Part I Formation and Registration of Companies; Juridical Status and Membership

Chapter I Company Formation

Memorandum of association

1 Mode of forming incorporated company.

^F1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2 Requirements with respect to memorandum.

^F2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3 Forms of memorandum.

^F3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3A Statement of company’s objects: general commercial company.

^F4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4 Resolution to alter objects.

^F5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5 Procedure for objecting to alteration.

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6 Provisions supplementing ss. 4, 5.

^F7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Articles of association

7 Articles prescribing regulations for companies.

^F8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8 Tables A, C, D and E.

^F9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8A Table G.

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9 Alteration of articles by special resolution.

^F11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Registration and its consequences

10 Documents to be sent to registrar.

^F12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11 Minimum authorised capital (public companies).

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12 Duty of registrar.

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13 Effect of registration.

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14 Effect of memorandum and articles.

^F16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15 Memorandum and articles of company limited by guarantee.

^F17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16 Effect of alteration on company’s members.

^F18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

17 Conditions in memorandum which could have been in articles.

^F19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

18 Amendments of memorandum or articles to be registered.

^F20 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

19 Copies of memorandum and articles to be given to members.

^F21 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

20 Issued copy of memorandum to embody alterations.

^F22 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

21 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

A company’s membership

22 Definition of “member”.

^F24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

23 Membership of holding company.

^F25 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

24 Minimum membership for carrying on business.

^F26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Chapter II Company Names

25 Name as stated in memorandum.

^F27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

26 Prohibition on registration of certain names.

^F28 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

27 Alternatives of statutory designations.

^F29 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

28 Change of name.

^F30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

29 Regulations about names.

(1)^F31. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2)^F31. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3)^F31. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4)^F32. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5)^F31. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6)^F31. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

30 Exemption from requirement of “limited” as part of the name.

^F33 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

31 Provisions applying to company exempt under s. 30.

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32 Power to require company to abandon misleading name.

^F35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

33 Prohibition on trading under misleading name.

^F36 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

34 Penalty for improper use of “limited” or “cyfyngedig”.

^F37 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

34A Penalty for improper use of “community interest company” etc.

^F38 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Chapter III A Company’s Capacity; Formalities of Carrying on Business

35 A company’s capacity not limited by its memorandum.

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35A Power of directors to bind the company.

^F40 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

35B No duty to enquire as to capacity of company or authority of directors.

^F41 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

36 Company contracts: England and Wales.

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36A Execution of documents: England and Wales.

(1)^F43. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2)^F44. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3)^F43. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4)^F44. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4A)^F44. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5)^F44. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6)^F44. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7)^F44. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(8)^F44. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

36AA Execution of deeds: England and Wales

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36B Execution of documents by companies.

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36C Pre-incorporation contracts, deeds and obligations.

^F47 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

37 Bills of exchange and promissory notes.

^F48 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

38 Execution of deeds abroad.

^F49 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

39 Power of company to have official seal for use abroad.

^F50 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

40 Official seal for share certificates, etc.

^F51 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

41 Authentication of documents.

^F52 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

42 Events affecting a company’s status.

^F53 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Part II Re-registration as a means of altering a company’s status

Private company becoming public

43 Re-registration of private company as public.

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44 Consideration for shares recently allotted to be valued.

^F55 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

45 Additional requirements relating to share capital.

^F56 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

46 Meaning of “unqualified report” in s. 43(3).

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47 Certificate of re-registration under s. 43.

^F58 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

48 Modification for unlimited company re-registering.

^F59 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Limited company becoming unlimited

49 Re-registration of limited company as unlimited.

^F60 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

50 Certificate of re-registration under s. 49.

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Unlimited company becoming limited

51 Re-registration of unlimited company as limited.

^F62 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

52 Certification of re-registration under s. 51.

^F63 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Public company becoming private

53 Re-registration of public company as private.

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54 Litigated objection to resolution under s. 53.

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55 Certificate of re-registration under s. 53.

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^F68[^F67Part III Capital Issues _cross-notes

Chapter I Issues by Companies Registered, or to be Registered, in Great Britain _cross-notes

The prospectus

56 Matters to be stated, and reports to be set out, in prospectus. _cross-notes

(1)Every prospectus issued by or on behalf of a company, or by or on behalf of any person who is or has been engaged or interested in the formation of the company, must comply—

(a)with Part I of Schedule 3 to this Act, as respects the matters to be stated in the prospectus, and

(b)with Part II of that Schedule, as respects the reports to be set out.

(2)It is unlawful to issue any form of application for shares in or debentures of a company unless the form is issued with a prospectus which complies with the requirements of this section.

(3)Subsection (2) does not apply if it is shown that the form of application was issued either—

(a)in connection with a bona fide invitation to a person to enter into an underwriting agreement with respect to the shares or debentures, or

(b)in relation to shares or debentures which were not offered to the public.

(4)If a person acts in contravention of subsection (2), he is liable to a fine.

(5)This section does not apply—

(a)to the issue to existing members or debenture holders of a company of a prospectus or form of application relating to shares in or debentures of the company, whether an applicant for shares or debentures will or will not have the right to renounce in favour of other persons, or

(b)to the issue of a prospectus or form of application relating to shares or debentures which are or are to be in all respects uniform with shares or debentures previously issued and for the time being listed on a prescribed stock exchange;

but subject to this, it applies to a prospectus or a form of application whether issued on or with reference to the formation of a company or subsequently.

57 Attempted evasion of s. 56 to be void.

A condition requiring or binding an applicant for shares in or debentures of a company to waive compliance with any requirement of section 56, or purporting to affect him with notice of any contract, document or matter not specifically referred to in the prospectus, is void.

58 Document offering shares etc. for sale deemed a prospectus.

^F69 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F7059 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F7160 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

61 Prospectus containing statement by expert. _cross-notes

(1)A prospectus inviting persons to subscribe for a company’s shares or debentures and including a statement purporting to be made by an expert shall not be issued unless—

(a)he (the expert) has given and has not, before delivery of a copy of the prospectus for registration, withdrawn his written consent to its issue with the statement included in the form and context in which it is in fact included; and

(b)a statement that he has given and not withdrawn that consent appears in the prospectus.

(2)If a prospectus is issued in contravention of this section, the company and every person who is knowingly a party to the issue of the prospectus is liable to a fine.

62 Meaning of “expert”.

^F72 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

63 Prospectus to be dated. _cross-notes

A prospectus issued by or on behalf of a company, or in relation to an intended company, shall be dated; and that date shall, unless the contrary is proved, be taken as its date of publication.

Registration of prospectus

64 Registration requirement applicable in all cases. _cross-notes

(1)No prospectus shall be issued by or on behalf of a company, or in relation to an intended company, unless on or before the date of its publication there has been delivered to the registrar of companies for registration a copy of the prospectus—

(a)signed by every person who is named in it as a director or proposed director of the company, or by his agent authorised in writing, and

(b)having endorsed on or attached to it any consent to its issue required by section 61 from any person as an expert.

(2)Where the prospectus is such a document as is referred to in section 58, the signatures required by subsection (1) above include those of every person making the offer, or his agent authorised in writing.

Where the offer is made by a company or a firm, it is sufficient for the purposes of this subsection if the document is signed on its behalf by two directors or (as the case may be) not less than half of the partners; and a director or partner may sign by his agent authorised in writing.

(3)Every prospectus shall on its face—

(a)state that a copy has been delivered for registration as required by this section, and

(b)specify, or refer to statements in the prospectus specifying, any documents required by this or the following section to be endorsed on or attached to the copy delivered.

(4)The registrar shall not register a prospectus unless it is dated and the copy of it signed as required by this section and unless it has endorsed on or attached to it the documents (if any) specified in subsection (3)(b).

(5)If a prospectus is issued without a copy of it being delivered to the registrar as required by this section, or without the copy so delivered having the required documents endorsed on or attached to it, the company and every person who is knowingly a party to the issue of the prospectus is liable to a fine and, for continued contravention, to a daily default fine.

65 Additional requirements in case of prospectus issued generally.

(1)In the case of a prospectus issued generally (that is to persons who are not existing members or debenture holders of the company), the following provisions apply in addition to those of section 64.

(2)The copy of the prospectus delivered to the registrar of companies must also have endorsed on or attached to it a copy of any contract required by paragraph 11 of Schedule 3 to be stated in the prospectus or, in the case of a contract not reduced into writing, a memorandum giving full particulars of it.

(3)In the case of a contract wholly or partly in a foreign language—

(a)the copy required by subsection (2) to be endorsed on or attached to the prospectus must be a copy of a translation of the contract into English or (as the case may be) a copy embodying a translation into English of the parts in a foreign language, and

(b)the translation must be certified in the prescribed manner to be a correct translation.

(4)If the persons making any report required by Part II of Schedule 3 have made in the report, or have (without giving reasons) indicated in it, any such adjustments as are mentioned in paragraph 21 of the Schedule (profits, losses, assets, liabilities), the copy of the prospectus delivered to the registrar must have endorsed on or attached to it a written statement signed by those persons setting out the adjustments and giving the reasons for them.

Liabilities and offences in connection with prospectus

66 Directors, etc. exempt from liability in certain cases.

(1)In the event of non-compliance with or contravention of section 56, a director or other person responsible for the prospectus does not incur any liability by reason of that non-compliance or contravention if—

(a)as regards any matter not disclosed, he proves that he was not cognisant of it, or

(b)he proves that the non-compliance or contravention arose from an honest mistake of fact on his part, or

(c)the non-compliance or contravention was in respect of matters which, in the opinion of the court dealing with the case, were immaterial or was otherwise such as ought (in the court’s opinion, having regard to all the circumstances of the case) reasonably to be excused.

(2)In the event of failure to include in a prospectus a statement with respect to the matters specified in paragraph 13 of Schedule 3 (disclosure of directors’ interests), no director or other person incurs any liability in respect of the failure unless it is proved that he had knowledge of the matters not disclosed.

(3)Nothing in section 56 or 57 or this section limits or diminishes any liability which a person may incur under the general law or this Act apart from those provisions.

67 Compensation for subscribers misled by statement in prospectus.

(1)Where a prospectus invites persons to subscribe for a company’s shares or debentures, compensation is payable to all those who subscribe for any shares or debentures on the faith of the prospectus for the loss or damage which they may have sustained by reason of any untrue statement included in it.

(2)The persons liable to pay the compensation are—

(a)every person who is a director of the company at the time of the issue of the prospectus,

(b)every person who authorised himself to be named, and is named, in the prospectus as a director or as having agreed to become a director (either immediately or after an interval of time),

(c)every person being a promoter of the company, and

(d)every person who has authorised the issue of the prospectus.

