| Company Law Reform Bill [Lords] - continued | House of Commons |
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Duty of directors and trustees to provide information Margaret Hodge NC346 To move the following Clause:— ‘(1) It is the duty of— (a) any director of the company, and (b) any trustee for its debenture holders, to give notice to the company of such matters relating to himself as may be necessary for purposes of section (Statement to be circulated or made available) (explanatory statement to be circulated or made available). (2) Any person who makes default in complying with this section commits an offence. (3) 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.’. Court order sanctioning compromise or arrangement Margaret Hodge NC347 To move the following Clause:— ‘(1) The court may sanction a compromise or arrangement only if, at a meeting summoned under section (Meeting of creditors or members), a majority in number representing 75% in value of the creditors or class of creditors or members or class of members (as the case may be), present and voting either in person or by proxy at the meeting, agree to the compromise or arrangement. (2) A compromise or agreement sanctioned by the court is binding on— (a) all creditors or the class of creditors or on the members or class of members (as the case may be), and (b) the company or, in the case of a company in the course of being wound up, the liquidator and contributories of the company. (3) The court’s order has no effect until a copy of it has been delivered to the registrar of companies for registration.’. Copy of court order to be annexed to copies of company’s constitution Margaret Hodge NC348 To move the following Clause:— ‘(1) A copy of every order of the court under section (Court order sanctioning compromise or arrangement) (order sanctioning compromise or arrangement with creditors or members) must be annexed to— (a) every copy of the company’s articles issued after the order has been made or, (b) in the case of a company not having articles of association, of every copy so issued of the instrument constituting the company or defining its constitution. (2) If a company makes default in complying with this section an offence is committed by— (a) the company, and (b) every officer of the company who is in default. (3) 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.’. Powers of court to facilitate reconstruction or amalgamation Margaret Hodge NC349 To move the following Clause:— ‘(1) This section applies where— (a) application is made to the court under section (Court sanction for compromise or arrangement) to sanction a compromise or arrangement proposed between a company and any such persons as are mentioned in that section, and (b) it is shown that— (i) the compromise or arrangement is proposed for the purposes of, or in connection with, a scheme for the reconstruction of any company or companies, or the amalgamation of any two or more companies, and (ii) under the scheme the whole or any part of the undertaking or the property of any company concerned in the scheme (“a transferor company”) is to be transferred to another company (“the transferee company”). (2) The court may, either by the order sanctioning the compromise or arrangement or by any subsequent order, make provision for all or any of the following matters— (a) the transfer to the transferee company of the whole or any part of the undertaking and of the property or liabilities of any transferor company; (b) the allotting or appropriation by the transferee company of any shares, debentures, policies or other like interests in that company which under the compromise or arrangement are to be allotted or appropriated by that company to or for any person; (c) the continuation by or against the transferee company of any legal proceedings pending by or against any transferor company; (d) the dissolution, without winding up, of any transferor company; (e) the provision to be made for any persons who, within such time and in such manner as the courts directs, dissent from the compromise or arrangement; (f) such incidental, consequential and supplemental matters as are necessary to secure that the reconstruction or amalgamation is fully and effectively carried out. (3) If an order under this section provides for the transfer of property or liabilities— (a) the property is by virtue of the order transferred to, and vests in, the transferee company, and (b) the liabilities are, by virtue of the order, transferred to and become liabilities of that company. (4) The property (if the order so directs) vests freed from any charge that is by virtue of the compromise or arrangement to cease to have effect. (5) In this section— “property” includes property, rights and powers of every description; and “liabilities” includes duties.’