Small Business, Enterprise and Employment Bill (HL Bill 91)

Rights exercisable only in certain circumstances etc

22 (1) Rights that are exercisable only in certain circumstances are to be
taken into account only—

(a) when the circumstances have arisen, and for so long as
5they continue to obtain, or

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

(2) But rights that are exercisable by an administrator or by creditors
while a legal entity is in relevant insolvency proceedings are not to
10be taken into account even while the entity is in those proceedings.

(3) “Relevant insolvency proceedings” means—

(a) administration within the meaning of the Insolvency Act
1986,

(b) administration within the meaning of the Insolvency
15(Northern Ireland) Order 1989, or

(c) proceedings under the insolvency law of another country
or territory during which an entity’s assets and affairs are
subject to the control or supervision of a third party or
creditor.

(4) 20Rights that are normally exercisable but are temporarily incapable
of exercise are to continue to be taken into account.

Rights attached to shares held by way of security

23 Rights attached to shares held by way of security provided by a
person are to be treated for the purposes of this Schedule as held
25by that person—

(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 that person’s
instructions, and

(b) 30where 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 that person’s interests.

35Significant influence or control

24 (1) The Secretary of State must prepare and publish guidance about
the meaning of “significant influence or control” for the purposes
of this Schedule.

(2) The guidance must be laid before Parliament.

(3) 40Regard must be had to that guidance (or, if it has been updated, to
the latest guidance) in interpreting references in this Schedule to
“significant influence or control”.

Limited partnerships

25 (1) An individual does not meet the specified condition in paragraph
2, 3 or 4 in relation to a company by virtue only of being a limited
partner.

(2) 5An individual does not meet the specified condition in paragraph
2, 3 or 4 in relation to a company by virtue only of, directly or
indirectly—

(a) holding shares, or

(b) holding a right,

10in or in relation to a limited partner which (in its capacity as such)
would meet the condition if it were an individual.

(3) Sub-paragraphs (1) and (2) do not apply for the purposes of
determining whether the requirement set out in paragraph (a) of
the specified condition in paragraph 6 is met.

(4) 15In this paragraph “limited partner” means a limited partner in a
limited partnership registered under the Limited Partnerships Act
1907 (other than one who takes part in the management of the
partnership business).

Part 4 20Power to amend thresholds etc

26 (1) The Secretary of State may by regulations amend this Schedule for
a permitted purpose.

(2) The permitted purposes are—

(a) to replace any or all references in this Schedule to a
25percentage figure with references to some other (larger or
smaller) percentage figure;

(b) to change or supplement the specified conditions in Part 1
of this Schedule so as to include circumstances (for
example, circumstances involving more complex
30structures) that give individuals a level of control over
company Y broadly similar to the level of control given by
the other specified conditions;

(c) in consequence of any provision made by virtue of
paragraph (b), to change or supplement Part 2 of this
35Schedule so that circumstances specified in that Part in
which a person is to be regarded as holding an interest in
a company correspond to any of the specified conditions,
or would do so but for the extent of the interest.

(3) Regulations under this paragraph are subject to affirmative
40resolution procedure.

Section 790I

Schedule 1A Enforcement of disclosure requirements

Right to issue restrictions notice

1 (1) This paragraph applies if—

(a) a notice under section 790D or 790E is served by a
5company on a person who has a relevant interest in the
company, and

(b) the person fails to comply with that notice within the time
specified in it.

(2) The company may give the person a notice under this paragraph
10(a “warning notice”) informing the person that it is proposing to
issue the person with a notice (a “restrictions notice”) with respect
to the relevant interest.

(3) The company may issue the restrictions notice if, by the end of the
period of one month beginning with the date on which the
15warning notice was given—

(a) the person has not complied with the notice served under
section 790D or 790E, and

(b) the company has not been provided with a valid reason
sufficient to justify the person’s failure to comply with the
20notice served under that section.

(4) A restrictions notice is issued on a person by sending the notice to
the person.

(5) The effect of a restrictions notice is set out in paragraph 3.

(6) In deciding whether to issue a restrictions notice, the company
25must have regard to the effect of the notice on the rights of third
parties in respect of the relevant interest.

