388A Certain companies exempt from obligation to appoint auditors
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Companies Act 1985
United Kingdom · statute
Ask the law about thisMore laws of United KingdomFor machines: Markdown
In force since 2026-04-07, as the publisher states.
Copy read on 2026-11-08. The page it was read from
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.
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Contents: 764 provisions
- Title and introductory text
- 1 Mode of forming incorporated company.
- 2 Requirements with respect to memorandum.
- 3 Forms of memorandum.
- 3A Statement of company’s objects: general commercial company.
- 4 Resolution to alter objects.
- 5 Procedure for objecting to alteration.
- 6 Provisions supplementing ss. 4, 5.
- 7 Articles prescribing regulations for companies.
- 8 Tables A, C, D and E.
- 8A Table G.
- 9 Alteration of articles by special resolution.
- 10 Documents to be sent to registrar.
- 11 Minimum authorised capital (public companies).
- 12 Duty of registrar.
- 13 Effect of registration.
- 14 Effect of memorandum and articles.
- 15 Memorandum and articles of company limited by guarantee.
- 16 Effect of alteration on company’s members.
- 17 Conditions in memorandum which could have been in articles.
- 18 Amendments of memorandum or articles to be registered.
- 19 Copies of memorandum and articles to be given to members.
- 20 Issued copy of memorandum to embody alterations.
- 21 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- 22 Definition of “member”.
- 23 Membership of holding company.
- 24 Minimum membership for carrying on business.
- 25 Name as stated in memorandum.
- 26 Prohibition on registration of certain names.
- 27 Alternatives of statutory designations.
- 28 Change of name.
- 29 Regulations about names.
- 30 Exemption from requirement of “limited” as part of the name.
- 31 Provisions applying to company exempt under s. 30.
- 32 Power to require company to abandon misleading name.
- 33 Prohibition on trading under misleading name.
- 34 Penalty for improper use of “limited” or “cyfyngedig”.
- 34A Penalty for improper use of “community interest company” etc.
- 35 A company’s capacity not limited by its memorandum.
- 35A Power of directors to bind the company.
- 35B No duty to enquire as to capacity of company or authority of directors.
- 36 Company contracts: England and Wales.
- 36A Execution of documents: England and Wales.
- 36AA Execution of deeds: England and Wales
- 36B Execution of documents by companies.
- 36C Pre-incorporation contracts, deeds and obligations.
- 37 Bills of exchange and promissory notes.
- 38 Execution of deeds abroad.
- 39 Power of company to have official seal for use abroad.
- 40 Official seal for share certificates, etc.
- 41 Authentication of documents.
- 42 Events affecting a company’s status.
- 43 Re-registration of private company as public.
- 44 Consideration for shares recently allotted to be valued.
- 45 Additional requirements relating to share capital.
- 46 Meaning of “unqualified report” in s. 43(3).
- 47 Certificate of re-registration under s. 43.
- 48 Modification for unlimited company re-registering.
- 49 Re-registration of limited company as unlimited.
- 50 Certificate of re-registration under s. 49.
- 51 Re-registration of unlimited company as limited.
- 52 Certification of re-registration under s. 51.
- 53 Re-registration of public company as private.
- 54 Litigated objection to resolution under s. 53.
- 55 Certificate of re-registration under s. 53.
- 56 Matters to be stated, and reports to be set out, in prospectus.
- 57 Attempted evasion of s. 56 to be void.
- 58 Document offering shares etc. for sale deemed a prospectus.
- 59 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- 60 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- 61 Prospectus containing statement by expert.
- 62 Meaning of “expert”.
- 63 Prospectus to be dated.
- 64 Registration requirement applicable in all cases.
- 65 Additional requirements in case of prospectus issued generally.
- 66 Directors, etc. exempt from liability in certain cases.
- 67 Compensation for subscribers misled by statement in prospectus.
- 68 Exemption from s. 67 for those acting with propriety.
- 69 Indemnity for innocent director or expert.
- 70 Criminal liability for untrue statements.
- 71 Interpretation for ss. 56 to 70.
- 72 Prospectus of oversea company.
- 73 Attempted evasion of s. 72 to be void.
- 74 Prospectus containing statement by expert.
- 75 Restrictions on allotment to be secured in prospectus.
- 76 Stock exchange certificate exempting from compliance with Sch. 3.
- 77 Registration of oversea prospectus before issue.
- 78 Consequences (criminal and civil) of non-compliance with ss. 72-77.
- 79 Supplementary.
- 80 Authority of company required for certain allotments.
- 80A Election by private company as to duration of authority.
- 81 Restriction on public offers by private company.
- 82 Application for, and allotment of, shares and debentures.
- 83 No allotment unless minimum subscription received.
- 84 Allotment where issue not fully subscribed.
- 85 Effect of irregular allotment.
- 86 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- 87 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- 88 Return as to allotments, etc.
- 89 Offers to shareholders to be on pre-emptive basis.
- 90 Communication of pre-emption offers to shareholders.
- 91 Exclusion of ss. 89, 90 by private company.
- 92 Consequences of contravening ss. 89, 90.
- 93 Saving for other restrictions as to offers.
- 94 Definitions for ss. 89-96.
- 95 Disapplication of pre-emption rights.
- 96 Saving for company’s pre-emption procedure operative before 1982.
- 97 Power of company to pay commissions.
- 98 Apart from s. 97, commissions and discounts barred.
- 99 General rules as to payment for shares on allotment.
- 100 Prohibition on allotment of shares at a discount.
- 101 Shares to be allotted as at least one-quarter paid-up.
- 102 Restriction on payment by long-term undertaking.
- 103 Non-cash consideration to be valued before allotment.
- 104 Transfer to public company of non-cash asset in initial period.
- 105 Agreements contravening s. 104.
- 106 Shares issued to subscribers of memorandum.
- 107 Meaning of “the appropriate rate”.
- 108 Valuation and report (s. 103).
- 109 Valuation and report (s. 104).
- 110 Entitlement of valuer to full disclosure.
- 111 Matters to be communicated to registrar.
- 111A Right to damages, &c. not affected.
- 112 Liability of subsequent holders of shares allotted.
- 113 Relief in respect of certain liabilities under ss. 99 ff.
- 114 Penalty for contravention.
- 115 Undertakings to do work, etc.
- 116 Application of ss. 99 ff to special cases.
- 117 Public company share capital requirements.
- 118 The authorised minimum.
- 119 Provision for different amounts to be paid on shares.
- 120 Reserve liability of limited company.
- 121 Alteration of share capital (limited companies).
- 122 Notice to registrar of alteration.
- 123 Notice to registrar of increased share capital.
- 124 Reserve capital of unlimited company.
- 125 Variation of class rights.
- 126 Saving for court’s powers under other provisions.
- 127 Shareholders’ right to object to variation.
- 128 Registration of particulars of special rights.
- 129 Registration of newly created class rights.
- 130 Application of share premiums.
- 131 Merger relief.
- 132 Relief in respect of group reconstructions.
- 133 Provisions supplementing ss. 131, 132.
- 134 Provision for extending or restricting relief from s. 130.
- 135 Special resolution for reduction of share capital.
- 136 Application to court for order of confirmation.
- 137 Court order confirming reduction.
- 138 Registration of order and minute of reduction.
- 139 Public company reducing capital below authorised minimum.
- 140 Liability of members on reduced shares.
- 141 Penalty for concealing name of creditor, etc.
- 142 Duty of directors on serious loss of capital.
- 143 General rule against company acquiring own shares.
