Change 1 Article Choose an article Title and introductory text 1 Mode of forming incorporated company. 2 Requirements with respect to memorandum. 3 Stamp and signature of memorandum. 4 Restriction on alteration of memorandum. 5 Mode in which and extent to which objects of company may be altered. 6 Articles prescribing regulations for companies. 7 Regulations required in case of unlimited company or company limited by guarantee. 8 Adoption and application of Table A. 9 Printing, stamp, and signature of articles. 10 Alteration of articles by special resolution. 11 Statutory forms of memorandum and articles. 12 Registration of memorandum and articles. 13 Effect of registration. 14 Power of company to hold lands. 15 Conclusiveness of certificate of incorporation. 16 Registration of unlimited company as limited. 17 Prohibition of registration of companies by undesirable names. 18 Change of name. 19 Power to dispense with “limited ” in name of charitable and other companies. 20 Effect of memorandum and articles. 21 Provision as to memorandum and articles of companies limited by guarantee. 22 Alterations in memorandum or articles increasing liability to contribute to share capital not to bind existing members without consent. 23 Power to alter conditions in memorandum which could have been contained in articles. 24 Copies of memorandum and articles to be given to members. 25 Issued copies of memorandum to embody alterations. 26 Definition of member. 27 Membership of holding company. 28 Meaning of “private company ”. 29 Consequences of default in complying with conditions constituting a company a private company. 30 Statement in lieu of prospectus to be delivered to registrar by company on ceasing to be private company. 31 Members severally liable for debts where business carried on with fewer than seven, or in case of private company two, members. 32 Form or contracts. 33 Bills of exchange and promissory notes. 34 Execution of deeds abroad. 35 Power for company to have official seal for use abroad. 36 Authentication of documents. 37 Dating of prospectus. 38 Matters to be stated and reports to be set out in prospectus. 39 Exclusion of foregoing section and relaxation of Fourth Schedule in case of certain prospectuses. 40 Expert's consent to issue of prospectus containing statement by him. 41 Registration of prospectus. 42 Restriction on alteration of terms mentioned in prospectus or statement in lieu of prospectus. 43 Civil liability for mis-statements in prospectus. 44 Criminal liability for mis-statements in prospectus. 45 Document containing offer of shares or debentures for sale to be deemed prospectus. 46 Interpretation of provisions relating to prospectuses. 47 Prohibition of allotment unless minimum subscription received. 48 Prohibition of allotment in certain cases unless statement in lieu of prospectus delivered to registrar. 49 Effect of irregular allotment. 50 Applications for, and allotment of, shares and debentures. 51 Allotment of shares and debentures to be dealt in on stock exchange. 52 Return as to allotments. 53 Power to pay certain commissions, and prohibition of payment of all other commissions, discounts, &c. 54 Prohibition of provision of financial assistance by company for purchase of or subscription for its own, or its holding company's, shares. 55 Construction of references to offering shares or debentures to the public. 56 Application of premiums received on issue of shares. 57 Power to issue shares at a discount. 58 Power to issue redeemable preference shares. 59 Power of company to arrange for different amounts being paid on shares. 60 Reserve liability of limited company. 61 Power of company limited by shares to alter its share capital. 62 Notice to registrar of consolidation of share capital, conversion of shares into stock, &c. 63 Notice of increase of share capital. 64 Power of unlimited company to provide for reserve share capital on re-registration. 65 Power of company to pay interest out of capital in certain cases. 66 Special resolution for reduction of share capital. 67 Application to court for confirming order, objections by creditors, and settlement of list of objecting creditors. 68 Order confirming reduction and powers of court on making such order. 69 Registration of order and minute of reduction. 70 Liability of members in respect of reduced shares. 71 Penalty for concealing name of creditor, &c. 72 Rights of holders of special classes of shares. 73 Nature of shares. 74 Numbering of shares. 75 Transfer not to be registered except on production of instrument of transfer. 76 Transfer by personal representative. 77 Registration of transfer at request of transferor. 78 Notice of refusal to register transfer. 79 Certification of transfers. 80 Duties of company with respect to issue of certificates. 81 Certificate to be evidence of title. 82 Evidence of grant of probate. 83 Issue and effect of share warrants to bearer. 84 Penalty for personation of shareholder. 85 Offences in connection with share warrants in Scotland. 86 Provisions as to registers of debenture holders. 87 Rights of inspection of register of debenture holders and to copies of register and trust deed. 88 Liability of trustees for debenture holders. 