(3) The above has effect subject to the two sections next following; and here and in those sections “ promoter ” means a promoter who was party to the preparation of the prospectus, or of the portion of it containing the untrue statement, but does not include any person by reason of his acting in a professional capacity for persons engaged in procuring the formation of the company.

68 Exemption from s. 67 for those acting with propriety.

(1)A person is not liable under section 67 if he proves—

(a)that, having consented to become a director of the company, he withdrew his consent before the issue of the prospectus, and that it was issued without his authority or consent, or

(b)that the prospectus was issued without his knowledge or consent, and that on becoming aware of its issue he forthwith gave reasonable public notice that it was issued without his knowledge or consent, or

(c)that after issue of the prospectus and before allotment under it he, on becoming aware of any untrue statement in it, withdrew his consent to its issue and gave reasonable public notice of the withdrawal and of the reason for it.

(2)A person is not liable under that section if he proves that—

(a)as regards every untrue statement not purporting to be made on the authority of an expert or of a public official document or statement, he had reasonable ground to believe, and did up to the time of the allotment of the shares or debentures (as the case may be) believe, that the statement was true; and

(b)as regards every untrue statement purporting to be a statement by an expert or contained in what purports to be a copy of or extract from a report or valuation of an expert, it fairly represented the statement, or was a correct and fair copy of or extract from the report or valuation, and he had reasonable ground to believe and did up to the time of issue of the prospectus believe that the person making the statement was competent to make it and that person had given the consent required by section 61 to the issue of the prospectus and had not withdrawn that consent before delivery of a copy of the prospectus for registration or, to the defendant’s knowledge, before allotment under it; and

(c)as regards every untrue statement purporting to be made by an official person or contained in what purports to be a copy of or extract from a public official document, it was a correct and fair representation of the statement or copy of or extract from the document.

(3)Subsections (1) and (2) of this section do not apply in the case of a person liable, by reason of his having given a consent required of him by section 61, as a person who has authorised the issue of the prospectus in respect of an untrue statement purporting to be made by him as an expert.

(4)Where under section 61 the consent of a person is required to the issue of a prospectus and he has given that consent, he is not by reason of his having given it liable under section 67 as a person who has authorised the issue of the prospectus except in respect of an untrue statement purporting to be made by him as an expert.

(5)A person who, apart from this subsection, would under section 67 be liable, by reason of his having given a consent required of him by section 61, as a person who has authorised the issue of a prospectus in respect of an untrue statement purporting to be made by him as an expert is not so liable if he proves—

(a)that, having given his consent under the section to the issue of the prospectus, he withdrew it in writing before the delivery of a copy of the prospectus for registration; or

(b)that, after delivery of a copy of the prospectus for registration and before allotment under it, he, on becoming aware of the untrue statement, withdrew his consent in writing and gave reasonable public notice of the withdrawal and of the reason for it; or

(c)that he was competent to make the statement and that he had reasonable ground to believe, and did up to the time of the allotment of the shares or debentures (as the case may be) believe, that the statement was true.

69 Indemnity for innocent director or expert.

(1)This section applies where—

(a)the prospectus contains the name of a person as a director of the company, or as having agreed to become a director of it, and he has not consented to become a director, or has withdrawn his consent before the issue of the prospectus, and has not authorised or consented to its issue, or

(b)the consent of a person is required under section 61 to the issue of the prospectus and he either has not given that consent or has withdrawn it before the issue of the prospectus.

(2)The directors of the company (except any without whose knowledge or consent the prospectus was issued) and any other person who authorised its issue are liable to indemnify the person named, or whose consent was required under section 61 (as the case may be), against all damages, costs and expenses to which he may be liable by reason of his name having been inserted in the prospectus or of the inclusion in it of a statement purporting to be made by him as an expert (as the case may be), or in defending himself against any action or legal proceedings brought against him in respect of it.

(3)A person is not deemed for purposes of this section to have authorised the issue of a prospectus by reason only of his having given the consent required by section 61 to the inclusion of a statement purporting to be made by him as an expert.

70 Criminal liability for untrue statements.

(1)If a prospectus is issued with an untrue statement included in it, any person who authorised the issue of the prospectus is guilty of an offence and liable to imprisonment or a fine, or both, unless he proves either—

(a)that the statement was immaterial, or

(b)that he had reasonable ground to believe and did, up to the time of the issue of the prospectus, believe that the statement was true.

(2)A person is not deemed for purposes of this section to have authorised the issue of a prospectus by reason only of his having given the consent required by section 61 to the inclusion in it of a statement purporting to be made by him as an expert.

Supplementary

71 Interpretation for ss. 56 to 70.

For purposes of sections 56 to 70—

(a)a statement included in a prospectus is deemed to be untrue if it is misleading in the form and context in which it is included, and

(b)a statement is deemed to be included in a prospectus if it is contained in it, or in any report or memorandum appearing on its face, or by reference incorporated in, or issued with, the prospectus.

Chapter II Issues by Companies Incorporated, or to be Incorporated, Outside Great Britain

72 Prospectus of oversea company. _cross-notes

(1)It is unlawful for a person to issue, circulate or distribute in Great Britain any prospectus offering for subscription shares in or debentures of a company incorporated or to be incorporated outside Great Britain (whether the company has or has not established, or when formed will or will not establish, a place of business in Great Britain) unless the prospectus complies with the requirements of the next two subsections.

(2)The prospectus must be dated and contain particulars with respect to the following matters—

(a)the instrument constituting or defining the constitution of the company;

(b)the enactments, or provisions having the force of an enactment, by or under which the incorporation of the company was effected;

(c)an address in Great Britain where that instrument, and those enactments or provisions, or copies of them (and, if they are in a foreign language, a translation of them certified in the prescribed manner), can be inspected;

(d)the date on which, and the country in which, the company was incorporated; and

(e)whether the company has established a place of business in Great Britain and, if so, the address of its principal office in Great Britain.

(3)Subject to the following provisions, the prospectus must comply—

(a)with Part I of Schedule 3, as respects the matters to be stated in the prospectus, and

(b)with Part II of that Schedule, as respects the reports to be set out.

(4)Paragraphs (a) to (c) of subsection (2) do not apply in the case of a prospectus issued more than 2 years after the company is entitled to commence business.

(5)It is unlawful for a person to issue to any person in Great Britain a form of application for shares in or debentures of such a company or intended company as is mentioned in subsection (1) unless the form is issued with a prospectus which complies with this Chapter and the issue of which in Great Britain does not contravene section 74 or 75 below.

This subsection does not apply if it is shown that the form of application was issued in connection with a bona fide invitation to a person to enter into an underwriting agreement with respect to the shares or debentures.

(6)This section—

(a)does not apply to the issue to a company’s existing members or debenture holders of a prospectus or form of application relating to shares in or debentures of the company, whether an applicant for shares or debentures will or will not have the right to renounce in favour of other persons; and

(b)except in so far as it requires a prospectus to be dated, does not apply to the issue of a prospectus relating to shares or debentures which are or are to be in all respects uniform with shares or debentures previously issued and for the time being listed on a prescribed stock exchange;

but subject to this, it applies to a prospectus or form of application whether issued on or with reference to the formation of a company or subsequently.

73 Attempted evasion of s. 72 to be void.

A condition requiring or binding an applicant for shares or debentures to waive compliance with any requirement imposed—

(a)by subsection (2) of section 72, as regards the particulars to be contained in the prospectus, or

(b)by subsection (3) of that section, as regards compliance with Schedule 3,

or purporting to affect an applicant with notice of any contract, document or matter not specifically referred to in the prospectus, is void.

74 Prospectus containing statement by expert. _cross-notes

(1)This section applies in the case of a prospectus offering for subscription shares in or debentures of a company incorporated or to be incorporated outside Great Britain (whether it has or has not established, or when formed will or will not establish, a place of business in Great Britain), if the prospectus includes a statement purporting to be made by an expert.

(2)It is unlawful for any person to issue, circulate or distribute in Great Britain such a prospectus if—

(a)the expert has not given, or has before delivery of the prospectus for registration withdrawn, his written consent to the issue of the prospectus with the statement included in the form and context in which it is included, or

(b)there does not appear in the prospectus a statement that he has given and has not withdrawn his consent as above mentioned.

(3)For purposes of this section, a statement is deemed to be included in a prospectus if it is contained in it, or in any report or memorandum appearing on its face, or by reference incorporated in, or issued with, the prospectus.

75 Restrictions on allotment to be secured in prospectus. _cross-notes

(1)It is unlawful for a person to issue, circulate or distribute in Great Britain a prospectus offering for subscription shares in or debentures of a company incorporated or to be incorporated outside Great Britain (whether the company has or has not established, or when formed will or will not establish, a place of business in Great Britain), unless the prospectus complies with the following condition.

(2)The prospectus must have the effect, where an application is made in pursuance of it, of rendering all persons concerned bound by all the provisions (other than penal provisions) of sections 82, 86 and 87 (restrictions on allotment), so far as applicable.

76 Stock exchange certificate exempting from compliance with Sch. 3.

(1)The following applies where—

(a)it is proposed to offer to the public by a prospectus issued generally any shares in or debentures of a company incorporated or to be incorporated outside Great Britain (whether the company has or has not established, or when formed will or will not establish, a place of business in Great Britain), and

(b)application is made to a prescribed stock exchange for permission for those shares or debentures to be listed on that stock exchange.

“ Issued generally ” means issued to persons who are not existing members or debenture holders of the company.

(2)There may on the applicant’s request be given by or on behalf of that stock exchange a certificate that, having regard to the proposals (as stated in the request) as to the size and other circumstances of the issue of shares or debentures and as to any limitation on the number and class of persons to whom the offer is to be made, compliance with Schedule 3 would be unduly burdensome.

(3)If a certificate is given under subsection (2), and if the proposals above mentioned are adhered to and the particulars and information required to be published in connection with the application for permission to the stock exchange are so published, then—

(a)a prospectus giving the particulars and information in the form in which they are so required to be published is deemed to comply with Schedule 3, and

(b)except as respects the requirement for the prospectus to be dated, section 72 does not apply to any issue, after the permission applied for is given, of a prospectus or form of application relating to the shares or debentures.

77 Registration of oversea prospectus before issue. _cross-notes

(1)It is unlawful for a person to issue, circulate or distribute in Great Britain a prospectus offering for subscription shares in or debentures of a company incorporated or to be incorporated outside Great Britain (whether the company has or has not established, or when formed will or will not establish, a place of business in Great Britain), unless before the issue, circulation or distribution the requirements of this section have been complied with.