- 144 Aquisition of shares by company’s nominee.
- 145 Exceptions from s. 144.
- 146 Treatment of shares held by or for public company.
- 147 Matters arising out of compliance with s. 146(2).
- 148 Further provisions supplementing ss. 146, 147.
- 149 Sanctions for non-compliance.
- 150 Charges of public companies on own shares.
- 151 Financial assistance generally prohibited.
- 152 Definitions for this Chapter.
- 153 Transactions not prohibited by s. 151.
- 154 Special restriction for public companies.
- 155 Relaxation of s. 151 for private companies.
- 156 Statutory declaration under s. 155.
- 157 Special resolution under s. 155.
- 158 Time for giving financial assistance under s. 155.
- 159 Power to issue redeemable shares.
- 159A Terms and manner of redemption.
- 160 Financing etc. of redemption.
- 161 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- 162 Power of company to purchase own shares.
- 162A Treasury shares
- 162B Treasury shares: maximum holdings
- 162C Treasury shares: voting and other rights
- 162D Treasury shares: disposal and cancellation
- 162E Treasury shares: mandatory cancellation
- 162F Treasury shares: proceeds of sale
- 162G Treasury shares: penalty for contravention
- 163 Definitions of “off-market” and “market” purchase.
- 164 Authority for off-market purchase.
- 165 Authority for contingent purchase contract.
- 166 Authority for market purchase.
- 167 Assignment or release of company’s right to purchase own shares.
- 168 Payments apart from purchase price to be made out of distributable profits.
- 169 Disclosure by company of purchase of own shares.
- 169A Disclosure by company of cancellation or disposal of treasury shares
- 170 The capital redemption reserve.
- 171 Power of private companies to redeem or purchase own shares out of capital.
- 172 Availability of profits for purposes of s. 171.
- 173 Conditions for payment out of capital.
- 174 Procedure for special resolution under s. 173.
- 175 Publicity for proposed payment out of capital.
- 176 Objections by company’s members or creditors.
- 177 Powers of court on application under s. 176.
- 178 Effect of company’s failure to redeem or purchase.
- 179 Power for Secretary of State to modify this Chapter.
- 180 Transitional cases arising under this Chapter; and savings.
- 181 Definitions for Chapter VII.
- 182 Nature, transfer and numbering of shares.
- 183 Transfer and registration.
- 184 Certification of transfers.
- 185 Duty of company as to issue of certificates.
- 186 Certificate to be evidence of title.
- 187 Evidence of grant of probate or confirmation as executor.
- 188 Issue and effect of share warrant to bearer.
- 189 Offences in connection with share warrants (Scotland).
- 190 Register of debenture holders.
- 191 Right to inspect register.
- 192 Liability of trustees of debentures.
- 193 Perpetual debentures.
- 194 Power to re-issue redeemed debentures.
- 195 Contract to subscribe for debentures.
- 196 Payment of debts out of assets subject to floating charge (England and Wales).
- 197 Debentures to bearer (Scotland).
- 198 Obligation of disclosure: the cases in which it may arise and “the relevant time”.
- 199 Interests to be disclosed.
- 200 “Percentage level” in relation to notifiable interests.
- 201 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- 202 Particulars to be contained in notification.
- 203 Notification of family and corporate interests.
- 204 Agreement to acquire interests in a particular company.
- 205 Obligation of disclosure arising under s. 204.
- 206 Obligation of persons acting together to keep each other informed.
- 207 Interests in shares by attribution.
- 208 Interests in shares which are to be notified.
- 209 Interests to be disregarded.
- 210 Other provisions about notification under this Part.
- 210A Power to make further provision by regulations.
- 211 Register of interests in shares.
- 212 Company investigations.
- 213 Registration of interests disclosed under s. 212.
- 214 Company investigation on requisition by members.
- 215 Company report to members.
- 216 Penalty for failure to provide information.
- 217 Removal of entries from register.
- 218 Otherwise, entries not to be removed.
- 219 Inspection of register and reports.
- 220 Definitions for Part VI.
- 221 Duty to keep accounting records.
- 222 Where and for how long records to be kept.
- 223 A company’s financial year.
- 224 Accounting reference periods and accounting reference date.
- 225 Alteration of accounting reference date.
- 226 Duty to prepare individual accounts.
- 226A Companies Act individual accounts
- 226B IAS individual accounts
- 227 Duty to prepare group accounts.
- 227A Companies Act group accounts
- 227B IAS group accounts
- 227C Consistency of accounts
- 228 Exemption for parent companies included in accounts of larger group.
- 228A Exemption for parent companies included in non-EEA group accounts
- 229 Subsidiary undertakings included in the consolidation.
- 230 Treatment of individual profit and loss account where group accounts prepared.
- 231 Disclosure required in notes to accounts:related undertakings.
- 231A Disclosure required in notes to annual accounts: particulars of staff
- 232 Disclosure required in notes to accounts: emoluments and other benefits of directors and others.
- 233 Approval and signing of accounts
- 234 Duty to prepare directors' report.
- 234ZZA Directors' report: general requirements
- 234ZZB Directors' report: business review
- 234ZA Statement as to disclosure of information to auditors
- 234A Approval and signing of directors’ report.
- 234AA Duty to prepare operating and financial review
- 234AB Approval and signing of operating and financial review
- 234B Duty to prepare directors’ remuneration report
- 234C Approval and signing of directors’ remuneration report
- 235 Auditors’ report.
- 236 Signature of auditors’ report.
- 237 Duties of auditors.
- 238 Persons entitled to receive copies of accounts and reports.
- 238A Time allowed for sending out copies of accounts and reports
- 239 Rights to demand copies of accounts and reports.
- 240 Requirements in connection with publication of accounts.
- 241 Accounts and reports to be laid before company in general meeting.
- 241A Members’ approval of directors’ remuneration report
- 242 Accounts and reports to be delivered to the registrar.
- 242A Civil penalty for failure to deliver accounts.
- 242B Delivery and publication of accounts in ECUs
- 243 Accounts of subsidiary undertakings to be appended in certain cases.
- 244 Period allowed for laying and delivering accounts and reports.
- 245 Voluntary revision of annual accounts or directors’ report.
- 245A Secretary of State’s notice in respect of annual accounts.
- 245B Application to court in respect of defective accounts.
- 245C Other persons authorised to apply to court.
- 245D Disclosure of information held by Inland Revenue to persons authorised to apply to court
- 245E Restrictions on use and further disclosure of information disclosed under section 245D
- 245F Power of authorised persons to require documents, information and explanations
- 245G Restrictions on further disclosure of information obtained under section 245F
- 246 Special provisions for small companies
- 246A Special provisions for medium-sized companies
- 247 Qualification of company as small or medium-sized.
- 247A Cases in which special provisions do not apply
- 247B Special auditors’ report
- 248 Exemption for small and medium-sized groups.
- 248A Group accounts prepared by small company
- 249 Qualification of group as small or medium-sized.
- 249A Exemptions from audit
- 249AA Dormant companies
- 249B Cases where exemptions not available
- 249C The report required for the purposes of section 249A(2).
- 249D The reporting accountant
- 249E Effect of exemptions
- 250 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- 251 Summary financial statement
- 252 Election to dispense with laying of accounts and reports before general meeting.
- 253 Right of shareholder to require laying of accounts.
- 254 Exemption from requirement to deliver accounts and reports.
- 255 Special provisions for banking and insurance companies.
- 255A Special provisions for banking and insurance groups.
- 255B Modification of disclosure requirements in relation to banking company or group.
