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| |
|
649 | Copy of court order to be forwarded to the registrar |
| |
(1) | The company must within 15 days after the making of an order by the court on |
| |
an application under section 647 or 648 (objection to variation of class rights) |
| |
forward a copy of the order to the registrar. |
| |
(2) | If default is made in complying with this section an offence is committed by— |
| 5 |
| |
(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 |
| 10 |
| |
Matters to be notified to the registrar |
| |
650 | Notice of name or other designation of class of shares |
| |
(1) | Where a company assigns a name or other designation, or a new name or other |
| |
designation, to any class of its shares, it must within one month from doing so |
| 15 |
deliver to the registrar a notice giving particulars of the name or designation so |
| |
| |
(2) | If default is made in complying with this section, an offence is committed by— |
| |
| |
(b) | every officer of the company who is in default. |
| 20 |
(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 |
| |
| |
651 | Notice of particulars of variation of rights attached to shares |
| 25 |
(1) | Where the rights attached to any shares of a company are varied, the company |
| |
must within one month from the date on which the variation is made deliver |
| |
to the registrar a notice giving particulars of the variation. |
| |
(2) | If default is made in complying with this section, an offence is committed by— |
| |
| 30 |
(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 |
| |
| 35 |
652 | Notice of new class of members |
| |
(1) | If a company not having a share capital creates a new class of members, the |
| |
company must within one month from the date on which the new class is |
| |
created deliver to the registrar a notice containing particulars of the rights |
| |
| 40 |
(2) | If default is made in complying with this section, 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 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 |
| 5 |
| |
653 | Notice of name or other designation of class of members |
| |
(1) | Where a company not having a share capital assigns a name or other |
| |
designation, or a new name or other designation, to any class of its members, |
| |
it must within one month from doing so deliver to the registrar a notice giving |
| 10 |
particulars of the name or designation so assigned. |
| |
(2) | If default is made in complying with this section, 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 on summary |
| 15 |
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 |
| |
| |
654 | Notice of particulars of variation of class rights |
| |
(1) | If the rights of any class of members of a company not having a share capital |
| 20 |
are varied, the company must within one month from the date on which the |
| |
variation is made deliver to the registrar a notice containing particulars of the |
| |
| |
(2) | If default is made in complying with this section, an offence is committed by— |
| |
| 25 |
(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 |
| |
| 30 |
| |
Reduction of share capital |
| |
| |
655 | Circumstances in which a company may reduce its share capital |
| |
(1) | A limited company having a share capital may reduce its share capital— |
| 35 |
(a) | in the case of a private company limited by shares, by special resolution |
| |
supported by a solvency statement (see sections 656 to 658); |
| |
(b) | in any case, by special resolution confirmed by the court (see sections |
| |
| |
|
| |
|
| |
|
(2) | A company may not reduce its capital under subsection (1)(a) if as a result of |
| |
the reduction there would no longer be any member of the company holding |
| |
shares other than redeemable shares. |
| |
(3) | Subject to that, a company may reduce its share capital under this section in |
| |
| 5 |
(4) | In particular, a company may— |
| |
(a) | extinguish or reduce the liability on any of its shares in respect of share |
| |
| |
(b) | either with or without extinguishing or reducing liability on any of its |
| |
| 10 |
(i) | cancel any paid-up share capital that is lost or unrepresented by |
| |
| |
(ii) | pay off any paid-up share capital in excess of the company’s |
| |
| |
(5) | A special resolution under this section may not provide for a reduction of share |
| 15 |
capital to take effect later than the date on which the resolution has effect in |
| |
accordance with this Chapter. |
| |
(6) | This Chapter (apart from subsection (5) above) has effect subject to any |
| |
provision of the company’s articles restricting or prohibiting the reduction of |
| |
the company’s share capital. |
| 20 |
Private companies: reduction of capital supported by solvency statement |
| |
656 | Reduction of capital supported by solvency statement |
| |
(1) | A resolution for reducing share capital of a private company limited by shares |
| |
is supported by a solvency statement if— |
| |
(a) | the directors of the company make a statement of the solvency of the |
| 25 |
company in accordance with section 657 (a “solvency statement”) not |
| |
more than 15 days before the date on which the resolution is passed, |
| |
| |
(b) | the resolution and solvency statement are registered in accordance with |
| |
| 30 |
(2) | Where the resolution is proposed as a written resolution, a copy of the solvency |
| |
statement must be sent or submitted to every eligible member at or before the |
| |
