619 Notice to registrar of sub-division or consolidation
(1) If a company exercises the power conferred by section 618 (sub-division or consolidation of shares) it must within one month after doing so give notice to the registrar, specifying the shares affected.
(2) The notice must be accompanied by a statement of capital.
(3) The statement of capital must state with respect to the company's share capital immediately following the exercise of the power—
(a) the total number of shares of the company,
(b) the aggregate nominal value of those shares,
(ba) the aggregate amount (if any) unpaid on those shares (whether on account of their nominal value or by way of premium), and
(c) for each class of shares—
(i) prescribed particulars of the rights attached to the shares,
(ii) the total number of shares of that class, and
(iii) the aggregate nominal value of shares of that class, ...
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(4) If default is made in complying with this section, an offence is committed by—
(a) the company, and
(b) every officer of the company who is in default.
(5) A person guilty of an offence under this section is liable on summary conviction to a fine not exceeding level 3 on the standard scale and, for continued contravention, a daily default fine not exceeding one-tenth of level 3 on the standard scale.
(1) A limited company that has converted paid-up shares into stock (before the repeal by this Act of the power to do so) may reconvert that stock into paid-up shares of any nominal value.
(2) A company may exercise the power conferred by this section only if its members have passed an ordinary resolution authorising it to do so.
(3) A resolution under subsection (2) may authorise a company to exercise the power conferred by this section—
(a) on more than one occasion;
(b) at a specified time or in specified circumstances.
621 Notice to registrar of reconversion of stock into shares
(1) If a company exercises a power conferred by section 620 (reconversion of stock into shares) it must within one month after doing so give notice to the registrar, specifying the stock affected.
(2) The notice must be accompanied by a statement of capital.
(3) The statement of capital must state with respect to the company's share capital immediately following the exercise of the power—
(a) the total number of shares of the company,
(b) the aggregate nominal value of those shares,
(ba) the aggregate amount (if any) unpaid on those shares (whether on account of their nominal value or by way of premium), and
(c) for each class of shares—
(i) prescribed particulars of the rights attached to the shares,
(ii) the total number of shares of that class, and
(iii) the aggregate nominal value of shares of that class, ...
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(4) If default is made in complying with this section, an offence is committed by—
(a) the company, and
(b) every officer of the company who is in default.
(5) A person guilty of an offence under this section is liable on summary conviction to a fine not exceeding level 3 on the standard scale and, for continued contravention, a daily default fine not exceeding one-tenth of level 3 on the standard scale.
(1) A limited company having a share capital may by resolution redenominate its share capital or any class of its share capital.
“Redenominate” means convert shares from having a fixed nominal value in one currency to having a fixed nominal value in another currency.
(2) The conversion must be made at an appropriate spot rate of exchange specified in the resolution.
(3) The rate must be either—
(a) a rate prevailing on a day specified in the resolution, or
(b) a rate determined by taking the average of rates prevailing on each consecutive day of a period specified in the resolution.
The day or period specified for the purposes of paragraph (a) or (b) must be within the period of 28 days ending on the day before the resolution is passed.
(4) A resolution under this section may specify conditions which must be met before the redenomination takes effect.
(5) Redenomination in accordance with a resolution under this section takes effect—
(a) on the day on which the resolution is passed, or
(b) on such later day as may be determined in accordance with the resolution.
(6) A resolution under this section lapses if the redenomination for which it provides has not taken effect at the end of the period of 28 days beginning on the date on which it is passed.
(7) A company's articles may prohibit or restrict the exercise of the power conferred by this section.
(8) Chapter 3 of Part 3 (resolutions affecting a company's constitution) applies to a resolution under this section.
For each class of share the new nominal value of each share is calculated as follows: Step One
Take the aggregate of the old nominal values of all the shares of that class.
Step Two
Translate that amount into the new currency at the rate of exchange specified in the resolution.
Step Three
Divide that amount by the number of shares in the class.
(1) The redenomination of shares does not affect any rights or obligations of members under the company's constitution, or any restrictions affecting members under the company's constitution.
In particular, it does not affect entitlement to dividends (including entitlement to dividends in a particular currency), voting rights or any liability in respect of amounts unpaid on shares.
