|
|
| |
| |
|
| | (3) | A person otherwise liable under subsection (1) or (2) is exempted from that |
|
| | |
| | (a) | he is a purchaser for value and, at the time of the purchase, he did not |
|
| | have actual notice of the contravention concerned, or |
|
| | (b) | he derived title to the shares (directly or indirectly) from a person who |
|
| | became a holder of them after the contravention and was not liable under |
|
| | |
| | (4) | References in this section to a holder, in relation to shares in a company, include |
|
| | any person who has an unconditional right— |
|
| | (a) | to be included in the company’s register of members in respect of those |
|
| | |
| | (b) | to have an instrument of transfer of the shares executed in his favour.’. |
|
| |
| | Power of court to grant relief |
|
| |
| | |
| To move the following Clause:— |
|
| | |
| | (a) | is liable to a company under any provision of this Chapter in relation to |
|
| | payment in respect of any shares in the company, or |
|
| | (b) | is liable to a company by virtue of an undertaking given to it in, or in |
|
| | connection with, payment for any shares in the company, |
|
| | may apply to the court to be exempted in whole or in part from the liability. |
|
| | (2) | In the case of a liability within subsection (1)(a), the court may exempt the |
|
| | applicant from the liability only if and to the extent that it appears to the court just |
|
| | and equitable to do so having regard to— |
|
| | (a) | whether the applicant has paid, or is liable to pay, any amount in respect |
|
| | |
| | (i) | any other liability arising in relation to those shares under any |
|
| | provision of this Chapter, or |
|
| | (ii) | any liability arising by virtue of any undertaking given in or in |
|
| | connection with payment for those shares; |
|
| | (b) | whether any person other than the applicant has paid or is likely to pay, |
|
| | whether in pursuance of any order of the court or otherwise, any such |
|
| | |
| | (c) | whether the applicant or any other person— |
|
| | (i) | has performed in whole or in part, or is likely so to perform any |
|
| | |
| | (ii) | has done or is likely to do any other thing in payment or part |
|
| | |
| | (3) | In the case of a liability within subsection (1)(b), the court may exempt the |
|
| | applicant from the liability only if and to the extent that it appears to the court just |
|
| | and equitable to do so having regard to— |
|
| | (a) | whether the applicant has paid or is liable to pay any amount in respect |
|
| | of liability arising in relation to the shares under any provision of this |
|
| | |
|
|
| |
| |
|
| | (b) | whether any person other than the applicant has paid or is likely to pay, |
|
| | whether in pursuance of any order of the court or otherwise, any such |
|
| | |
| | (4) | In determining whether it should exempt the applicant in whole or in part from |
|
| | any liability, the court must have regard to the following overriding principles— |
|
| | (a) | that a company that has allotted shares should receive money or money’s |
|
| | worth at least equal in value to the aggregate of the nominal value of |
|
| | those shares and the whole of any premium or, if the case so requires, so |
|
| | much of that aggregate as is treated as paid up; |
|
| | (b) | subject to this, that where such a company would, if the court did not |
|
| | grant the exemption, have more than one remedy against a particular |
|
| | person, it should be for the company to decide which remedy it should |
|
| | remain entitled to pursue. |
|
| | (5) | If a person brings proceedings against another (“the contributor”) for a |
|
| | contribution in respect of liability to a company arising under any provision of |
|
| | this Chapter and it appears to the court that the contributor is liable to make such |
|
| | a contribution, the court may, if and to the extent that it appears to it, just and |
|
| | equitable to do so having regard to the respective culpability (in respect of the |
|
| | liability to the company) of the contributor and the person bringing the |
|
| | |
| | (a) | exempt the contributor in whole or in part from his liability to make such |
|
| | |
| | (b) | order the contributor to make a larger contribution than, but for this |
|
| | subsection, he would be liable to make. |
|
| | (6) | Where a person is liable to a company under section (Agreement for transfer of |
|
| | non-cash asset: effect of contravention)(2) (agreement for transfer of non-cash |
|
| | asset: effect of contravention), the court may, on application, exempt him in |
|
| | whole or in part from that liability if and to the extent that it appears to the court |
|
| | to be just and equitable to do so having regard to any benefit accruing to the |
|
| | company by virtue of anything done by him towards the carrying out of the |
|
| | agreement mentioned in that subsection.’. |
|
| |
| | Penalty for contravention of this Chapter |
|
| |
| | |
| To move the following Clause:— |
|
| | ‘(1) | This section applies where a company contravenes—— |
|
| | section (Public company: valuation of non-cash consideration for shares) |
|
| | (public company allotting shares for non-cash consideration), or |
|
| | section (Public company: agreement for transfer of non-cash asset in initial |
|
| | period) (public company entering into agreement for transfer of non-cash |
|
| | |
| | (2) | An offence is committed by— |
