|
| |
|
708 | Resolution authorising off-market purchase: exercise of voting rights |
| |
(1) | This section applies to a resolution to confer, vary, revoke or renew authority |
| |
for the purposes of section 707 (authority for off-market purchase of own |
| |
| |
(2) | Where the resolution is proposed as a written resolution, a member who holds |
| 5 |
shares to which the resolution relates is not an eligible member. |
| |
(3) | Where the resolution is proposed at a meeting of the company, it is not |
| |
| |
(a) | any member of the company holding shares to which the resolution |
| |
relates exercises the voting rights carried by any of those shares in |
| 10 |
voting on the resolution, and |
| |
(b) | the resolution would not have been passed if he had not done so. |
| |
| |
(a) | a member who holds shares to which the resolution relates is regarded |
| |
as exercising the voting rights carried by those shares not only if he |
| 15 |
votes in respect of them on a poll on the question whether the |
| |
resolution shall be passed, but also if he votes on the resolution |
| |
otherwise than on a poll; |
| |
(b) | notwithstanding anything in the company’s articles, any member of the |
| |
company may demand a poll on that question; |
| 20 |
(c) | a vote and a demand for a poll by a person as proxy for a member are |
| |
the same respectively as a vote and a demand by the member. |
| |
709 | Resolution authorising off-market purchase: disclosure of details of contract |
| |
(1) | This section applies in relation to a resolution to confer, vary, revoke or renew |
| |
authority for the purposes of section 707 (authority for off-market purchase of |
| 25 |
| |
(2) | A copy of the proposed contract (if it is in writing) or a memorandum setting |
| |
out its terms (if it is not) must be made available to members— |
| |
(a) | in the case of a written resolution, by being sent or submitted to every |
| |
eligible member at or before the time at which the proposed resolution |
| 30 |
is sent or submitted to him; |
| |
(b) | in the case of a resolution at a meeting, by being made available for |
| |
inspection by members of the company both— |
| |
(i) | at the company’s registered office for not less than 15 days |
| |
ending with the date of the meeting, and |
| 35 |
(ii) | at the meeting itself. |
| |
(3) | A memorandum of contract terms so made available must include the names |
| |
of the members holding shares to which the contract relates. |
| |
(4) | A copy of the contract so made available must have annexed to it a written |
| |
memorandum specifying such of those names as do not appear in the contract |
| 40 |
| |
(5) | The resolution is not validly passed if the requirements of this section are not |
| |
| |
|
| |
|
| |
|
710 | Variation of contract for off-market purchase |
| |
(1) | A company may only agree to a variation of a contract authorised under |
| |
section 707 (authority for off-market purchase) if the variation is approved in |
| |
advance in accordance with this section. |
| |
(2) | The terms of the variation must be authorised by a special resolution of the |
| 5 |
company before it is agreed to. |
| |
(3) | That authority may be varied, revoked or from time to time renewed by a |
| |
special resolution of the company. |
| |
(4) | In the case of a public company a resolution conferring, varying or renewing |
| |
authority must specify a date on which the authority is to expire, which must |
| 10 |
not be later than 18 months after the date on which the resolution is passed. |
| |
(5) | A resolution conferring, varying, revoking or renewing authority under this |
| |
| |
section 711 (exercise of voting rights), and |
| |
section 712 (disclosure of details of variation). |
| 15 |
711 | Resolution authorising variation: exercise of voting rights |
| |
(1) | This section applies to a resolution to confer, vary, revoke or renew authority |
| |
for the purposes of section 710 (variation of contract for off-market purchase of |
| |
| |
(2) | Where the resolution is proposed as a written resolution, a member who holds |
| 20 |
shares to which the resolution relates is not an eligible member. |
| |
(3) | Where the resolution is proposed at a meeting of the company, it is not |
| |
| |
(a) | any member of the company holding shares to which the resolution |
| |
relates exercises the voting rights carried by any of those shares in |