(2)A copy of the prospectus, certified by the chairman and two other directors of the company as having been approved by resolution of the managing body, must have been delivered for registration to the registrar of companies.

(3)The prospectus must state on the face of it that a copy has been so delivered to the registrar of companies; and the following must be endorsed on or attached to that copy of the prospectus—

(a)any consent to the issue of the prospectus which is required by section 74;

(b)a copy of any contract required by paragraph 11 of Schedule 3 to be stated in the prospectus or, in the case of a contract not reduced into writing, a memorandum giving full particulars of it; and

(c)where the persons making any report required by Part II of Schedule 3 have made in it or have, without giving the reasons, indicated in it any such adjustments as are mentioned in paragraph 21 of the Schedule, a written statement signed by those persons setting out the adjustments and giving the reasons for them.

(4)If in the case of a prospectus deemed by virtue of a certificate under section 76 to comply with Schedule 3, a contract or a copy of it, or a memorandum of a contract, is required to be available for inspection in connection with application under that section to the stock exchange, a copy or (as the case may be) a memorandum of the contract must be endorsed on or attached to the copy of the prospectus delivered to the registrar for registration.

(5)References in subsections (3)(b) and (4) to the copy of a contract are, in the case of a contract wholly or partly in a foreign language, to a copy of a translation of the contract into English, or a copy embodying a translation into English of the parts in a foreign language (as the case may be); and—

(a)the translation must in either case be certified in the prescribed manner to be a correct translation, and

(b)the reference in subsection (4) to a copy of a contract required to be available for inspection includes a copy of a translation of it or a copy embodying a translation of parts of it.

78 Consequences (criminal and civil) of non-compliance with ss. 72-77.

(1)A person who is knowingly responsible for the issue, circulation or distribution of a prospectus, or for the issue of a form of application for shares or debentures, in contravention of any of sections 72 to 77 is liable to a fine.

(2)Sections 67, 68 and 69 extend to every prospectus offering for subscription shares in or debentures of a company incorporated or to be incorporated outside Great Britain (whether the company has or has not established, or when formed will or will not establish, a place of business in Great Britain), substituting for any reference to section 61 a reference to section 74.

(3)In the event of non-compliance with or contravention of any of the requirements of section 72(2) as regards the particulars to be contained in the prospectus, or section 72(3) as regards compliance with Schedule 3, a director or other person responsible for the prospectus incurs no liability by reason of the non-compliance or contravention if—

(a)as regards any matter not disclosed, he proves that he was not cognisant of it, or

(b)he proves that the non-compliance or contravention arose from an honest mistake of fact on his part, or

(c)the non-compliance or contravention was in respect of matters which, in the opinion of the court dealing with the case, were immaterial or were otherwise such as ought, in the court’s opinion, having regard to all the circumstances of the case, reasonably to be excused.

(4)In the event of failure to include in a prospectus to which this Chapter applies a statement with respect to the matters contained in paragraph 13 of Schedule 3, no director or other person incurs any liability in respect of the failure unless it is proved that he had knowledge of the matters not disclosed.

(5)Nothing in section 72 or 73 or this section, limits or diminishes any liability which a person may incur under the general law or this Act, apart from those provisions.

79 Supplementary. _cross-notes

(1)Where a document by which the shares or debentures of a company incorporated outside Great Britain are offered for sale to the public would, if the company had been a company incorporated under this Act, have been deemed by virtue of section 58 to be a prospectus issued by the company, that document is deemed, for the purposes of this Chapter, a prospectus so issued.

(2)An offer of shares or debentures for subscription or sale to a person whose ordinary business it is to buy or sell shares or debentures (whether as principal or agent) is not deemed an offer to the public for those purposes.

(3) In this Chapter “ shares ” and “ debentures ” have the same meaning as when those expressions are used, elsewhere in this Act, in relation to a company incorporated under this Act. ^F67]

Part IV Allotment of Shares and Debentures

General provisions as to allotment

80 Authority of company required for certain allotments.

^F73 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

80A Election by private company as to duration of authority.

^F74 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

81 Restriction on public offers by private company.

^F75 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

82 Application for, and allotment of, shares and debentures.

^F76 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

83 No allotment unless minimum subscription received.

^F77 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

84 Allotment where issue not fully subscribed.

^F78 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

85 Effect of irregular allotment.

^F79 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

86 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F80 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

87 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F81 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

88 Return as to allotments, etc.

^F82 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Pre-emption rights

89 Offers to shareholders to be on pre-emptive basis.

^F83 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

90 Communication of pre-emption offers to shareholders.

^F84 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

91 Exclusion of ss. 89, 90 by private company.

^F85 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

92 Consequences of contravening ss. 89, 90.

^F86 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

93 Saving for other restrictions as to offers.

^F87 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

94 Definitions for ss. 89-96.

^F88 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

95 Disapplication of pre-emption rights.

^F89 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

96 Saving for company’s pre-emption procedure operative before 1982.

^F90 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Commissions and discounts

97 Power of company to pay commissions.

^F91 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

98 Apart from s. 97, commissions and discounts barred.

^F92 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Amount to be paid for shares; the means of payment

99 General rules as to payment for shares on allotment.

^F93 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

100 Prohibition on allotment of shares at a discount.

^F94 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

101 Shares to be allotted as at least one-quarter paid-up.

^F95 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

102 Restriction on payment by long-term undertaking.

^F96 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

103 Non-cash consideration to be valued before allotment.

^F97 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

104 Transfer to public company of non-cash asset in initial period.

^F98 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

105 Agreements contravening s. 104.

^F99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

106 Shares issued to subscribers of memorandum.

^F100 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

107 Meaning of “the appropriate rate”.

^F101 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Valuation provisions

108 Valuation and report (s. 103).

^F102 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

109 Valuation and report (s. 104).

^F103 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

110 Entitlement of valuer to full disclosure.

^F104 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

111 Matters to be communicated to registrar.

^F105 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other matters arising out of allotment &c.

111A Right to damages, &c. not affected.

^F106 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

112 Liability of subsequent holders of shares allotted.

^F107 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

113 Relief in respect of certain liabilities under ss. 99 ff.

^F108 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

114 Penalty for contravention.

^F109 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

115 Undertakings to do work, etc.

^F110 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

116 Application of ss. 99 ff to special cases.

^F111 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Part V Share Capital, its Increase, Maintenance and Reduction

Chapter I General Provisions about Share Capital

117 Public company share capital requirements.

^F112 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

118 The authorised minimum.

^F113 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

119 Provision for different amounts to be paid on shares.

^F114 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

120 Reserve liability of limited company.

^F115 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

121 Alteration of share capital (limited companies).

^F116 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

122 Notice to registrar of alteration.

^F117 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

123 Notice to registrar of increased share capital.

^F118 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

124 Reserve capital of unlimited company.

^F119 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Chapter II Class Rights

125 Variation of class rights.

(1)^F120. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2)^F120. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3)^F120. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4)^F120. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5)^F120. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6)^F121. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7)^F120. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(8)^F120. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

126 Saving for court’s powers under other provisions.

^F122 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

127 Shareholders’ right to object to variation.

^F123 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

128 Registration of particulars of special rights.

^F124 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

129 Registration of newly created class rights.

^F125 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F126,F126Chapter III Share Premiums

130 Application of share premiums.

(1) If 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 called “the share premium account”.

(2)The share premium account may be applied by the company in paying up unissued shares to be allotted to members as fully paid bonus shares, or is writing off—

(a)the company’s preliminary expenses; 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 debentures of the company.

(3)Subject to this, the provisions of this Act relating to the reduction of a company’s share capital apply as if the share premium account were part of its paid up share capital.

(4)Sections 131 and 132 below give relief from the requirements of this section, and in those sections references to the issuing company are to the company issuing shares as above mentioned.

131. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

132 Relief in respect of group reconstructions.

(1)This section applies where the issuing company—

(a) is a wholly-owned subsidiary of another company (“the holding company”), and

(b) allots shares to the holding company or to another wholly-owned subsidiary of the holding company in consideration for the transfer to the issuing company of assets other than cash, being assets of any company (“the transferor company”) which is a member of the group of companies which comprises the holding company and all its wholly-owned subsidiaries.

(2)Where the shares in the issuing company allotted in consideration for the transfer are issued at a premium, the issuing company is not required by section 130 to transfer any amount in excess of the minimum premium value to the share premium account.

(3) In subsection (2), “ the minimum premium value ” means the amount (if any) by which the base value of the consideration for the shares allotted exceeds the aggregate nominal value of those shares.

(4)For the purposes of subsection (3), the base value of the consideration for the shares allotted is the amount by which the base value of the assets transferred exceeds the base value of any liabilities of the transferor company assumed by the issuing company as part of the consideration for the assets transferred.

(5)For the purposes of subsection (4)—

(a)the base value of the assets transferred is to be taken as—

(i)the cost of those assets to the transferor company, or

(ii)the amount at which those assets are stated in the transferor company’s accounting records immediately before the transfer,

whichever is the less; and

(b)the base value of the liabilities assumed is to be taken as the amount at which they are stated in the transferor company’s accounting records immediately before the transfer.

(6)^M1The relief allowed by this section does not apply (subject to the next subsection) if the issue of shares took place before the date of the coming into force of the Companies (Share Premium Account) Regulations 1984 (which were made on 21st December 1984).

(7)^M2To the extent that the relief allowed by this section would have been allowed by section 38 of the Companies Act 1981 as originally enacted (the text of which section is set out in Schedule 25 to this Act), the relief applies where the issue of shares took place before the date of the coming into force of those Regulations, but not if the issue took place before 4th February 1981.

(8)Section 131 does not apply in a case falling within this section.

133 Provisions supplementing ss. 131, 132.

(1)An amount corresponding to one representing the premiums or part of the premiums on shares issued by a company which by virtue of section 131 or 132 of this Act, or section 12 of the Consequential Provisions Act, is not included in the company’s share premium account may also be disregarded in determining the amount at which any shares or other consideration provided for the shares issued is to be included in the company’s balance sheet.

(2)References in this Chapter (however expressed) to—

(a)the acquisition by a company of shares in another company; and

(b)the issue or allotment of shares to, or the transfer of shares to or by, a company,

include (respectively) the acquisition of any of those shares by, and the issue or allotment or (as the case may be) the transfer of any of those shares to or by, nominees of that company; and the reference in section 132 to the company transferring the shares is to be construed accordingly.

(3)References in this Chapter to the transfer of shares in a company include the transfer of a right to be included in the company’s register of members in respect of those shares.

(4) In sections 131 to 133 “ company ”, except in references to the issuing company, includes any body corporate.