|
| | |
| | (b) | every officer of the company who is in default. |
|
| | (3) | A person guilty of an offence under this section is liable— |
|
| | (a) | on conviction on indictment, to a fine; |
|
|
|
| |
| |
|
| | (b) | on summary conviction, to a fine not exceeding the statutory maximum.’. |
|
| |
| | Enforceability of undertakings to do work etc |
|
| |
| | |
| To move the following Clause:— |
|
| | ‘(1) | An undertaking given by any person, in or in connection with payment for shares |
|
| | in a company, to do work or perform services or to do any other thing, if it is |
|
| | enforceable by the company apart from this Chapter, is so enforceable |
|
| | notwithstanding that there has been a contravention in relation to it of a provision |
|
| | |
| | (2) | This is without prejudice to section (Power of court to grant relief) (power of |
|
| | court to grant relief etc in respect of liabilities).’. |
|
| |
| | The appropriate rate of interest |
|
| |
| | |
| To move the following Clause:— |
|
| | ‘(1) | For the purposes of this Chapter the “appropriate rate” of interest is 5% per annum |
|
| | or such other rate as may be specified by order made by the Secretary of State. |
|
| | (2) | An order under this section is subject to negative resolution procedure.’. |
|
| |
| | Application of share premiums |
|
| |
| | |
| To move the following Clause:— |
|
| | ‘(1) | If a company issues shares at a premium, whether for cash or otherwise, a sum |
|
| | equal to the aggregate amount or value of the premiums on those shares must be |
|
| | transferred to an account called “the share premium account”. |
|
| | (2) | Where, on issuing shares, a company has transferred a sum to the share premium |
|
| | account, it may use that sum to write off— |
|
| | (a) | the expenses of the issue of those shares; |
|
| | (b) | any commission paid on the issue of those shares. |
|
| | (3) | The company may use the share premium account to pay up new shares to be |
|
| | allotted to members as fully paid bonus shares. |
|
|
|
| |
| |
|
| | (4) | Subject to subsections (2) and (3), the provisions of the Companies Acts relating |
|
| | to the reduction of a company’s share capital apply as if the share premium |
|
| | account were part of its paid-up share capital. |
|
| | (5) | This section has effect subject to— |
|
| | section (Group reconstruction relief) (group reconstruction relief); |
|
| | section (Merger relief) (merger relief); |
|
| | section (Power to make further provision by regulations) (power to make |
|
| | further provisions by regulations). |
|
| | (6) | In this Chapter “the issuing company” means the company issuing shares as |
|
| | mentioned in subsection (1) above.’. |
|
| |
| | Group reconstruction relief |
|
| |
| | |
| To move the following Clause:— |
|
| | ‘(1) | This section applies where the issuing company— |
|
| | (a) | is a wholly owned subsidiary of another company (“the holding |
|
| | |
| | |
| | (i) | to the holding company or |
|
| | (ii) | to another wholly-owned subsidiary of the holding company, |
|
| | | in consideration for the transfer to the issuing company of non-cash |
|
| | assets of a company (“the transferor company”) that is a member of the |
|
| | group of companies that comprises the holding company and all its |
|
| | wholly-owned subsidiaries. |
|
| | (2) | Where the shares in the issuing company allotted in consideration for the transfer |
|
| | are issued at a premium, the issuing company is not required by section |
|
| | (Application of share premiums) to transfer any amount in excess of the minimum |
|
| | premium value to the share premium account. |
|
| | (3) | The minimum premium value means the amount (if any) by which the base value |
|
| | of the consideration for the shares allotted exceeds the aggregate nominal value |
|
| | |
| | (4) | The base value of the consideration for the shares allotted is the amount by which |
|
| | the base value of the assets transferred exceeds the base value of any liabilities of |
|
| | the transferor company assumed by the issuing company as part of the |
|
| | consideration for the assets transferred. |
|
| | (5) | For the purposes of this section— |
|
| | (a) | the base value of assets transferred is taken as— |
|
| | (i) | the cost of those assets to the transferor company, or |
|
| | (ii) | if less, the amount at which those assets are stated in the |
|
| | transferor company’s accounting records immediately before the |
|
| | |
|
|
| |
| |
|
| | (b) | the base value of the liabilities assumed is taken as the amount at which |
|
| | they are stated in the transferor company’s accounting records |
|
| | immediately before the transfer.’. |
|
| |
| | |
| |
| | |
| To move the following Clause:— |
|
| | ‘(1) | This section applies where the issuing company has secured at least a 90% equity |
|
| | holding in another company in pursuance of an arrangement providing for the |
|
| | allotment of equity shares in the issuing company on terms that the consideration |
|
| | for the shares allotted is to be provided— |
|
| | (a) | by the issue or transfer to the issuing company of equity shares in the |
|
| | |
| | (b) | by the cancellation of any such shares not held by the issuing company. |
|
| | (2) | If the equity shares in the issuing company allotted in pursuance of the |
|
| | arrangment in consideration for the acquisition or cancellation of equity shares in |
|
