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| |
| |
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| | (a) | on conviction on indictment, to imprisonment for a term not exceeding |
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| | two years or a fine (or both); |
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| | (b) | on summary conviction— |
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| | (i) | in England and Wales, to imprisonment for a term not exceeding |
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| | twelve months or to a fine not exceeding the statutory maximum |
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| | |
| | (ii) | in Scotland or Northern Ireland, to imprisonment for a term not |
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| | exceeding six months, or to a fine not exceeding the statutory |
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| | |
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| | |
| To move the following Clause:— |
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| | ‘(1) | Neither section (Assistance for acquisition of shares in public company) nor |
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| | section (Assistance by public company for acquisition of shares in its private |
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| | holding company) prohibits a transaction to which this section applies. |
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| | (2) | Those transactions are— |
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| | (a) | a distribution of the company’s assets by way of— |
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| | (i) | dividend lawfully made, or |
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| | (ii) | distribution in the course of a company’s winding up; |
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| | (b) | an allotment of bonus shares; |
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| | (c) | a reduction of capital under Chapter (Reduction of capital) of Part (A |
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| | company’s share capital); |
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| | (d) | a redemption of shares under Chapter (Redeemable shares) or a purchase |
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| | of shares under Chapter (Purchase of own shares) of this Part; |
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| | (e) | anything done in pursuance of an order of the court under Part |
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| | (Arrangements and reconstructions) (order sanctioning compromise or |
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| | arrangement with members or creditors); |
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| | (f) | any thing done under an arrangement made in pursuance of section 110 |
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| | of the Insolvency Act 1986 (c. 45) or Article 96 of the Insolvency |
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| | (Northern Ireland) Order 1989 (S.I. 1989/2405 (N.I. 19)) (liquidator in |
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| | winding up accepting shares as consideration for sale of company’s |
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| | |
| | (g) | anything done under an arrangement made between a company and its |
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| | creditors that is binding on the creditors by virtue of Part 1 of the |
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| | Insolvency Act 1986 (c. 45) or Part 2 of the Insolvency (Northern |
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| | Ireland) Order 1989 (S.I. 1989/2405 (N.I. 19)).’. |
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| |
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| |
| |
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| | |
| |
| | |
| To move the following Clause:— |
|
| | ‘(1) | Neither section (Assistance for acquisition of shares in public company) nor |
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| | section (Assistance by public company for acquisition of shares in its private |
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| | holding company) prohibits a transaction to which this section applies— |
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| | (a) | in the case of a private company, or |
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| | (b) | in the case of a public company if— |
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| | (i) | the company has net assets that are not reduced by the giving of |
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| | |
| | (ii) | to the extent that those assets are so reduced, the assistance is |
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| | provided out of distributable profits. |
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| | (2) | The transactions to which this section applies are— |
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| | (a) | the lending of money in the ordinary course of the company’s business; |
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| | (b) | the provision by the company, in good faith in the interests of the |
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| | company, of financial assistance for the purposes of an employees’ share |
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| | |
| | (c) | the provision of financial assistance by a company or any of its |
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| | subsidiaries for the purposes of or in connection with anything done by |
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| | the company, or a company in the same group, for the purpose of |
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| | enabling or facilitating transactions in shares in the first-mentioned |
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| | company between, and involving the acquisition of beneficial ownership |
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| | |
| | (i) | bona fide employees or former employees of that company or of |
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| | another company in the same group, or |
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| | (ii) | spouses or civil partners, widows, widowers or surviving civil |
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| | partners, or minor children or step-children of any such |
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| | employees or former employees; |
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| | (d) | the making by a company of loans to persons (other than directors) |
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| | employed in good faith by the company with a view to enabling those |
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| | persons to acquire fully paid shares in the company or its holding |
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| | company to be held by them by way of beneficial ownership. |
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| | (3) | The references in this section to “net assets” are to the amount by which the |
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| | aggregate of the company’s assets exceeds the aggregate of its liabilities. |
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| | |
| | (a) | the amount of both assets and liabilities shall be taken to be as stated in |
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| | the company’s accounting records immediately before the financial |
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| | |
| | (b) | “liabilities” includes any amount retained as reasonably necessary for the |
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| | purpose of providing for a liability the nature of which is clearly defined |
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| | and that is either likely to be incurred or certain to be incurred but |
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| | uncertain as to amount or as to the date on which it will arise. |
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| | (5) | For the purposes of subsection (2)(c) a company is in the same group as another |
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| | company if it is a holding company or subsidiary of that company or a subsidiary |
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| | of a holding company of that company.’. |
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| |
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| |
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| | Definitions for this Chapter |
