|
| |
|
733 | Directors’ statement and auditor’s report to be available for inspection |
| |
(1) | The directors’ statement and auditor’s report must be kept available for |
| |
inspection at the company’s registered office throughout the period— |
| |
(a) | beginning with the day on which the company— |
| |
(i) | first publishes the notice required by section 732(1), or |
| 5 |
(ii) | if earlier, first publishes or gives the notice required by section |
| |
| |
(b) | ending five weeks after the date of the resolution for payment out of |
| |
| |
(2) | They must be open to the inspection of any member or creditor of the company |
| 10 |
| |
(3) | If an inspection under subsection (2) is refused, an offence is committed by— |
| |
| |
(b) | every officer of the company who is in default. |
| |
(4) | 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 |
| |
| |
(5) | In the case of a refusal of an inspection required by subsection (2), the court |
| |
may by order compel an immediate inspection. |
| 20 |
Objection to payment by members or creditors |
| |
734 | Application to court to cancel resolution |
| |
(1) | Where a private company passes a special resolution approving a payment out |
| |
of capital for the redemption or purchase of any of its shares— |
| |
(a) | any member of the company (other than one who consented to or voted |
| 25 |
in favour of the resolution), and |
| |
(b) | any creditor of the company, |
| |
| may apply to the court for the cancellation of the resolution. |
| |
| |
(a) | must be made within five weeks after the passing of the resolution, and |
| 30 |
(b) | may be made on behalf of the persons entitled to make it by such one |
| |
or more of their number as they may appoint in writing for the purpose. |
| |
(3) | On an application under this section the court may if it thinks fit— |
| |
(a) | adjourn the proceedings in order that an arrangement may be made to |
| |
the satisfaction of the court— |
| 35 |
(i) | for the purchase of the interests of dissentient members, or |
| |
(ii) | for the protection of dissentient creditors, and |
| |
(b) | give such directions and make such orders as it thinks expedient for |
| |
facilitating or carrying into effect any such arrangement. |
| |
(4) | Subject to that, the court must make an order either cancelling or confirming |
| 40 |
the resolution, and may do so on such terms and conditions as it thinks fit. |
| |
(5) | If the court confirms the resolution, it may by order alter or extend any date or |
| |
period of time specified— |
| |
|
| |
|
| |
|
(a) | in the resolution, or |
| |
(b) | in any provision of this Chapter applying to the redemption or |
| |
purchase to which the resolution relates. |
| |
(6) | The court’s order may, if the court thinks fit— |
| |
(a) | provide for the purchase by the company of the shares of any of its |
| 5 |
members and for the reduction accordingly of the company’s capital, |
| |
| |
(b) | make any alteration in the company’s articles that may be required in |
| |
consequence of that provision. |
| |
(7) | The court’s order may, if the court thinks fit, require the company not to make |
| 10 |
any, or any specified, amendments of its articles without the leave of the court. |
| |
735 | Notice to registrar of court application or order |
| |
(1) | On making an application under section 734 (application to court to cancel |
| |
resolution) the applicants, or the person making the application on their behalf, |
| |
must immediately give notice to the registrar. |
| 15 |
| This is without prejudice to any provision of rules of court as to service of |
| |
notice of the application. |
| |
(2) | On being served with notice of any such application, the company must |
| |
immediately give notice to the registrar. |
| |
(3) | Within 15 days of the making of the court’s order on the application, or such |
| 20 |
longer period as the court may at any time direct, the company must deliver to |
| |
the registrar a copy of the order. |
| |
(4) | If a company fails to comply with subsection (2) or (3) an offence is committed |
| |
| |
| 25 |
(b) | every officer of the company who is in default. |
| |
(5) | 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 |
| |
736 | When payment out of capital to be made |
| |
