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Report Stage Proceedings: 19th October 2006              

950

 

Companies Bill[ [], continued

 
 

(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

 

Added  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

 

Added  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.


 
 

Report Stage Proceedings: 19th October 2006              

951

 

Companies Bill[ [], continued

 
 

(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

 

Added  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

 

Added  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.


 
 

Report Stage Proceedings: 19th October 2006              

952

 

Companies Bill[ [], continued

 
 

(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

 

Added  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

 

Added  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 Insolvency Act 1986 (c. 45) or the Insolvency

 

(Northern Ireland) Order 1989 (S.I. 1989/2405 (N.I. 19)).

 

(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


 
 

Report Stage Proceedings: 19th October 2006              

953

 

Companies Bill[ [], continued

 
 

applies (see sections (Application of Part 27A) and (Relationship of this Part with

 

Part 27)).’.

 


 

Court order for holding of meeting

 

Mr Secretary Darling

 

Added  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

 

Added  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


 
 

Report Stage Proceedings: 19th October 2006              

954

 

Companies Bill[ [], continued

 
 

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

 

Added  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

 

Added  NC70

 

To move the following Clause:—


 
 

Report Stage Proceedings: 19th October 2006              

955

 

Companies Bill[ [], continued

 
 

‘(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

 

Added  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;


 
 

Report Stage Proceedings: 19th October 2006              

956

 

Companies Bill[ [], continued

 
 

(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.’.

 


 

Documents to be incorporated in or accompany copies of articles issued by company

 

Mr Secretary Darling

 

Added  NC77

 

To move the following Clause:—

 

‘(1)    

Every copy of a company’s articles issued by the company must be accompanied

 

by—

 

(a)    

a copy of any resolution or agreement relating to the company to which

 

Chapter 3 applies (resolutions and agreements affecting a company’s

 

constitution),

 

(b)    

where the company has been required to give notice to the registrar under

 

section 35(2) (notice where company’s constitution altered by

 

enactment), a statement that the enactment in question alters the effect of

 

the company’s constitution,

 

(c)    

where the company’s constitution is altered by a special enactment (see

 

section 35(4)), a copy of the enactment, and

 

(d)    

a copy of any order required to be sent to the registrar under section

 

36(2)(a) (order of court or other authority altering company’s

 

constitution).

 

(2)    

This does not require the articles to be accompanied by a copy of a document or

 

by a statement if—

 

(a)    

the effect of the resolution, agreement, enactment or order (as the case

 

may be) on the company’s constitution has been incorporated into the

 

articles by amendment, or


 
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