| 25 |
voting on the resolution, and |
| |
(b) | the resolution would not have been passed if he had not done so. |
| |
| |
(a) | a member who holds shares to which the resolution relates is regarded |
| |
as exercising the voting rights carried by those shares not only if he |
| 30 |
votes in respect of them on a poll on the question whether the |
| |
resolution shall be passed, but also if he votes on the resolution |
| |
otherwise than on a poll; |
| |
(b) | notwithstanding anything in the company’s articles, any member of the |
| |
company may demand a poll on that question; and |
| 35 |
(c) | a vote and a demand for a poll by a person as proxy for a member are |
| |
the same respectively as a vote and a demand by the member. |
| |
712 | Resolution authorising variation: disclosure of details of variation |
| |
(1) | This section applies in relation to a resolution under section 710 (variation of |
| |
contract for off-market purchase of own shares). |
| 40 |
(2) | A copy of the proposed variation (if it is in writing) or a written memorandum |
| |
giving details of the proposed variation (if it is not) must be made available to |
| |
| |
|
| |
|
| |
|
(a) | in the case of a written resolution, by being sent or submitted to every |
| |
eligible member at or before the time at which the proposed resolution |
| |
is sent or submitted to him; |
| |
(b) | in the case of a resolution at a meeting, by being made available for |
| |
inspection by members of the company both— |
| 5 |
(i) | at the company’s registered office for not less than 15 days |
| |
ending with the date of the meeting, and |
| |
(ii) | at the meeting itself. |
| |
(3) | There must also be made available as mentioned in subsection (2) a copy of the |
| |
original contract or, as the case may be, a memorandum of its terms, together |
| 10 |
with any variations previously made. |
| |
(4) | A memorandum of the proposed variation so made available must include the |
| |
names of the members holding shares to which the variation relates. |
| |
(5) | A copy of the proposed variation so made available must have annexed to it a |
| |
written memorandum specifying such of those names as do not appear in the |
| 15 |
| |
(6) | The resolution is not validly passed if the requirements of this section are not |
| |
| |
713 | Release of company’s rights under contract for off-market purchase |
| |
(1) | An agreement by a company to release its rights under a contract approved |
| 20 |
under section 707 (authorisation of off-market purchase) is void unless the |
| |
terms of the release agreement are approved in advance in accordance with |
| |
| |
(2) | The terms of the proposed agreement must be authorised by a special |
| |
resolution of the company before the agreement is entered into. |
| 25 |
(3) | That authority may be varied, revoked or from time to time renewed by a |
| |
special resolution of the company. |
| |
(4) | In the case of a public company a resolution conferring, varying or renewing |
| |
authority must specify a date on which the authority is to expire, which must |
| |
not be later than 18 months after the date on which the resolution is passed. |
| 30 |
| |
section 711 (exercise of voting rights), and |
| |
section 712 (disclosure of details of variation), |
| |
| apply to a resolution authorising a proposed release agreement as they apply |
| |
to a resolution authorising a proposed variation. |
| 35 |
Authority for market purchase |
| |
714 | Authority for market purchase |
| |
(1) | A company may only make a market purchase of its own shares if the purchase |
| |
has first been authorised by a resolution of the company. |
| |
| 40 |
(a) | may be general or limited to the purchase of shares of a particular class |
| |
| |
|
| |
|
| |
|
(b) | may be unconditional or subject to conditions. |
| |
| |
(a) | specify the maximum number of shares authorised to be acquired, and |
| |
(b) | determine both the maximum and minimum prices that may be paid |
| |
| 5 |
(4) | The authority may be varied, revoked or from time to time renewed by a |
| |
resolution of the company. |
| |
(5) | A resolution conferring, varying or renewing authority must specify a date on |
| |
which it is to expire, which must not be later than 18 months after the date on |
| |
which the resolution is passed. |
| 10 |
(6) | A company may make a purchase of its own shares after the expiry of the time |
