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Company Law Reform Bill [HL]


Company Law Reform Bill [HL]
Part 7 — Re-registration as a means of altering a company’s status

41

 

(3)   

An allotment is in connection with a share exchange if—

(a)   

the shares are allotted in connection with an arrangement under which

the whole or part of the consideration for the shares allotted is provided

by—

(i)   

the transfer to the company allotting the shares of shares (or

5

shares of a particular class) in another company, or

(ii)   

the cancellation of shares (or shares of a particular class) in

another company; and

(b)   

the allotment is open to all the holders of the shares of the other

company in question (or, where the arrangement applies only to shares

10

of a particular class, to all the holders of the company’s shares of that

class) to take part in the arrangement in connection with which the

shares are allotted.

(4)   

In determining whether a person is a holder of shares for the purposes of

subsection (3), there shall be disregarded—

15

(a)   

shares held by, or by a nominee of, the company allotting the shares;

(b)   

shares held by, or by a nominee of—

(i)   

the holding company of the company allotting the shares,

(ii)   

a subsidiary of the company allotting the shares, or

(iii)   

a subsidiary of the holding company of the company allotting

20

the shares.

(5)   

It is immaterial, for the purposes of deciding whether an allotment is in

connection with a share exchange, whether or not the arrangement in

connection with which the shares are allotted involves the issue to the

company allotting the shares of shares (or shares of a particular class) in the

25

other company.

(6)   

There is a proposed merger with another company if one of the companies

concerned proposes to acquire all the assets and liabilities of the other in

exchange for the issue of its shares or other securities to shareholders of the

other (whether or not accompanied by a cash payment).

30

   

“Another company” includes any body corporate.

(7)   

For the purposes of this section—

(a)   

the consideration for an allotment does not include any amount

standing to the credit of any of the company’s reserve accounts, or of its

profit and loss account, that has been applied in paying up (to any

35

extent) any of the shares allotted or any premium on those shares; and

(b)   

“arrangement” means any agreement, scheme or arrangement,

including an arrangement sanctioned in accordance with—

(i)   

section 425 of the Companies Act 1985 (c. 6) (company

compromise with creditors and members), or

40

(ii)   

section 110 of the Insolvency Act 1986 (c. 45) or Article 96 of the

Insolvency (Northern Ireland) Order 1989 (S.I. 1989/2405 (N.I.

19)) (liquidator in winding up accepting shares as consideration

for sale of company’s property).

94      

Application and accompanying documents

45

(1)   

An application for re-registration as a public company must contain—

(a)   

a statement of the company’s proposed name on re-registration; and

(b)   

a statement of the company’s proposed secretary (see section 95).

 
 

Company Law Reform Bill [HL]
Part 7 — Re-registration as a means of altering a company’s status

42

 

(2)   

The application must be accompanied by—

(a)   

a copy of the special resolution that the company should re-register as

a public company (unless a copy has already been forwarded to the

registrar under Chapter 3 of Part 3);

(b)   

a copy of the company’s articles as proposed to be amended;

5

(c)   

a copy of the balance sheet and other documents referred to in section

92(1); and

(d)   

if section 93 applies (recent allotment of shares for non-cash

consideration), a copy of the valuation report (if any) under subsection

(2)(a) of that section.

10

(3)   

The statement of compliance required to be delivered together with the

application is a statement that the requirements of this Part as to re-registration

as a public company have been complied with.

(4)   

The registrar may accept the statement of compliance as sufficient evidence

that the company is entitled to be re-registered as a public company.

15

95      

Statement of proposed secretary

(1)   

The statement of the company’s proposed secretary must contain the required

particulars of the person who is or the persons who are to be (or continue to be)

the secretary or joint secretaries of the company.

(2)   

The required particulars are the particulars that will be required to be stated in

20

the company’s register of secretaries (see sections 260 to 262).

(3)   

The statement must also contain a consent by the person named as secretary,

or each of the persons named as joint secretaries, to act in the relevant capacity.

   

If all the partners in a firm are to be joint secretaries, consent may be given by

one partner on behalf of all of them.

25

96      

Issue of certificate of incorporation on re-registration

(1)   

If on an application for re-registration as a public company the registrar is

satisfied that the company is entitled to be so re-registered, the company shall

be re-registered accordingly.

(2)   

The registrar must issue a certificate of incorporation altered to meet the

30

circumstances of the case.

(3)   

The certificate must state that it is issued on re-registration and the date on

which it is issued.