134 Provision for extending or restricting relief from s. 130.

(1)The Secretary of State may by regulations in a statutory instrument make such provision as appears to him to be appropriate—

(a)for relieving companies from the requirements of section 130 in relation to premiums other than cash premiums, or

(b)for restricting or otherwise modifying any relief from those requirements provided by this Chapter.

(2)Regulations under this section may make different provision for different cases or classes of case and may contain such incidental and supplementary provisions as the Secretary of State thinks fit.

(3)No such regulations shall be made unless a draft of the instrument containing them has been laid before Parliament and approved by a resolution of each House.

^F131,F131Chapter IV Reduction of Share Capital

135 Special resolution for reduction of share capital.

(1)Subject to confirmation by the court, a company limited by shares or a company limited by guarantee and having a share capital may, if so authorised by its articles, by special resolution reduce its share capital in any way.

(2)In particular, and without prejudice to subsection (1), the 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, cancel any paid-up share capital which is lost or unrepresented by available assets; or

(c)either with or without extinguishing or reducing liability on any of its shares, pay off any paid-up share capital which is in excess of the company’s wants;

and the company may, if and so far as is necessary, alter its memorandum by reducing the amount of its share capital and of its shares accordingly.

(3) A special resolution under this section is in this Act referred to as “ a resolution for reducing share capital ”.

136. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

137 Court order confirming reduction.

(1)The court, if satisfied with respect to every creditor of the company who under section 136 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,

may make an order confirming the reduction on such terms and conditions as it thinks fit.

(2)Where the court so orders, it may also—

(a) if for any special reason it thinks proper to do so, make an order directing that the company shall, 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”; and

(b)make an order requiring 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 which led to the reduction.

(3) Where a company is ordered to add to its name the words “and reduced”, those words are, until the expiration of the period specified in the order, deemed to be part of the company’s name.

138 Registration of order and minute of reduction.

(1)The registrar of companies, on production to him of an order of the court confirming the reduction of a company’s share capital, and the delivery to him of a copy of the order and of a minute (approved by the court) showing, with respect to the company’s share capital as altered by the order—

(a)the amount of the share capital;

(b)the number of shares into which it is to be divided, and the amount of each share; and

(c)the amount (if any) at the date of the registration deemed to be paid up on each share,

shall register the order and minute (but subject to section 139).

(2)On the registration of the order and minute, and not before, the resolution for reducing share capital as confirmed by the order so registered takes effect.

(3)Notice of the registration shall be published in such manner as the court may direct.

(4)The registrar shall certify the registration of the order and minute; and the certificate—

(a)may be either signed by the registrar, or authenticated by his official seal;

(b)is conclusive evidence that all the requirements of this Act with respect to the reduction of share capital have been complied with, and that the company’s share capital is as stated in the minute.

(5)The minute when registered is deemed to be substituted for the corresponding part of the company’s memorandum, and is valid and alterable as if it had been originally contained therein.

(6)The substitution of such a minute for part of the company’s memorandum is deemed an alteration of the memorandum for purposes of section 20.

139 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 which has the effect of bringing the nominal value of its allotted share capital below the authorised minimum.

(2)The registrar of companies shall not register the order under section 138 unless the court otherwise directs, or the company is first re-registered as a private company.

(3)The court may authorise the company to be so re-registered without its having passed the special resolution required by section 53; and where that authority is given, the court shall specify in the order the alterations in the company’s memorandum and articles to be made in connection with that re-registration.

(4)The company may then be re-registered as a private company, if an application in the prescribed form and signed by a director or secretary of the company is delivered to the registrar, together with a printed copy of the memorandum and articles as altered by the court’s order.

(5)On receipt of such an application, the registrar shall retain it and the other documents delivered with it and issue the company with a certificate of incorporation appropriate to a company that is not a public company; and—

(a)the company by virtue of the issue of the certificate becomes a private company, and the alterations in the memorandum and articles set out in the court’s order take effect; and

(b)the certificate is conclusive evidence that the requirements of this section in respect of re-registration and of matters precedent and incidental thereto have been complied with, and that the company is a private company.

140 Liability of members on reduced shares.

(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 the amount of the share as fixed by the minute and 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)But the following two subsections apply if—

(a)a creditor, entitled in respect of a debt or claim to object to the reduction of share capital, by reason of his ignorance of the proceedings for reduction of share capital, or of their nature and effect with respect to his claim, is not entered on the list of creditors; and

(b)after the reduction of capital, the company is unable (within the meaning of [^F134section 123 of the Insolvency Act^F134] ) to pay the amount of his debt or claim.

(3)Every person who was a member of the company at the date of the registration of the order for reduction and minute is then liable to contribute for the payment of the debt or claim in question 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.

(4)If the company is wound up, the court, on the application of the creditor in question and proof of ignorance referred to in subsection (2)(a), may (if it thinks fit) settle accordingly a list of persons so liable to contribute, and make and enforce calls and orders on the contributories settled on the list, as if they were ordinary contributories in a winding up.

(5)Nothing in this section affects the rights of the contributories among themselves.

141 Penalty for concealing name of creditor, etc.

If an officer of the company—

(a)wilfully conceals the name of a creditor entitled to object to the reduction of capital; or

(b)wilfully misrepresents the nature or amount of the debt or claim of any creditor; or

(c)aids, abets or is privy to any such concealment or misrepresentation as is mentioned above,

he is guilty of an offence and liable to a fine.

^F135,F135Chapter V Maintenance of Capital

142 Duty of directors 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 shall, not later than 28 days from the earliest day on which that fact is known to a director of the company, duly convene an extraordinary general meeting of the company for a date not later than 56 days from that day for the purpose of considering whether any, and if so what, steps should be taken to deal with the situation.

(2)If there is a failure to convene an extraordinary general meeting as required by subsection (1), each of the directors of the company who—

(a)knowingly and wilfully authorises or permits the failure, or

(b)after the expiry of the period during which that meeting should have been convened, knowingly and wilfully authorises or permits the failure to continue,

is liable to a fine.

(3)Nothing in this section authorises the consideration, at a meeting convened in pursuance of subsection (1), of any matter which could not have been considered at that meeting apart from this section.

143. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

144 Aquisition of shares by company’s nominee.

(1)Subject to section 145, where shares are issued to a nominee of a company mentioned in section 143(1), or are acquired by a nominee of such a company from a third person as partly paid up, then, for all purposes—

(a)the shares are to be treated as held by the nominee on his own account; and

(b)the company is to be regarded as having no beneficial interest in them.

(2)Subject to that section, if a person is called on to pay any amount for the purpose of paying up, or paying any premium on, any shares in such a company which were issued to him, or which he otherwise acquired, as the company’s nominee and he fails to pay that amount within 21 days from being called on to do so, then—

(a)if the shares were issued to him as subscriber to the memorandum by virtue of an undertaking of his in the memorandum, the other subscribers to the memorandum, or

(b)if the shares were otherwise issued to or acquired by him, the directors of the company at the time of the issue or acquisition,

are jointly and severally liable with him to pay that amount.

(3)If in proceedings for the recovery of any such amount from any such subscriber or director under this section it appears to the court—

(a)that he is or may be liable to pay that amount, but

(b)that he has acted honestly and reasonably and, having regard to all the circumstances of the case, he ought fairly to be excused from liability,

the court may relieve him, either wholly or partly, from his liability on such terms as the court thinks fit.

(4)Where any such subscriber or director has reason to apprehend that a claim will or might be made for the recovery of any such amount from him, he may apply to the court for relief; and the court has the same power to relieve him as it would have had in proceedings for the recovery of that amount.

145 Exceptions from s. 144.

(1)Section 144(1) does not apply to shares acquired otherwise than by subscription by a nominee of a public company, where a person acquires shares in the company with financial assistance given to him directly or indirectly by the company for the purpose of or in connection with the acquisition, and the company has a beneficial interest in the shares.

(2)Section 144(1) and (2) do not apply—

(a)to shares acquired by a nominee of a company when the company has no beneficial interest in those shares, or

(b)to shares issued in consequence of an application made before 22nd December 1980, or transferred in pursuance of an agreement to acquire them made before that date.

(3)Schedule 2 to this Act has effect for the interpretation of references in this section to a company having, or not having, a beneficial interest in shares.

146. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

147. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

148 Further provisions supplementing ss. 146, 147.

(1)Where, after shares in a private company—

(a)are forfeited in pursuance of the company’s articles or are surrendered to the company in lieu of forfeiture, or

(b)are acquired by the company (otherwise than by such surrender or forfeiture, and otherwise than by any of the methods mentioned in section 143(3)), the company having a beneficial interest in the shares, or

(c)are acquired by the nominee of a company in the circumstances mentioned in section 146(1)(c), or

(d)are acquired by any person in the circumstances mentioned in section 146(1)(d),

the company is re-registered as a public company, sections 146 and 147, and also section 149, apply to the company as if it had been a public company at the time of the forfeiture, surrender or acquisition, but with the modification required by the following subsection.

(2)That modification is to treat any reference to the relevant period from the forfeiture, surrender or acquisition as referring to the relevant period from the re-registration of the company as a public company.

(3)Schedule 2 to this Act has effect for the interpretation of the reference in subsection (1)(b) to the company having a beneficial interest in shares.

(4)Where a public company or a nominee of a public company acquires shares in the company or an interest in such shares, and those shares are (or that interest is) shown in a balance sheet of the company as an asset, an amount equal to the value of the shares or (as the case may be) the value to the company of its interest in them shall be transferred out of profits available for dividend to a reserve fund and are not then available for distribution.

149. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

150 Charges of public companies on own shares.

(1)A lien or other charge of a public company on its own shares (whether taken expressly or otherwise), except a charge permitted by any of the following subsections, is void.

This is subject to section 6 of the Consequential Provisions Act (saving for charges of old public companies on their own shares).

(2) In the case of any description of company, a charge on its own shares is permitted if the shares are not fully paid and the charge is for any amount payable in respect of the shares.

(3)In the case of a company whose ordinary business—

(a)includes the lending of money, or

(b)consists of the provision of credit or the bailment (in Scotland, hiring) of goods under a hire purchase agreement, or both,

a charge of the company on its own shares is permitted (whether the shares are fully paid or not) if it arises in connection with a transaction entered into by the company in the ordinary course of its business.

(4)In the case of a company which is re-registered or is registered under section 680 as a public company, a charge on its own shares is permitted if the charge was in existence immediately before the company’s application for re-registration or (as the case may be) registration.