- 255C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- 255D Power to apply provisions to banking partnerships.
- 255E Delivery of accounting documents in Welsh only.
- 256 Accounting standards.
- 256A Reporting standards
- 257 Power of Secretary of State to alter accounting requirements.
- 258 Parent and subsidiary undertakings.
- 259 Meaning of “undertaking” and related expressions.
- 260 Participating interests.
- 261 Notes to the accounts.
- 262 Minor definitions.
- 262A Index of defined expressions.
- 263 Certain distributions prohibited.
- 264 Restriction on distribution of assets.
- 265 Other distributions by investment companies.
- 266 Meaning of “investment company”.
- 267 Extension of ss. 265, 266 to other companies.
- 268 Realised profits of insurance company with long term business.
- 269 Treatment of development costs.
- 270 Distribution to be justified by reference to company’s accounts.
- 271 Requirements for last annual accounts.
- 272 Requirements for interim accounts.
- 273 Requirements for initial accounts.
- 274 Method of applying s. 270 to successive distributions.
- 275 Treatment of assets in the relevant accounts.
- 276 Distributions in kind.
- 277 Consequences of unlawful distribution.
- 278 Saving for provision in articles operative before Act of 1980.
- 279 Distributions by banking or insurance companies.
- 280 Definitions for Part VIII.
- 281 Saving for other restraints on distribution.
- 282 Directors.
- 283 Secretary.
- 284 Acts done by person in dual capacity.
- 285 Validity of acts of directors.
- 286 Qualifications of company secretaries.
- 287 Registered office.
- 288 Register of directors and secretaries.
- 288A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- 289 Particulars of directors to be registered under s. 288.
- 290 Particulars of secretaries to be registered under s. 288.
- 291 Share qualification of directors.
- 292 Appointment of directors to be voted on individually.
- 293 Age limit for directors.
- 294 Duty of director to disclose his age.
- 295–299 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- 300 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- 301 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- 303 Resolution to remove director.
- 304 Director’s right to protest removal.
- 305 Directors’ names on company correspondence, etc.
- 306 Limited company may have directors with unlimited liability.
- 307 Special resolution making liability of directors unlimited.
- 308 Assignment of office by directors.
- 309 Directors to have regard to interests of employees.
- 309A Provisions protecting directors from liability
- 309B Qualifying third party indemnity provisions
- 309C Disclosure of qualifying third party indemnity provisions
- 310 Provisions protecting auditors from liability.
- 311 Prohibition on tax-free payments to directors.
- 312 Payment to director for loss of office etc.
- 313 Company approval for property transfer.
- 314 Director’s duty of disclosure on takeover, etc.
- 315 Consequences of non-compliance with s. 314.
- 316 Provisions supplementing ss. 312 to 315.
- 317 Directors to disclose interest in contracts.
- 318 Directors’ service contracts to be open to inspection.
- 319 Director’s contract of employment for more than 5 years.
- 320 Substantial property transactions involving directors, etc.
- 321 Exceptions from s. 320.
- 322 Liabilities arising from contravention of s. 320.
- 322A Invalidity of certain transactions involving directors, etc.
- 322B Contracts with sole members who are directors
- 323 Prohibition on directors dealing in share options.
- 324 Duty of director to disclose shareholdings in own company.
- 325 Register of directors’ interests notified under s. 324.
- 326 Sanctions for non-compliance.
- 327 Extension of s. 323 to spouses , civil partners and children.
- 328 Extension of s. 324 to spouses , civil partners and children.
- 329 Duty to notify stock exchange of matters notified under preceding sections.
- 330 General restriction on loans etc. to directors and persons connected with them.
- 331 Definitions for ss. 330 ff.
- 332 Short-term quasi-loans.
- 333 Inter-company loans in same group.
- 334 Loans of small amounts.
- 335 Minor and business transactions.
- 336 Transactions at behest of holding company.
- 337 Funding of director’s expenditure on duty to company.
- 337A Funding of director’s expenditure on defending proceedings
- 338 Loan or quasi-loan by money-lending company.
- 339 “Relevant amounts” for purposes of ss. 334 ff.
- 340 “Value” of transactions and arrangements.
- 341 Civil remedies for breach of s. 330.
- 342 Criminal penalties for breach of s. 330.
- 343 Record of transactions not disclosed in company accounts.
- 344 Exceptions from s. 343.
- 345 Power to increase financial limits.
- 346 “Connected persons”, etc.
- 347 Transactions under foreign law.
- 347A Introductory provisions.
- 347B Exemptions.
- 347C Prohibition on donations and political expenditure by companies.
- 347D Special rules for subsidiaries.
- 347E Special rule for parent company of non-GB subsidiary undertaking.
- 347F Remedies for breach of prohibitions on company donations etc.
- 347G Remedy for unauthorised donation or expenditure by non-GB subsidiary.
- 347H Exemption of directors from liability in respect of unauthorised donation or expenditure.
- 347I Enforcement of directors’ liabilities by shareholder action.
- 347J Costs of shareholder action.
- 347K Information for purposes of shareholder action.
- 348 Company name to appear outside place of business.
- 349 Company’s name to appear in its correspondence, etc.
- 350 Company seal.
- 351 Particulars in correspondence, etc.
- 352 Obligation to keep and enter up register.
- 352A Statement that company has only one member
- 353 Location of register.
- 354 Index of members.
- 355 Entries in register in relation to share warrants.
- 356 Inspection of register and index.
- 357 Non-compliance with ss. 353, 354, 356; agent’s default.
- 358 Power to close register.
- 359 Power of court to rectify register.
- 360 Trusts not to be entered on register in England and Wales.
- 361 Register to be evidence.
- 362 Overseas branch registers.
- 363 Duty to deliver annual returns.
- 364 Contents of annual return: general.
- 364A Contents of annual return: particulars of share capital . . . .
- 364B Contents of annual return: information about shareholders: non-traded companies
- 364C Contents of annual return: information about shareholders: traded companies
- 364D Contents of annual return: information about shareholders: supplementary
- 365 Supplementary provisions: regulations and interpretation.
- 366 Annual general meeting.
- 366A Election by private company to dispense with annual general meetings.
- 367 Secretary of State’s power to call meeting in default.
- 368 Extraordinary general meeting on members’ requisition.
- 369 Length of notice for calling meetings.
- 370 General provisions as to meetings and votes.
- 370A Quorum at meetings of the sole member
- 371 Power of court to order meeting.
- 372 Proxies.
- 373 Right to demand a poll.
- 374 Voting on a poll.
- 375 Representation of corporations at meetings.
- 376 Circulation of members’ resolutions.
- 377 In certain cases, compliance with s. 376 not required.
- 378 Extraordinary and special resolutions.
- 379 Resolution requiring special notice.
- 379A Elective resolution of private company.
- 380 Registration, etc. of resolutions and agreements.
- 381 Resolution passed at adjourned meeting.
- 381A Written resolutions of private companies.
- 381B Duty to notify auditors of proposed written resolution
- 381C Written resolutions: supplementary provisions.
- 382 Minutes of meetings.
- 382A Recording of written resolutions.
- 382B Recording of decisions by the sole member
- 383 Inspection of minute books.
- 384 Duty to appoint auditors.
- 385 Appointment at general meeting at which accounts laid.
- 385A Appointment by private company which is not obliged to lay accounts.
- 386 Election by private company to dispense with annual appointment.
- 387 Appointment by Secretary of State in default of appointment by company.
- 388 Filling of casual vacancies.
