| Company Law Reform Bill [Lords] - continued | House of Commons |
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Power of court to summon meeting of members or creditors of existing transferee company Mr Secretary Darling NC54 To move the following Clause:— ‘(1) The court may order a meeting of— (a) the members of an existing transferee company, or any class of them, or (b) the creditors of an existing transferee company, or any class of them, to be summoned in such manner as the court directs. (2) An application for such an order may be made by— (a) the company concerned, (b) a member or creditor of the company, or (c) if an administration order is in force in relation to the company, the administrator.’. Court to fix date for transfer of undertaking etc of transferor company Mr Secretary Darling NC55 To move the following Clause:— ‘(1) Where the court sanctions the compromise or arrangement, it must— (a) in the order sanctioning the compromise or arrangement, or (b) in a subsequent order under section 906 (powers of court to facilitate reconstruction or amalgamation), fix a date on which the transfer (or transfers) to the transferee company (or transferee companies) of the undertaking, property and liabilities of the transferor company is (or are) to take place. (2) Any such order that provides for the dissolution of the transferor company must fix the same date for the dissolution. (3) If it is necessary for the transferor company to take steps to ensure that the undertaking, property and liabilities are fully transferred, the court must fix a date, not later than six months after the date fixed under subsection (1), by which such steps must be taken. (4) In that case, the court may postpone the dissolution of the transferor company until that date. (5) The court may postpone or further postpone the date fixed under subsection (3) if it is satisfied that the steps mentioned cannot be completed by the date (or latest date) fixed under that subsection.’. Liability of transferee companies for each other’s defaults Mr Secretary Darling NC56 To move the following Clause:— ‘(1) In the case of a division, each transferee company is jointly and severally liable for any liability transferred to any other transferee company under the scheme to the extent that the other company has made default in satisfying that liability. This is subject to the following provisions. (2) If a majority in number representing 75% in value of the creditors or any class of creditors of the transferor company, present and voting either in person or by proxy at a meeting summoned for the purposes of agreeing to the scheme, so agree, subsection (1) does not apply in relation to the liabilities owed to the creditors or that class of creditors. (3) A transferee company is not liable under this section for an amount greater than the net value transferred to it under the scheme. The “net value transferred” is the value at the time of the transfer of the property transferred to it under the scheme less the amount at that date of the liabilities so transferred.’. Meaning of “liabilities” and “property” Mr Secretary Darling NC57 To move the following Clause:— ‘In this Part— “liabilities” includes duties; “property” includes property, rights and powers of every description.’. Consequences of order imposing restrictions Mr Secretary Darling NC58 To move the following Clause:— ‘(1) The effect of an order under section 803 that shares are subject to restrictions is as follows— (a) any transfer of the shares is void; (b) no voting rights are exercisable in respect of the shares; (c) no further shares may be issued in right of the shares or in pursuance of an offer made to their holder; (d) except in a liquidation, no payment may be made of sums due from the company on the shares, whether in respect of capital or otherwise. (2) Where shares are subject to the restriction in subsection (1)(a), an agreement to transfer the shares is void. This does not apply to an agreement to transfer the shares on the making of an order under section (Removal of restrictions) made by virtue of subsection (3)(b) (removal of restrictions in case of court-approved transfer). (3) Where shares are subject to the restriction in subsection (1)(c) or (d), an agreement to transfer any right to be issued with other shares in right of those shares, or to receive any payment on them (otherwise than in a liquidation), is void. This does not apply to an agreement to transfer any such right on the making of an order under section (Removal of restrictions) made by virtue of subsection (3)(b) (removal of restrictions in case of court-approved transfer). (4) The provisions of this section are subject— (a) to any directions under section 803(2) or section (Relaxation of restrictions) (3) (directions for protection of third parties), and (b) in the case of an interim order under section 803(3), to the terms of the order.’