(2) For this purpose the company's constitution includes the terms on which any shares of the company are allotted or held.
(3) Subject to subsection (1), references to the old nominal value of the shares in any agreement or statement, or in any deed, instrument or document, shall (unless the context otherwise requires) be read after the resolution takes effect as references to the new nominal value of the shares.
(1) If a limited company having a share capital redenominates any of its share capital, it must within one month after doing so give notice to the registrar, specifying the shares redenominated.
(2) The notice must—
(a) state the date on which the resolution was passed, and
(b) be accompanied by a statement of capital.
(3) The statement of capital must state with respect to the company's share capital as redenominated by the resolution—
(a) the total number of shares of the company,
(b) the aggregate nominal value of those shares,
(ba) the aggregate amount (if any) unpaid on those shares (whether on account of their nominal value or by way of premium), and
(c) for each class of shares—
(i) prescribed particulars of the rights attached to the shares,
(ii) the total number of shares of that class, and
(iii) the aggregate nominal value of shares of that class, ...
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(4) If default is made in complying with this section, an offence is committed by—
(a) the company, and
(b) every officer of the company who is in default.
(5) A person guilty of an offence under this section is liable on summary conviction to a fine not exceeding level 3 on the standard scale and, for continued contravention, a daily default fine not exceeding one-tenth of level 3 on the standard scale.
626 Reduction of capital in connection with redenomination
(1) A limited company that passes a resolution redenominating some or all of its shares may, for the purpose of adjusting the nominal values of the redenominated shares to obtain values that are, in the opinion of the company, more suitable, reduce its share capital under this section.
(2) A reduction of capital under this section requires a special resolution of the company.
(3) Any such resolution must be passed within three months of the resolution effecting the redenomination.
(4) The amount by which a company's share capital is reduced under this section must not exceed 10% of the nominal value of the company's allotted share capital immediately after the reduction.
(5) A reduction of capital under this section does not extinguish or reduce any liability in respect of share capital not paid up.
(6) Nothing in Chapter 10 applies to a reduction of capital under this section.
627 Notice to registrar of reduction of capital in connection with redenomination
(1) A company that passes a resolution under section 626 (reduction of capital in connection with redenomination) must within 15 days after the resolution is passed give notice to the registrar stating—
(a) the date of the resolution, and
(b) the date of the resolution under section 622 in connection with which it was passed.
This is in addition to the copies of the resolutions themselves that are required to be delivered to the registrar under Chapter 3 of Part 3.
(2) The notice must be accompanied by a statement of capital.
(3) The statement of capital must state with respect to the company's share capital as reduced by the resolution—
(a) the total number of shares of the company,
(b) the aggregate nominal value of those shares,
(ba) the aggregate amount (if any) unpaid on those shares (whether on account of their nominal value or by way of premium), and
(c) for each class of shares—
(i) prescribed particulars of the rights attached to the shares,
(ii) the total number of shares of that class, and
(iii) the aggregate nominal value of shares of that class, ...
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(4) The registrar must register the notice and the statement on receipt.
(5) The reduction of capital is not effective until those documents are registered.
(6) The company must also deliver to the registrar, within 15 days after the resolution is passed, a statement by the directors confirming that the reduction in share capital is in accordance with section 626(4) (reduction of capital not to exceed 10% of nominal value of allotted shares immediately after reduction).
(7) If default is made in complying with this section, 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 this section is liable—
(a) on conviction on indictment to a fine, and
(b) on summary conviction to a fine not exceeding the statutory maximum.
(1) The amount by which a company's share capital is reduced under section 626 (reduction of capital in connection with redenomination) must be transferred to a reserve, called “the redenomination reserve”.
(2) The redenomination reserve may be applied by the company in paying up shares to be allotted to members as fully paid bonus shares.
(3) Subject to that, the provisions of the Companies Acts relating to the reduction of a company's share capital apply as if the redenomination reserve were paid-up share capital of the company.
(1) For the purposes of the Companies Acts shares are of one class if the rights attached to them are in all respects uniform.