(4)   

On the issue of the certificate—

(a)   

the company by virtue of the issue of the certificate becomes a public

35

company,

(b)   

the changes in the company’s name and articles take effect, and

(c)   

the person or persons named in the statement under section 95

(statement of proposed secretary) as secretary or joint secretary of the

company are deemed to have been appointed to that office.

40

(5)   

The certificate is conclusive evidence that the requirements of this Act as to re-

registration have been complied with.

 
 

Company Law Reform Bill [HL]
Part 7 — Re-registration as a means of altering a company’s status

43

 

Public company becoming private

97      

Re-registration of public company as private limited company

(1)   

A public company may be re-registered as a private limited company if—

(a)   

a special resolution that it should be so re-registered is passed,

(b)   

the conditions specified below are met, and

5

(c)   

an application for re-registration is delivered to the registrar in

accordance with section 100, together with—

(i)   

the other documents required by that section, and

(ii)   

a statement of compliance.

(2)   

The conditions are that—

10

(a)   

where no application under section 98 for cancellation of the resolution

has been made—

(i)   

having regard to the number of members who consented to or

voted in favour of the resolution, no such application may be

made, or

15

(ii)   

the period within which such an application could be made has

expired, or

(b)   

where such an application has been made—

(i)   

the application has been withdrawn, or

(ii)   

an order has been made confirming the resolution and a copy of

20

that order has been delivered to the registrar.

(3)   

The company must make such changes—

(a)   

in its name, and

(b)   

in its articles,

   

as are necessary in connection with its becoming a private company limited by

25

shares or, as the case may be, by guarantee.

98      

Application to court to cancel resolution

(1)   

Where a special resolution by a public company to be re-registered as a private

limited company has been passed, an application to the court for the

cancellation of the resolution may be made—

30

(a)   

by the holders of not less in the aggregate than 5% in nominal value of

the company’s issued share capital or any class of the company’s issued

share capital (disregarding any shares held by the company as treasury

shares);

(b)   

if the company is not limited by shares, by not less than 5% of its

35

members; or

(c)   

by not less than 50 of the company’s members;

   

but not by a person who has consented to or voted in favour of the resolution.

(2)   

The application must be made within 28 days after the passing of the resolution

and may be made on behalf of the persons entitled to make it by such one or

40

more of their number as they may appoint for the purpose.

(3)   

On the hearing of the application the court shall make an order either

cancelling or confirming the resolution.

(4)   

The court may—

 
 

Company Law Reform Bill [HL]
Part 7 — Re-registration as a means of altering a company’s status

44

 

(a)   

make that order on such terms and conditions as it thinks fit,

(b)   

if it thinks fit adjourn the proceedings in order that an arrangement

may be made to the satisfaction of the court for the purchase of the

interests of dissentient members, and

(c)   

give such directions, and make such orders, as it thinks expedient for

5

facilitating or carrying into effect any such arrangement.

(5)   

The court’s order may, if the court thinks fit—

(a)   

provide for the purchase by the company of the shares of any of its

members and for the reduction accordingly of the company’s capital;

and

10

(b)   

make such alteration in the company’s articles as may be required in

consequence of that provision.

(6)   

The court’s order may, if the court thinks fit, require the company not to make

any, or any specified, alterations in its articles without the leave of the court.

99      

Notice to registrar of court application or order

15

(1)   

On making an application under section 98 (application to court to cancel

resolution) the applicants, or the person making the application on their behalf,

must immediately give notice to the registrar.

   

This is without prejudice to any provision of rules of court as to service of

notice of the application.

20

(2)   

On being served with notice of any such application, the company must

immediately give notice to the registrar.

(3)   

Within 15 days of the making of the court’s order on the application, or such

longer period as the court may at any time direct, the company must deliver to

the registrar a copy of the order.

25

(4)   

If a company fails to comply with subsection (2) or (3) an offence is committed

by—

(a)   

the company, and

(b)   

every officer of the company who is in default.

(5)   

A person guilty of an offence under this section is liable on summary

30

conviction to a fine not exceeding level 3 on the standard scale and, for

continued contravention, a daily default fine not exceeding one-tenth of level

3 on the standard scale.

100     

Application and accompanying documents

(1)   

An application for re-registration as a private limited company must contain a

35

statement of the company’s proposed name on re-registration.

(2)   

The application must be accompanied by—

(a)   

a copy of the resolution that the company should re-register as a private

limited company (unless a copy has already been forwarded to the

registrar under Chapter 3 of Part 3); and

40

(b)   

a copy of the company’s articles as proposed to be amended.