89 Perpetual debentures. 90 Power to re-issue redeemed debentures in certain cases. 91 Saving, in case of re-issued debentures, of rights of certain mortgagees. 92 Specific performance of contracts to subscribe for debentures. 93 Validity of debentures to bearer in Scotland. 94 Payment of certain debts out of assets subject to floating charge in priority to claims under the charge. 95 Registration of charges created by companies registered in England. 96 Duty of company to register charges created by company. 97 Duty of company to register charges existing on property acquired. 98 Register of charges to be kept by registrar of companies. 99 Endorsement of certificate of registration on debentures. 100 Entries of satisfaction and release of property from charge. 101 Rectification of register of charges. 102 Registration of enforcement of security. 103 Copies of instruments creating charges to be kept by company. 104 Company's register of charges. 105 Right to inspect copies of instruments creating mortgages and charges and company's register of charges. 106 Application of Part III to charges created, and property subject to charge acquired, by company incorporated outside England. 107 Registered office of company. 108 Publication of name by company. 109 Restrictions on commencement of business. 110 Register of members. 111 Index of members. 112 Provisions as to entries in register in relation to share warrants. 113 Inspection of register and index. 114 Consequences of failure to comply with requirements as to register owing to agent's default. 115 Power to close register. 116 Power of court to rectify register. 117 Trusts not to be entered on register in England. 118 Register to be evidence. 119 Power for company to keep dominion register. 120 Regulations as to dominion register. 121 Stamp duties in case of shares registered in dominion registers. 122 Power to extend provisions as to dominion registers to other countries. 123 Provisions as to branch registers of dominion companies kept in the United Kingdom. 124 Annual return to be made by company having a share capital. 125 Annual return to be made by company not having a share capital. 126 Time for completion of annual return. 127 Documents to be annexed to annual return. 128 Certificates to be sent by private company with annual return. 129 Exemption, in certain cases, of private companies from requirements of s.127. 130 Statutory meeting and statutory report. 131 Annual general meeting. 132 Convening of extraordinary general meeting on requisition. 133 Length of notice for calling meetings. 134 General provisions as to meetings and votes. 135 Power of court to order meeting. 136 Proxies. 137 Right to demand a poll. 138 Voting on a poll. 139 Representation of corporations at meetings of companies and of creditors. 140 Circulation of members' resolutions, &c. 141 Extraordinary and special resolutions. 142 Resolutions requiring special notice. 143 Registration and copies of certain resolutions and agreements. 144 Resolutions passed at adjourned meetings. 145 Minutes of proceedings of meetings of company and of directors and managers. 146 Inspection of minute books. 147 Keeping of books of account. 148 Profit and loss account and balance sheet. 149 General provisions as to contents and form of accounts. 150 Obligation to lay group accounts before holding company. 151 Form of group accounts. 152 Contents of group accounts. 153 Financial year of holding company and subsidiary. 154 Meaning of “holding company ” and “subsidiary ”. 155 Signing of balance sheet. 156 Accounts and auditors' report to be annexed to balance sheet. 157 Directors report to be attached to balance sheet. 158 Right to receive copies of balance sheets and auditors' report. 159 Appointment and remuneration of auditors. 160 Provisions as to resolutions relating to appointment and removal of auditors. 161 Disqualifications for appointment as auditor. 162 Auditors' report and right of access to books and to attend and be heard at general meetings. 163 Construction of references to documents annexed to accounts. 164 Investigation of company's affairs on application of members. 165 Investigation of company's affairs in other cases. 166 Power of inspectors to carry investigation into affairs of related companies. 167 Production of documents, and evidence, on investigation. 168 Inspectors' report. 169 Proceedings on inspectors' report. 170 Expenses of investigation of company's affairs. 171 Inspectors' report to be evidence. 172 Appointment and powers of inspectors to investigate ownership of company. 173 Power to require information as to persons interested in shares or debentures. 174 Power to impose restrictions on shares or debentures. 175 Saving for solicitors and bankers. 176 Directors. 177 Secretary. 178 Prohibition of certain persons being sole director or secretary. 179 Avoidance of acts done by person in dual capacity as director and secretary. 180 Validity of acts of directors. 181 Restrictions on appointment or advertisement of director. 182 Share qualifications of directors. 183 Appointment of directors to be voted on individually. 184 Removal of directors. 