Relevant interests

2 (1) For the purposes of this Schedule, a person has a relevant interest
in a company if the person—

(a) 30holds any shares in the company,

(b) holds any voting rights in the company, or

(c) holds the right to appoint or remove any member of the
board of directors of the company.

(2) References to “the relevant interest” are to the shares or right in
35question.

(3) Part 3 of Schedule 1A applies for the interpretation of sub-
paragraph (1) save that, where the relevant interest is by virtue of
paragraph 19 or 20 of that Schedule, treated for the purposes of
that Schedule as held by a person other than the person who in fact
40holds the interest, both the holder and the other person are to be
regarded for the purposes of this Schedule as having the relevant
interest.

Effect of restrictions notice

3 (1) The effect of a restrictions notice issued under paragraph 1 with
respect to a relevant interest is as follows—

(a) any transfer of the interest is void,

(b) 5no rights are exercisable in respect of the interest,

(c) no shares may be issued in right of the interest or in
pursuance of an offer made to the interest-holder,

(d) except in a liquidation, no payment may be made of sums
due from the company in respect of the interest, whether
10in respect of capital or otherwise.

(2) An agreement to transfer an interest that is subject to the
restriction in sub-paragraph (1)(a) is void.

(3) Sub-paragraph (2) does not apply to an agreement to transfer the
interest on the making of an order under paragraph 8 made by
15virtue of sub-paragraph (3)(b) of that paragraph (removal of
restrictions in case of court-approved transfer).

(4) An agreement to transfer any associated right (otherwise than in a
liquidation) is void.

(5) Sub-paragraph (4) does not apply to an agreement to transfer any
20such right on the making of an order under paragraph 8 made by
virtue of sub-paragraph (3)(b) of that paragraph (removal of
restrictions in case of court-approved transfer).

(6) An “associated right”, in relation to a relevant interest, is—

(a) a right to be issued with any shares issued in right of the
25relevant interest, or

(b) a right to receive payment of any sums due from the
company in respect of the relevant interest.

(7) The provisions of this section are subject to any directions given
under paragraph 4.

30Protection of third party rights

4 (1) The court may give a direction under this paragraph if, on
application by any person aggrieved, the court is satisfied that a
restrictions notice issued by the company under paragraph 1
unfairly affects the rights of third parties in respect of the relevant
35interest.

(2) The direction is given for the purpose of protecting those third
party rights.

(3) The direction is a direction that certain acts will not constitute a
breach of the restrictions placed on the relevant interest by the
40restrictions notice.

(4) An order containing a direction under this paragraph—

(a) must specify the acts that will not constitute a breach of the
restrictions, and

(b) may confine the direction to cases where those acts are
45done by persons, or for purposes, described in the order.

(5) The direction may be given subject to such terms as the court
thinks fit.

Breach of restrictions

5 (1) A person commits an offence if the person does anything listed in
5sub-paragraph (2) knowing that the interest is subject to
restrictions.

(2) The things are—

(a) exercising or purporting to exercise any right to dispose of
a relevant interest,

(b) 10exercising or purporting to exercise any right to dispose of
any right to be issued with a relevant interest, or

(c) voting in respect of a relevant interest (whether as holder
of the interest or as proxy) or appointing a proxy to vote in
respect of a relevant interest.

(3) 15A person who has a relevant interest that the person knows to be
subject to restrictions commits an offence if the person—

(a) knows a person to be entitled (apart from the restrictions)
to vote in respect of the interest, whether as holder or as
proxy,

(b) 20does not know the person to be aware of the fact that the
interest is subject to restrictions, and

(c) fails to notify the person of that fact.

(4) A person commits an offence if the person—

(a) either has a relevant interest that the person knows to be
25subject to restrictions or is entitled to an associated right,
and

(b) enters in that capacity into an agreement that is void by
virtue of paragraph 3(2) or (4).

(5) References in this Schedule to an interest being “subject to
30restrictions” are to an interest being subject to restrictions by
virtue of a restrictions notice under paragraph 1.

6 If shares in a company are issued in contravention of a restriction
imposed by virtue of a restrictions notice under paragraph 1, an
offence is committed by—

(a) 35the company, and

(b) every officer of the company who is in default.