- 388A Certain companies exempt from obligation to appoint auditors
- 389 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- 389A Rights to information.
- 389B Offences relating to the provision of information to auditors
- 390 Right to attend company meetings, &c.
- 390A Remuneration of auditors.
- 390B Disclosure of services provided by auditors or associates and related remuneration
- 391 Removal of auditors.
- 391A Rights of auditors who are removed or not re-appointed.
- 392 Resignation of auditors.
- 392A Rights of resigning auditors.
- 393 Termination of appointment of auditors not appointed annually.
- 394 Statement by person ceasing to hold office as auditor.
- 394A Offences of failing to comply with s. 394.
- 395 Certain charges void if not registered.
- 396 Charges which have to be registered.
- 397 Formalities of registration (debentures).
- 398 Verification of charge on property outside United Kingdom.
- 399 Company’s duty to register charges it creates.
- 400 Charges existing on property acquired.
- 401 Register of charges to be kept by registrar of companies.
- 402 Endorsement of certificate on debentures.
- 403 Entries of satisfaction and release.
- 404 Rectification of register of charges.
- 405 Registration of enforcement of security.
- 406 Companies to keep copies of instruments creating charges.
- 407 Company’s register of charges.
- 408 Right to inspect instruments which create charges, etc.
- 409 Charges on property in England and Wales created by oversea company.
- 410 Charges void unless registered.
- 411 Charges on property outside United Kingdom.
- 412 Negotiable instrument to secure book debts.
- 413 Charges associated with debentures.
- 414 Charge by way of ex facie absolute disposition, etc.
- 415 Company’s duty to register charges created by it.
- 416 Duty to register charges existing on property acquired.
- 417 Register of charges to be kept by registrar of companies.
- 418 Certificate of registration to be issued.
- 419 Entries of satisfaction and relief.
- 420 Rectification of register.
- 421 Copies of instruments creating charges to be kept by company.
- 422 Company’s register of charges.
- 423 Right to inspect copies of instruments, and company’s register.
- 424 Extension of Chapter II.
- 425 Power of company to compromise with creditors and members.
- 426 Information as to compromise to be circulated.
- 427 Provisions for facilitating company reconstruction or amalgamation.
- 427A Application of ss. 425–427 to mergers and divisions of public companies.
- 428 Takeover offers.
- 429 Right of offeror to buy out minority shareholders.
- 430 Effect of notice under s. 429.
- 430A Right of minority shareholder to be bought out by offeror.
- 430B Effect of requirement under s. 430A.
- 430C Applications to the court.
- 430D Joint offers.
- 430E Associates.
- 430F Convertible securities.
- 431 Investigation of a company on its own application or that of its members.
- 432 Other company investigations.
- 433 Inspectors’ powers during investigation.
- 434 Production of documents and evidence to inspectors.
- 435 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- 436 Obstruction of inspectors treated as contempt of court.
- 437 Inspectors’ reports.
- 438 Power to bring civil proceedings on company’s behalf.
- 439 Expenses of investigating a company’s affairs.
- 440 Power of Secretary of State to present winding-up petition.
- 441 Inspectors’ report to be evidence.
- 442 Power to investigate company ownership.
- 443 Provisions applicable on investigation under s. 442.
- 444 Power to obtain information as to those interested in shares, etc.
- 445 Power to impose restrictions on shares and debentures.
- 446 Investigation of share dealings.
- 447 Power to require documents and information
- 447A Information provided: evidence
- 448 Entry and search of premises.
- 448A Protection in relation to certain disclosures: information provided to Secretary of State
- 449 Provision for security of information obtained.
- 450 Punishment for destroying, mutilating, etc. company documents.
- 451 Punishment for furnishing false information.
- 451A Disclosure of information by Secretary of State or inspector.
- 452 Privileged information.
- 453 Investigation of overseas companies.
- 453A Power to enter and remain on premises
- 453B Power to enter and remain on premises: procedural
- 453C Failure to comply with certain requirements
- 453D Offences by bodies corporate
- 454 Consequence of order imposing restrictions.
- 455 Punishment for attempted evasion of restrictions.
- 456 Relaxation and removal of restrictions.
- 457 Further provisions on sale by court order of restricted shares.
- 458 Punishment for fraudulent trading.
- 459 Order on application of company member.
- 460 Order on application of Secretary of State.
- 461 Provisions as to petitions and orders under this Part.
- 462 Power of incorporated company to create floating charge.
- 463 Effect of floating charge on winding up.
- 464 Ranking of floating charges.
- 465 Continued effect of certain charges validated by Act of 1972.
- 466 Alteration of floating charges.
- 467–485 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- 486 Interpretation for Part XVIII generally.
- 487 Extent of Part XVIII.
- 488–500 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- 501–650 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- 651 Power of court to declare dissolution of company void.
- 652 Registrar may strike defunct company off register.
- 652A Registrar may strike private company off register on application.
- 652B Duties in connection with making application under section 652A.
- 652C Directors’ duties following application under section 652A.
- 652D Sections 652B and 652C: supplementary provisions.
- 652E Sections 652B and 652C: enforcement.
- 652F Other offences connected with section 652A.
- 653 Objection to striking off by person aggrieved.
- 654 Property of dissolved company to be bona vacantia.
- 655 Effect on s. 654 of company’s revival after dissolution.
- 656 Crown disclaimer of property vesting as bona vacantia.
- 657 Effect of Crown disclaimer under s. 656.
- 658 Liability for rentcharge on company’s land after dissolution.
- 659–662 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- 663 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- 664 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- 665–674 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- 675 Companies formed and registered under former Companies Acts.
- 676 Companies registered but not formed under former Companies Acts.
- 677 Companies re-registered with altered status under former Companies Acts.
- 678 Companies registered under Joint Stock Companies Acts.
- 679 Northern Ireland and Irish companies.
- 680 Companies capable of being registered under this Chapter.
- 681 Procedural requirements for registration.
- 682 Change of name on registration.
- 683 Definition of “joint stock company”.
- 684 Requirements for registration by joint stock companies.
- 685 Registration of joint stock company as public company.
- 686 Other requirements for registration.
- 687 Name of company registering.
- 688 Certificate of registration under this Chapter.
- 689 Effect of registration.
- 690 Power to substitute memorandum and articles for deed of settlement.
- 690A Branch registration under the Eleventh Company Law Directive (89/666/EEC).
- 690B Scope of sections 691 and 692.
- 691 Documents to be delivered to registrar.
- 692 Registration of altered particulars.
- 692A Change in registration regime.
- 693 Obligation to state name and other particulars.
- 694 Regulation of oversea companies in respect of their names.
- 694A Service of documents: companies to which section 690A applies.
- 695 Service of documents on oversea company.
- 695A Registrar to whom documents to be delivered: companies to which section 690A applies.
- 696 Office where documents to be filed.
- 697 Penalties for non-compliance.
- 698 Definitions . . ..
- 699 Channel Islands and Isle of Man companies.
- 699A Credit and financial institutions to which the Bank Branches Directive (89/117/EEC) applies.
- 699AA Companies to which the Eleventh Company Law Directive applies.
- 699B Scope of sections 700 to 703.
- 700 Preparation of accounts and reports by oversea companies.
- 701 Oversea company’s financial year and accounting reference periods.
- 702 Delivery to registrar of accounts and reports of oversea company.
- 703 Penalty for non-compliance.
- 703A Introductory provisions.
- 703B Charges requiring registration.
- 703C The register.
- 703D Company’s duty to deliver particulars of charges for registration.