. Copy of order to be delivered to the registrar Margaret Hodge NC350 To move the following Clause:— ‘(1) Where an order is made under section (Powers of court to facilitate reconstruction or amalgamation) (powers of court to facilitate reconstruction or amalgamation), every company in relation to which the order is made must cause a copy of the order to be delivered to the registrar of companies for registration within 7 days after its making. (2) If default is made in complying with this section an offence is committed by— (a) the company, and (b) every officer of the company who is in default. (3) 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 and, for continued contravention, a daily default fine not exceeding one-tenth of level 3 on the standard scale.’. Power to make provision for mergers and divisions of public companies Margaret Hodge NC351 To move the following Clause:— ‘(1) Where— (a) a compromise or arrangement is proposed between a public company and any such persons as are mentioned in section (Court sanction for compromise or arrangement) for the purpose of, or in connection with, a scheme for— (i) the reconstruction of any company or companies, or (ii) the amalgamation of any two or more companies, (b) the circumstances are as specified in any of the Cases described below, and (c) the consideration for the transfer or each of the transfers envisaged in the Case in question is to be shares in the transferee company or any of the transferee companies receivable by members of the transferor company or transferor companies, with or without any cash payment to members, the preceding provisions of this Part have effect, as regards that compromise or arrangement, subject to regulations under this section. (2) The Cases are— Case 1 Where under the scheme the undertaking property and liabilities of the company in respect of which the compromise or arrangement in question is proposed are to be transferred to another public company, other than one formed for the purpose of, or in connection with, the scheme. Case 2 Where under the scheme the undertaking, property and liabilities of two or more public companies concerned in the scheme, including the company in respect of which the compromise or arrangement in question is proposed, are to be transferred to a company (whether or not a public company) formed for the purposes of or in connection with the scheme. Case 3 Where under the scheme the undertaking, property and liabilities of the company in respect of which the compromise or arrangement in question is proposed are to be divided among and transferred to two or more companies each of which is either— (a) a public company, or (b) a company (whether or not a public company) formed for the purposes of, or in connection with, the scheme. (3) This section does not apply where the company in respect of which the compromise or arrangement is proposed is being wound up. (4) The Secretary of State may by regulations provide that where this section applies the court must not sanction a compromise or arrangement unless the requirements of the regulations have been complied with. (5) Without prejudice to the
generality of the power conferred by this section, the regulations may
make any such provision as was formerly made by section 427A(3) of,
and Schedule 15B to, the (6) Regulations under this section are subject to affirmative resolution procedure.’. Meaning of “takeover offer” Margaret Hodge NC352 To move the following Clause:— ‘(1) For the purposes of this Chapter an offer to acquire shares in a company is a “takeover offer” if the following two conditions are satisfied in relation to the offer. (2) The first condition is that it is an offer to acquire— (a) all the shares in a company, or (b) where there is more than one class of shares in a company, all the shares of one or more classes, other than shares that at the date of the offer are already held by the offeror. Section (Shares already held by the offeror etc) contains provision supplementing this subsection. (3) The second condition is that the terms of the offer are the same— (a) in relation to all the shares to which the offer relates, or (b) where the shares to which the offer relates include shares of different classes, in relation to all the shares of each class. Section (Cases where offer treated as being on same terms) contains provision treating this condition as satisfied in certain circumstances. (4) In subsections (1) to (3) “shares” means shares, other than relevant treasury shares, that have been allotted on the date of the offer (but see subsection (5)). (5) A takeover offer may include among the shares to which it relates— (a) all or any shares that are allotted after the date of the offer but before a specified date; (b) all or any relevant treasury shares that cease to be held as treasury shares before a specified date; (c) all or any other relevant treasury shares. (6) In this section— “relevant treasury shares” means shares that— (k) are held by the company as treasury shares on the date of the offer, or (l) become shares held by the company as treasury shares after that date but before a specified date; “specified date” means a date specified in or determined in accordance with the terms of the offer. (7) Where the terms of an offer make provision for their revision and for acceptances on the previous terms to be treated as acceptances on the revised terms, then, if the terms of the offer are revised in accordance with that provision— (a) the revision is not to be regarded for the purposes of this Chapter as the making of a fresh offer, and (b) references in this Chapter to the date of the offer are accordingly to be read as references to the date of the original offer.’