185 Retirement of directors under age limit. 186 Duty of directors to disclose age to company. 187 Provisions as to undischarged bankrupts acting as directors. 188 Power to restrain fraudulent persons from managing companies. 189 Prohibition of tax-free payments to directors. 190 Prohibition of loans to directors. 191 Approval of company requisite for payment by it to director for loss of office, &c. 192 Approval of company requisite for any payment, in connection with transfer of its property, to director for loss of office, &c. 193 Duty of director to disclose payment for loss of office, &c, made in connection with transfer of shares in company. 194 Provisions supplementary to three foregoing sections. 195 Register of directors' shareholdings, &c. 196 Particulars in accounts of directors' salaries, pensions, &c. 197 Particulars in accounts of loans to officers, &c. 198 General duty to make disclosure for purposes of three foregoing sections. 199 Disclosure by directors of interests in contracts. 200 Register of directors and secretaries. 201 Particulars with respect to directors in trade catalogues, circulars, &c. 202 Limited company may have directors with unlimited liability. 203 Special resolution of limited company making liability of directors unlimited. 204 Provisions as to assignment of office by directors. 205 Provisions as to liability of officers and auditors. 206 Power to compromise, with creditors and members. 207 Information as to compromises with creditors and members. 208 Provisions for facilitating reconstruction and amalgamation of companies. 209 Power to acquire shares of shareholders dissenting from scheme or contract approved by majority. 210 Alternative remedy to winding up in cases of oppression. 211 Modes of winding up. 212 Liability as contributories of present and past members. 213 Definition of “contributory ”. 214 Nature of liability of contributory. 215 Contributories in case of death, of member. 216 Contributories in case of bankruptcy of member. 217 Provision as to married women. 218 Jurisdiction to wind up companies registered in England. 219 Transfer of proceedings from one court to another and statement of case by county court. 220 Jurisdiction to wind up companies registered in Scotland. 221 Power in Scotland to remit winding up to Lord Ordinary. 222 Circumstances in which company may be wound up by court. 223 Definition of inability to pay debts. 224 Provisions as to applications for winding up. 225 Powers of court on hearing petition. 226 Power to stay or restrain proceedings against company. 227 Avoidance of dispositions of property, &c, after commencement of winding up. 228 Avoidance of attachments, &c, in case of English company, and in case of effects in England of Scottish company. 229 Commencement of winding up by the court. 230 Copy of order to be forwarded to registrar. 231 Actions stayed on winding-up order. 232 Effect of winding-up order. 233 Official receiver in bankruptcy to be official receiver for winding-up purposes. 234 Appointment of official receiver by court in certain cases. 235 Statement of company's affairs to be submitted to official receiver. 236 Report by official receiver. 237 Power of court to appoint liquidators. 238 Appointment and powers of provisional liquidator. 239 Appointment, style, &c, of liquidators in England. 240 Provisions where person other than official receiver is appointed liquidator. 241 Provisions as to liquidators in Scotland. 242 General provisions as to liquidators. 243 Custody of company's property. 244 Vesting of property of company in liquidator. 245 Powers of liquidator. 246 Exercise and control of liquidator's powers in England. 247 Books to be kept by liquidator in England. 248 Payments of liquidator in England into bank. 249 Audit of liquidator's accounts in England. 250 Control of Board of Trade over liquidators in England. 251 Release of liquidators in England. 252 Meetings of creditors and contributories to determine whether committee of inspection shall be appointed. 253 Constitution and proceedings of committee of inspection. 254 Powers of Board of Trade in England where no committee of inspection. 255 Additional powers of committee of inspection in Scotland. 256 Power to stay winding up. 257 Settlement of list of contributories and application of assets. 258 Delivery of property to liquidator. 259 Payment of debts due by contributory to company and extent to which set-off allowed. 260 Power of court to make calls. 261 Payment into Bank of moneys due to company. 262 Order on contributory conclusive evidence. 263 Appointment in England of special manager. 264 Power to exclude creditors not proving in time. 265 Adjustment of rights of contributories. 266 Inspection of books by creditors and contributories. 267 Power to order costs of winding up to be paid out of assets. 268 Power to summon persons suspected of having property of company, &c. 269 Attendance of officers of company at meetings of creditors, &c, in Scotland. 270 Power in England to order public examination of promoters and officers. 271 Power to arrest absconding contributory. 272 Powers of court cumulative. 273 Delegation to liquidator of certain powers of court in England. 