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| | |
| To move the following Clause:— |
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| | |
| | “distributable profits”, in relation to the giving of any financial assistance— |
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| | (g) | means those profits out of which the company could lawfully |
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| | make a distribution equal in value to that assistance, and |
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| | (h) | includes, in a case where the financial assistance consists of or |
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| | includes, or is treated as arising in consequence of, the sale, |
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| | transfer or other disposition of a non-cash asset, any profit that, |
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| | if the company were to make a distribution of that character |
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| | would be available for that purpose in accordance with section |
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| | (Distributions in kind: determination of amount); and |
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| | “distribution” has the same meaning as in Part (Distributions) |
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| | (distributions) (see section (Meaning of “distribution”)). |
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| | |
| | (a) | a reference to a person incurring a liability includes his changing his |
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| | financial position by making an agreement or arrangement (whether |
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| | enforceable or unenforceable, and whether made on his own account or |
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| | with any other person) or by any other means, and |
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| | (b) | a reference to a company giving financial assistance for the purposes of |
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| | reducing or discharging a liability incurred by a person for the purpose of |
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| | the acquisition of shares includes its giving such assistance for the |
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| | purpose of wholly or partly restoring his financial position to what it was |
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| | before the acquisition took place.’. |
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| |
| | Power of limited company to issue redeemable shares |
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| |
| | |
| To move the following Clause:— |
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| | ‘(1) | A limited company having a share capital may issue shares that are to be |
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| | redeemed or are liable to be redeemed at the option of the company or the |
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| | shareholder (“redeemable shares”), subject to the following provisions. |
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| | (2) | The articles of a private limited company may exclude or restrict the issue of |
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| | |
| | (3) | A public limited company may only issue redeemable shares if it is authorised to |
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| | |
| | (4) | No redeemable shares may be issued at a time when there are no issued shares of |
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| | the company that are not redeemable.’. |
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| |
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| |
| |
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| | Terms and manner of redemption |
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| |
| | |
| To move the following Clause:— |
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| | ‘(1) | The directors of a limited company may determine the terms, conditions and |
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| | manner of redemption of shares if they are authorised to do so— |
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| | (a) | by the company’s articles, or |
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| | (b) | by a resolution of the company. |
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| | (2) | A resolution under subsection (1)(b) may be an ordinary resolution, even though |
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| | it amends the company’s articles. |
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| | (3) | Where the directors are authorised under subsection (1) to determine the terms, |
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| | conditions and manner of redemption of shares— |
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| | (a) | they must do so before the shares are allotted, and |
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| | (b) | any obligation of the company to state in a statement of capital the rights |
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| | attached to the shares extends to the terms, conditions and manner of |
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| | |
| | (4) | Where the directors are not so authorised, the terms, conditions and manner of |
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| | redemption of any redeemable shares must be stated in the company’s articles.’. |
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| |
| | Payment for redeemable shares |
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| |
| | |
| To move the following Clause:— |
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| | ‘(1) | Redeemable shares in a limited company may not be redeemed unless they are |
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| | |
| | (2) | The terms of redemption of shares in a limited company may provide that the |
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| | amount payable on redemption may, by agreement between the company and the |
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| | holder of the shares, be paid on a date later than the redemption date. |
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| | (3) | Unless redeemed in accordance with provision authorised by subsection (2), the |
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| | shares must be paid for on redemption.’. |
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| |
| | |
| |
| | |
| To move the following Clause:— |
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| | ‘(1) | A private limited company may redeem redeemable shares out of capital in |
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| | accordance with Chapter (Redemption or purchase by private company out of |
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| | |
| | (2) | Subject to that, redeemable shares in a limited company may only be redeemed |
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| | |
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| |
| |
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| | (a) | distributable profits of the company, or |
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| | (b) | the proceeds of a fresh issue of shares made for the purposes of the |
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| | |
| | (3) | Any premium payable on redemption of shares in a limited company must be paid |
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| | out of distributable profits of the company, subject to the following provision. |
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| | (4) | If the redeemable shares were issued at a premium, any premium payable on their |
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| | redemption may be paid out of the proceeds of a fresh issue of shares made for |
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| | the purposes of the redemption, up to an amount equal to— |
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| | (a) | the aggregate of the premiums received by the company on the issue of |
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| | |
| | (b) | the current amount of the company’s share premium account (including |
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| | any sum transferred to that account in respect of premiums on the new |
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| | |
| | |
| | (5) | The amount of the company’s share premium account is reduced by a sum |