- 703E Registrar to whom particulars, &c. to be delivered.
- 703F Effect of failure to deliver particulars, late delivery and effect of errors and omissions.
- 703G Delivery of further particulars or memorandum.
- 703H Further provisions with respect to voidness of charges.
- 703I Additional information to be registered.
- 703J Copies of instruments and register to be kept by company.
- 703K Power to make further provision by regulations.
- 703L Provisions as to situation of property.
- 703M Other supplementary provisions.
- 703N Index of defined expressions.
- 703O Scope of Chapter.
- 703P Particulars to be delivered to the registrar: winding up.
- 703Q Particulars to be delivered to the registrar: insolvency proceedings etc.
- 703R Penalty for non-compliance
- 704 Registration offices.
- 705 Companies’ registered numbers.
- 705A Registration of branches of oversea companies.
- 706 Delivery to the registrar of documents in legible form.
- 707 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- 707A The keeping of company records by the registrar.
- 707B Delivery to the registrar using electronic communications
- 708 Fees payable to registrar.
- 709 Inspection, &c. of records kept by the registrar.
- 710 Certificate of incorporation.
- 710A Provision and authentication by registrar of documents in non-legible form.
- 710B Documents relating to Welsh companies.
- 711 Public notice by registrar of receipt and issue of certain documents.
- 711A Exclusion of deemed notice.
- 712 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- 713 Enforcement of company’s duty to make returns.
- 714 Registrar’s index of company and corporate names.
- 715 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- 715A Interpretation.
- 716 Prohibition of partnerships with more than 20 members.
- 717 Limited partnerships: limit on number of members.
- 718 Unregistered companies.
- 719 Power of company to provide for employees on cessation or transfer of business.
- 720 Certain companies to publish periodical statement.
- 721 Production and inspection of books where offence suspected.
- 722 Form of company registers, etc.
- 723 Use of computers for company records.
- 723A Obligations of company as to inspection of registers, &c.
- 723B Confidentiality orders
- 723C Effect of confidentiality orders
- 723D Construction of sections 723B and 723C
- 723E Sections 723B and 723C: offences
- 723F Regulations under sections 723B to 723E
- 724 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- 725 Service of documents.
- 726 Costs and expenses in actions by certain limited companies.
- 727 Power of court to grant relief in certain cases.
- 728 Enforcement of High Court orders.
- 729 Annual report by Secretary of State.
- 730 Punishment of offences.
- 730A Meaning of “officer in default”
- 731 Summary proceedings.
- 732 Prosecution by public authorities.
- 733 Offences by bodies corporate.
- 734 Criminal proceedings against unincorporated bodies.
- 735 “Company”, etc.
- 735A Relationship of this Act to Insolvency Act.
- 735B Relationship of this Act to Parts IV and V of the Financial Services Act 1986.
- 736 “Subsidiary”, “holding company” and “wholly-owned subsidiary”.
- 736A Provisions supplementing s. 736.
- 736B Power to amend ss. 736 and 736A.
- 737 “Called-up share capital”.
- 738 “Allotment” and “paid up”.
- 739 “Non-cash asset”.
- 740 “Body corporate” and “corporation”.
- 741 “Director” and “shadow director”.
- 742 Expressions used in connection with accounts.
- 742A Meaning of “offer to the public”
- 742B Meaning of “banking company”
- 742C Meaning of “insurance company” and “authorised insurance company”
- 743 “Employees’ share scheme”.
- 743A Meaning of “office copy” in Scotland.
- 744 Expressions used generally in this Act.
- 744A Index of defined expressions.
- 745 Northern Ireland.
- 745A “Bank of England”
- 746 Commencement.
- 747 Citation.
- SCHEDULE 1 Particulars of Directors etc. to be Contained in Statement Under Section 10
- SCHEDULE 2 Interpretation of References to “Beneficial Interest”
- SCHEDULE 3 Mandatory Contents of Prospectus
- SCHEDULE 4
- Schedule 4A
- SCHEDULE 5
- SCHEDULE 6
- SCHEDULE 7
- SCHEDULE 7ZA
- SCHEDULE 7A
- SCHEDULE 7B
- SCHEDULE 8
- SCHEDULE 8A
- SCHEDULE 9
- SCHEDULE 9A
- SCHEDULE 10
- SCHEDULE 10A
- SCHEDULE 11
- SCHEDULE 12 . . .
- SCHEDULE 13 Provisions Supplementing and Interpreting Sections 324 to 328
- SCHEDULE 14
- SCHEDULE 15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- Schedule 15A
- SCHEDULE 15B
- SCHEDULE 15C Specified persons
- SCHEDULE 15D Disclosures
- SCHEDULE 16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- SCHEDULES 17–19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
- SCHEDULE 20
- SCHEDULE 21
- SCHEDULE 21A
- SCHEDULE 21B
- SCHEDULE 21C
- SCHEDULE 21D
- SCHEDULE 22
- SCHEDULE 23
- SCHEDULE 24
- SCHEDULE 25
Proposed changes to this act
No one has proposed a change to this act yet.
764 provisions
389 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Propose a change389A Rights to information.
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Propose a change389B Offences relating to the provision of information to auditors
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Propose a change390 Right to attend company meetings, &c.
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Propose a change390A Remuneration of auditors.
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Propose a change390B Disclosure of services provided by auditors or associates and related remuneration
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Propose a change391 Removal of auditors.
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Propose a change391A Rights of auditors who are removed or not re-appointed.
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Propose a change392 Resignation of auditors.
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Propose a change392A Rights of resigning auditors.
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Propose a change393 Termination of appointment of auditors not appointed annually.
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Propose a change394 Statement by person ceasing to hold office as auditor.
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Propose a change394A Offences of failing to comply with s. 394.
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Propose a change395 Certain charges void if not registered.
(1) Subject to the provisions of this Chapter, a charge created by a company registered in England and Wales and being a charge to which this section applies is, so far as any security on the company’s property or undertaking is conferred by the charge, void against the liquidator or administratorand any creditor of the company, unless the prescribed particulars of the charge together with the instrument (if any) by which the charge is created or evidenced, are delivered to or received by the registrar of companies for registration in the manner required by this Chapter within 21 days after the date of the charge’s creation. (2) Subsection (1) is without prejudice to any contract or obligation for repayment of the money secured by the charge; and when a charge becomes void under this section, the money secured by it immediately becomes payable.
Propose a change396 Charges which have to be registered.
(1) Section 395 applies to the following charges— (a) a charge for the purpose of securing any issue of debentures, (b) a charge on uncalled share capital of the company, (c) a charge created or evidenced by an instrument which, if executed by an individual, would require registration as a bill of sale, (d) a charge on land (wherever situated) or any interest in it, but not including a charge for any rent or other periodical sum issuing out of the land, (e) a charge on book debts of the company, (f) a floating charge on the company’s undertaking or property, (g) a charge on calls made but not paid, (h) a charge on a ship or aircraft, or any share in a ship, (j) a charge on goodwill, or on any intellectual property. (2) Where a negotiable instrument has been given to secure the payment of any book debts of a company, the deposit of the instrument for the purpose of securing an advance to the company is not, for purposes of section 395, to be treated as a charge on those book debts. (3) The holding of debentures entitling the holder to a charge on land is not for purposes of this section deemed to be an interest in land. (3A) The following are 'intellectual property’ for the purposes of this section— (a) any patent, trade mark, . . . registered design, copyright or design right; (b) any licence under or in respect of any such right. (4) In this Chapter, “charge” includes mortgage.