274 Dissolution of company. 275 Order for calls on contributories in Scotland. 276 Enforcement throughout United Kingdom of orders made in winding up. 277 Appeals from orders in Scotland. 278 Circumstances in which company may be wound up voluntarily. 279 Notice of resolution to wind up voluntarily. 280 Commencement of voluntary winding up. 281 Effect of voluntary winding up on business and status of company. 282 Avoidance of transfers, &c., after commencement of voluntary winding up. 283 Statutory declaration of solvency in case of proposal to wind up voluntarily. 284 Provisions applicable to a members' winding up. 285 Power of company to appoint and fix remuneration of liquidators. 286 Power to fill vacancy in office of liquidator. 287 Power of liquidator to accept shares, &c, as consideration for sale of property of company. 288 Duty of liquidator to call creditors' meeting in case of insolvency. 289 Duty of liquidator to call general meeting at end of each year. 290 Final meeting and dissolution. 291 Alternative provisions as to annual and final meetings in case of insolvency. 292 Provisions applicable to a creditors' winding up. 293 Meeting of creditors. 294 Appointment of liquidator. 295 Appointment of committee of inspection. 296 Fixing of liquidators' remuneration and cesser of directors' powers. 297 Power to fill vacancy in office of liquidator. 298 Application of s.287 to a creditors' voluntary winding up. 299 Duty of liquidator to call meetings of company and of creditors at end of each year. 300 Final meeting and dissolution. 301 Provisions applicable to every voluntary winding up. 302 Distribution of property of company. 303 Powers and duties of liquidator in voluntary winding up. 304 Power of court to appoint and remove liquidator in voluntary winding up. 305 Notice by liquidator of his appointment. 306 Arrangement when binding on creditors. 307 Power to apply to court to have questions determined or powers exercised. 308 Power of court in Scotland to stay proceedings against company. 309 Costs of voluntary winding up. 310 Saving for rights of creditors and contributories. 311 Power to order winding up subject to supervision. 312 Effect of petition for winding up subject to supervision. 313 Application of ss.227 and 228 to winding up subject to supervision. 314 Power of court to appoint or remove liquidators. 315 Effect of supervision order. 316 Debts of all descriptions may be proved. 317 Application of bankruptcy rules in winding up of insolvent English companies. 318 Ranking of claims in Scotland. 319 Preferential payments. 320 Fraudulent preference. 321 Liabilities and rights of certain fraudulently preferred persons. 322 Effect of floating charge. 323 Disclaimer of onerous property in case of company wound up in England. 324 Liability for rentcharge on company's land after disclaimer. 325 Restriction of rights of creditor as to execution or attachment in case of company being wound up in England. 326 Duties of sheriff as to goods taken in execution. 327 Effect of diligence within 60 days of winding up in case of Scottish company and in case of effects in Scotland of English company. 328 Offences by officers of companies in liquidation. 329 Penalty for falsification of books. 330 Frauds by officers of companies which have gone into liquidation. 331 Liability where proper accounts not kept. 332 Responsibility for fraudulent trading of persons concerned. 333 Power of court to assess damages against delinquent directors, &c. 334 Prosecution of delinquent officers and members of company. 335 Disqualification for appointment as liquidator. 336 Corrupt inducement affecting appointment as liquidator. 337 Enforcement of duty of liquidator to make returns, &c. 338 Notification that a company is in liquidation. 339 Exemption of certain documents from stamp duty on winding up of companies. 340 Books of company to be evidence. 341 Disposal of books and papers of company. 342 Information as to pending liquidations. 343 Unclaimed assets in England to be paid to Companies Liquidation Account. 344 Unclaimed dividends, &c, in Scotland to be lodged in bank. 345 Resolutions passed at adjourned meetings of creditors and contributories. 346 Meetings to ascertain wishes of creditors or contributories. 347 Judicial notice of signature of officers. 348 Special commission for receiving evidence. 349 Court may order examination of persons in Scotland. 350 Costs of application for leave to proceed against company being wound up in Scotland. 351 Affidavits, &c, in United Kingdom and dominions. 352 Power of court to declare dissolution of company void. 353 Registrar may strike defunct company off register. 354 Property of dissolved company to be bona vacantia. 355 Power of Crown to disclaim title to property vesting under foregoing section. 356 Liability for rentcharge on company's land after dissolution. 357 Attachment of debt due to contributory on winding up in stannaries court. 358 Preferential payments in stannaries cases. 359 Provisions as to mine club funds. 360 Companies Liquidation Account. 361 Investment of surplus funds on general account. 362 Separate accounts of particular estates. 363 Officers and remuneration. 