This subsection does not apply in the case of such a company as is referred to in section 6(3) of the Consequential Provisions Act (old public company remaining such after 22nd March 1982, not having applied to be re-registered as public company).

^F142,F142Chapter VI Financial Assistance by a Company for Acquisition of its Own Shares

Provisions applying to both public and private companies

151. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

152. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

153. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

154. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Private companies

155. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

156. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

157. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

158. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F151,F151Chapter VII Redeemable Shares; Purchase by a Company of its Own Shares

Redemption and purchase generally

159 Power to issue redeemable shares.

[^F152159A Terms and manner of redemption.

160 Financing etc. of redemption.

161 ^F155 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

162. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

162A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

162B. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

162C. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

162D. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

162E. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

162F. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

162G. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

163. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

164 Authority for off-market purchase.

165 Authority for contingent purchase contract.

166. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

169A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

170. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Redemption or purchase of own shares out of capital (private companies only)

171. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

172. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

173 Conditions for payment out of capital.

(1)Subject to any order of the court under section 177, a payment out of capital by a private company for the redemption or purchase of its own shares is now lawful unless the requirements of this and the next two sections are satisfied.

(2)The payment out of capital must be approved by a special resolution of the company.

(3)The company’s directors must make a statutory declaration specifying the amount of the permissible capital payment for the shares in question and stating that, having made full inquiry into the affairs and prospects of the company, they have formed the opinion—

(a)as regards its initial situation immediately following the date on which the payment out of capital is proposed to be made, that there will be no grounds on which the company could then be found unable to pay its debts, and

(b)as regards its prospects for the year immediately following that date, that, having regard to their intentions with respect to the management of the company’s business during that year and to the amount and character of the financial resources which will in their view be available to the company during that year, the company will be able to continue to carry on business as a going concern (and will accordingly be able to pay its debts as they fall due) throughout that year.

(4)In forming their opinion for purposes of subsection (3)(a), the directors shall take into account the same liabilities (including prospective and contingent liabilities) as would be relevant under [^F184section 122 of the Insolvency Act^F184] (winding up by the court) to the question whether a company is unable to pay its debts.

(5)The directors’ statutory declaration must be in the prescribed form and contain such information with respect to the nature of the company’s business as may be prescribed, and must in addition have annexed to it a report addressed to the directors by the company’s auditors stating that—

(a)they have inquired into the company’s state of affairs; and

(b)the amount specified in the declaration as the permissible capital payment for the shares in question is in their view properly determined in accordance with sections 171 and 172; and

(c)they are not aware of anything to indicate that the opinion expressed by the directors in the declaration as to any of the matters mentioned in subsection (3) is unreasonable in all the circumstances.

(6)A director who makes a declaration under this section without having reasonable grounds for the opinion expressed in the declaration is liable to imprisonment or a fine, or both.

174 Procedure for special resolution under s. 173.

(1)The resolution required by section 173 must be passed on, or within the week immediately following, the date on which the directors make the statutory declaration required by that section; and the payment out of capital must be made no earlier than 5 nor more than 7 weeks after the date of the resolution.

(2)The resolution is ineffective if any member of the company holding shares to which the resolution relates exercises the voting rights carried by any of those shares in voting on the resolution and the resolution would not have been passed if he had not done so.

(3)For purposes of subsection (2), a member who holds such shares is to be regarded as exercising the voting rights carried by them in voting on the resolution not only if he votes in respect of them on a poll on the question whether the resolution shall be passed, but also if he votes on the resolution otherwise than on a poll; and notwithstanding anything in a company’s articles, any member of the company may demand a poll on that question.

(4)The resolution is ineffective unless the statutory declaration and auditors’ report required by the section are available for inspection by members of the company at the meeting at which the resolution is passed.

(5)For purposes of this section a vote and a demand for a poll by a person as proxy for a member are the same (respectively) as a vote and demand by the member.

175. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

176 Objections by company’s members or creditors.

(1)Where a private company passes a special resolution approving for purposes of this Chapter any payment out of capital for the redemption or purchase of any of its shares—

(a)any member of the company other than one who consented to or voted in favour of the resolution; and

(b)any creditor of the company,

may within 5 weeks of the date on which the resolution was passed apply to the court for cancellation of the resolution.

(2)The application may be made on behalf of the persons entitled to make it by such one or more of their number as they may appoint in writing for the purpose.

(3)If an application is made, the company shall—

(a)forthwith give notice in the prescribed form of that fact to the registrar of companies; and

(b)within 15 days from the making of any order of the court on the hearing of the application, or such longer period as the court may by order direct, deliver an office copy of the order to the registrar.

(4)A company which fails to comply with subsection (3), and any officer of it who is in default, is liable to a fine and for continued contravention, to a daily default fine.

177 Powers of court on application under s. 176.

(1)On the hearing of an application under section 176 the court may, if it thinks fit, adjourn the proceedings in order that an arrangement may be made to the court’s satisfaction for the purchase of the interests of dissentient members or for the protection of dissentient creditors (as the case may be); and the court may give such directions and make such orders as it thinks expedient for facilitating or carrying into effect any such arrangement.

(2)Without prejudice to its powers under subsection (1), the court shall make an order on such terms and conditions as it thinks fit either confirming or cancelling the resolution; and, if the court confirms the resolution, it may in particular by order alter or extend any date or period of time specified in the resolution or in any provision in this Chapter which applies to the redemption or purchase of shares to which the resolution refers.

(3)The court’s order may, if the court thinks fit, provide for the purchase by the company of the shares of any of its members and for the reduction accordingly of the company’s capital, and may make such alterations in the company’s memorandum and articles as may be required in consequence of that provision.

(4)If the court’s order requires the company not to make any, or any specified, alteration in its memorandum or articles, the company has not then power without leave of the court to make any such alteration in breach of the requirement.

(5)An alteration in the memorandum or articles made by virtue of an order under this section, if not made by resolution of the company, is of the same effect as if duly made by resolution; and this Act applies accordingly to the memorandum or articles as so altered.

Supplementary

178 Effect of company’s failure to redeem or purchase.

(1)This section has effect where a company has, on or after 15th June 1982,—

(a)issued shares on terms that they are or are liable to be redeemed, or

(b)agreed to purchase any of its own shares.

(2)The company is not liable in damages in respect of any failure on its part to redeem or purchase any of the shares.

(3)Subsection (2) is without prejudice to any right of the holder of the shares other than his right to sue the company for damages in respect of its failure; but the court shall not grant an order for specific performance of the terms of redemption or purchase if the company shows that it is unable to meet the costs of redeeming or purchasing the shares in question out of distributable profits.

(4)If the company is wound up and at the commencement of the winding up any of the shares have not been redeemed or purchased, the terms of redemption or purchase may be enforced against the company; and when shares are redeemed or purchased under this subsection, they are treated as cancelled.

(5)However, subsection (4) does not apply if—

(a)the terms provided for the redemption or purchase to take place at a date later than that of the commencement of the winding up, or

(b)during the period beginning with the date on which the redemption or purchase was to have taken place and ending with the commencement of the winding up the company could not at any time have lawfully made a distribution equal in value to the price at which the shares were to have been redeemed or purchased.

(6)There shall be paid in priority to any amount which the company is liable under subsection (4) to pay in respect of any shares—

(a)all other debts and liabilities of the company (other than any due to members in their character as such),

(b)if other shares carry rights (whether as to capital or as to income) which are preferred to the rights as to capital attaching to the first-mentioned shares, any amount due in satisfaction of those preferred rights;

but, subject to that, any such amount shall be paid in priority to any amounts due to members in satisfaction of their rights (whether as to capital or income) as members.

(7). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F186179 Power for Secretary of State to modify this Chapter.

(1)The Secretary of State may by regulations made by statutory instrument modify the provisions of this Chapter with respect to any of the following matters—

(a)the authority required for a purchase by a company of its own shares,

(b)the authority required for the release by a company of its rights under a contract for the purchase of its own shares or a contract under which the company may (subject to any conditions) become entitled or obliged to purchase its own shares,

(c)the information to be included in a return delivered by a company to the registrar of companies in accordance with section 169(1),

(d)the matters to be dealt with in the statutory declaration of the directors under section 173 with a view to indicating their opinion of their company’s ability to make a proposed payment out of capital with due regard to its financial situation and prospects, and

(e)the contents of the auditors’ report required by that section to be annexed to that declaration.

(2)The Secretary of State may also by regulations so made make such provision (including modification of the provisions of this Chapter) as appears to him to be appropriate—

(a)for wholly or partly relieving companies from the requirement of section 171(3)(a) that any available profits must be taken into account in determining the amount of the permissible capital payment for shares under that section, or

(b)for permitting a company’s share premium account to be applied, to any extent appearing to the Secretary of State to be appropriate, in providing for the premiums payable on the redemption or purchase by the company of any of its own shares.

(3)Regulations under this section—

(a)may make such further modification of any provisions of this Chapter as appears to the Secretary of State to be reasonably necessary in consequence of any provision made under such regulations by virtue of subsection (1) or (2),

(b)may make different provision for different cases or classes of case, and

(c)may contain such further consequential provisions, and such incidental and supplementary provisions, as the Secretary of State thinks fit.

(4)No regulations shall be made under this section unless a draft of the instrument containing them has been laid before Parliament and approved by resolution of each House.

180 Transitional cases arising under this Chapter; and savings.

(1)^M3,M4Any preference shares issued by a company before 15th June 1982 which could but for the repeal by the Companies Act 1981 of section 58 of the Companies Act 1948 (power to issue redeemable preference shares) have been redeemed under that section are subject to redemption in accordance with the provisions of this Chapter.

(2)In a case to which sections 159 and 160 apply by virtue of this section, any premium payable on redemption may, notwithstanding the repeal by the 1981 Act of any provision of the 1948 Act, be paid out of the share premium account instead of out of profits, or partly out of that account and partly out of profits (but subject to the provisions of this Chapter so far as payment is out of profits).

(3)Any capital redemption reserve fund established before 15th June 1982 by a company for the purposes of section 58 of the Act of 1948 is to be known as the company’s capital redemption reserve and be treated as if it had been established for the purposes of section 170 of this Act; and accordingly, a reference in any enactment or in the articles of any company, or in any other instrument, to a company’s capital redemption reserve fund is to be construed as a reference to the company’s capital redemption reserve.

181. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Chapter VIII Miscellaneous Provisions about Shares and Debentures

Share and debenture certificates, transfers and warrants

182 Nature, transfer and numbering of shares.

^F188 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

183 Transfer and registration.

^F189 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

184 Certification of transfers.

^F190 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

185 Duty of company as to issue of certificates.

^F191 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

186 Certificate to be evidence of title.

^F192 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

187 Evidence of grant of probate or confirmation as executor.

^F193 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

188 Issue and effect of share warrant to bearer.

^F194 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

189 Offences in connection with share warrants (Scotland).

^F195 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Debentures

190 Register of debenture holders.

^F196 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

191 Right to inspect register.

^F197 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

192 Liability of trustees of debentures.

^F198 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

193 Perpetual debentures.

^F199 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

194 Power to re-issue redeemed debentures.

^F200 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

195 Contract to subscribe for debentures.

^F201 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

196 Payment of debts out of assets subject to floating charge (England and Wales).

^F202 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

197 Debentures to bearer (Scotland).

^F203 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Part VI Disclosure of Interests in Shares

Individual and group acquisitions

198 Obligation of disclosure: the cases in which it may arise and “the relevant time”.

^F204 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

199 Interests to be disclosed.

^F205 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

200 “Percentage level” in relation to notifiable interests.

^F206 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F207201 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

202 Particulars to be contained in notification.

^F208 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

203 Notification of family and corporate interests.

^F209 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

204 Agreement to acquire interests in a particular company.

^F210 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

205 Obligation of disclosure arising under s. 204.

^F211 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

206 Obligation of persons acting together to keep each other informed.

^F212 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

207 Interests in shares by attribution.

^F213 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

208 Interests in shares which are to be notified.

^F214 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

209 Interests to be disregarded.

^F215 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

210 Other provisions about notification under this Part.

^F216 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

210A Power to make further provision by regulations.

^F217 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Registration and investigation of share acquisitions and disposals

211 Register of interests in shares.

^F218 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

212 Company investigations.

^F219 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

213 Registration of interests disclosed under s. 212.

^F220 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

214 Company investigation on requisition by members.

^F221 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

215 Company report to members.

^F222 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

216 Penalty for failure to provide information.

^F223 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

217 Removal of entries from register.

^F224 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

218 Otherwise, entries not to be removed.

^F225 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

219 Inspection of register and reports.

^F226 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Supplementary

220 Definitions for Part VI.

^F227 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Part VII Accounts and Audit _cross-notes

Chapter I Provisions Applying to Companies Generally

Accounting records

221 Duty to keep accounting records.

^F228 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

222 Where and for how long records to be kept.

^F229 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

A company’s financial year and accounting reference periods

223 A company’s financial year.

^F230 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

224 Accounting reference periods and accounting reference date.

^F231 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

225 Alteration of accounting reference date.

^F232 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Annual accounts

226 Duty to prepare individual accounts.

^F233 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

226A Companies Act individual accounts

^F234 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

226B IAS individual accounts

^F235 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

227 Duty to prepare group accounts.

^F236 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

227A Companies Act group accounts

^F237 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

227B IAS group accounts

^F238 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

227C Consistency of accounts

^F239 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

228 Exemption for parent companies included in accounts of larger group.

^F240 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

228A Exemption for parent companies included in non-EEA group accounts

^F241 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

229 Subsidiary undertakings included in the consolidation.

^F242 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

230 Treatment of individual profit and loss account where group accounts prepared.

^F243 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

231 Disclosure required in notes to accounts:related undertakings.

^F244 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

231A Disclosure required in notes to annual accounts: particulars of staff

^F245 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

232 Disclosure required in notes to accounts: emoluments and other benefits of directors and others.

^F246 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Approval and signing of accounts

233 Approval and signing of accounts

^F247 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F248Directors' report^F248]

234 Duty to prepare directors' report.

^F249 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

234ZZA Directors' report: general requirements

^F250 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

234ZZB Directors' report: business review

^F251 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

234ZA Statement as to disclosure of information to auditors

^F252 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

234A Approval and signing of directors’ report.

^F253 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F254. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

234AA Duty to prepare operating and financial review

^F255 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

234AB Approval and signing of operating and financial review

^F256 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Quoted companies: directors’ remuneration report

234B Duty to prepare directors’ remuneration report

^F257 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

234C Approval and signing of directors’ remuneration report

^F258 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Auditors’ report

235 Auditors’ report.

^F259 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

236 Signature of auditors’ report.

^F260 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

237 Duties of auditors.

^F261 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Publication of accounts and reports

238 Persons entitled to receive copies of accounts and reports.

^F262 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F263238A Time allowed for sending out copies of accounts and reports

^F264. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F263]

239 Rights to demand copies of accounts and reports.

^F265 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

240 Requirements in connection with publication of accounts.

^F266 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Laying and delivering of accounts and reports

241 Accounts and reports to be laid before company in general meeting.

^F267 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

241A Members’ approval of directors’ remuneration report

^F268 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

242 Accounts and reports to be delivered to the registrar.

^F269 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

242A Civil penalty for failure to deliver accounts.

^F270 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

242B Delivery and publication of accounts in ECUs

^F271 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

243 Accounts of subsidiary undertakings to be appended in certain cases.

^F272 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

244 Period allowed for laying and delivering accounts and reports.

^F273 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Revision of defective accounts and reports

245 Voluntary revision of annual accounts or directors’ report.

^F274 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

245A Secretary of State’s notice in respect of annual accounts.

^F275 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

245B Application to court in respect of defective accounts.

^F276 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

245C Other persons authorised to apply to court.

^F277 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

245D Disclosure of information held by Inland Revenue to persons authorised to apply to court

^F278 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

245E Restrictions on use and further disclosure of information disclosed under section 245D

^F279 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

245F Power of authorised persons to require documents, information and explanations

^F280 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

245G Restrictions on further disclosure of information obtained under section 245F

^F281 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Chapter II Exemptions, Exceptions and Special Provisions

Small and medium-sized companies and groups

246 Special provisions for small companies

^F282 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

246A Special provisions for medium-sized companies

^F283 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

247 Qualification of company as small or medium-sized.

^F284 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

247A Cases in which special provisions do not apply

^F285 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

247B Special auditors’ report

^F286 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

248 Exemption for small and medium-sized groups.

^F287 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

248A Group accounts prepared by small company

^F288 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

249 Qualification of group as small or medium-sized.

^F289 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F290 Exemptions from audit for certain categories of small company^F290]

249A Exemptions from audit

^F291 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

249AA Dormant companies

^F292 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

249B Cases where exemptions not available

^F293 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

249C The report required for the purposes of section 249A(2).

^F294 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

249D The reporting accountant

^F295 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

249E Effect of exemptions

^F296 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Dormant companies

250 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F297 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Listed public companies

251 [^F298Summary financial statement^F298]

^F299 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Private companies

252 Election to dispense with laying of accounts and reports before general meeting.

^F300 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

253 Right of shareholder to require laying of accounts.

^F301 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Unlimited companies

254 Exemption from requirement to deliver accounts and reports.

^F302 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Banking and insurance companies and groups

255 Special provisions for banking and insurance companies.

^F303 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

255A Special provisions for banking and insurance groups.

^F304 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

255B Modification of disclosure requirements in relation to banking company or group.

^F305 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

255C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F306 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

255D Power to apply provisions to banking partnerships.

^F307 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Welsh private companies

255E Delivery of accounting documents in Welsh only.

^F308 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Chapter III Supplementary Provisions

Accounting standards

256 Accounting standards.

^F309 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

256A Reporting standards

^F310 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Power to alter accounting requirements

257 Power of Secretary of State to alter accounting requirements.

^F311 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Parent and subsidiary undertakings

258 Parent and subsidiary undertakings.

^F312 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other interpretation provisions

259 Meaning of “undertaking” and related expressions.

^F313 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

260 Participating interests.

^F314 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

261 Notes to the accounts.

^F315 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

262 Minor definitions.

^F316 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

262A Index of defined expressions.

^F317 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Part VIII Distribution of Profits and Assets

Limits of company’s power of distribution

263 Certain distributions prohibited.

^F318 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

264 Restriction on distribution of assets.

^F319 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

265 Other distributions by investment companies.

^F320 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

266 Meaning of “investment company”.

^F321 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

267 Extension of ss. 265, 266 to other companies.

^F322 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

268 Realised profits of insurance company with long term business.

^F323 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

269 Treatment of development costs.

^F324 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Relevant accounts

270 Distribution to be justified by reference to company’s accounts. _cross-notes

^F325 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

271 Requirements for last annual accounts. _cross-notes

^F326 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

272 Requirements for interim accounts. _cross-notes

^F327 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

273 Requirements for initial accounts. _cross-notes

^F328 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

274 Method of applying s. 270 to successive distributions. _cross-notes

^F329 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

275 Treatment of assets in the relevant accounts. _cross-notes

^F330 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

276 Distributions in kind. _cross-notes

^F331 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Supplementary

277 Consequences of unlawful distribution.

^F332 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

278 Saving for provision in articles operative before Act of 1980.

^F333 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

279 Distributions by banking or insurance companies.

^F334 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

280 Definitions for Part VIII.

^F335 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

281 Saving for other restraints on distribution.

^F336 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Part IX A Company’s Management; Directors and Secretaries; their Qualifications, Duties and Responsibilities

Officers and registered office

282 Directors.

^F337 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

283 Secretary.

^F338 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

284 Acts done by person in dual capacity.

^F339 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

285 Validity of acts of directors.

^F340 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

286 Qualifications of company secretaries.

^F341 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

287 Registered office.

^F342 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

288 Register of directors and secretaries.

^F343 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

288A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F344 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

289 Particulars of directors to be registered under s. 288.

^F345 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

290 Particulars of secretaries to be registered under s. 288.

^F346 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Provisions governing appointment of directors

291 Share qualification of directors.

^F347 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

292 Appointment of directors to be voted on individually.

^F348 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

293 Age limit for directors.

^F349 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

294 Duty of director to disclose his age.

^F350 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Disqualification

^F351295–299 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F352300 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F353301, 302. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Removal of directors

303 Resolution to remove director.

^F354 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

304 Director’s right to protest removal.

^F355 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other provisions about directors and officers

305 Directors’ names on company correspondence, etc.

^F356 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

306 Limited company may have directors with unlimited liability.

^F357 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

307 Special resolution making liability of directors unlimited.

^F358 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

308 Assignment of office by directors.

^F359 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

309 Directors to have regard to interests of employees.

^F360 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

309A Provisions protecting directors from liability

^F361 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

309B Qualifying third party indemnity provisions

^F362 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

309C Disclosure of qualifying third party indemnity provisions

^F363 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

310 Provisions protecting auditors from liability.

^F364 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Part X Enforcement of Fair Dealing by Directors

Restrictions on directors taking financial advantage

311 Prohibition on tax-free payments to directors.

^F365 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

312 Payment to director for loss of office etc.

^F366 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

313 Company approval for property transfer.

^F367 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

314 Director’s duty of disclosure on takeover, etc.

^F368 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

315 Consequences of non-compliance with s. 314.

^F369 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

316 Provisions supplementing ss. 312 to 315.

^F370 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

317 Directors to disclose interest in contracts.

^F371 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

318 Directors’ service contracts to be open to inspection.

^F372 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

319 Director’s contract of employment for more than 5 years.

^F373 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

320 Substantial property transactions involving directors, etc.

^F374 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

321 Exceptions from s. 320.

^F375 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

322 Liabilities arising from contravention of s. 320.

^F376 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

322A Invalidity of certain transactions involving directors, etc.