7 (1) A person guilty of an offence under paragraph 5 or 6 is liable—

(a) on conviction on indictment, to a fine;

(b) on summary conviction—

(i) 40in England and Wales, to a fine,

(ii) in Scotland or Northern Ireland, to a fine not
exceeding the statutory maximum.

(2) The provisions of those paragraphs are subject to any direction
given under paragraph 4 or 8.

Relaxation of restrictions

8 (1) An application may be made to the court for an order directing
that the relevant interest cease to be subject to restrictions.

(2) An application for an order under this paragraph may be made by
5the company in question or by any person aggrieved.

(3) The court must not make an order under this paragraph unless—

(a) it is satisfied that the information required by the notice
served under section 790D or 790E has been disclosed to
the company and no unfair advantage has accrued to any
10person as a result of the earlier failure to make that
disclosure, or

(b) the relevant interest is to be transferred for valuable
consideration and the court approves the transfer.

(4) An order under this paragraph made by virtue of sub-paragraph
15(3)(b) may continue, in whole or in part, the restrictions mentioned
in paragraph 3(1)(c) and (d) so far as they relate to a right acquired
or offer made before the transfer.

(5) Where any restrictions continue in force under sub-paragraph
(4)—

(a) 20an application may be made under this paragraph for an
order directing that the relevant interest cease to be subject
to those restrictions, and

(b) sub-paragraph (3) does not apply in relation to the making
of such an order.

25Orders for sale

9 (1) The court may order that the relevant interest subject to
restrictions be sold subject to the court’s approval as to the sale.

(2) An application for an order under sub-paragraph (1) may only be
made by the company in question.

(3) 30If the court makes an order under this paragraph, it may make
such further order relating to the sale or transfer of the interest as
it thinks fit.

(4) An application for an order under sub-paragraph (3) may be
made—

(a) 35by the company in question,

(b) by the person appointed by or in pursuance of the order to
effect the sale, or

(c) by any person with an interest in the relevant interest.

(5) On making an order under sub-paragraph (1) or (3), the court may
40order that the applicant’s costs (in Scotland, expenses) be paid out
of the proceeds of sale.

10 (1) If a relevant interest is sold in pursuance of an order under
paragraph 9, the proceeds of the sale, less the costs of the sale,
must be paid into court for the benefit of those who are
45beneficially interested in the relevant interest.

(2) A person who is beneficially interested in the relevant interest
may apply to the court for the whole or part of those proceeds to
be paid to that person.

(3) On such an application, the court must order the payment to the
5applicant of—

(a) the whole of the proceeds of sale together with any interest
on the proceeds, or

(b) if another person was also beneficially interested in the
relevant interest at the time of the sale, such proportion of
10the proceeds (and any interest) as the value of the
applicant’s interest bears to the total value of the relevant
interest.

(4) If the court has ordered under paragraph 9 that the costs (in
Scotland, expenses) of an applicant under that paragraph are to be
15paid out of the proceeds of sale, the applicant is entitled to
payment of those costs (or expenses) out of the proceeds before
any person receives any part of the proceeds under this
paragraph.

Company’s power to withdraw restrictions notice

11 20A company that issues a person with a restrictions notice under
paragraph 1 must by notice withdraw the restrictions notice if—

(a) it is satisfied that there is a valid reason sufficient to justify
the person’s failure to comply with the notice served under
section 790D or 790E,

(b) 25the notice served under section 790D or 790E is complied
with, or

(c) it discovers that the rights of a third party in respect of the
relevant interest are being unfairly affected by the
restrictions notice.

30Supplementary provision

12 (1) The Secretary of State may by regulations make provision about
the procedure to be followed by companies in issuing and
withdrawing restrictions notices.

(2) The regulations may in particular make provision about—

(a) 35the form and content of warning notices and restrictions
notices, and the manner in which they must be given,

(b) the factors to be taken into account in deciding what
counts as a “valid reason” sufficient to justify a person’s
failure to comply with a notice under section 790D or 790E,
40and

(c) the effect of withdrawing a restrictions notice on matters
that are pending with respect to the relevant interest when
the notice is withdrawn.

(3) Regulations under this paragraph are subject to negative
45resolution procedure.