(2) For this purpose the rights attached to shares are not regarded as different from those attached to other shares by reason only that they do not carry the same rights to dividends in the twelve months immediately following their allotment.
630 Variation of class rights: companies having a share capital
(1) This section is concerned with the variation of the rights attached to a class of shares in a company having a share capital.
(2) Rights attached to a class of a company's shares may only be varied—
(a) in accordance with provision in the company's articles for the variation of those rights, or
(b) where the company's articles contain no such provision, if the holders of shares of that class consent to the variation in accordance with this section.
(3) This is without prejudice to any other restrictions on the variation of the rights.
(4) The consent required for the purposes of this section on the part of the holders of a class of a company's shares is—
(a) consent in writing from the holders of at least three-quarters in nominal value of the issued shares of that class (excluding any shares held as treasury shares), or
(b) a special resolution passed at a separate general meeting of the holders of that class sanctioning the variation.
(5) Any amendment of a provision contained in a company's articles for the variation of the rights attached to a class of shares, or the insertion of any such provision into the articles, is itself to be treated as a variation of those rights.
(6) In this section, and (except where the context otherwise requires) in any provision in a company's articles for the variation of the rights attached to a class of shares, references to the variation of those rights include references to their abrogation.
631 Variation of class rights: companies without a share capital
(1) This section is concerned with the variation of the rights of a class of members of a company where the company does not have a share capital.
(2) Rights of a class of members may only be varied—
(a) in accordance with provision in the company's articles for the variation of those rights, or
(b) where the company's articles contain no such provision, if the members of that class consent to the variation in accordance with this section.
(3) This is without prejudice to any other restrictions on the variation of the rights.
(4) The consent required for the purposes of this section on the part of the members of a class is—
(a) consent in writing from at least three-quarters of the members of the class, or
(b) a special resolution passed at a separate general meeting of the members of that class sanctioning the variation.
(5) Any amendment of a provision contained in a company's articles for the variation of the rights of a class of members, or the insertion of any such provision into the articles, is itself to be treated as a variation of those rights.
(6) In this section, and (except where the context otherwise requires) in any provision in a company's articles for the variation of the rights of a class of members, references to the variation of those rights include references to their abrogation.
632 Variation of class rights: saving for court's powers under other provisions
Nothing in section 630 or 631 (variation of class rights) affects the power of the court under—
section 98 (application to cancel resolution for public company to be re-registered as private),
Part 26 (arrangements and reconstructions: general)
Part 26A (arrangements and reconstructions: companies in financial difficulty), or
Part 30 (protection of members against unfair prejudice).
633 Right to object to variation: companies having a share capital
(1) This section applies where the rights attached to any class of shares in a company are varied under section 630 (variation of class rights: companies having a share capital).
(2) The holders of not less in the aggregate than 15% of the issued shares of the class in question (being persons who did not consent to or vote in favour of the resolution for the variation) may apply to the court to have the variation cancelled.
For this purpose any of the company's share capital held as treasury shares is disregarded.
(3) If such an application is made, the variation has no effect unless and until it is confirmed by the court.
(4) Application to the court—
(a) must be made within 21 days after the date on which the consent was given or the resolution was passed (as the case may be), and
(b) may be made on behalf of the shareholders entitled to make the application by such one or more of their number as they may appoint in writing for the purpose.
(5) The court, after hearing the applicant and any other persons who apply to the court to be heard and appear to the court to be interested in the application, may, if satisfied having regard to all the circumstances of the case that the variation would unfairly prejudice the shareholders of the class represented by the applicant, disallow the variation, and shall if not so satisfied confirm it.
The decision of the court on any such application is final.
(6) References in this section to the variation of the rights of holders of a class of shares include references to their abrogation.
634 Right to object to variation: companies without a share capital
(1) This section applies where the rights of any class of members of a company are varied under section 631 (variation of class rights: companies without a share capital).
(2) Members amounting to not less than 15% of the members of the class in question (being persons who did not consent to or vote in favour of the resolution for the variation) may apply to the court to have the variation cancelled.
(3) If such an application is made, the variation has no effect unless and until it is confirmed by the court.