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| | corresponding (or by sums in the aggregate corresponding) to the amount of any |
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| | payment made under subsection (3). |
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| | (6) | This section is subject to section (Effect of company’s failure to redeem or |
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| | purchase)(4) (terms of redemption enforceable in a winding up).’. |
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| |
| | Redeemed shares treated as cancelled |
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| |
| | |
| To move the following Clause:— |
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| | ‘Where shares in a limited company are redeemed— |
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| | (a) | the shares are treated as cancelled, and |
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| | (b) | the amount of the company’s issued share capital is diminished |
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| | accordingly by the nominal value of the shares redeemed.’. |
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| |
| | Notice to registrar of redemption |
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| |
| | |
| To move the following Clause:— |
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| | ‘(1) | If a limited company redeems any redeemable shares it must within one month |
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| | after doing so give notice to the registrar, specifying the shares redeemed. |
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| | (2) | The notice must be accompanied by a statement of capital. |
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| | (3) | The statement of capital must state with respect to the company’s share capital |
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| | immediately following the redemption— |
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| | (a) | the total number of shares of the company, |
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| | (b) | the aggregate nominal value of those shares, |
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| | (c) | for each class of shares— |
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| |
| |
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| | (i) | prescribed particulars of the rights attached to the shares, |
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| | (ii) | the total number of shares of that class, and |
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| | (iii) | the aggregate nominal value of shares of that class, and |
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| | (d) | the amount paid up and the amount (if any) unpaid on each share |
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| | (whether on account of the nominal value of the share or by way of |
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| | |
| | (4) | If default is made in complying with this section, an offence is committed by— |
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| | |
| | (b) | every officer of the company who is in default. |
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| | (5) | A person guilty of an offence under this section is liable on summary conviction |
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| | to a fine not exceeding level 3 on the standard scale and, for continued |
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| | contravention, a daily default fine not exceeding one-tenth of level 3 on the |
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| | |
| |
| | Power of limited company to purchase own shares |
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| |
| | |
| To move the following Clause:— |
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| | ‘(1) | A limited company having a share capital may purchase its own shares (including |
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| | any redeemable shares), subject to— |
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| | (a) | the following provisions of this Chapter, and |
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| | (b) | any restriction or prohibition in the company’s articles. |
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| | (2) | A limited company may not purchase its own shares if as a result of the purchase |
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| | there would no longer be any issued shares of the company other than redeemable |
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| | shares or shares held as treasury shares.’. |
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| |
| | Payment for purchase of own shares |
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| |
| | |
| To move the following Clause:— |
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| | ‘(1) | A limited company may not purchase its own shares unless they are fully paid. |
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| | (2) | Where a limited company purchases its own shares, the shares must be paid for |
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| | |
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| |
| |
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| | Financing of purchase of own shares |
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| |
| | |
| To move the following Clause:— |
|
| | ‘(1) | A private limited company may purchase its own shares out of capital in |
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| | accordance with Chapter (Redemption or purchase by private company out of |
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| | |
| | |
| | (a) | a limited company may only purchase its own shares out of— |
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| | (i) | distributable profits of the company, or |
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| | (ii) | the proceeds of a fresh issue of shares made for the purpose of |
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| | financing the purchase, and |
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| | (b) | any premium payable on the purchase by a limited company of its own |
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| | shares must be paid out of distributable profits of the company, subject |
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| | |
| | (3) | If the shares to be purchased were issued at a premium, any premium payable on |
|
| | their purchase by the company may be paid out of the proceeds of a fresh issue of |
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| | shares made for the purpose of financing the purchase, up to an amount equal to— |
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| | (a) | the aggregate of the premiums received by the company on the issue of |
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| | |
| | (b) | the current amount of the company’s share premium account (including |
|
| | any sum transferred to that account in respect of premiums on the new |
|
| | |
| | |
| | (4) | The amount of the company’s share premium account is reduced by a sum |
|
| | corresponding (or by sums in the aggregate corresponding) to the amount of any |
|
| | payment made under subsection (3). |
|
| | (5) | This section has effect subject to section (Effect of company’s failure to redeem |
|
| | or purchase)(4) (terms of purchase enforceable in a winding up).’. |
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| |
| | Authority for purchase of own shares |
|
| |
| | |
| To move the following Clause:— |
|
| | ‘(1) | A limited company may only purchase its own shares— |
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| | (a) | by an off-market purchase, in pursuance of a contract approved in |
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| | advance in accordance with section (Authority for off-market purchase); |
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| | (b) | by a market purchase, authorised in accordance with section (Authority |
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| | |
| | (2) | A purchase is “off-market” if the shares either— |
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| | (a) | are purchased otherwise than on a recognised investment exchange, or |
|
| | (b) | are purchased on a recognised investment exchange but are not subject to |
|
| | a marketing arrangement on the exchange. |
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| | (3) | For this purpose a company’s shares are subject to a marketing arrangement on a |
|
| | recognised investment exchange if— |
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|