Offences for failing to comply with notices

13 (1) A person to whom a notice under section 790D or 790E is
addressed commits an offence if the person—

(a) fails to comply with the notice, or

(b) 5in purported compliance with the notice—

(i) makes a statement that the person knows to be false
in a material particular, or

(ii) recklessly makes a statement that is false in a
material particular.

(2) 10Where the person is a legal entity, an offence is also committed by
every officer of the entity who is in default.

(3) A person does not commit an offence under sub-paragraph (1)(a)
(or sub-paragraph (2) as it applies in relation to that sub-
paragraph) if the person proves that the requirement to give
15information was frivolous or vexatious.

(4) A person guilty of an offence under this paragraph 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) 20in England and Wales, to imprisonment for a term
not exceeding twelve months or to a fine (or both);

(ii) in Scotland, to imprisonment for a term not
exceeding twelve months or to a fine not exceeding
the statutory maximum (or both);

(iii) 25in Northern Ireland, to imprisonment for a term
not exceeding six months or to a fine not exceeding
the statutory maximum (or both).

Offences for failing to provide information

14 (1) A person commits an offence if the person—

(a) 30fails to comply with a duty under section 790G or 790H, or

(b) in purported compliance with such a duty—

(i) makes a statement that the person knows to be false
in a material particular, or

(ii) recklessly makes a statement that is false in a
35material particular.

(2) Where the person is a legal entity, an offence is also committed by
every officer of the entity who is in default.

(3) A person guilty of an offence under this paragraph is liable—

(a) on conviction on indictment, to imprisonment for a term
40not 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 (or both);

(ii) in Scotland, to imprisonment for a term not
45exceeding twelve months or to a fine not exceeding
the statutory maximum (or both);

(iii) in Northern Ireland, to imprisonment for a term
not exceeding six months or to a fine not exceeding
the statutory maximum (or both).”

Part 2 5Related amendments

3 The Companies Act 2006 is amended as follows.

4 In section 9 (registration documents), in subsection (4), at the end of
paragraph (c) insert “;

(d) a statement of initial significant control (see section 12A).”

5 10After section 12 insert—

“12A Statement of initial significant control

(1) The statement of initial significant control required to be delivered to
the registrar must—

(a) state whether, on incorporation, there will be anyone who
15will count for the purposes of section 790M (register of
people with significant control over a company) as either a
registrable person or a registrable relevant legal entity in
relation to the company,

(b) include the required particulars of anyone who will count as
20such, and

(c) include any other matters that on incorporation will be
required (or, in the absence of an election under section
790W, would be required) to be entered in the company’s
PSC register by virtue of section 790M.

(2) 25It is not necessary to include under subsection (1)(b) the date on
which someone becomes a registrable person or a registrable
relevant legal entity in relation to the company.

(3) If the statement includes required particulars of an individual, it
must also contain a statement that those particulars are included
30with the knowledge of that individual.

(4) “Registrable person”, “registrable relevant legal entity” and
“required particulars” have the meanings given in Part 21A (see
sections 790C and 790K).”

6 In section 120 (information as to state of register and index), in subsection
35(1), for “there were no” substitute “whether there are”.

7 In section 1068 (registrar’s requirements as to form, authentication and
manner of delivery), in subsection (6A) (inserted by Schedule 5 to this Act),
after “central register)” insert “or Chapter 4 of Part 21A (option to keep PSC
information on central register)”.

8 40In section 1087 (material not available for public inspection), in subsection
(1), after paragraph (ba) insert—

“(bb) information to which sections 240 to 244 are applied by
section 790ZE(1) (residential addresses of people with
significant control over the company) or any corresponding

provision of regulations under section 1046 (overseas
companies);

(bc) information that, by virtue of regulations under section
790ZF or any corresponding provision of regulations under
5section 1046, the registrar must omit from the material on the
register that is available for inspection;”.

9 (1) Section 1126 (consents required for certain prosecutions) is amended as
follows.

(2) In subsection (1), at the end insert—

• 10“section 1112 of this Act (general false statement offence);

• paragraph 5 or 6 of Schedule 1B to this Act (breach of certain
  restrictions imposed under that Schedule)”.

(3) In subsection (2)(a)—

(a) omit the “or” at the end of sub-paragraph (ii), and

(b) 15after sub-paragraph (iii) insert “or

(iv) section 1112 of this Act,”.