(4) Application to the court must be made within 21 days after the date on which the consent was given or the resolution was passed (as the case may be) and may be made on behalf of the members entitled to make the application by such one or more of their number as they may appoint in writing for the purpose.
(5) The court, after hearing the applicant and any other persons who apply to the court to be heard and appear to the court to be interested in the application, may, if satisfied having regard to all the circumstances of the case that the variation would unfairly prejudice the members of the class represented by the applicant, disallow the variation, and shall if not so satisfied confirm it.
The decision of the court on any such application is final.
(6) References in this section to the variation of the rights of a class of members include references to their abrogation.
635 Copy of court order to be forwarded to the registrar
(1) The company must within 15 days after the making of an order by the court on an application under section 633 or 634 (objection to variation of class rights) forward a copy of the order to the registrar.
(2) If default is made in complying with this section an offence is committed by—
(a) the company, and
(b) every officer of the company who is in default.
(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 and, for continued contravention, a daily default fine not exceeding one-tenth of level 3 on the standard scale.
636 Notice of name or other designation of class of shares
(1) Where a company assigns a name or other designation, or a new name or other designation, to any class or description of its shares, it must within one month from doing so deliver to the registrar a notice giving particulars of the name or designation so assigned.
(2) If default is made in complying with this section, an offence is committed by—
(a) the company, and
(b) every officer of the company who is in default.
(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 and, for continued contravention, a daily default fine not exceeding one-tenth of level 3 on the standard scale.
637 Notice of particulars of variation of rights attached to shares
(1) Where the rights attached to any shares of a company are varied, the company must within one month from the date on which the variation is made deliver to the registrar a notice giving particulars of the variation.
(2) If default is made in complying with this section, an offence is committed by—
(a) the company, and
(b) every officer of the company who is in default.
(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 and, for continued contravention, a daily default fine not exceeding one-tenth of level 3 on the standard scale.
(1) If a company not having a share capital creates a new class of members, the company must within one month from the date on which the new class is created deliver to the registrar a notice containing particulars of the rights attached to that class.
(2) If default is made in complying with this section, an offence is committed by—
(a) the company, and
(b) every officer of the company who is in default.
(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 and, for continued contravention, a daily default fine not exceeding one-tenth of level 3 on the standard scale.
639 Notice of name or other designation of class of members
(1) Where a company not having a share capital assigns a name or other designation, or a new name or other designation, to any class of its members, it must within one month from doing so deliver to the registrar a notice giving particulars of the name or designation so assigned.
(2) If default is made in complying with this section, an offence is committed by—
(a) the company, and
(b) every officer of the company who is in default.
(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 and, for continued contravention, a daily default fine not exceeding one-tenth of level 3 on the standard scale.
640 Notice of particulars of variation of class rights
(1) If the rights of any class of members of a company not having a share capital are varied, the company must within one month from the date on which the variation is made deliver to the registrar a notice containing particulars of the variation.
(2) If default is made in complying with this section, an offence is committed by—
(a) the company, and
(b) every officer of the company who is in default.
(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 and, for continued contravention, a daily default fine not exceeding one-tenth of level 3 on the standard scale.
641 Circumstances in which a company may reduce its share capital
(1) A limited company having a share capital may reduce its share capital—
(a) in the case of a private company limited by shares, by special resolution supported by a solvency statement (see sections 642 to 644);
(b) in any case, by special resolution confirmed by the court (see sections 645 to 651).
(2) A company may not reduce its capital under subsection (1)(a) if as a result of the reduction there would no longer be any member of the company holding shares other than redeemable shares.
(2A) A company may not reduce its share capital under subsection (1)(a) or (b) as part of a scheme by virtue of which a person, or a person together with its associates, is to acquire all the shares in the company or (where there is more than one class of shares in a company) all the shares of one or more classes, in each case other than shares that are already held by that person or its associates.
(2B) Subsection (2A) does not apply to a scheme under which—
(a) the company is to have a new parent undertaking,
(b) all or substantially all of the members of the company become members of the parent undertaking, and
(c) the members of the company are to hold proportions of the equity share capital of the parent undertaking in the same or substantially the same proportions as they hold the equity share capital of the company.