. Penalty for attempted evasion of restrictions Mr Secretary Darling NC59 To move the following Clause:— ‘(1) This section applies where shares are subject to restrictions by virtue of an order under section 803. (2) A person commits an offence if he— (a) exercises or purports to exercise any right— (i) to dispose of shares that to his knowledge, are for the time being subject to restrictions, or (ii) to dispose of any right to be issued with any such shares, or (b) votes in respect of any such shares (whether as holder or proxy), or appoints a proxy to vote in respect of them, or (c) being the holder of any such shares, fails to notify of their being subject to those restrictions a person whom he does not know to be aware of that fact but does know to be entitled (apart from the restrictions) to vote in respect of those shares whether as holder or as proxy, or (d) being the holder of any such shares, or being entitled to a right to be issued with other shares in right of them, or to receive any payment on them (otherwise than in a liquidation), enters into an agreement which is void under section (Consequences of order imposing restrictions)(2) or (3). (3) If shares in a company are issued in contravention of the restrictions, an offence is committed by— (a) the company, and (b) every officer of the company who is in default. (4) 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) The provisions of this section are subject— (a) to any directions under— section 803(2) (directions for protection of third parties), or section (Relaxation of restrictions) or (Removal of restrictions) (relaxation or removal of restrictons), and (b) in the case of an interim order under section 803(3), to the terms of the order.’. Relaxation of restrictions Mr Secretary Darling NC60 To move the following Clause:— ‘(1) An application may be made to the court on the ground that an order directing that shares shall be subject to restrictions unfairly affects the rights of third parties in respect of the shares. (2) An application for an order under this section may be made by the company or by any person aggrieved. (3) If the court is satisfied that the application is well-founded, it may, for the purpose of protecting the rights of third parties in respect of the shares, and subject to such terms as it thinks fit, direct that such acts by such persons or descriptions of persons and for such purposes as may be set out in the order do not constitute a breach of the restrictions.’. Removal of restrictions Mr Secretary Darling NC61 To move the following Clause:— ‘(1) An application may be made to the court for an order directing that the shares shall cease to be subject to restrictions. (2) An application for an order under this section may be made by the company or by any person aggrieved. (3) The court must not make an order under this section unless— (a) it is satisfied that the relevant facts about the shares have been disclosed to the company and no unfair advantage has accrued to any person as a result of the earlier failure to make that disclosure, or (b) the shares are to be transferred for valuable consideration and the court approves the transfer. (4) An order under this section made by virtue of subsection (3)(b) may continue, in whole or in part, the restrictions mentioned in section (Consequences of order imposing restrictions)(1)(c) and (d) (restrictions on issue of further shares or making of payments) so far as they relate to a right acquired or offer made before the transfer. (5) Where any restrictions continue in force under subsection (4)— (a) an application may be made under this section for an order directing that the shares shall cease to be subject to those restrictions, and (b) subsection (3) does not apply in relation to the making of such an order.’. Order for sale of shares Mr Secretary Darling NC62 To move the following Clause:— ‘(1) The court may order that the shares subject to restrictions be sold, subject to the court’s approval as to the sale. (2) An application for an order under subsection (1) may only be made by the company. (3) Where the court has made an order under this section, it may make such further order relating to the sale or transfer of the shares as it thinks fit. (4) An application for an order under subsection (3) may be made— (a) by the company, (b) by the person appointed by or in pursuance of the order to effect the sale, or (c) by any person interested in the shares. (5) On making an order under subsection (1) or (3) the court may order that the applicant’s costs (in Scotland, expenses) be paid out of the proceeds of sale.’. Application of proceeds of sale under court order Mr Secretary Darling NC63 To move the following Clause:— ‘(1) Where shares are sold in pursuance of an order of the court under section (Order for sale of shares), the proceeds of the sale, less the costs of the sale, must be paid into court for the benefit of the persons who are beneficially interested in the shares. (2) A person who is beneficially interested in the shares may apply to the court for the whole or part of those proceeds to be paid to him. (3) On such an application the court shall order the payment to the applicant of— (a) the whole of the proceeds of sale together with any interest on them, or (b) if another person had a beneficial interest in the shares at the time of their sale, such proportion of the proceeds and interest as the value of the applicant’s interest in the shares bears to the total value of the shares. This is subject to the following qualification. (4) If the court has ordered under section (Order for sale of shares)(5) that the costs (in Scotland, expenses) of an applicant under that section are to be paid out of the proceeds of sale, the applicant is entitled to payment of his costs (or expenses) out of those proceeds before any person interested in the shares receives any part of those proceeds.’