(4) In subsection (2)(b), after “section 798 of” insert “, or paragraph 5 or 6 of
Schedule 1B to,”.

(5) In subsection (3)(a)—

(a) 20omit the “or” at the end of sub-paragraph (ii), and

(b) after sub-paragraph (iii) insert “or

(iv) section 1112 of this Act,”.

(6) In subsection (3)(b), after “section 798 of” insert “, or paragraph 5 or 6 of
Schedule 1B to,”.

10 25In section 1136 (regulations about where certain company records to be kept
available for inspection), in subsection (2), after the entry for section 743
insert—

• “section 790M (register of people with significant control over a
  company);

• 30section 790Y (historic PSC register);”.

11 In Schedule 8 (index of defined expressions), in the appropriate places
insert—

Section 84

SCHEDULE 4 Abolition of share warrants to bearer

5Part 1 Arrangements for conversion and cancellation of existing share warrants

Right of surrender during surrender period

1 (1) This paragraph applies in relation to a company which has issued a share
warrant which has not been surrendered for cancellation before the day on
10which section 84 comes into force (the “commencement date”).

(2) During the period of 9 months beginning with the commencement date (the
“surrender period”) the bearer of the share warrant has a right of surrender
in relation to the warrant.

(3) For the purposes of this Schedule, if the bearer of a share warrant has a right
15of surrender in relation to the warrant, the bearer is entitled on surrendering
the warrant for cancellation—

(a) to have the bearer’s name entered as a member in the register of
members of the company concerned, or

(b) where an election is in force under section 128B of the Companies Act
202006 (option to keep membership information on central register) in
respect of the company, to have the bearer’s name and other
particulars delivered to the registrar, and the document containing
that information registered by the registrar and the date recorded, as
if the information were information required to be delivered under
25section 128E of that Act.

(4) A company must, as soon as reasonably practicable and in any event before
the end of the period of 2 months beginning with the day on which a share
warrant is surrendered for cancellation pursuant to a right of surrender,
complete and have ready for delivery the certificates of the shares specified
30in the warrant.

(5) If a company fails to comply with sub-paragraph (4) an offence is committed
by every officer of the company who is in default.

2 (1) A company must, as soon as reasonably practicable and in any event before
the end of the period of 1 month beginning with the commencement date,
35give notice to the bearer of a share warrant issued by the company of—

(a) the bearer’s right of surrender,

(b) the consequences of not exercising that right before the end of the
period of 7 months beginning with the commencement date (see
paragraph 3),

(c) 40the fact that the right will cease to be exercisable at the end of the
surrender period, and

(d) the consequences of not exercising the right before the end of that
period (see in particular paragraphs 5, 6 and 9 to 12).

(2) If a company fails to comply with this paragraph an offence is committed by
every officer of the company who is in default.

5Consequences of failure to surrender during first 7 months of surrender period

3 (1) This paragraph applies in relation to a share warrant of a company which
has not been surrendered by the bearer for cancellation before the end of the
period of 7 months beginning with the commencement date.

(2) Any transfer of, or agreement to transfer, the share warrant made after the
10end of that period is void.

(3) With effect from the end of that period, all rights which are attached to the
shares specified in the warrant are suspended (including any voting rights
and any right to receive a dividend or other distribution).

(4) The company must pay into a separate bank account that complies with sub-
15paragraph (5) any dividend or other distribution which the bearer of the
share warrant would, but for the suspension, have been entitled to receive.

(5) A bank account complies with this sub-paragraph if the balance of the
account—

(a) bears interest at an appropriate rate, and

(b) 20can be withdrawn by such notice (if any) as is appropriate.

(6) If the share warrant is subsequently surrendered in accordance with this
Schedule—

(a) the suspension ceases to have effect on surrender, and

(b) the suspension period amount must be paid to the bearer by the
25company.

(7) The “suspension period amount”, in relation to a share warrant, is—

(a) the aggregate amount of any dividends or other distributions which
the bearer of the warrant would, but for the suspension, have been
entitled to receive, plus

(b) 30any interest accrued on that amount.