| |
| |
(a) | the contract of purchase was concluded before the authority expired, |
| |
| |
(b) | the terms of the authority permitted the company to make a contract of |
| 15 |
purchase that would or might be executed wholly or partly after its |
| |
| |
(7) | A resolution to confer or vary authority under this section may determine |
| |
either or both the maximum and minimum price for purchase by— |
| |
(a) | specifying a particular sum, or |
| 20 |
(b) | providing a basis or formula for calculating the amount of the price (but |
| |
without reference to any person’s discretion or opinion). |
| |
| |
715 | Copy of contract or memorandum to be available for inspection |
| |
(1) | This section applies where a company has entered into— |
| 25 |
(a) | a contract approved under section 707 (authorisation of contract for off- |
| |
| |
(b) | a contract for a purchase authorised under section 714 (authorisation of |
| |
| |
(2) | The company must keep available for inspection at its registered office— |
| 30 |
(a) | a copy of the contract, or |
| |
(b) | if the contract is not in writing, a written memorandum setting out its |
| |
| |
(3) | The copy or memorandum must be kept available for inspection from the |
| |
conclusion of the contract until the end of the period of ten years beginning |
| 35 |
| |
(a) | the date on which the purchase of all the shares in pursuance of the |
| |
contract is completed or, |
| |
(b) | the date on which the contract otherwise determines. |
| |
(4) | Every copy or memorandum required to be kept under this section must be |
| 40 |
kept open to inspection without charge— |
| |
(a) | by any member of the company, and |
| |
(b) | in the case of a public company, by any other person. |
| |
|
| |
|
| |
|
(5) | The provisions of this section apply to a variation of a contract as they apply to |
| |
| |
716 | Enforcement of right to inspect copy or memorandum |
| |
(1) | If default is made in complying with section 715(2) or (3), or an inspection |
| |
required under section 715(4) is refused, an offence is committed by every |
| 5 |
officer of the company who is in default. |
| |
(2) | 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 |
(3) | In the case of refusal of an inspection required under section 715(4) the court |
| |
may by order compel an immediate inspection. |
| |
717 | No assignment of company’s right to purchase own shares |
| |
The rights of a company under a contract authorised under— |
| |
(a) | section 707 (authority for off-market purchase), or |
| 15 |
(b) | section 714 (authority for market purchase) |
| |
are not capable of being assigned. |
| |
718 | Payments apart from purchase price to be made out of distributable profits |
| |
(1) | A payment made by a company in consideration of— |
| |
(a) | acquiring any right with respect to the purchase of its own shares in |
| 20 |
pursuance of a contingent purchase contract approved under section |
| |
707 (authorisation of off-market purchase), |
| |
(b) | the variation of any contract approved under that section, or |
| |
(c) | the release of any of the company’s obligations with respect to the |
| |
purchase of any of its own shares under a contract— |
| 25 |
(i) | approved under section 707, or |
| |
(ii) | authorised under section 714 (authorisation of market |
| |
| |
| must be made out of the company’s distributable profits. |
| |
(2) | If this requirement is not met in relation to a contract, then— |
| 30 |
(a) | in a case within subsection (1)(a), no purchase by the company of its |
| |
own shares in pursuance of that contract may be made under this |
| |
| |
(b) | in a case within subsection (1)(b), no such purchase following the |
| |
variation may be made under this Chapter; |
| 35 |
(c) | in a case within subsection (1)(c), the purported release is void. |
| |
719 | Treatment of shares purchased |
| |
Where a limited company makes a purchase of its own shares in accordance |
| |
| |
(a) | if section 737 (treasury shares) applies, the shares may be held and dealt |
| 40 |
with in accordance with Chapter 6 of this Part; |
| |
(b) | if that section does not apply— |
| |
|
| |
|
| |
|
(i) | the shares are treated as cancelled, and |
| |
(ii) | the amount of the company’s issued share capital is diminished |
| |
accordingly by the nominal value of the shares cancelled. |
| |
720 | Return to registrar of purchase of own shares |