^F377 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

322B Contracts with sole members who are directors

^F378 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Share dealings by directors and their families

323 Prohibition on directors dealing in share options.

^F379 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

324 Duty of director to disclose shareholdings in own company.

^F380 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

325 Register of directors’ interests notified under s. 324.

^F381 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

326 Sanctions for non-compliance.

^F382 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

327 Extension of s. 323 to spouses [^F383, civil partners^F383] and children.

^F384 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

328 Extension of s. 324 to spouses [^F385, civil partners^F385] and children.

^F386 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

329 Duty to notify stock exchange of matters notified under preceding sections.

^F387 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Restrictions on a company’s power to make loans, etc., to directors and persons connected with them

330 General restriction on loans etc. to directors and persons connected with them.

^F388 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

331 Definitions for ss. 330 ff.

^F389 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

332 Short-term quasi-loans.

^F390 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

333 Inter-company loans in same group.

^F391 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

334 Loans of small amounts.

^F392 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

335 Minor and business transactions.

^F393 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

336 Transactions at behest of holding company.

^F394 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

337 Funding of director’s expenditure on duty to company.

^F395 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

337A Funding of director’s expenditure on defending proceedings

^F396 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

338 Loan or quasi-loan by money-lending company.

^F397 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

339 “Relevant amounts” for purposes of ss. 334 ff.

^F398 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

340 “Value” of transactions and arrangements.

^F399 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

341 Civil remedies for breach of s. 330.

^F400 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

342 Criminal penalties for breach of s. 330.

^F401 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

343 Record of transactions not disclosed in company accounts.

^F402 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

344 Exceptions from s. 343.

^F403 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Supplementary

345 Power to increase financial limits.

^F404 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

346 “Connected persons”, etc.

^F405 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

347 Transactions under foreign law.

^F406 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Part XA Control of political donations _cross-notes

347A Introductory provisions.

^F407 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

347B Exemptions.

^F408 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

347C Prohibition on donations and political expenditure by companies.

^F409 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

347D Special rules for subsidiaries.

^F410 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

347E Special rule for parent company of non-GB subsidiary undertaking.

^F411 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

347F Remedies for breach of prohibitions on company donations etc.

^F412 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

347G Remedy for unauthorised donation or expenditure by non-GB subsidiary.

^F413 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

347H Exemption of directors from liability in respect of unauthorised donation or expenditure.

^F414 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

347I Enforcement of directors’ liabilities by shareholder action.

^F415 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

347J Costs of shareholder action.

^F416 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

347K Information for purposes of shareholder action.

^F417 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Part XI Company administration and procedure

Chapter I Company Identification

348 Company name to appear outside place of business.

^F418 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

349 Company’s name to appear in its correspondence, etc.

^F419 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

350 Company seal.

^F420 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

351 Particulars in correspondence, etc.

^F421 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Chapter II Register of Members

352 Obligation to keep and enter up register.

^F422 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

352A Statement that company has only one member

^F423 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

353 Location of register.

^F424 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

354 Index of members.

^F425 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

355 Entries in register in relation to share warrants.

^F426 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

356 Inspection of register and index.

^F427 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

357 Non-compliance with ss. 353, 354, 356; agent’s default.

^F428 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

358 Power to close register.

^F429 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

359 Power of court to rectify register.

^F430 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

360 Trusts not to be entered on register in England and Wales.

^F431 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

361 Register to be evidence.

^F432 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

362 Overseas branch registers.

^F433 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F434,F434 Chapter III Annual Return

363. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F437364. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F444364A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

364B. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

364C. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

364D. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F448365 Supplementary provisions: regulations and interpretation.

(1)The Secretary of State may by regulations make further provision as to the information to be given in a company’s annual return, which may amend or repeal the provisions of sections 364 and 364A.

(2)Regulations under this section shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliamant.

(3)For the purposes of this Chapter, except section 363(2)(c) (signature of annual return), a shadow director shall be deemed to be a director.^F448]

Chapter IV Meetings and Resolutions

Meetings

366 Annual general meeting.

^F449 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

366A Election by private company to dispense with annual general meetings.

^F450 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

367 Secretary of State’s power to call meeting in default.

^F451 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

368 Extraordinary general meeting on members’ requisition.

^F452 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

369 Length of notice for calling meetings.

^F453 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

370 General provisions as to meetings and votes.

^F454 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

370A Quorum at meetings of the sole member

^F455 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

371 Power of court to order meeting.

^F456 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

372 Proxies.

^F457 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

373 Right to demand a poll.

^F458 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

374 Voting on a poll.

^F459 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

375 Representation of corporations at meetings.

^F460 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Resolutions

376 Circulation of members’ resolutions.

^F461 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

377 In certain cases, compliance with s. 376 not required.

^F462 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

378 Extraordinary and special resolutions.

^F463 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

379 Resolution requiring special notice.

^F464 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

379A Elective resolution of private company.

^F465 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

380 Registration, etc. of resolutions and agreements.

^F466 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

381 Resolution passed at adjourned meeting.

^F467 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Written resolutions of private companies

381A Written resolutions of private companies.

^F468 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

381B Duty to notify auditors of proposed written resolution

^F469 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

381C Written resolutions: supplementary provisions.

^F470 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Records of proceedings

382 Minutes of meetings.

^F471 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

382A Recording of written resolutions.

^F472 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

382B Recording of decisions by the sole member

^F473 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

383 Inspection of minute books.

^F474 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F475 Appointment of auditors

384 Duty to appoint auditors.

^F476. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

385 Appointment at general meeting at which accounts laid.

^F477. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

385A Appointment by private company which is not obliged to lay accounts.

^F478. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

386 Election by private company to dispense with annual appointment.

^F479. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

387 Appointment by Secretary of State in default of appointment by company.

^F480. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

388 Filling of casual vacancies.

^F481. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

388A Certain companies exempt from obligation to appoint auditors

^F482. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F475]

^F483389 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Rights of auditors

389A Rights to information.

^F484 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

389B Offences relating to the provision of information to auditors

^F485 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

390 Right to attend company meetings, &c.

^F486 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Remuneration of auditors

390A Remuneration of auditors.

^F487 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

390B Disclosure of services provided by auditors or associates and related remuneration

^F488 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Removal, resignation, &c. of auditors

391 Removal of auditors.

^F489 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

391A Rights of auditors who are removed or not re-appointed.

^F490 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

392 Resignation of auditors.

^F491 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

392A Rights of resigning auditors.

^F492 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

393 Termination of appointment of auditors not appointed annually.

^F493 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

394 Statement by person ceasing to hold office as auditor.

^F494 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

394A Offences of failing to comply with s. 394.

^F495 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Part XII Registration of Charges _cross-notes

^F496,F496Chapter I Registration of Charges (England and Wales)

^X1395 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 [^F497or administrator^F497] and 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.

^X2396. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^X3397 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:

(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.

^X4398 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.

^X5399 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.

^X6400 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.

^X7401 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.

^X8402 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.

^X9403. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^X10404 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.

^X11405 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.

^X12406 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.

^X13407 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.

^X14408 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.

^X15409 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.

^F504,F504Chapter II Registration of Charges (Scotland)

^X16410. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^X17411 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.

^X18412 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.

^X19413 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:

(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.

^X20414 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.

^X21415 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.

^X22416 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.

^X23417 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.

^X24418 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.

^X25419. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^X26420 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.

^X27421 Copies of instruments creating charges to be kept by company.

(1)Every company shall cause a copy of every instrument creating a charge requiring registration under this Chapter to be kept at the company’s registered office.

(2)In the case of a series of uniform debentures, a copy of one debenture of the series is sufficient.

^X28422 Company’s register of charges.

(1)Every 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 any property of the company.

(2)There shall be given in each case 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.

^X29423 Right to inspect copies of instruments, and company’s register.

(1)The copies of instruments creating charges requiring registration under this Chapter with the registrar of companies, and the register of charges kept in pursuance of section 422, 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 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 or 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, the court may by order compel an immediate inspection of the copies or register.

^X30424 Extension of Chapter II.

(1)This Chapter extends to charges on property in Scotland which are created, and to charges on property in Scotland which is acquired, by a company incorporated outside Great Britain which has a place of business in Scotland.

(2)In relation to such a company, sections 421 and 422 apply with the substitution, for the reference to the company’s registered office, of a reference to its principal place of business in Scotland.

Part XIII Arrangements and Reconstructions _cross-notes

425 Power of company to compromise with creditors and members.

^F511 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

426 Information as to compromise to be circulated.

^F512 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

427 Provisions for facilitating company reconstruction or amalgamation.

^F513 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

427A Application of ss. 425–427 to mergers and divisions of public companies.

^F514 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

^F515 Part XIIIA Takeover Offers _cross-notes

428 Takeover offers.

^F516 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

429 Right of offeror to buy out minority shareholders.

^F517 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

430 Effect of notice under s. 429.

^F518 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

430A Right of minority shareholder to be bought out by offeror.

^F519 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

430B Effect of requirement under s. 430A.

^F520 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

430C Applications to the court.

^F521 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

430D Joint offers.

^F522 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

430E Associates.

^F523 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

430F Convertible securities.

^F524 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Part XIV Investigation of Companies and Their Affairs; Requisition of Documents _cross-notes

Appointment and functions of inspectors

431 Investigation of a company on its own application or that of its members. _cross-notes

(1)The Secretary of State may appoint one or more competent inspectors to investigate the affairs of a company and to [^F525report the result of their investigations to him^F525] .

(2)The appointment may be made—

(a)in the case of a company having a share capital, on the application either of not less than 200 members or of members holding not less than one-tenth of the shares issued, [^F526(excluding any shares held as treasury shares)^F526]

(b)in the case of a company not having a share capital, on the application of not less than one-fifth in number of the persons on the company’s register of members, and

(c)in any case, on application of the company.

(3)The application shall be supported by such evidence as the Secretary of State may require for the purpose of showing that the applicant or applicants have good reason for requiring the investigation.