. Registrar’s requirements as to certification or verification Mr Secretary Darling NC64 To move the following Clause:— ‘(1) Where a document required or authorised to be delivered to the registrar under any enactment is required— (a) to be certified as an accurate translation or transliteration, or (b) to be certified as a correct copy or verified, the registrar may impose requirements as to the person, or description of person, by whom the certificate or verification is to be given. (2) The power conferred by section 1034 (registrar’s requirements as to form, authentication and manner of delivery) is exercisable in relation to the certificate or verification as if it were a separate document. (3) Requirements imposed under this section must not be inconsistent with requirements imposed by any enactment with respect to the certification or verification of the document concerned.’. Meaning of “UK-registered company” Mr Secretary Darling NC65 To move the following Clause:— ‘In the Companies Acts “UK-registered company” means a company registered under this Act. The expression does not include an overseas company that has registered particulars under section 1012.’. Application of Part 27 Mr Secretary Darling NC66 To move the following Clause:— ‘(1) The provisions of this Part apply where a compromise or arrangement is proposed between a company and— (a) its creditors, or any class of them, or (b) its members, or any class of them. (2) In this Part— “arrangement” includes a reorganisation of the company’s share capital by the consolidation of shares of different classes or by the division of shares into shares of different classes, or by both of those methods; and “company”— (a) in section (Powers of court to facilitate reconstruction or amalgamation) (powers of court to facilitate reconstruction or amalgamation) means a company within the meaning of this Act, and (b) elsewhere in this Part means any company liable
to be wound up under the (3) The provisions of this Part have effect subject to Part (Mergers and divisions of public companies) (mergers and divisions of public companies) where that Part applies (see sections (Application of Part 27A) and (Relationship of this Part with Part 27)).’. Court order for holding of meeting Mr Secretary Darling NC67 To move the following Clause:— ‘(1) The court may, on an application under this section, order a meeting of the creditors or class of creditors, or of the members of the company or class of members (as the case may be), to be summoned in such manner as the court directs. (2) An application under this section may be made by— (a) the company, (b) any creditor or member of the company, or (c) if the company is being wound up or an administration order is in force in relation to it, the liquidator or administrator.’. Statement to be circulated or made available Mr Secretary Darling NC68 To move the following Clause:— ‘(1) Where a meeting is summoned under section (Court order for holding of meeting)— (a) every notice summoning the meeting that is sent to a creditor or member must be accompanied by a statement complying with this section, and (b) every notice summoning the meeting that is given by advertisement must either— (i) include such a statement, or (ii) state where and how creditors or members entitled to attend the meeting may obtain copies of such a statement (2) The statement must— (a) explain the effect of the compromise or arrangement, and (b) in particular, state— (i) any material interests of the directors of the company (whether as directors or as members or as creditors of the company or otherwise), and (ii) the effect on those interests of the compromise or arrangement, in so far as it is different from the effect on the like interests of other persons. (3) Where the compromise or arrangement affects the rights of debenture holders of the company, the statement must give the like explanation as respects the trustees of any deed for securing the issue of the debentures as it is required to give as respects the company’s directors. (4) Where a notice given by advertisement states that copies of an explanatory statement can be obtained by creditors or members entitled to attend the meeting, every such creditor or member is entitled, on making application in the manner indicated by the notice, to be provided by the company with a copy of the statement free of charge. (5) If a company makes default in complying with any requirement of this section, an offence is committed by— (a) the company, and (b) every officer of the company who is in default. This is subject to subsection (7) below. (6) For this purpose the following are treated as officers of the company— (a) a liquidator or administrator of the company, and (b) a trustee of a deed for securing the issue of debentures of the company. (7) A person is not guilty of an offence under this section if he shows that the default was due to the refusal of a director or trustee for debenture holders to supply the necessary particulars of his interests. (8) 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.’