. Shares already held by the offeror etc Margaret Hodge NC353 To move the following Clause:— ‘(1) The reference in section (Meaning of “takeover offer”)(2) to shares already held by the offeror includes a reference to shares that he has contracted to acquire, whether unconditionally or subject to conditions being met. This is subject to subsection (2). (2) The reference in section (Meaning of “takeover offer”)(2) to shares already held by the offeror does not include a reference to shares that are the subject of a contract— (a) intended to secure that the holder of the shares will accept the offer when it is made, and (b) entered into— (i) by deed and for no consideration, (ii) for consideration of negligible value, or (iii) for consideration consisting of a promise by the offeror to make the offer. (3) In relation to Scotland, this section applies as if the words “by deed and” in subsection (2)(b)(i) were omitted. (4) The condition in section (Meaning of “takeover offer”)(2) is treated as satisfied where— (a) the offer does not extend to shares that associates of the offeror hold or have contracted to acquire (whether unconditionally or subject to conditions being met), and (b) the condition would be satisfied if the offer did extend to those shares. (For further provision about such shares, see section (Shares to which an offer relates)(2)).’. Cases where offer treated as being on same terms Margaret Hodge NC354 To move the following Clause:— ‘(1) The condition in section (Meaning of “takeover offer”)(3) (terms of offer to be the same for all shares or all shares of particular classes) is treated as satisfied where subsection (2) or (3) below applies. (2) This subsection applies where— (a) shares carry an entitlement to a particular dividend which other shares of the same class, by reason of being allotted later, do not carry, (b) there is a difference in the value of consideration offered for the shares allotted earlier as against that offered for those allotted later, (c) that difference merely reflects the difference in entitlement to the dividend, and (d) the condition in section (Meaning of “takeover offer”)(3) would be satisfied but for that difference. (3) This subsection applies where— (a) the law of a country or territory outside the United Kingdom— (i) precludes an offer of consideration in the form, or any of the forms, specified in the terms of the offer (“the specified form”), or (ii) precludes it except after compliance by the offeror with conditions with which he is unable to comply or which he regards as unduly onerous, (b) the persons to whom an offer of consideration in the specified form is precluded are able to receive consideration in another form that is of substantially equivalent value, and (c) the condition in section (Meaning of “takeover offer”)(3) would be satisfied but for the fact that an offer of consideration in the specified form to those persons is precluded.’. Shares to which an offer relates Margaret Hodge NC355 To move the following Clause:— ‘(1) Where a takeover offer is made and, during the period beginning with the date of the offer and ending when the offer can no longer be accepted, the offeror— (a) acquires or unconditionally contracts to acquire any of the shares to which the offer relates, but (b) does not do so by virtue of acceptances of the offer, those shares are treated for the purposes of this Chapter as excluded from those to which the offer relates. (2) For the purposes of this Chapter shares that an associate of the offeror holds or has contracted to acquire, whether at the date of the offer or subsequently, are not treated as shares to which the offer relates, even if the offer extends to such shares. In this subsection “contracted” means contracted unconditionally or subject to conditions being met. (3) This section is subject to section (Right of offeror to buy out minority shareholder)(8) and (9).’. Effect of impossibility etc of communicating or accepting offer Margaret Hodge NC356 To move the following Clause:— ‘(1) Where there are holders of shares in a company to whom an offer to acquire shares in the company is not communicated, that does not prevent the offer from being a takeover offer for the purposes of this Chapter if— (a) those shareholders have no registered address in the United Kingdom, (b) the offer was not communicated to those shareholders in order not to contravene the law of a country or territory outside the United Kingdom, and (c) either— (i) the offer is published in the Gazette, or (ii) the offer can be inspected, or a copy of it obtained, at a place in an EEA State or on a website, and a notice is published in the Gazette specifying the