Propose a change397 Formalities of registration (debentures).
(1) Where a series of debentures containing, or giving by reference to another instrument, any charge to the benefit of which the debenture holders of that series are entitled pari passu is created by a company, it is for purposes of section 395 sufficient if there are delivered to or received by the registrar, within 21 days after the execution of the deed containing the charge (or, if there is no such deed, after the execution of any debentures of the series), the following particulars in the prescribed form— (a) the total amount secured by the whole series, and (b) the dates of the resolutions authorising the issue of the series and the date of the covering deed (if any) by which the security is created or defined, and (c) a general description of the property charged, and (d) the names of the trustees (if any) for the debenture holders, together with the deed containing the charge or, if there is no such deed, one of the debentures of the series: Provided that there shall be sent to the registrar of companies, for entry in the register, particulars in the prescribed form of the date and amount of each issue of debentures of the series, but any omission to do this does not affect the validity of any of those debentures. (2) Where any commission, allowance or discount has been paid or made either directly or indirectly by a company to a person in consideration of his— (a) subscribing or agreeing to subscribe, whether absolutely or conditionally, for debentures of the company, or (b) procuring or agreeing to procure subscriptions, whether absolute or conditional, for such debentures, the particulars required to be sent for registration under section 395 shall include particulars as to the amount or rate per cent. of the commission, discount or allowance so paid or made, but omission to do this does not affect the validity of the debentures issued. (3) The deposit of debentures as security for a debt of the company is not, for the purposes of subsection (2), treated as the issue of the debentures at a discount.
Propose a change398 Verification of charge on property outside United Kingdom.
(1) In the case of a charge created out of the United Kingdom comprising property situated outside the United Kingdom, the delivery to and the receipt by the registrar of companies of a copy (verified in the prescribed manner) of the instrument by which the charge is created or evidenced has the same effect for purposes of sections 395 to 398 as the delivery and receipt of the instrument itself. (2) In that case, 21 days after the date on which the instrument or copy could, in due course of post (and if despatched with due diligence), have been received in the United Kingdom are substituted for the 21 days mentioned in section 395(1) (or as the case may be, section 397(1)) as the time within which the particulars and instrument or copy are to be delivered to the registrar. (3) Where a charge is created in the United Kingdom but comprises property outside the United Kingdom, the instrument creating or purporting to create the charge may be sent for registration under section 395 notwithstanding that further proceedings may be necessary to make the charge valid or effectual according to the law of the country in which the property is situated. (4) Where a charge comprises property situated in Scotland or Northern Ireland and registration in the country where the property is situated is necessary to make the charge valid or effectual according to the law of that country, the delivery to and the receipt by the registrar of a copy (verified in the prescribed manner) of the instrument by which the charge is created or evidenced, together with a certificate in the prescribed form stating that the charge was presented for registration in Scotland or Northern Ireland (as the case may be) on the date on which it was so presented has, for purposes of sections 395 to 398, the same effect as the delivery and receipt of the instrument itself.
Propose a change399 Company’s duty to register charges it creates.
(1) It is a company’s duty to send to the registrar of companies for registration the particulars of every charge created by the company and of the issues of debentures of a series requiring registration under sections 395 to 398; but registration of any such charge may be effected on the application of any person interested in it. (2) Where registration is effected on the application of some person other than the company, that person is entitled to recover from the company the amount of any fees properly paid by him to the registrar on the registration. (3) If a company fails to comply with subsection (1), then, unless the registration has been effected on the application of some other person, the company and every officer of it who is in default is liable to a fine and, for continued contravention, to a daily default fine.
Propose a change400 Charges existing on property acquired.
(1) This section applies where a company is registered in England and Wales acquires property which is subject to a charge of any such kind as would, if it had been created by the company after the acquisition of the property, have been required to be registered under this Chapter. (2) The company shall cause the prescribed particulars of the charge, together with a copy (certified in the prescribed manner to be a correct copy) of the instrument (if any) by which the charge was created or is evidenced, to be delivered to the registrar of companies for registration in manner required by this Chapter within 21 days after the date on which the acquisition is completed. (3) However, if the property is situated and the charge was created outside Great Britain, 21 days after the date on which the copy of the instrument could in due course of post, and if despatched with due diligence, have been received in the United Kingdom is substituted for the 21 days above-mentioned as the time within which the particulars and copy of the instrument are to be delivered to the registrar. (4) If default is made in complying with this section, the company and every officer of it who is in default is liable to a fine and, for continued contravention, to a daily default fine.
Propose a change401 Register of charges to be kept by registrar of companies.
(1) The registrar of companies shall keep, with respect to each company, a register in the prescribed form of all the charges requiring registration under this Chapter; and he shall enter in the register with respect to such charges the following particulars— (a) in the case of a charge to the benefit of which the holders of a series of debentures are entitled, the particulars specified in section 397(1), (b) in the case of any other charge— (i) if it is a charge created by the company, the date of its creation, and if it is a charge which was existing on property acquired by the company, the date of the acquisition of the property, and (ii) the amount secured by the charge, and (iii) short particulars of the property charged, and (iv) the persons entitled to the charge. (2) The registrar shall give a certificate of the registration of any charge registered in pursuance of this Chapter, stating the amount secured by the charge. The certificate— (a) shall be either signed by the registrar, or authenticated by his official seal, and (b) is conclusive evidence that the requirements of this Chapter as to registration have been satisfied. (3) The register kept in pursuance of this section shall be open to inspection by any person.
Propose a change402 Endorsement of certificate on debentures.
(1) The company shall cause a copy of every certificate of registration given under section 401 to be endorsed on every debenture or certificate of debenture stock which is issued by the company, and the payment of which is secured by the charge so registered. (2) But this does not require a company to cause a certificate of registration of any charge so given to be endorsed on any debenture or certificate of debenture stock issued by the company before the charge was created. (3) If a person knowingly and wilfully authorises or permits the delivery of a debenture or certificate of debenture stock which under this section is required to have endorsed on it a copy of a certificate of registration, without the copy being so endorsed upon it, he is liable (without prejudice to any other liability) to a fine.
Propose a change403 Entries of satisfaction and release.
(1) Subject to subsection (1A), the registrar of companies, on receipt of a statutory declaration in the prescribed form verifying, with respect to a registered charge,— (a) that the debt for which the charge was given has been paid or satisfied in whole or in part, or (b) that part of the property or undertaking charged has been released from the charge or has ceased to form part of the company’s property or undertaking, may enter on the register a memorandum of satisfaction in whole or in part, or of the fact that part of the property or undertaking has been released from the charge or has ceased to form part of the company’s property or undertaking (as the case may be). (1A) The registrar of companies may make any such entry as is mentioned in subsection (1) where, instead of receiving such a statutory declaration as is mentioned in that subsection, he receives a statement by a director, secretary, administrator or administrative receiver of the company which is contained in an electronic communication and that statement— (a) verifies the matters set out in paragraph (a) or (b) of that subsection, (b) contains a description of the charge, (c) states the date of creation of the charge and the date of its registration under this Chapter, (d) states the name and address of the chargee or, in the case of a debenture, trustee, and (e) where paragraph (b) of subsection (1) applies, contains short particulars of the property or undertaking which has been released from the charge, or which has ceased to form part of the company’s property or undertaking (as the case may be). (2) Where the registrar enters a memorandum of satisfaction in whole, he shall if required furnish the company with a copy of it. (2A) Any person who makes a false statement under subsection (1A) which he knows to be false or does not believe to be true is liable to imprisonment or a fine, or both.