time at which the proposed resolution is sent or submitted to him. |
| |
(3) | Where the resolution is proposed at a general meeting, a copy of the solvency |
| |
statement must be made available for inspection by members of the company |
| 35 |
| |
(4) | The validity of a resolution is not affected by a failure to comply with |
| |
| |
| |
(1) | A solvency statement is a statement that each of the directors— |
| 40 |
(a) | has formed the opinion, as regards the company’s situation at the date |
| |
of the statement, that there is no ground on which the company could |
| |
|
| |
|
| |
|
then be found to be unable to pay (or otherwise discharge) its debts; |
| |
| |
(b) | has also formed the opinion— |
| |
(i) | if it is intended to commence the winding up of the company |
| |
within twelve months of that date, that the company will be |
| 5 |
able to pay (or otherwise discharge) its debts in full within |
| |
twelve months of the commencement of the winding up; or |
| |
(ii) | in any other case, that the company will be able to pay (or |
| |
otherwise discharge) its debts as they fall due during the year |
| |
immediately following that date. |
| 10 |
(2) | In forming those opinions, the directors must take into account all of the |
| |
company’s liabilities (including any contingent or prospective liabilities). |
| |
(3) | The solvency statement must be in the prescribed form and must state— |
| |
(a) | the date on which it is made, and |
| |
(b) | the name of each director of the company. |
| 15 |
(4) | If the directors make a solvency statement without having reasonable grounds |
| |
for the opinions expressed in it, and the statement is delivered to the registrar, |
| |
an offence is committed by every director who is in default. |
| |
(5) | A person guilty of an offence under subsection (4) is liable— |
| |
(a) | on conviction on indictment, to imprisonment for a term not exceeding |
| 20 |
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 not exceeding the |
| |
statutory maximum (or both); |
| 25 |
(ii) | in Scotland or Northern Ireland, to imprisonment for a term not |
| |
exceeding six months, or to a fine not exceeding the statutory |
| |
| |
658 | Registration of resolution and supporting documents |
| |
(1) | Within 15 days after the resolution for reducing share capital is passed the |
| 30 |
company must deliver to the registrar— |
| |
(a) | a copy of the solvency statement, and |
| |
(b) | a statement of capital. |
| |
| This is in addition to the copy of the resolution itself that is required to be |
| |
delivered to the registrar under Chapter 3 of Part 3. |
| 35 |
(2) | The statement of capital must state with respect to the company’s share capital |
| |
as reduced by the resolution— |
| |
(a) | the total number of shares of the company, |
| |
(b) | the aggregate nominal value of those shares, |
| |
(c) | for each class of shares— |
| 40 |
(i) | prescribed particulars of the rights attached to the shares, |
| |
(ii) | the total number of shares of that class, and |
| |
(iii) | the aggregate nominal value of shares of that class, and |
| |
(d) | the amount paid up and the amount (if any) unpaid on each share |
| |
(whether on account of the nominal value of the share or by way of |
| 45 |
| |
|
| |
|
| |
|
(3) | The registrar must register the documents delivered to him under subsection |
| |
| |
(4) | The resolution does not take effect until those documents are registered. |
| |
(5) | The company must also deliver to the registrar, within 15 days after the |
| |
resolution is passed, a statement by the directors confirming that the solvency |
| 5 |
| |
(a) | made not more than 15 days before the date on which the resolution |
| |
| |
(b) | provided to members in accordance with section 656(2) or (3). |
| |
(6) | The validity of a resolution is not affected by— |
| 10 |
(a) | a failure to deliver the documents required to be delivered to the |
| |
registrar under subsection (1) within the time specified in that |
| |
| |
(b) | a failure to comply with subsection (5). |
| |
(7) | If the company delivers to the registrar a solvency statement that was not |
| 15 |
provided to members in accordance with section 656(2) or (3), an offence is |
| |
committed by every officer of the company who is in default. |
| |
(8) | If default is made in complying with this section, an offence is committed by— |
| |
| |
(b) | every officer of the company who is in default. |
| 20 |
(9) | A person guilty of an offence under subsection (7) or (8) is liable— |
| |
(a) | on conviction on indictment, to a fine; |
| |
(b) | on summary conviction, to a fine not exceeding the statutory |
| |
| |
Reduction of capital confirmed by the court |
| 25 |
659 | Application to court for order of confirmation |
| |
(1) | Where a company has passed a resolution for reducing share capital, it may |
| |
apply to the court for an order confirming the reduction. |
| |
(2) | If the proposed reduction of capital involves either— |
| |
(a) | diminution of liability in respect of unpaid share capital, or |
| 30 |
(b) | the payment to a shareholder of any paid-up share capital, |
| |
| section 660 (creditors entitled to object to reduction) applies unless the court |
| |
| |
(3) | The court may, if having regard to any special circumstances of the case it |
| |
thinks proper to do so, direct that section 660 is not to apply as regards any |
| 35 |
class or classes of creditors. |
| |
(4) | The court may direct that section 660 is to apply in any other case. |
