometimes i really give up on the law and order of this country. nobody in authority wants to uphold the law
I was under the impression that if an Act was broken it was Regina Vs XXXXX. especially as there are fines laid down in the Act covering the failure. I cannot see how i can do it privately and then enforce a fine on behalf of the Government or Monarch. Unless It is now covere under some obscure EU directive!!
silverfoxcc said:
I cannot see why i should have to take out an action in a civil court which may not have the authority to administer the fine.
Perhaps someone who knows about this, rather than guesswork might be able to comment?
A civil court will not administer a fine or be the right forum for a criminal prosecution. Perhaps someone who knows about this, rather than guesswork might be able to comment?
S 325 gives you a right as a shareholder - a right enforceable by you against the company in a civil court, and also creates a criminal offence.
Giving notice os the ability to provide a proxy is basically a private right. If it is ignored the only people who suffer are the shareholders of the company. And if they care enough, or are prejudiced, they can enforce their rights under the CA; that is to say they can compel the company to recognise a vote cast by their proxy.
The criminal aspect is at a guess administered in the first instance by the Department of Business, Enterprise and Skills (or whatever it is currently called). Or Companies House. Or both. Who will refer it to the CPS if the conduct is so egregious that it is in the public interest to prosecute.
And there's the rub. If the shareholders with private rights that have been violated can't be bothered to enforce those private rights, or don't enforce them because the prejudice they suffer is marginal, it is very unlikely that the default will be considered so serious that it is the public interest to do anything about it.
So the real question: do you want this prosecuted because you have suffered some identifiable and real harm or loss, or are yo ureally just trying to make trouble for a bunch of people that you don't happen to like very much?
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