(1) | The payment out of capital must be made— |
| |
(a) | no earlier than five weeks after the date on which the resolution under |
| |
section 729 is passed, and |
| 35 |
(b) | no more than seven weeks after that date. |
| |
(2) | This is subject to any exercise of the court’s powers under section 734(5) (power |
| |
to alter or extend time where resolution confirmed after objection). |
| |
|
| |
|
| |
|
| |
| |
| |
(1) | This section applies where— |
| |
(a) | a limited company makes a purchase of its own shares in accordance |
| 5 |
| |
(b) | the purchase is made out of distributable profits, and |
| |
(c) | the shares are qualifying shares. |
| |
(2) | For this purpose “qualifying shares” means shares that— |
| |
(a) | are included in the official list in accordance with the provisions of Part |
| 10 |
6 of the Financial Services and Markets Act 2000 (c. 8), |
| |
(b) | are traded on the market known as the Alternative Investment Market |
| |
established under the rules of London Stock Exchange plc, |
| |
(c) | are officially listed in an EEA State, or |
| |
(d) | are traded on a regulated market. |
| 15 |
| In paragraph (a) “the official list” has the meaning given in section 103(1) of the |
| |
Financial Services and Markets Act 2000. |
| |
(3) | Where this section applies the company may— |
| |
(a) | hold the shares (or any of them), or |
| |
(b) | deal with any of them, at any time, in accordance with section 740 or |
| 20 |
| |
(4) | Where shares are held by the company, the company must be entered in its |
| |
register of members as the member holding the shares. |
| |
(5) | In the Companies Acts references to a company holding shares as treasury |
| |
shares are to the company holding shares that— |
| 25 |
(a) | were (or are treated as having been) purchased by it in circumstances |
| |
in which this section applies, and |
| |
(b) | have been held by the company continuously since they were so |
| |
purchased (or treated as purchased). |
| |
738 | Treasury shares: maximum holdings |
| 30 |
(1) | Where a company has shares of only one class, the aggregate nominal value of |
| |
shares held as treasury shares must not at any time exceed 10% of the nominal |
| |
value of the issued share capital of the company at that time. |
| |
(2) | Where the share capital of a company is divided into shares of different classes, |
| |
the aggregate nominal value of the shares of any class held as treasury shares |
| 35 |
must not at any time exceed 10% of the nominal value of the issued share |
| |
capital of the shares of that class at that time. |
| |
(3) | If subsection (1) or (2) is contravened by a company, the company must dispose |
| |
of or cancel the excess shares, in accordance with section 740, before the end of |
| |
the period of twelve months beginning with the date on which that |
| 40 |
| |
| The “excess shares” means such number of the shares held by the company as |
| |
treasury shares at the time in question as resulted in the limit being exceeded. |
| |
|
| |
|
| |
|
(4) | Where a company purchases qualifying shares out of distributable profits in |
| |
accordance with section 737, a contravention by the company of subsection (1) |
| |
or (2) above does not render the acquisition void under section 671 (general |
| |
rule against limited company acquiring its own shares). |
| |
739 | Treasury shares: exercise of rights |
| 5 |
(1) | This section applies where shares are held by a company as treasury shares. |
| |
(2) | The company must not exercise any right in respect of the treasury shares, and |
| |
any purported exercise of such a right is void. |
| |
| This applies, in particular, to any right to attend or vote at meetings. |
| |
(3) | No divided may be paid, and no other distribution (whether in cash or |
| 10 |
otherwise) of the company’s assets (including any distribution of assets to |
| |
members on a winding up) may be made to the company, in respect of the |
| |
| |
(4) | Nothing in this section prevents— |
| |
(a) | an allotment of shares as fully paid bonus shares in respect of the |
| 15 |
| |
(b) | the payment of any amount payable on the redemption of the treasury |
| |
shares (if they are redeemable shares). |
| |
(5) | Shares allotted as fully paid bonus shares in respect of the treasury shares are |
| |