Propose a change404 Rectification of register of charges.
(1) The following applies if the court is satisfied that the omission to register a charge within the time required by this Chapter or that the omission or mis-statement of any particular with respect to any such charge or in a memorandum of satisfaction was accidental, or due to inadvertence or to some other sufficient cause, or is not of a nature to prejudice the position of creditors or shareholders of the company, or that on other grounds it is just and equitable to grant relief. (2) The court may, on the application of the company or a person interested, and on such terms and conditions as seem to the court just and expedient, order that the time for registration shall be extended or, as the case may be, that the omission or mis-statement shall be rectified.
Propose a change405 Registration of enforcement of security.
(1) If a person obtains an order for the appointment of a receiver or manager of a company’s property, or appoints such a receiver or manager under powers contained in an instrument, he shall within 7 days of the order or of the appointment under those powers, give notice of the fact to the registrar of companies; and the registrar shall enter the fact in the register of charges. (2) Where a person appointed receiver or manager of a company’s property under powers contained in an instrument ceases to act as such receiver or manager, he shall, on so ceasing, give the registrar notice to that effect, and the registrar shall enter the fact in the register of charges. (3) A notice under this section shall be in the prescribed form. (4) If a person makes default in complying with the requirements of this section, he is liable to a fine and, for continued contravention, to a daily default fine.
Propose a change406 Companies to keep copies of instruments creating charges.
(1) Every company shall cause a copy of every instrument creating a charge requiring registration under this Chapter to be kept at its registered office. (2) In the case of a series of uniform debentures, a copy of one debenture of the series is sufficient.
Propose a change407 Company’s register of charges.
(1) Every limited company shall keep at its registered office a register of charges and enter in it all charges specifically affecting property of the company and all floating charges on the company’s undertaking or any of its property. (2) The entry shall in each case give a short description of the property charged, the amount of the charge and, except in the case of securities to bearer, the names of the persons entitled to it. (3) If an officer of the company knowingly and wilfully authorises or permits the omission of an entry required to be made in pursuance of this section, he is liable to a fine.
Propose a change408 Right to inspect instruments which create charges, etc.
(1) The copies of instruments creating any charge requiring registration under this Chapter with the registrar of companies, and the register of charges kept in pursuance of section 407, shall be open during business hours (but subject to such reasonable restrictions as the company in general meeting may impose, so that not less than 2 hours in each day be allowed for inspection) to the inspection of any creditor or member of the company without fee. (2) The register of charges shall also be open to the inspection of any other person on payment of such fee, not exceeding 5 pence, for each inspection, as the company may prescribe. (3) If inspection of the copies referred to, or of the register, is refused, every officer of the company who is in default is liable to a fine and, for continued contravention, to a daily default fine. (4) If such a refusal occurs in relation to a company registered in England and Wales, the court may by order compel an immediate inspection of the copies or register.
Propose a change409 Charges on property in England and Wales created by oversea company.
(1) This Chapter extends to charges on property in England and Wales which are created, and to charges on property in England and Wales which is acquired, by a company (whether a company within the meaning of this Act or not) incorporated outside Great Britain which has an established place of business in England and Wales. (2) In relation to such a company, sections 406 and 407 apply with the substitution, for the reference to the company’s registered office, of a reference to its principal place of business in England and Wales.
Propose a change410 Charges void unless registered.
(1) The following provisions of this Chapter have effect for the purpose of securing the registration in Scotland of charges created by companies. (2) Every charge created by a company, being a charge to which this section applies, is, so far as any security on the company’s property or any part of it is conferred by the charge, void against the liquidator or administrator and any creditor of the company unless the prescribed particulars of the charge, together with a copy (certified in the prescribed manner to be a correct copy) of the instrument (if any) by which the charge is created or evidenced, are delivered to or received by the registrar of companies for registration in the manner required by this Chapter within 21 days after the date of the creation of the charge. (3) Subsection (2) is without prejudice to any contract or obligation for repayment of the money secured by the charge; and when a charge becomes void under this section the money secured by it immediately becomes payable. (4) This section applies to the following charges— (a) a charge on land wherever situated, or any interest in such land (not including a charge for any rent , ground annual or other periodical sum payable in respect of the land, but including a charge created by a heritable security within the meaning of section 9(8) of the Conveyancing and Feudal Reform (Scotland) Act 1970), (b) a security over the uncalled share capital of the company, (c) a security over incorporeal moveable property of any of the following categories— (i) the book debts of the company, (ii) calls made but not paid, (iii) goodwill, (iv) a patent or a licence under a patent, (v) a trademark, (vi) a copyright or a licence under a copyright, (vii) a registered design or a licence in respect of such a design, (viii) a design right or a licence under a design right, (d) a security over a ship or aircraft or any share in a ship, and (e) a floating charge. (5) In this Chapter “company” (except in section 424) means an incorporated company registered in Scotland; “registrar of companies” means the registrar or other officer performing under this Act the duty of registration of companies in Scotland; and references to the date of creation of a charge are— (a) in the case of a floating charge, the date on which the instrument creating the floating charge was executed by the company creating the charge, and (b) in any other case, the date on which the right of the person entitled to the benefit of the charge was constituted as a real right.
Propose a change411 Charges on property outside United Kingdom.
(1) In the case of a charge created out of the United Kingdom comprising property situated outside the United Kingdom, the period of 21 days after the date on which the copy of the instrument creating it could (in due course of post, and if despatched with due diligence) have been received in the United Kingdom is substituted for the period of 21 days after the date of the creation of the charge as the time within which, under section 410(2), the particulars and copy are to be delivered to the registrar. (2) Where a charge is created in the United Kingdom but comprises property outside the United Kingdom, the copy of the instrument creating or purporting to create the charge may be sent for registration under section 410 notwithstanding that further proceedings may be necessary to make the charge valid or effectual according to the law of the country in which the property is situated.
Propose a change412 Negotiable instrument to secure book debts.
Where a negotiable instrument has been given to secure the payment of any book debts of a company, the deposit of the instrument for the purpose of securing an advance to the company is not, for purposes of section 410, to be treated as a charge on those book debts.
Propose a change413 Charges associated with debentures.
(1) The holding of debentures entitling the holder to a charge on land is not, for the purposes of section 410, deemed to be an interest in land. (2) Where a series of debentures containing, or giving by reference to any other instrument, any charge to the benefit of which the debenture-holders of that series are entitled pari passu, is created by a company, it is sufficient for purposes of section 410 if there are delivered to or received by the registrar of companies within 21 days after the execution of the deed containing the charge or, if there is no such deed, after the execution of any debentures of the series, the following particulars in the prescribed form— (a) the total amount secured by the whole series, (b) the dates of the resolutions authorising the issue of the series and the date of the covering deed (if any) by which the security is created or defined, (c) a general description of the property charged, (d) the names of the trustees (if any) for the debenture holders, and (e) in the case of a floating charge, a statement of any provisions of the charge and of any instrument relating to it which prohibit or restrict or regulate the power of the company to grant further securities ranking in priority to, or pari passu with, the floating charge, or which vary or otherwise regulate the order of ranking of the floating charge in relation to subsisting securities, together with a copy of the deed containing the charge or, if there is no such deed, of one of the debentures of the series: Provided that, where more than one issue is made of debentures in the series, there shall be sent to the registrar of companies for entry in the register particulars (in the prescribed form) of the date and amount of each issue of debentures of the series, but any omission to do this does not affect the validity of any of those debentures. (3) Where any commission, allowance or discount has been paid or made, either directly or indirectly, by a company to any person in consideration of his subscribing or agreeing to subscribe, whether absolutely or conditionally, for any debentures of the company, or procuring or agreeing to procure subscriptions (whether absolute or conditional) for any such debentures, the particulars required to be sent for registration under section 410 include particulars as to the amount or rate per cent. of the commission, discount or allowance so paid or made; but any omission to do this does not affect the validity of the debentures issued. The deposit of any debentures as security for any debt of the company is not, for purposes of this subsection, treated as the issue of the debentures at a discount.