(2C) In this section—
“associate” has the meaning given by section 988 (meaning of “associate”), reading references in that section to an offeror as references to the person acquiring the shares in the company;
“scheme” means a compromise or arrangement sanctioned by the court under Part 26 or 26A (arrangements and reconstructions).
(3) Subject to subsections (2) to (2B), a company may reduce its share capital under this section in any way.
(4) In particular, a company may—
(a) extinguish or reduce the liability on any of its shares in respect of share capital not paid up, or
(b) either with or without extinguishing or reducing liability on any of its shares—
(i) cancel any paid-up share capital that is lost or unrepresented by available assets, or
(ii) repay any paid-up share capital in excess of the company's wants.
(5) A special resolution under this section may not provide for a reduction of share capital to take effect later than the date on which the resolution has effect in accordance with this Chapter.
(6) This Chapter (apart from subsection (5) above) has effect subject to any provision of the company's articles restricting or prohibiting the reduction of the company's share capital.
(7) In subsection (1)(b), section 91(5)(b)(iii), sections 645 to 651 (except in the phrases “sanctioned by the court under Part 26” and “sanctioned by the court under Part 26A”) and 653(1) “the court” means, in England and Wales, the High Court.
642 Reduction of capital supported by solvency statement
(1) A resolution for reducing share capital of a private company limited by shares is supported by a solvency statement if—
(a) the directors of the company make a statement of the solvency of the company in accordance with section 643 (a “solvency statement”) not more than 15 days before the date on which the resolution is passed, and
(b) the resolution and solvency statement are registered in accordance with section 644.
(2) Where the resolution is proposed as a written resolution, a copy of the solvency statement must be sent or submitted to every eligible member at or before the time at which the proposed resolution is sent or submitted to him.
(3) Where the resolution is proposed at a general meeting, a copy of the solvency statement must be made available for inspection by members of the company throughout that meeting.
(4) The validity of a resolution is not affected by a failure to comply with subsection (2) or (3).
(1) A solvency statement is a statement that each of the directors—
(a) has formed the opinion, as regards the company's situation at the date of the statement, that there is no ground on which the company could then be found to be unable to pay (or otherwise discharge) its debts; and
(b) has also formed the opinion—
(i) if it is intended to commence the winding up of the company within twelve months of that date, that the company will be able to pay (or otherwise discharge) its debts in full within twelve months of the commencement of the winding up; or
(ii) in any other case, that the company will be able to pay (or otherwise discharge) its debts as they fall due during the year immediately following that date.
(2) In forming those opinions, the directors must take into account all of the company's liabilities (including any contingent or prospective liabilities).
(3) The solvency statement must be in the prescribed form and must state—
(a) the date on which it is made, and
(b) the name of each director of the company.
(4) If the directors make a solvency statement without having reasonable grounds for the opinions expressed in it, and the statement is delivered to the registrar, an offence is committed by every director who is in default.
(5) A person guilty of an offence under subsection (4) is liable—
(a) on conviction on indictment, to imprisonment for a term not exceeding two years or a fine (or both);
(b) on summary conviction—
(i) in England and Wales, to imprisonment for a term not exceeding twelve months or to a fine not exceeding the statutory maximum (or both);
(ii) in Scotland or Northern Ireland, to imprisonment for a term not exceeding six months, or to a fine not exceeding the statutory maximum (or both).
644 Registration of resolution and supporting documents
(1) Within 15 days after the resolution for reducing share capital is passed the company must deliver to the registrar—
(a) a copy of the solvency statement, and
(b) a statement of capital.
This is in addition to the copy of the resolution itself that is required to be delivered to the registrar under Chapter 3 of Part 3.
(2) The statement of capital must state with respect to the company's share capital as reduced by the resolution—
(a) the total number of shares of the company,
(b) the aggregate nominal value of those shares,
(ba) the aggregate amount (if any) unpaid on those shares (whether on account of their nominal value or by way of premium), and
(c) for each class of shares—
(i) prescribed particulars of the rights attached to the shares,
(ii) the total number of shares of that class, and
(iii) the aggregate nominal value of shares of that class, ...
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(3) The registrar must register the documents delivered to him under subsection (1) on receipt.