Second notice of right to surrender

4 (1) A company must, before the end of the period of 8 months beginning with
the commencement date, give further notice to the bearer of a share warrant
of the company of—

(a) 35the bearer’s right of surrender,

(b) the consequences of not having exercised the right of surrender
before the end of the period of 7 months beginning with the
commencement date (see paragraph 3), and

(c) the matters referred to in paragraph 2(1)(c) and (d).

(2) 40If a company fails to comply with this paragraph an offence is committed by
every officer of the company who is in default.

Expiry of right to surrender and applications for cancellation of outstanding share warrants

5 (1) This paragraph applies in relation to a company which has issued a share
warrant which has not been surrendered for cancellation before the end of
the surrender period.

(2) 5The company must, as soon as reasonably practicable and in any event
before the end of the period of 3 months beginning with the day after the end
of the surrender period, apply to the court for an order (referred to in this
Schedule as a “cancellation order”) cancelling with effect from the date of the
order—

(a) 10the share warrant, and

(b) the shares specified in it.

(3) The company must give notice to the bearer of the share warrant of the fact
that an application has been made under this paragraph before the end of
the period of 14 days beginning with the day on which it is made; and the
15notice must include a copy of the application.

(4) If a company fails to comply with sub-paragraph (2) or (3) an offence is
committed by every officer of the company who is in default.

(5) A company must, on making an application for a cancellation order,
immediately give notice to the registrar.

(6) 20If a company fails to comply with sub-paragraph (5) an offence is committed
by—

(a) the company, and

(b) every officer of the company who is in default.

Cancellation orders and suspended cancellation orders

6 (1) 25The court must make a cancellation order in respect of a share warrant if, on
an application under paragraph 5, it is satisfied that—

(a) the company has given notice to the bearer of the share warrant as
required by paragraphs 2 and 4, or

(b) the bearer had actual notice by other means of the matters mentioned
30in paragraph 2(1).

(2) If, on such an application, the court is not so satisfied, it must instead make
a suspended cancellation order in respect of the share warrant.

(3) A “suspended cancellation order” is an order—

(a) requiring the company to give notice to the bearer of the share
35warrant containing the information set out in sub-paragraph (4)
before the end of the period of 5 working days beginning with the
day the order is made,

(b) providing that the bearer of the share warrant has a right of
surrender during the period of 2 months beginning with the day the
40order is made (referred to in this Schedule as “the grace period”), and

(c) if the share warrant is not so surrendered, cancelling it and the shares
specified in it with effect from the end of the grace period.

(4) A notice required to be given by a suspended cancellation order must—

(a) inform the bearer of the share warrant of the fact that the bearer has
45a right of surrender during the grace period,

(b) inform the bearer of the consequences of not having exercised that
right before the end of the period of 7 months beginning with the
commencement date (see paragraph 3), and

(c) explain that the share warrant will be cancelled with effect from the
5end of the grace period if it is not surrendered before then.

(5) Where a share warrant is cancelled by an order under this paragraph, the
company concerned must, as soon as reasonably practicable—

(a) enter the cancellation date in its register of members, or

(b) where an election is in force under section 128B of the Companies Act
102006 (option to keep membership information on central register) in
respect of the company, deliver that information to the registrar as if
it were information required to be delivered under section 128E of
that Act.

(6) In this Schedule “the cancellation date”, in relation to a share warrant, means
15the day its cancellation by a cancellation order or suspended cancellation
order takes effect.

Registration of reduction of share capital

7 (1) This paragraph applies in relation to a company if a share warrant of the
company and the shares specified in it are cancelled by a cancellation order
20or a suspended cancellation order.

(2) The company must, before the end of the period of 15 days beginning with
the cancellation date, deliver to the registrar—

(a) a copy of the order,

(b) in the case of a suspended cancellation order, a statement confirming
25that the share warrant and the shares specified in it have been
cancelled by the order with effect from the cancellation date, and

(c) a statement of capital.

(3) The statement of capital must state with respect to the company’s share
capital as reduced by the cancellation of the share warrant and the shares
30specified in it—

(a) the total number of shares of the company,

(b) the aggregate nominal value of those shares,

(c) the aggregate amount (if any) unpaid on those shares (whether on
account of their nominal value or by way of premium), and

(d) 35for each class of shares—

(i) such particulars of the rights attached to the shares as are
prescribed by the Secretary of State under section 644(2)(c)(i)
of the Companies Act 2006,

(ii) the total number of shares of that class, and

(iii) 40the aggregate nominal value of shares of that class.