. Duty of directors and trustees to provide information Mr Secretary Darling NC69 To move the following Clause:— ‘(1) It is the duty of— (a) any director of the company, and (b) any trustee for its debenture holders, to give notice to the company of such matters relating to himself as may be necessary for the purposes of section (Statement to be circulated or made available) (explanatory statement to be circulated or made available). (2) Any person who makes default in complying with this section commits an offence. (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.’. Court sanction for compromise or arrangement Mr Secretary Darling NC70 To move the following Clause:— ‘(1) If a majority in number representing 75% in value of the creditors or class of creditors or members or class of members (as the case may be), present and voting either in person or by proxy at the meeting summoned under section (Court order for holding of meeting), agree a compromise or arrangement, the court may, on an application under this section, sanction the compromise or arrangement. (2) An application under this section may be made by— (a) the company, (b) any creditor or member of the company, or (c) if the company is being wound up or an administration order is in force in relation it, the liquidator or administrator. (3) A compromise or agreement sanctioned by the court is binding on— (a) all creditors or the class of creditors or on the members or class of members (as the case may be), and (b) the company or, in the case of a company in the course of being wound up, the liquidator and contributories of the company. (4) The court’s order has no effect until a copy of it has been delivered to the registrar.’. Powers of court to facilitate reconstruction or amalgamation Mr Secretary Darling NC71 To move the following Clause:— ‘(1) This section applies where application is made to the court under section (Court sanction for compromise or arrangement) to sanction a compromise or arrangement and it is shown that— (a) the compromise or arrangement is proposed for the purposes of, or in connection with, a scheme for the reconstruction of any company or companies, or the amalgamation of any two or more companies, and (b) under the scheme the whole or any part of the undertaking or the property of any company concerned in the scheme (“a transferor company”) is to be transferred to another company (“the transferee company”). (2) The court may, either by the order sanctioning the compromise or arrangement or by a subsequent order, make provision for all or any of the following matters— (a) the transfer to the transferee company of the whole or any part of the undertaking and of the property or liabilities of any transferor company; (b) the allotting or appropriation by the transferee company of any shares, debentures, policies or other like interests in that company which under the compromise or arrangement are to be allotted or appropriated by that company to or for any person; (c) the continuation by or against the transferee company of any legal proceedings pending by or against any transferor company; (d) the dissolution, without winding up, of any transferor company; (e) the provision to be made for any persons who, within such time and in such manner as the court directs, dissent from the compromise or arrangement; (f) such incidental, consequential and supplemental matters as are necessary to secure that the reconstruction or amalgamation is fully and effectively carried out. (3) If an order under this section provides for the transfer of property or liabilities— (a) the property is by virtue of the order transferred to, and vests in, the transferee company, and (b) the liabilities are, by virtue of the order, transferred to and become liabilities of that company. (4) The property (if the order so directs) vests freed from any charge that is by virtue of the compromise or arrangement to cease to have effect. (5) In this section— “property” includes property, rights and powers of every description; and “liabilities” includes duties. (6) Every company in relation to which an order is made under this section must cause a copy of the order to be delivered to the registrar within seven days after its making. (7) If default is made in complying with subsection (6) an offence is committed by— (a) the company, and (b) every officer of the company who is in default. (8) A person guilty of an offence under subsection (7) 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 3 on the standard scale.’. |
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| © Parliamentary copyright 2006 | Prepared: 17 October 2006 |