364 Returns by officers in English winding up. 365 General rules and fees for winding up. 366 Disqualification of body corporate for appointment as receiver. 367 Disqualification of undischarged bankrupt from acting as receiver or manager. 368 Power in England to appoint official receiver as receiver for debenture holders or creditors. 369 Receivers and managers appointed out of court. 370 Notification that receiver or manager appointed. 371 Power of court to fix remuneration on application of liquidator. 372 Provisions as to information where receiver or manager appointed. 373 Special provisions as to statement submitted to receiver. 374 Delivery to registrar of accounts of receivers and managers. 375 Enforcement of duty of receivers and managers to make returns, &c. 376 Construction of references to receivers and managers. 377 Application of Act to companies formed and registered under former Companies Acts. 378 Application of Act to companies registered but not formed under former Companies Acts. 379 Application of Act to unlimited companies re-registered under former Companies Acts. 380 Provisions as to companies registered under the Joint Stock Companies Acts. 381 Exclusion of companies registered in Northern Ireland or Eire. 382 Companies capable of being registered. 383 Definition of joint stock company. 384 Requirements for registration by joint stock companies. 385 Requirements for registration by other than joint stock companies. 386 Authentication of statements of existing companies. 387 Registrar may require evidence as to nature of company. 388 Change of name for purposes of registration. 389 Addition of “limited ” to name. 390 Certificate of registration of existing companies. 391 Vesting of property on registration. 392 Saving for existing liabilities. 393 Continuation of existing actions. 394 Effect of registration under Part VIII. 395 Power to substitute memorandum and articles for deed of settlement. 396 Power of court to stay or restrain proceedings. 397 Actions stayed on winding-up order. 398 Meaning of unregistered company. 399 Winding up of unregistered companies. 400 Oversea companies may be wound up although dissolved. 401 Contributories in winding up of unregistered company. 402 Power of court to stay or restrain proceedings. 403 Actions stayed on winding-up order. 404 Provisions of Part IX cumulative. 405 Saving for enactments providing for winding up under former Companies Acts. 406 Application of ss.407 to 414. 407 Documents, &c, to be delivered to registrar by oversea companies carrying on business in Great Britain. 408 Power of oversea company to hold lands. 409 Return to be delivered to registrar by oversea company where documents, &c., altered. 410 Accounts of oversea company. 411 Obligation to state name of oversea company, whether limited, and country where incorporated. 412 Service on oversea company. 413 Office where documents to be filed. 414 Penalties. 415 Interpretation of ss. 407 to 414. 416 Special provisions as to delivery of documents by companies incorporated in Channel Islands or Isle of Man. 417 Dating of prospectus and particulars to be contained therein. 418 Exclusion of foregoing section and relaxation of Fourth Schedule in case of certain prospectuses. 419 Provisions as to expert's consent, and allotment. 420 Registration of prospectus. 421 Penalty for contravention of four foregoing sections. 422 Civil liability for mis-statements in prospectus. 423 Interpretation of provisions as to prospectuses. 424 Registration offices in England and Scotland. 425 Fees. 426 Inspection, production and evidence of documents kept by registrar. 427 Power of registrar in England to direct removal of documents to Public Record Office. 428 Enforcement of duty of company to make returns to registrar. 429 Prohibition of banking partnerships with more than ten members. 430 On registration of banking company with limited liability, notice to be given to customers. 431 Liability of bank of issue unlimited in respect of notes. 432 Privileges of banks making annual return. 433 Banking and certain other companies to publish periodical statement. 434 Prohibition of partnerships with more than twenty members. 435 Application of certain provisions of this Act to unregistered companies. 436 Form of registers, &c. 437 Service of documents on a company. 438 Penalty for false statements. 439 Penalty for improper use of word “limited ”. 440 Provision with respect to default fines and meaning of “officer in default ”. 441 Production and inspection of books where offence suspected. 442 Provisions as to summary proceedings. 443 Proceedings on indictment in Scotland against bodies corporate. 444 Application of fines. 445 Saving as to private prosecutors. 446 Saving for privileged communications. 447 Costs in actions by certain limited companies. 448 Power of court to grant relief in certain cases. 449 Power to enforce orders. 450 Jurisdiction of stannaries court. 451 Annual report by Board of Trade. 452 Authentication of documents issued by Board of Trade. 453 Orders and certificates of Board to be evidence. 454 Power to alter tables and forms. 455 Interpretation. 