(3)   

The statement of compliance required to be delivered together with the

application is a statement that the requirements of this Part as to re-registration

as a private limited company have been complied with.

 
 

Company Law Reform Bill [HL]
Part 7 — Re-registration as a means of altering a company’s status

45

 

(4)   

The registrar may accept the statement of compliance as sufficient evidence

that the company is entitled to be re-registered as a private limited company.

101     

Issue of certificate of incorporation on re-registration

(1)   

If on an application for re-registration as a private limited company the

registrar is satisfied that the company is entitled to be so re-registered, the

5

company shall be re-registered accordingly.

(2)   

The registrar must issue a certificate of incorporation altered to meet the

circumstances of the case.

(3)   

The certificate must state that it is issued on re-registration and the date on

which it is issued.

10

(4)   

On the issue of the certificate—

(a)   

the company by virtue of the issue of the certificate becomes a private

limited company, and

(b)   

the changes in the company’s name and articles take effect.

(5)   

The certificate is conclusive evidence that the requirements of this Act as to re-

15

registration have been complied with.

Private limited company becoming unlimited

102     

Re-registration of private limited company as unlimited

(1)   

A private limited company may be re-registered as an unlimited company if—

(a)   

all the members of the company have assented to its being so re-

20

registered,

(b)   

the condition specified below is met, and

(c)   

an application for re-registration is delivered to the registrar in

accordance with section 103, together with—

(i)   

the other documents required by that section, and

25

(ii)   

a statement of compliance.

(2)   

The condition is that the company has not previously been re-registered as

limited.

(3)   

The company must make such changes in its name and its articles—

(a)   

as are necessary in connection with its becoming an unlimited

30

company; and

(b)   

if it is to have a share capital, as are necessary in connection with its

becoming an unlimited company having a share capital.

(4)   

For the purposes of this section—

(a)   

a trustee in bankruptcy of a member of the company is entitled, to the

35

exclusion of the member, to assent to the company’s becoming

unlimited; and

(b)   

the personal representative of a deceased member of the company may

assent on behalf of the deceased.

(5)   

In subsection (4)(a), “a trustee in bankruptcy of a member of the company”

40

includes—

 
 

Company Law Reform Bill [HL]
Part 7 — Re-registration as a means of altering a company’s status

46

 

(a)   

a permanent trustee or an interim trustee (within the meaning of the

Bankruptcy (Scotland) Act 1985 (c. 66)) on the sequestrated estate of a

member of the company;

(b)   

a trustee under a protected trustee deed (within the meaning of the

Bankruptcy (Scotland) Act 1985) granted by a member of the company.

5

103     

Application and accompanying documents

(1)   

An application for re-registration as an unlimited company must contain a

statement of the company’s proposed name on re-registration.

(2)   

The application must be accompanied by—

(a)   

the prescribed form of assent to the company’s being registered as an

10

unlimited company, authenticated by or on behalf of all the members

of the company;

(b)   

a copy of the company’s articles as proposed to be amended.

(3)   

The statement of compliance required to be delivered together with the

application is a statement that the requirements of this Part as to re-registration

15

as an unlimited company have been complied with.

(4)   

The statement must contain a statement by the directors of the company—

(a)   

that the persons by whom or on whose behalf the form of assent is

authenticated constitute the whole membership of the company, and

(b)   

if any of the members have not authenticated that form themselves, that

20

the directors have taken all reasonable steps to satisfy themselves that

each person who authenticated it on behalf of a member was lawfully

empowered to do so.

(5)   

The registrar may accept the statement of compliance as sufficient evidence

that the company is entitled to be re-registered as an unlimited company.

25

104     

Issue of certificate of incorporation on re-registration

(1)   

If on an application for re-registration of a private limited company as an

unlimited company the registrar is satisfied that the company is entitled to be

so re-registered, the company shall be re-registered accordingly.

(2)   

The registrar must issue a certificate of incorporation altered to meet the

30

circumstances of the case.

(3)   

The certificate must state that it is issued on re-registration and the date on

which it is issued.

(4)   

On the issue of the certificate—

(a)   

the company by virtue of the issue of the certificate becomes an

35

unlimited company, and

(b)   

the changes in the company’s name and articles take effect.

(5)   

The certificate is conclusive evidence that the requirements of this Act as to re-

registration have been complied with.

 
 

 
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