(4) The resolution does not take effect until those documents are registered.
(5) The company must also deliver to the registrar, within 15 days after the resolution is passed, a statement by the directors confirming that the solvency statement was—
(a) made not more than 15 days before the date on which the resolution was passed, and
(b) provided to members in accordance with section 642(2) or (3).
(6) The validity of a resolution is not affected by—
(a) a failure to deliver the documents required to be delivered to the registrar under subsection (1) within the time specified in that subsection, or
(b) a failure to comply with subsection (5).
(7) If the company delivers to the registrar a solvency statement that was not provided to members in accordance with section 642(2) or (3), an offence is committed by every officer of the company who is in default.
(8) If default is made in complying with this section, an offence is committed by—
(a) the company, and
(b) every officer of the company who is in default.
(9) A person guilty of an offence under subsection (7) or (8) is liable—
(a) on conviction on indictment, to a fine;
(b) on summary conviction, to a fine not exceeding the statutory maximum.
645 Application to court for order of confirmation
(1) Where a company has passed a resolution for reducing share capital, it may apply to the court for an order confirming the reduction.
(2) If the proposed reduction of capital involves either—
(a) diminution of liability in respect of unpaid share capital, or
(b) the payment to a shareholder of any paid-up share capital,
section 646 (creditors entitled to object to reduction) applies unless the court directs otherwise.
(3) The court may, if having regard to any special circumstances of the case it thinks proper to do so, direct that section 646 is not to apply as regards any class or classes of creditors.
(4) The court may direct that section 646 is to apply in any other case.
(1) Where this section applies (see section 645(2) and (4)), every creditor of the company who
(a) at the date fixed by the court is entitled to any debt or claim that, if that date were the commencement of the winding up of the company would be admissible in proof against the company, and
(b) can show that there is a real likelihood that the reduction would result in the company being unable to discharge his debt or claim when it fell due,
is entitled to object to the reduction of capital.
(2) The court shall settle a list of creditors entitled to object.
(3) For that purpose the court—
(a) shall ascertain, as far as possible without requiring an application from any creditor, the names of those creditors and the nature and amount of their debts or claims, and
(b) may publish notices fixing a day or days within which creditors not entered on the list are to claim to be so entered or are to be excluded from the right of objecting to the reduction of capital.
(4) If a creditor entered on the list whose debt or claim is not discharged or has not determined does not consent to the reduction, the court may, if it thinks fit, dispense with the consent of that creditor on the company securing payment of his debt or claim.
(5) For this purpose the debt or claim must be secured by appropriating (as the court may direct) the following amount—
(a) if the company admits the full amount of the debt or claim or, though not admitting it, is willing to provide for it, the full amount of the debt or claim;
(b) if the company does not admit, and is not willing to provide for, the full amount of the debt or claim, or if the amount is contingent or not ascertained, an amount fixed by the court after the like enquiry and adjudication as if the company were being wound up by the court.
(1) If an officer of the company—
(a) intentionally or recklessly—
(i) conceals the name of a creditor entitled to object to the reduction of capital, or
(ii) misrepresents the nature or amount of the debt or claim of a creditor, or
(b) is knowingly concerned in any such concealment or misrepresentation,
he commits an offence.
(2) A person guilty of an offence under this section is liable—
(a) on conviction on indictment, to a fine;
(b) on summary conviction, to a fine not exceeding the statutory maximum.
(1) The court may make an order confirming the reduction of capital on such terms and conditions as it thinks fit.
(2) The court must not confirm the reduction unless it is satisfied, with respect to every creditor of the company who is entitled to object to the reduction of capital that either—
(a) his consent to the reduction has been obtained, or
(b) his debt or claim has been discharged, or has determined or has been secured.
(3) Where the court confirms the reduction, it may order the company to publish (as the court directs) the reasons for reduction of capital, or such other information in regard to it as the court thinks expedient with a view to giving proper information to the public, and (if the court thinks fit) the causes that led to the reduction.
(4) The court may, if for any special reason it thinks proper to do so, make an order directing that the company must, during such period (commencing on or at any time after the date of the order) as is specified in the order, add to its name as its last words the words “and reduced”.