456 Amendments of other Acts. 457 Construction of references in other Acts to subsidiary companies as defined by, and companies registered under, the Companies Act, 1929. 458 Effect of provisions of former Companies Acts as to registration of charges on land and keeping books of account. 459 Repeal and savings. 460 Provisions as to winding-up proceedings commenced before 1st November, 1929. 461 Application to Northern Ireland. 462 Short title and commencement. FIRST SCHEDULE Tables A, B, C, D and E. SECOND SCHEDULE Form of Licence to hold Lands. THIRD SCHEDULE Form of Statement in lieu of Prospectus to be delivered to Registrar by a Private Company on becoming a Public Company and Reports to be set out therein. FOURTH SCHEDULE Matters to be specified in Prospectus and Reports to be set out therein. FIFTH SCHEDULE Form of Statement in lieu of Prospectus to be delivered to Registrar by a Company which does not issue a Prospectus or which does not go to Allotment on a Prospectus issued, and Reports to be set out therein. SIXTH SCHEDULE Contents and Form of Annual Return of a Company having a Share Capital. SEVENTH SCHEDULE Conditions as to Interests in Shares and Debentures of Exempt Private Company. EIGHTH SCHEDULE Accounts. NINTH SCHEDULE Matters to be expressly stated in Auditors' Report. TENTH SCHEDULE Orders in Course of Winding Up pronounced in Vacation in Scotland. ELEVENTH SCHEDULE Provisions of this Act which do not apply in the case of a Winding Up subject to Supervision of the Court. TWELFTH SCHEDULE Fees to be paid to the Registrar of Companies. THIRTEENTH SCHEDULE Form of Statement to be published by Banking and Insurance Companies and Deposit, Provident or Benefit Societies. FOURTEENTH SCHEDULE Provisions of this Act applied to Unregistered Companies. FIFTEENTH SCHEDULE Provisions Referred to in Section 438 of this Act. SIXTEENTH SCHEDULE Amendments of other Acts. SEVENTEENTH SCHEDULE Enactments Repealed. EIGHTEENTH SCHEDULE Enactments Saved.
What to do with it
As published
56 Application of premiums received on issue of shares.
(1) Where a company issues shares at a premium, whether for cash or otherwise, a sum equal to the aggregate amount or value of the premiums on those shares shall be transferred to an account, to be called “the share premium account ”, and the provisions of this Act relating to the reduction of the share capital of a company shall, except as provided in this section, apply as if the share premium account were paid up share capital of the company.
(2) The share premium account may, notwithstanding anything in the foregoing subsection, be applied by the company in paying up unissued shares of the company to be issued to members of the company as fully paid bonus shares, in waiting off—
(a) the preliminary expenses of the company; or
(b) the expenses of, or the commission paid or discount allowed on, any issue of shares or debentures of the company;
or in providing for the premium payable on redemption of any redeemable preference shares or of any debentures of the company.
(3) Where a company has before the commencement of this Act issued any shares at a premium, this section shall apply as if the shares had been issued after the commencement of this Act:
Provided that any part of the premiums which has been so applied that it does not at the commencement of this Act form an identifiable part of the company's reserves within the meaning of the Eighth Schedule to this Act shall be disregarded in determining the sum to be included in the share premium account.
Your wording
Your change, as a redline
56 Application of premiums received on issue of shares.
(1) Where a company issues shares at a premium, whether for cash or otherwise, a sum equal to the aggregate amount or value of the premiums on those shares shall be transferred to an account, to be called “the share premium account ”, and the provisions of this Act relating to the reduction of the share capital of a company shall, except as provided in this section, apply as if the share premium account were paid up share capital of the company.
(2) The share premium account may, notwithstanding anything in the foregoing subsection, be applied by the company in paying up unissued shares of the company to be issued to members of the company as fully paid bonus shares, in waiting off—
(a) the preliminary expenses of the company; or
(b) the expenses of, or the commission paid or discount allowed on, any issue of shares or debentures of the company;
or in providing for the premium payable on redemption of any redeemable preference shares or of any debentures of the company.
(3) Where a company has before the commencement of this Act issued any shares at a premium, this section shall apply as if the shares had been issued after the commencement of this Act:
Provided that any part of the premiums which has been so applied that it does not at the commencement of this Act form an identifiable part of the company's reserves within the meaning of the Eighth Schedule to this Act shall be disregarded in determining the sum to be included in the share premium account.
A proposal here is not law. Support on Solon is evidence that people want the change; the official route says what it takes to make it law.