(4) If the company fails to comply with this paragraph an offence is committed
by—

(a) the company, and

(b) every officer of the company who is in default.

(5) 45In the case of a public company, a statement of capital delivered under this
paragraph is to be treated as a document subject to the Directive disclosure

requirements for the purposes of the Companies Act 2006 (see section 1078
of that Act).

Reduction of share capital below authorised minimum in case of public company

8 (1) This paragraph applies where the court makes a cancellation order or a
5suspended cancellation order in relation to a public company and—

(a) in the case of a cancellation order, the order has the effect of bringing
the nominal value of its allotted share capital below the authorised
minimum, or

(b) in the case of a suspended cancellation order, the order may have
10that effect from the end of the grace period.

(2) The registrar must not register the cancellation order or (as the case may be)
the suspended cancellation order if it has that effect from the end of the grace
period unless—

(a) the court so directs in the order concerned, or

(b) 15the company is first re-registered as a private company.

(3) The expedited procedure for re-registration provided by section 651 of the
Companies Act 2006 applies for the purposes of this paragraph as it applies
for the purposes of section 650 of that Act.

(4) Where the court makes an order under section 651 of that Act in connection
20with a suspended cancellation order, the order under section 651 must be
conditional on the suspended cancellation order having the effect
mentioned in sub-paragraph (1)(b) from the end of the grace period.

Payment into court in connection with cancellation

9 (1) Where a share warrant is cancelled by a cancellation order or suspended
25cancellation order, the company concerned must, before the end of the
period of 14 days beginning with the cancellation date, make a payment into
court of an amount equal to—

(a) the aggregate nominal value of the shares specified in the warrant
and the whole of any premium paid on them, plus

(b) 30the suspension period amount.

(2) If a company fails to comply with sub-paragraph (1) an offence is committed
by every officer of the company who is in default.

10 (1) A person who, at the end of the period of 7 months beginning with the
commencement date, was the bearer of a share warrant which has been
35cancelled by a cancellation order or a suspended cancellation order may
apply to the court for the sum paid into court under paragraph 9(1) in
respect of the shares specified in the warrant to be paid to that person.

(2) Such an application may only be made during the period—

(a) beginning with the day which is 6 months after the cancellation date,
40and

(b) ending with the day which is 3 years after the cancellation date.

(3) The court may grant an application under sub-paragraph (1) only if it is
satisfied that there are exceptional circumstances justifying the failure of the
bearer of the share warrant to exercise the right of surrender—

(a) in the case of a warrant cancelled by a cancellation order, before the
end of the surrender period, or

(b) in the case of a warrant cancelled by a suspended cancellation order,
before the end of the grace period.

11 (1) 5This paragraph applies in relation to a company in respect of which a
cancellation order or suspended cancellation order has been made if any of
the following is appointed in relation to the company after the cancellation
date—

(a) an administrator;

(b) 10an administrative receiver;

(c) a liquidator;

and that person is referred to in this paragraph as the “office-holder”.

(2) The office-holder may apply to the court for the sum paid into court under
paragraph 9(1)(a) to be paid to the office-holder by way of a contribution to
15the company’s assets.

(3) Such an application may only be made during the period—

(a) beginning with the cancellation date, and

(b) ending with the day which is 3 years after that date.

12 (1) Anything left of a sum paid into court under paragraph 9(1) immediately
20after the end of the period mentioned in paragraph 11(3) must be paid into
the Consolidated Fund.

(2) Sub-paragraph (1) does not apply to any amount in respect of which an
application under paragraph 10(1) or 11(2) has been made but not yet
determined before the end of that period unless and until the application is
25dismissed and either—

(a) the period for bringing an appeal against the dismissal has expired,
or

(b) in a case where an appeal is brought before the end of that period, the
appeal is dismissed, abandoned or otherwise ceases to have effect.

30Company with outstanding share warrants: prohibition on striking off

13 (1) An application under section 1003 of the Companies Act 2006 (application
for voluntary striking off) on behalf of a company must not be made at a time
when there is a share warrant issued by the company.

(2) It is an offence for a person to make an application in contravention of this
35section.