address of that place or website. (2) Where an offer is made to acquire shares in a company and there are persons for whom, by reason of the law of a country or territory outside the United Kingdom, it is impossible to accept the offer, or more difficult to do so, that does not prevent the offer from being a takeover offer for the purposes of this Chapter. (3) It is not to be inferred— (a) that an offer which is not communicated to every holder of shares in the company cannot be a takeover offer for the purposes of this Chapter unless the requirements of paragraphs (a) to (c) of subsection (1) are met, or (b) that an offer which is impossible, or more difficult, for certain persons to accept cannot be a takeover offer for those purposes unless the reason for the impossibility or difficulty is the one mentioned in subsection (2).’. Right of offeror to buy out minority shareholder Margaret Hodge NC357 To move the following Clause:— ‘(1) Subsection (2) applies in a case where a takeover offer does not relate to shares of different classes. (2) If the offeror has, by virtue of acceptances of the offer, acquired or unconditionally contracted to acquire— (a) not less than 90% in value of the shares to which the offer relates, and (b) in a case where the shares to which the offer relates are voting shares, not less than 90% of the voting rights carried by those shares, he may give notice to the holder of any shares to which the offer relates which the offeror has not acquired or unconditionally contracted to acquire that he desires to acquire those shares. (3) Subsection (4) applies in a case where a takeover offer relates to shares of different classes. (4) If the offeror has, by virtue of acceptances of the offer, acquired or unconditionally contracted to acquire— (a) not less than 90% in value of the shares of any class to which the offer relates, and (b) in a case where the shares of that class are voting shares, not less than 90% of the voting rights carried by those shares, he may give notice to the holder of any shares of that class to which the offer relates which the offeror has not acquired or unconditionally contracted to acquire that he desires to acquire those shares. (5) In the case of a takeover offer which includes among the shares to which it relates— (a) shares that are allotted after the date of the offer, or (b) relevant treasury shares (within the meaning of section (Meaning of “takeover offer”)) that cease to be held as treasury shares after the date of the offer, the offeror’s entitlement to give a notice under subsection (2) or (4) on any particular date shall be determined as if the shares to which the offer relates did not include any allotted, or ceasing to be held as treasury shares, on or after that date. (6) Subsection (7) applies where— (a) the requirements for the giving of a notice under subsection (2) or (4) are satisfied, and (b) there are shares in the company which the offeror, or an associate of his, has contracted to acquire subject to conditions being met, and in relation to which the contract has not become unconditional. (7) The offeror’s entitlement to give a notice under subsection (2) or (4) shall be determined as if— (a) the shares to which the offer relates included shares falling within paragraph (b) of subsection (6), and (b) in relation to shares falling within that paragraph, the words “by virtue of acceptances of the offer” in subsection (2) or (4) were omitted. (8) Where a takeover offer is made and, during the period beginning with the date of the offer and ending when the offer can no longer be accepted, the offeror— (a) acquires or unconditionally contracts to acquire any of the shares to which the offer relates, but (b) does not do so by virtue of acceptances of the offer, then, if subsection (10) applies, the offeror is treated for the purposes of this section as having acquired or contracted to acquire those shares by virtue of acceptances of the offer. (9) Where a takeover offer is made and, during the period beginning with the date of the offer and ending when the offer can no longer be accepted, an associate of the offeror acquires or unconditionally contracts to acquire any of the shares to which the offer relates, then, if subsection (10) applies, those shares are treated for the purposes of this section as shares to which the offer relates. (10) This subsection applies if— (a) at the time the shares are acquired or contracted to be acquired as mentioned in subsection (8) or (9) (as the case may be), the value of the consideration for which they are acquired or contracted to be acquired (“the acquisition consideration”) does not exceed the value of the consideration specified in the terms of the offer, or (b) those terms are subsequently revised so that when the revision is announced the value of the acquisition consideration, at the time mentioned in paragraph (a), no longer exceeds the value of the consideration specified in those terms.’. |
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| © Parliamentary copyright 2006 | Prepared: 18 July 2006 |