If such an order is made, those words are, until the end of the period specified in the order, deemed to be part of the company's name.
649 Registration of order and statement of capital
(1) The registrar, on the delivery of a copy of a court order confirming the reduction of a company’s share capital and of a statement of capital (approved by the court), shall register the order and statement.
This is subject to section 650 (public company reducing capital below authorised minimum).
(2) The statement of capital must state with respect to the company's share capital as altered by the order—
(a) the total number of shares of the company,
(b) the aggregate nominal value of those shares,
(ba) the aggregate amount (if any) unpaid on those shares (whether on account of their nominal value or by way of premium), and
(c) for each class of shares—
(i) prescribed particulars of the rights attached to the shares,
(ii) the total number of shares of that class, and
(iii) the aggregate nominal value of shares of that class, ...
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(3) The resolution for reducing share capital, as confirmed by the court's order, takes effect—
(a) in the case of a reduction of share capital that forms part of a compromise or arrangement sanctioned by the court under Part 26 (arrangements and reconstructions: general)—
(i) on delivery of the order and statement of capital to the registrar, or
(ii) if the court so orders, on the registration of the order and statement of capital;
(aa) in the case of a reduction of share capital that forms part of a compromise or arrangement sanctioned by the court under Part 26A (arrangements and reconstructions: companies in financial difficulty)—
(i) in the case of any company other than one to which sub-paragraph (ii) applies, on delivery of the order and statement of capital to the registrar;
(ii) in the case of an overseas company that is not required to register particulars under section 1046, on publication of the order and statement of capital in the Gazette;
(iii) in either case, if the court so orders, on the registration of the order and statement of capital;
(b) in any case not falling within paragraph (a) or (aa), on the registration of the order and statement of capital.
(4) Notice of the registration of the order and statement of capital must be published in such manner as the court may direct.
(5) The registrar must certify the registration of the order and statement of capital.
(6) The certificate—
(a) must be signed by the registrar or authenticated by the registrar's official seal, and
(b) is conclusive evidence—
(i) that the requirements of this Act with respect to the reduction of share capital have been complied with, and
(ii) that the company's share capital is as stated in the statement of capital.
650 Public company reducing capital below authorised minimum
(1) This section applies where the court makes an order confirming a reduction of a public company's capital that has the effect of bringing the nominal value of its allotted share capital below the authorised minimum.
(2) The registrar must not register the order unless either—
(a) the court so directs, or
(b) the company is first re-registered as a private company.
(3) Section 651 provides an expedited procedure for re-registration in these circumstances.
651 Expedited procedure for re-registration as a private company
(1) The court may authorise the company to be re-registered as a private company without its having passed the special resolution required by section 97.
(2) If it does so, the court must specify in the order the changes to the company's name and articles to be made in connection with the re-registration.
(3) The company may then be re-registered as a private company if an application to that effect is delivered to the registrar together with—
(a) a copy of the court's order, and
(b) notice of the company's name, and a copy of the company's articles, as altered by the court's order.
(4) On receipt of such an application the registrar must issue a certificate of incorporation altered to meet the circumstances of the case.
(5) The certificate must state that it is issued on re-registration and the date on which it is issued.
(6) On the issue of the certificate—
(a) the company by virtue of the issue of the certificate becomes a private company, and
(b) the changes in the company's name and articles take effect.
(7) The certificate is conclusive evidence that the requirements of this Act as to re-registration have been complied with.
652 Liability of members following reduction of capital
(1) Where a company's share capital is reduced a member of the company (past or present) is not liable in respect of any share to any call or contribution exceeding in amount the difference (if any) between—
(a) the nominal amount of the share as notified to the registrar in the statement of capital delivered under section 644 , 649, 1028A or 1032A of this Act or paragraph 7 of Schedule 4 to the Small Business, Enterprise and Employment Act 2015, and
(b) the amount paid on the share or the reduced amount (if any) which is deemed to have been paid on it, as the case may be.
(2) This is subject to section 653 (liability to creditor in case of omission from list).
(3) Nothing in this section affects the rights of the contributories among themselves.