treated as if purchased by the company, at the time they were allotted, in |
| 20 |
circumstances in which section 737(1) (treasury shares) applied. |
| |
740 | Treasury shares: disposal |
| |
(1) | Where shares are held as treasury shares, the company may at any time— |
| |
(a) | sell the shares (or any of them) for a cash consideration, or |
| |
(b) | transfer the shares (or any of them) for the purposes of or pursuant to |
| 25 |
an employees’ share scheme. |
| |
(2) | In subsection (1)(a) “cash consideration” means— |
| |
(a) | cash received by the company, or |
| |
(b) | a cheque received by the company in good faith that the directors have |
| |
no reason for suspecting will not be paid, or |
| 30 |
(c) | a release of a liability of the company for a liquidated sum, or |
| |
(d) | an undertaking to pay cash to the company on or before a date not more |
| |
than 90 days after the date on which the company agrees to sell the |
| |
| |
| For this purpose “cash” includes foreign currency. |
| 35 |
(3) | If the company receives a notice under section 946 (takeover offers: right of |
| |
offeror to buy out minority shareholders) that a person desires to acquire |
| |
shares held by the company as treasury shares, the company must not sell or |
| |
transfer the shares to which the notice relates except to that person. |
| |
741 | Treasury shares: notice of disposal |
| 40 |
(1) | Where shares held by a company as treasury shares— |
| |
| |
(b) | are transferred for the purposes of an employees’ share scheme, |
| |
|
| |
|
| |
|
| the company must deliver a return to the registrar not later than 28 days after |
| |
the shares are disposed of. |
| |
(2) | The return must state with respect to shares of each class disposed of— |
| |
(a) | the number and nominal value of the shares, and |
| |
(b) | the date on which they were disposed of. |
| 5 |
(3) | Particulars of shares disposed of on different dates may be included in a single |
| |
| |
(4) | If default is made in complying with this section an offence is committed by |
| |
every officer of the company who is in default. |
| |
(5) | A person guilty of an offence under this section is liable— |
| 10 |
(a) | on conviction on indictment, to a fine; |
| |
(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. |
| |
742 | Treasury shares: cancellation |
| 15 |
(1) | Where shares are held as treasury shares, the company may at any time cancel |
| |
the shares (or any of them). |
| |
(2) | If shares held as treasury shares cease to be qualifying shares, the company |
| |
must forthwith cancel the shares. |
| |
(3) | For this purpose shares are not to be regarded as ceasing to be qualifying |
| 20 |
shares by virtue only of— |
| |
(a) | the suspension of their listing in accordance with the applicable rules in |
| |
the EEA state in which the shares are officially listed, or |
| |
(b) | the suspension of their trading in accordance with— |
| |
(i) | in the case of shares traded on the market known as the |
| 25 |
Alternative Investment Market, the rules of London Stock |
| |
| |
(ii) | in any other case, the rules of the regulated market on which |
| |
| |
(4) | If company cancels shares held as treasury shares, the amount of the |
| 30 |
company’s share capital is reduced accordingly by the nominal amount of the |
| |
| |
(5) | The directors may take any steps required to enable the company to cancel its |
| |
shares under this section without complying with the provisions of Chapter 10 |
| |
of Part 18 (reduction of share capital). |
| 35 |
743 | Treasury shares: notice of cancellation |
| |
(1) | Where shares held by a company as treasury shares are cancelled, the company |
| |
must deliver a return to the registrar not later than 28 days after the shares are |
| |
| |
| This does not apply to shares that are cancelled forthwith on their acquisition |
| 40 |
by the company (see section 721). |
| |
(2) | The return must state with respect to shares of each class cancelled— |
| |
(a) | the number and nominal value of the shares, and |
| |
|
| |
|
| |
|
(b) | the date on which they were cancelled. |
| |
(3) | Particulars of shares cancelled on different dates may be included in a single |
| |
| |
(4) | The notice must be accompanied by a statement of capital. |
| |