| |
(1) | Where a company purchases shares under this Chapter, it must deliver a |
| 5 |
return to the registrar within the period of 28 days beginning with the date on |
| |
which the shares are delivered to it. |
| |
(2) | The return must distinguish— |
| |
(a) | shares in relation to which section 737 (treasury shares) applies and |
| |
shares in relation to which that section does not apply, and |
| 10 |
(b) | shares in relation to which that section applies— |
| |
(i) | that are cancelled forthwith (under section 742 (cancellation of |
| |
| |
(ii) | that are not so cancelled. |
| |
(3) | The return must state, with respect to shares of each class purchased— |
| 15 |
(a) | the number and nominal value of the shares, and |
| |
(b) | the date on which they were delivered to the company. |
| |
(4) | In the case of a public company the return must also state— |
| |
(a) | the aggregate amount paid by the company for the shares, and |
| |
(b) | the maximum and minimum prices paid in respect of shares of each |
| 20 |
| |
(5) | Particulars of shares delivered to the company on different dates and under |
| |
different contracts may be included in a single return. |
| |
| In such a case the amount required to be stated under subsection (4)(a) is the |
| |
aggregate amount paid by the company for all the shares to which the return |
| 25 |
| |
(6) | If default is made in complying with this section an offence is committed by |
| |
every officer of the company who is in default. |
| |
(7) | A person guilty of an offence under this section is liable— |
| |
(a) | on conviction on indictment, to a fine; |
| 30 |
(b) | on summary conviction to a fine not exceeding the statutory maximum |
| |
and, for continued contravention, a daily default fine not exceeding |
| |
one-tenth of the statutory maximum. |
| |
721 | Notice to registrar of cancellation of shares |
| |
(1) | If on the purchase by a company of any of its own shares in accordance with |
| 35 |
| |
(a) | section 737 (treasury shares) does not apply (so that the shares are |
| |
treated as cancelled), or |
| |
(b) | that section applies but the shares are cancelled forthwith (under |
| |
section 742 (cancellation of treasury shares)), |
| 40 |
| the company must give notice of cancellation to the registrar, within the period |
| |
of 28 days beginning with the date on which the shares are delivered to it, |
| |
specifying the shares cancelled. |
| |
(2) | The notice must be accompanied by a statement of capital. |
| |
|
| |
|
| |
|
(3) | The statement of capital must state with respect to the company’s share capital |
| |
immediately following the cancellation— |
| |
(a) | the total number of shares of the company, |
| |
(b) | the aggregate nominal value of those shares, |
| |
(c) | for each class of shares— |
| 5 |
(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 |
| 10 |
| |
(4) | If default is made in complying this section, an offence is committed by— |
| |
| |
(b) | every officer of the company who is in default. |
| |
(5) | 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 |
| |
| |
| |
Redemption or purchase by private company out of capital |
| 20 |
| |
722 | Power of private limited company to redeem or purchase own shares out of |
| |
| |
(1) | A private limited company may in accordance with this Chapter, but subject to |
| |
any restriction or prohibition in the company’s articles, make a payment in |
| 25 |
respect of the redemption or purchase of its own shares otherwise than out of |
| |
distributable profits or the proceeds of a fresh issue of shares. |
| |
(2) | References below in this Chapter to payment out of capital are to any payment |
| |
so made, whether or not it would be regarded apart from this section as a |
| |
| 30 |
The permissible capital payment |
| |
723 | The permissible capital payment |
| |
(1) | The payment that may, in accordance with this Chapter, be made by a |
| |
company out of capital in respect of the redemption or purchase of its own |
| |
shares is such amount as, after applying for that purpose— |
| 35 |
(a) | any available profits of the company, and |
| |
(b) | the proceeds of any fresh issue of shares made for the purposes of the |
| |
| |
| is required to meet the price of redemption or purchase. |
| |
(2) | That is referred to below in this Chapter as “the permissible capital payment” |
| 40 |
| |
|
| |
|