Propose a change414 Charge by way of ex facie absolute disposition, etc.
(1) For the avoidance of doubt, it is hereby declared that, in the case of a charge created by way of an ex facie absolute disposition or assignation qualified by a back letter or other agreement, or by a standard security qualified by an agreement, compliance with section 410(2) does not of itself render the charge unavailable as security for indebtedness incurred after the date of compliance. (2) Where the amount secured by a charge so created is purported to be increased by a further back letter or agreement, a further charge is held to have been created by the ex facie absolute disposition or assignation or (as the case may be) by the standard security, as qualified by the further back letter or agreement; and the provisions of this Chapter apply to the further charge as if— (a) references in this Chapter (other than in this section) to the charge were references to the further charge, and (b) references to the date of the creation of the charge were references to the date on which the further back letter or agreement was executed.
Propose a change415 Company’s duty to register charges created by it.
(1) It is a company’s duty to send to the registrar of companies for registration the particulars of every charge created by the company and of the issues of debentures of a series requiring registration under sections 410 to 414; but registration of any such charge may be effected on the application of any person interested in it. (2) Where registration is effected on the application of some person other than the company, that person is entitled to recover from the company the amount of any fees properly paid by him to the registrar on the registration. (3) If a company makes default in sending to the registrar for registration the particulars of any charge created by the company or of the issues of debentures of a series requiring registration as above mentioned, then, unless the registration has been effected on the application of some other person, the company and every officer of it who is in default is liable to a fine and, for continued contravention, to a daily default fine.
Propose a change416 Duty to register charges existing on property acquired.
(1) Where a company acquires any property which is subject to a charge of any kind as would, if it had been created by the company after the acquisition of the property, have been required to be registered under this Chapter, the company shall cause the prescribed particulars of the charge, together with a copy (certified in the prescribed manner to be a correct copy) of the instrument (if any) by which the charge was created or is evidenced, to be delivered to the registrar of companies for registration in the manner required by this Chapter within 21 days after the date on which the transaction was settled. (2) If, however, the property is situated and the charge was created outside Great Britain, 21 days after the date on which the copy of the instrument could (in due course of post, and if despatched with due diligence) have been received in the United Kingdom are substituted for 21 days after the settlement of the transaction as the time within which the particulars and the copy of the instrument are to be delivered to the registrar. (3) If default is made in complying with this section, the company and every officer of it who is in default is liable to a fine and, for continued contravention, to a daily default fine.
Propose a change417 Register of charges to be kept by registrar of companies.
(1) The registrar of companies shall keep, with respect to each company, a register in the prescribed form of all the charges requiring registration under this Chapter, and shall enter in the register with respect to such charges the particulars specified below. (2) In the case of a charge to the benefit of which the holders of a series of debentures are entitled, there shall be entered in the register the particulars specified in section 413(2). (3) In the case of any other charge, there shall be entered— (a) if it is a charge created by the company, the date of its creation, and if it was a charge existing on property acquired by the company, the date of the acquisition of the property, (b) the amount secured by the charge, (c) short particulars of the property charged, (d) the persons entitled to the charge, and (e) in the case of a floating charge, a statement of any of the provisions of the charge and of any instrument relating to it which prohibit or restrict or regulate the company’s power to grant further securities ranking in priority to, or pari passu with, the floating charge, or which vary or otherwise regulate the order of ranking of the floating charge in relation to subsisting securities. (4) The register kept in pursuance of this section shall be open to inspection by any person.
Propose a change418 Certificate of registration to be issued.
(1) The registrar of companies shall give a certificate of the registration of any charge registered in pursuance of this Chapter. (2) The certificate— (a) shall be either signed by the registrar, or authenticated by his official seal, (b) shall state the name of the company and the person first-named in the charge among those entitled to the benefit of the charge (or, in the case of a series of debentures, the name of the holder of the first such debenture to be issued) and the amount secured by the charge, and (c) is conclusive evidence that the requirements of this Chapter as to registration have been complied with.
Propose a change419 Entries of satisfaction and relief.
(1) Subject to subsections (1A) and (1B), the registrar of companies, on application being made to him in the prescribed form, and on receipt of a statutory declaration in the prescribed form verifying, with respect to any registered charge,— (a) that the debt for which the charge was given has been paid or satisfied in whole or in part, or (b) that part of the property charged has been released from the charge or has ceased to form part of the company’s property, may enter on the register a memorandum of satisfaction (in whole or in part) regarding that fact. (1A) On an application being made to him in the prescribed form, the registrar of companies may make any such entry as is mentioned in subsection (1) where, instead of receiving such a statutory declaration as is mentioned in that subsection, he receives a statement by a director, secretary, liquidator, receiver or administrator of the company which is contained in an electronic communication and that statement— (a) verifies the matters set out in paragraph (a) or (b) of that subsection, (b) contains a description of the charge, (c) states the date of creation of the charge and the date of its registration under this Chapter, (d) states the name and address of the chargee or, in the case of a debenture, trustee, and (e) where paragraph (b) of subsection (1) applies, contains short particulars of the property which has been released from the charge, or which has ceased to form part of the company’s property (as the case may be). (1B) Where the statement under subsection (1A) concerns the satisfaction of a floating charge, then there shall be delivered to the registrar a further statement which— (a) is made by the creditor entitled to the benefit of the floating charge or a person authorised to act on his behalf; (b) is incorporated into, or logically associated with, the electronic communication containing the statement; and (c) certifies that the particulars contained in the statement are correct. (2) Where the registrar enters a memorandum of satisfaction in whole, he shall, if required, furnish the company with a copy of the memorandum. (3) Without prejudice to the registrar’s duty under this section to require to be satisfied as above mentioned, he shall not be so satisfied unless— (a) the creditor entitled to the benefit of the floating charge, or a person authorised to do so on his behalf, certifies as correct the particulars submitted to the registrar with respect to the entry on the register of a memorandum under this section, or (b) the court, on being satisfied that such certification cannot readily be obtained, directs him accordingly. (4) Nothing in this section requires the company to submit particulars with respect to the entry in the register of a memorandum of satisfaction where the company, having created a floating charge over all or any part of its property, disposes of part of the property subject to the floating charge. (5) A memorandum or certification required for the purposes of this section shall be in such form as may be prescribed. (5A) Any person who makes a false statement under subsection (1A) or (1B) which he knows to be false or does not believe to be true is liable to imprisonment or a fine, or both.
Propose a change420 Rectification of register.
The court, on being satisfied that the omission to register a charge within the time required by this Act or that the omission or mis-statement of any particular with respect to any such charge or in a memorandum of satisfaction was accidental, or due to inadvertence or to some other sufficient cause, or is not of a nature to prejudice the position of creditors or shareholders of the company, or that it is on other grounds just and equitable to grant relief, may, on the application of the company or any person interested, and on such terms and conditions as seem to the court just and expedient, order that the time for registration shall be extended or (as the case may be) that the omission or mis-statement shall be rectified.
Propose a change