| | the other company are issued at a premium, section (Application of share |
|
| | premiums) does not apply to the premiums on those shares. |
|
| | (3) | Where the arrangement also provides for the allotment of any shares in the issuing |
|
| | company on terms that the consideration for those shares is to be provided— |
|
| | (a) | by the issue or transfer to the issuing company of non-equity shares in the |
|
| | |
| | (b) | by the cancellation of any such shares in that company not held by the |
|
| | |
| | | relief under subsection (2) extends to any shares in the issuing company allotted |
|
| | on those terms in pursuance of the arrangement. |
|
| | (4) | This section does not apply in a case falling within section (Group reconstruction |
|
| | relief) (group reconstruction relief).’. |
|
| |
| | Merger relief: meaning of 90% equity holding |
|
| |
| | |
| To move the following Clause:— |
|
| | ‘(1) | The following provisions have effect to determine for the purposes of section |
|
| | (Merger relief) (merger relief) whether a company (“company A”) has secured a |
|
| | 90% equity holding in another company (“company B”) in pursuance of such an |
|
| | arrangement as is mentioned in subsection (1) of that section. |
|
| | (2) | Company A has a 90% equity holding in company B if in consequence of an |
|
| | acquisition or cancellation of equity shares in company B (in pursuance of that |
|
| | arrangement) it holds equity shares in company B of an aggregate amount equal |
|
| | to 90% or more of the nominal value of that company’s equity share capital. |
|
|
|
| |
| |
|
| | |
| | (a) | it is immaterial whether any of those shares were acquired in pursuance |
|
| | |
| | (b) | shares in company B held by the company as treasury shares are excluded |
|
| | in determining the nominal value of company B’s share capital. |
|
| | (4) | Where the equity share capital of company B is divided into different classes of |
|
| | shares, company A is not regarded as having a 90% equity holding in company B |
|
| | unless the requirements of subsection (2) are met in relation to each of those |
|
| | classes of shares taken separately. |
|
| | (5) | For the purposes of this section shares held by— |
|
| | (a) | a company that is company A’s holding company or subsidiary, or |
|
| | (b) | a subsidiary of company A’s holding company, or |
|
| | (c) | its or their nominees, |
|
| | | are treated as held by company A.’. |
|
| |
| | Power to make further provision by regulations |
|
| |
| | |
| To move the following Clause:— |
|
| | ‘(1) | The Secretary of State may by regulations make such provision as he thinks |
|
| | |
| | (a) | for relieving companies from the requirements of section (Application of |
|
| | share premiums) (application of share premiums) in relation to premiums |
|
| | other than cash premiums; |
|
| | (b) | for restricting or otherwise modifying any relief from those requirements |
|
| | provided by this Chapter. |
|
| | (2) | Regulations under this section are subject to affirmative resolution procedure.’. |
|
| |
| | Relief may be reflected in company’s balance sheet |
|
| |
| | |
| To move the following Clause:— |
|
| | ‘An amount corresponding to the amount representing the premiums, or part of |
|
| | the premiums, on shares issued by a company that by virtue of any relief under |
|
| | this Chapter is not included in the company’s share premium account may also be |
|
| | disregarded in determining the amount at which any shares or other consideration |
|
| | provided for the shares issued is to be included in the company’s balance sheet.’ |
|
| |
|
|
| |
| |
|
| | Interpretation of this Chapter |
|
| |
| | |
| To move the following Clause:— |
|
| | |
| | “arrangement” means any agreement, scheme or arrangement (including an |
|
| | arrangement sanctioned in accordance with— |
|
| | (e) | Part (Arrangements and reconstructions) (arrangements and |
|
| | |
| | (f) | 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 property)); |
|
| | “company”, except in reference to the issuing company, includes any body |
|
| | |
| | “equity shares” means shares comprised in a company’s equity share |
|
| | capital, and “non-equity shares” means shares (of any class) that are not |
|
| | |
| | “the issuing company” has the meaning given by section (Application of |
|
| | |
| | (2) | References in this Chapter (however expressed) to— |
|
| | (a) | the acquisition by a company of shares in another company, and |
|
| | (b) | the issue or allotment of shares to, or the transfer of shares to or by, a |
|
| | |
| | | include (respectively) the acquisition of shares by, and the issue or allotment or |
|
| | transfer of shares to or by, a nominee of that company. |
|
| | | The reference in section (Group reconstruction relief) to the transferor company |
|
| | shall be read accordingly. |
|
| | (3) | References in this Chapter to the transfer of shares in a company include the |
|
| | transfer of a right to be included in the company’s register of members in respect |
|
| | |
| |
| | Alteration of share capital of limited company |
|
| |
| | |
| To move the following Clause:— |
|
| | ‘(1) | A limited company having a share capital may not alter its share capital except in |
|
| | |
| | |
| | (a) | increase its share capital by allotting new shares in accordance with this |
|
| | |
| | (b) | reduce its share capital in accordance with Chapter (Reduction of share |
|
| | |
| | |
|