| |
660 | Creditors entitled to object to reduction |
| |
(1) | Where this section applies (see section 659(2) and (4)), every creditor of the |
| |
company who at the date fixed by the court is entitled to any debt or claim that, |
| 40 |
if that date were the commencement of the winding up of the company would |
| |
|
| |
|
| |
|
be admissible in proof against the company, is entitled to object to the |
| |
| |
(2) | The court shall settle a list of creditors entitled to object. |
| |
(3) | For that purpose the court— |
| |
(a) | shall ascertain, as far as possible without requiring an application from |
| 5 |
any creditor, the names of those creditors and the nature and amount |
| |
of their debts or claims, and |
| |
(b) | may publish notices fixing a day or days within which creditors not |
| |
entered on the list are to claim to be so entered or are to be excluded |
| |
from the right of objecting to the reduction of capital. |
| 10 |
(4) | If a creditor entered on the list whose debt or claim is not discharged or has not |
| |
determined does not consent to the reduction, the court may, if it thinks fit, |
| |
dispense with the consent of that creditor on the company securing payment |
| |
| |
(5) | For this purpose the debt or claim must be secured by appropriating (as the |
| 15 |
court may direct) the following amount— |
| |
(a) | if the company admits the full amount of the debt or claim or, though |
| |
not admitting it, is willing to provide for it, the full amount of the debt |
| |
| |
(b) | if the company does not admit, and is not willing to provide for, the full |
| 20 |
amount of the debt or claim, or if the amount is contingent or not |
| |
ascertained, an amount fixed by the court after the like enquiry and |
| |
adjudication as if the company were being wound up by the court. |
| |
661 | Offences in connection with list of creditors |
| |
(1) | If an officer of the company— |
| 25 |
(a) | intentionally or recklessly— |
| |
(i) | conceals the name of a creditor entitled to object to the reduction |
| |
| |
(ii) | misrepresents the nature or amount of the debt or claim of a |
| |
| 30 |
(b) | is knowingly concerned in any such concealment or misrepresentation, |
| |
| |
(2) | 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 |
| 35 |
| |
662 | Court order confirming reduction |
| |
(1) | The court may make an order confirming the reduction of capital on such terms |
| |
and conditions as it thinks fit. |
| |
(2) | The court must not confirm the reduction unless it is satisfied, with respect to |
| 40 |
every creditor of the company who is entitled to object to the reduction of |
| |
| |
(a) | his consent to the reduction has been obtained, or |
| |
(b) | his debt or claim has been discharged, or has determined or has been |
| |
| 45 |
|
| |
|
| |
|
(3) | Where the court confirms the reduction, it may order the company to publish |
| |
(as the court directs) the reasons for reduction of capital, or such other |
| |
information in regard to it as the court thinks expedient with a view to giving |
| |
proper information to the public, and (if the court thinks fit) the causes that led |
| |
| 5 |
(4) | The court may, if for any special reason it thinks proper to do so, make an order |
| |
directing that the company must, during such period (commencing on or at |
| |
any time after the date of the order) as is specified in the order, add to its name |
| |
as its last words the words “and reduced”. |
| |
| If such an order is made, those words are, until the end of the period specified |
| 10 |
in the order, deemed to be part of the company’s name. |
| |
663 | Registration of order and statement of capital |
| |
(1) | The registrar, on production of an order of the court confirming the reduction |
| |
of a company’s share capital and the delivery of a copy of the order and of a |
| |
statement of capital (approved by the court), shall register the order and |
| 15 |
| |
| This is subject to section 664 (public company reducing capital below |
| |
| |
(2) | The statement of capital must state with respect to the company’s share capital |
| |
| 20 |
(a) | the total number of shares of the company, |
| |
(b) | the aggregate nominal value of those shares, |
| |
(c) | for each class of shares— |
| |
(i) | prescribed particulars of the rights attached to the shares, |
| |
(ii) | the total number of shares of that class, and |
| 25 |
(iii) | the aggregate nominal value of shares of that class, and |
| |
(d) | the amount paid up and the amount (if any) unpaid on each share |
| |
(whether on account of the nominal value of the share or by way of |
| |
| |
(3) | The resolution for reducing share capital, as confirmed by the court’s order, |
| 30 |
| |
(a) | in the case of a reduction of share capital that forms part of a |
| |
compromise or arrangement sanctioned by the court under Part 27 |
| |
(arrangements and reconstructions)— |
| |
(i) | on delivery of the order and statement of capital to the registrar, |
| 35 |
| |
(ii) | if the court so orders, on the registration of the order and |
| |
| |
(b) | in any other case, on the registration of the order and statement of |
| |
| 40 |
(4) | Notice of the registration of the order and statement of capital must be |
| |
published in such manner as the court may direct. |
| |
(5) | The registrar must certify the registration of the order and statement of capital. |
| |
| |
(a) | must be signed by the registrar or authenticated by the registrar’s |
| 45 |
| |
|
| |
|