653 Liability to creditor in case of omission from list of creditors
(1) This section applies where, in the case of a reduction of capital confirmed by the court—
(a) a creditor entitled to object to the reduction of share capital is by reason of his ignorance—
(i) of the proceedings for reduction of share capital, or
(ii) of their nature and effect with respect to his debt or claim,
not entered on the list of creditors, and
(b) after the reduction of capital the company is unable to pay the amount of his debt or claim.
(2) Every person who was a member of the company at the date on which the resolution for reducing capital took effect under section 649(3) is liable to contribute for the payment of the debt or claim an amount not exceeding that which he would have been liable to contribute if the company had commenced to be wound up on the day before that date.
(3) If the company is wound up, the court on the application of the creditor in question, and proof of ignorance as mentioned in subsection (1)(a), may if it thinks fit—
(a) settle accordingly a list of persons liable to contribute under this section, and
(b) make and enforce calls and orders on them as if they were ordinary contributories in a winding up.
(4) The reference in subsection (1)(b) to a company being unable to pay the amount of a debt or claim has the same meaning as in section 123 of the Insolvency Act 1986 (c. 45) or Article 103 of the Insolvency (Northern Ireland) Order 1989 (S.I. 1989/2405 (N.I. 19)).
654 Treatment of reserve arising from reduction of capital
(1) A reserve arising from the reduction of a company's share capital is not distributable, subject to any provision made by order under this section.
(2) The Secretary of State may by order specify cases in which—
(a) the prohibition in subsection (1) does not apply, and
(b) the reserve is to be treated for the purposes of Part 23 (distributions) as a realised profit.
(3) An order under this section is subject to affirmative resolution procedure.
A person is not debarred from obtaining damages or other compensation from a company by reason only of his holding or having held shares in the company or any right to apply or subscribe for shares or to be included in the company's register of members ... in respect of shares.
656 Public companies: duty of directors to call meeting on serious loss of capital
(1) Where the net assets of a public company are half or less of its called-up share capital, the directors must call a general meeting of the company to consider whether any, and if so what, steps should be taken to deal with the situation.
(2) They must do so not later than 28 days from the earliest day on which that fact is known to a director of the company.
(3) The meeting must be convened for a date not later than 56 days from that day.
(4) If there is a failure to convene a meeting as required by this section, each of the directors of the company who—
(a) knowingly authorises or permits the failure, or
(b) after the period during which the meeting should have been convened, knowingly authorises or permits the failure to continue,
commits an offence.
(5) 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.
(6) Nothing in this section authorises the consideration at a meeting convened in pursuance of subsection (1) of any matter that could not have been considered at that meeting apart from this section.
657 General power to make further provision by regulations
(1) The Secretary of State may by regulations modify the following provisions of this Part—
sections 552 and 553 (prohibited commissions, discounts and allowances),
Chapter 5 (payment for shares),
Chapter 6 (public companies: independent valuation of non-cash consideration),
Chapter 7 (share premiums),
sections 622 to 628 (redenomination of share capital),
Chapter 10 (reduction of capital), and
section 656 (public companies: duty of directors to call meeting on serious loss of capital).
(2) The regulations may—
(a) amend or repeal any of those provisions, or
(b) make such other provision as appears to the Secretary of State appropriate in place of any of those provisions.
(3) Regulations under this section may make consequential amendments or repeals in other provisions of this Act, or in other enactments.
(4) Regulations under this section are subject to affirmative resolution procedure.
658 General rule against limited company acquiring its own shares
(1) A limited company must not acquire its own shares, whether by purchase, subscription or otherwise, except in accordance with the provisions of this Part.
(2) If a company purports to act in contravention of this section—
(a) an offence is committed by—
(i) the company, and
(ii) every officer of the company who is in default, and
(b) the purported acquisition is void.
(3) A person guilty of an offence under this section is liable—
(a) on conviction on indictment, to imprisonment for a term not exceeding two years or a fine (or both);
(b) on summary conviction—
(i) in England and Wales, to imprisonment for a term not exceeding twelve months or a fine not exceeding the statutory maximum (or both);
(ii) in Scotland or Northern Ireland, to imprisonment for a term not exceeding six months or a fine not exceeding the statutory maximum (or both).