(5) | The statement of capital must state with respect to the company’s share capital |
| 5 |
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— |
| |
(i) | prescribed particulars of the rights attached to the shares, |
| 10 |
(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 |
| |
| 15 |
(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; |
| |
(b) | on summary conviction, to a fine not exceeding the statutory maximum |
| 20 |
and, for continued contravention, a daily default fine not exceeding |
| |
one-tenth of the statutory maximum. |
| |
744 | Treasury shares: treatment of proceeds of sale |
| |
(1) | Where shares held as treasury shares are sold, the proceeds of sale must be |
| |
dealt with in accordance with this section. |
| 25 |
(2) | If the proceeds of sale are equal to or less than the purchase price paid by the |
| |
company for the shares, the proceeds are treated for the purposes of Part 24 |
| |
(distributions) as a realised profit of the company. |
| |
(3) | If the proceeds of sale exceed the purchase price paid by the company— |
| |
(a) | an amount equal to the purchase price paid is treated as a realised profit |
| 30 |
of the company for the purposes of that Part, and |
| |
(b) | the excess must be transferred to the company’s share premium |
| |
| |
(4) | For the purposes of this section— |
| |
(a) | the purchase price paid by the company must be determined by the |
| 35 |
application of a weighted average price method, and |
| |
(b) | if the shares were allotted to the company as fully paid bonus shares, |
| |
the purchase price paid for them is treated as nil. |
| |
745 | Treasury shares: offences |
| |
(1) | If a company contravenes any of the provisions of this Chapter (except section |
| 40 |
743 (notice of cancellation)), an offence is committed by— |
| |
| |
(b) | every officer of the company who is in default. |
| |
|
| |
|
| |
|
(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 maximum. |
| |
| |
| 5 |
746 | The capital redemption reserve |
| |
(1) | Where under this Part shares of a limited company are redeemed or purchased |
| |
wholly out of the company’s profits, the amount by which the company’s |
| |
issued share capital is diminished— |
| |
(a) | on cancellation of the shares redeemed or purchased (see section 701 or |
| 10 |
| |
(b) | on cancellation of shares held as treasury shares (see section 742), |
| |
| must be transferred to a reserve, called the “capital redemption reserve”. |
| |
| |
(a) | the shares are redeemed or purchased wholly or partly out of the |
| 15 |
proceeds of a fresh issue, and |
| |
(b) | the aggregate amount of the proceeds is less than the aggregate |
| |
nominal value of the shares redeemed or purchased, |
| |
| the amount of the difference must be transferred to the capital redemption |
| |
| 20 |
(3) | Subsection (2) does not apply in the case of a private company if, in addition to |
| |
the proceeds of the fresh issue, the company applies a payment out of capital |
| |
under Chapter 5 in making the purchase of shares. |
| |
(4) | The company may use the capital redemption reserve to pay up new shares to |
| |
be allotted to members as fully paid bonus shares. |
| 25 |
(5) | Subject to that, the provisions of the Companies Acts relating to the reduction |
| |
of a company’s share capital apply as if the capital redemption reserve were |
| |
part of its paid up share capital. |
| |
747 | Accounting consequences of payment out of capital |
| |
(1) | This section applies where a payment out of capital is made in accordance with |
| 30 |
Chapter 5 (redemption or purchase of own shares by private company out of |
| |
| |
(2) | If the permissible capital payment is less than the nominal amount of the shares |
| |
redeemed or purchased, the amount of the difference must be transferred to |
| |
the company’s capital redemption reserve. |
| 35 |
(3) | If the permissible capital payment is greater than the nominal amount of the |
| |
shares redeemed or purchased— |
| |
(a) | the amount of any capital redemption reserve, share premium account |
| |
or fully paid share capital of the company, and |
| |
(b) | any amount representing unrealised profits of the company for the |
| 40 |
time being standing to the credit of any revaluation reserve maintained |
| |
| |
|
| |
|