(4)The Secretary of State may, before appointing inspectors, require the applicant or applicants to give security, to an amount not exceeding £5,000, or such other sum as he may by order specify, for payment of the costs of the investigation.

An order under this subsection shall be made by statutory instrument subject to annulment in pursuance of a resolution of either House of Parliament.

432 Other company investigations. _cross-notes

(1)The Secretary of State shall appoint one or more competent inspectors to investigate the affairs of a company and [^F527report the result of their investigations to him^F527] , if the court by order declares that its affairs out to be so investigated.

(2)The Secretary of State may make such an appointment if it appears to him that there are circumstances suggesting—

(a)that the company’s affairs are being or have been conducted with intent to defraud its creditors or the creditors of any other person, or otherwise for a fraudulent or unlawful purpose, or in a manner which is unfairly prejudicial to some part of its members, or

(b)that any actual or proposed act or omission of the company (including an act or omission on its behalf) is or would be so prejudicial, or that the company was formed for any fraudulent or unlawful purpose, or

(c)that persons concerned with the company’s formation or the management of its affairs have in connection therewith been guilty of fraud, misfeasance or other misconduct towards it or towards its members, or

(d)that the company’s members have not been given all the information with respect to its affairs which they might reasonably expect.

[^F528 (2A)Inspectors may be appointed under subsection (2) on terms that any report they may make is not for publication; and in such a case, the provisions of section 437(3) (availability and publication of inspectors’ reports) do not apply.^F528]

(3)Subsections (1) and (2) are without prejudice to the powers of the Secretary of State under section 431; and the power conferred by subsection (2) is exercisable with respect to a body corporate notwithstanding that it is in course of being voluntarily wound up.

(4)The reference in subsection (2)(a) to a company’s members includes any person who is not a member but to whom shares in the company have been transferred or transmitted by operation of law.

433 Inspectors’ powers during investigation. _cross-notes

(1)If inspectors appointed under section 431 or 432 to investigate the affairs of a company think it necessary for the purposes of their investigation to investigate also the affairs of another body corporate which is or at any relevant time has been the company’s subsidiary or holding company, or a subsidiary of its holding company or a holding company of its subsidiary, they have power to do so; and they shall report on the affairs of the other body corporate so far as they think that the results of their investigation of its affairs are relevant to the investigation of the affairs of the company first mentioned above.

^F529(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

434 Production of documents and evidence to inspectors. _cross-notes

(1)When inspectors are appointed under section 431 or 432, it is the duty of all officers and agents of the company, and of all officers and agents of any other body corporate whose affairs are investigated under section 433(1)—

(a)to produce to the inspectors all [^F530documents^F530] of or relating to the company or, as the case may be, the other body corporate which are in their custody or power,

(b)to attend before the inspectors when required to do so, and

(c)otherwise to give the inspectors all assistance in connection with the investigation which they are reasonably able to give.

[^F531 (2)If the inspectors consider that an officer or agent of the company or other body corporate, or any other person, is or may be in possession of information relating to a matter which they believe to be relevant to the investigation, they may require him—

(a)to produce to them any documents in his custody or power relating to that matter,

(b)to attend before them, and

(c)otherwise to give them all assistance in connection with the investigation which he is reasonably able to give;

and it is that person’s duty to comply with the requirement.^F531]

[^F532 (3)An inspector may for the purposes of the investigation examine any person on oath, and may administer an oath accordingly.^F532]

(4) In this section a reference to officers or to agents includes past, as well as present, officers or agents (as the case may be); and “ agents ”, in relation to a company or other body corporate, includes its bankers and solicitors and persons employed by it as auditors, whether these persons are or are not officers of the company or other body corporate.

(5)An answer given by a person to a question put to him in exercise of powers conferred by this section (whether as it has effect in relation to an investigation under any of sections 431 to 433, or as applied by any other section in this Part) may be used in evidence against him.

[^F533 (5A)However, in criminal proceedings in which that person is charged with an offence to which this subsection applies—

(a)no evidence relating to the answer may be adduced, and

(b)no question relating to it may be asked,

by or on behalf of the prosecution, unless evidence relating to it is adduced, or a question relating to it is asked, in the proceedings by or on behalf of that person.

(5B)Subsection (5A) applies to any offence other than—

(a)an offence under section 2 or 5 of the Perjury Act 1911 (false statements made on oath otherwise than in judicial proceedings or made otherwise than on oath); or

(b)an offence under section 44(1) or (2) of the Criminal Law (Consolidation) (Scotland) Act 1995 (false statements made on oath or otherwise than on oath)[^F534 ; or

(c)an offence under Article 7 or 10 of the Perjury (Northern Ireland) Order 1979 (false statements made on oath otherwise than in judicial proceedings or made otherwise than on oath).^F534,F533]]

[^F535 (6) In this section “ document ” includes information recorded in any form.

(7)The power under this section to require production of a document includes power, in the case of a document not in hard copy form, to require the production of a copy of the document—

(a)in hard copy form, or

(b)in a form from which a hard copy can be readily obtained.

(8)An inspector may take copies of or extracts from a document produced in pursuance of this section.^F535]

^F536435 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

436 Obstruction of inspectors treated as contempt of court. _cross-notes

[^F537 (1)If any person—

(a)fails to comply with section 434(1)(a) or (c),

(b)refuses to comply with a requirement under section 434(1)(b) or (2), or

(c)refuses to answer any question put to him by the inspectors for the purposes of the investigation,

the inspectors may certify that fact in writing to the court.^F537]

(3)The court may thereupon enquire into the case; and, after hearing any witnesses who may be produced against or on behalf of the alleged offender and after hearing any statement which may be offered in defence, the court may punish the offender in like manner as if he had been guilty of contempt of the court.

437 Inspectors’ reports. _cross-notes

(1)The inspectors may, and if so directed by the Secretary of State shall, make interim reports to the Secretary of State, and on the conclusion of their investigation shall make a final report to him.

^F538 . . .

[^F539 (1A)Any persons who have been appointed under section 431 or 432 may at any time and, if the Secretary of State directs them to do so, shall inform him of any matters coming to their knowledge as a result of their investigations.^F539]

(1B)^F540. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(1C)^F540. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2)If the inspectors were appointed under section 432 in pursuance of an order of the court, the Secretary of State shall furnish a copy of any report of theirs to the court.

[^F541 (2A)If the company is registered under the Companies Act 2006 in Northern Ireland, the Secretary of State must send a copy of any interim or final report by the inspectors to the Department of Enterprise, Trade and Investment in Northern Ireland.^F541]

(3)In any case the Secretary of State may, if he thinks fit—

(a)forward a copy of any report made by the inspectors to the company’s registered office,

(b)furnish a copy on request and on payment of the prescribed fee to—

(i)any member of the company or other body corporate which is the subject of the report,

(ii)any person whose conduct is referred to in the report,

(iii)the auditors of that company or body corporate,

(iv)the applicants for the investigation,

(v)any other person whose financial interests appear to the Secretary of State to be affected by the matters dealt with in the report, whether as a creditor of the company or body corporate, or otherwise, and

(c)cause any such report to be printed and published.

438 Power to bring civil proceedings on company’s behalf.

^F542 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

439 Expenses of investigating a company’s affairs. _cross-notes

[^F543 (1)The expenses of an investigation under any of the powers conferred by this Part shall be defrayed in the first instance by the Secretary of State, but he may recover those expenses from the persons liable in accordance with this section.

There shall be treated as expenses of the investigation, in particular, such reasonable sums as the Secretary of State may determine in respect of general staff costs and overheads.^F543]

(2)^F544A person who is convicted on a prosecution instituted as a result of the investigation . . . may in the same proceedings be ordered to pay those expenses to such extent as may be specified in the order.

(3)^F545. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4)A body corporate dealt with by [^F546an inspectors’ report^F546] , where the inspectors were appointed otherwise than of the Secretary of State’s own motion, is liable except where it was the applicant for the investigation, and except so far as the Secretary of State otherwise directs.

[^F547 (5)Where inspectors were appointed—

(a)under section 431, or

(b)on an application under section 442(3),

the applicant or applicants for the investigation is or are liable to such extent (if any) as the Secretary of State may direct.^F547]

(6)The report of inspectors appointed otherwise than of the Secretary of State’s own motion may, if they think fit, and shall if the Secretary of State so directs, include a recommendation as to the directions (if any) which they think appropriate, in the light of their investigation, to be given under subsection (4) or (5) of this section.

(7)^F548. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(8)^F550Any liability to repay the Secretary of State imposed by [^F549subsection (2)^F549] above is (subject to satisfaction of his right to repayment) a liability also to indemnify all persons against liability under subsections (4) and (5). . . .

(9)A person liable under any one of those subsections is entitled to contribution from any other person liable under the same subsection, according to the amount of their respective liabilities under it.

(10)Expenses to be defrayed by the Secretary of State under this section shall, so far as not recovered under it, be paid out of money provided by Parliament.

^F551440 Power of Secretary of State to present winding-up petition.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

441 Inspectors’ report to be evidence. _cross-notes

(1)A copy of any report of inspectors appointed under [^F552this Part^F552] , certified by the Secretary of State to be a true copy, is admissible in any legal proceedings as evidence of the opinion of the inspectors in relation to any matter contained in the report [^F553and, in proceedings on an application under [^F554 section 8 of the Company Directors Disqualification Act 1986^F554] [^F555 or Article 11 of the Company Directors Disqualification (Northern Ireland) Order 2002^F555] , as evidence of any fact stated therein^F553] .

(2)A document purporting to be such a certificate as is mentioned above shall be received in evidence and be deemed to be such a certificate, unless the contrary is proved.

Other powers of investigation available to the Secretary of State

442 Power to investigate company ownership.

(1)Where it appears to the Secretary of State that there is good reason to do so, he may appoint one or more competent inspectors to investigate and report on the membership of any company, and otherwise with respect to the company, for the purpose of determining the true persons who are or have been financially interested in the success or failure (real or apparent) of the company or able to control or materially to influence its policy.

(2)^F556. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F557 (3)If an application for investigation under this section with respect to particular shares or debentures of a company is made to the Secretary of State by members of the company, and the number of applicants or the amount of shares held by them is not less than that required for an application for the appointment of inspectors under section 431(2)(a) or (b), then, subject to the following provisions, the Secretary of State shall appoint inspectors to conduct the investigation applied for.

(3A)The Secretary of State shall not appoint inspectors if he is satisfied that the application is vexatious; and where inspectors are appointed their terms of appointment shall exclude any matter in so far as the Secretary of State is satisfied that it is unreasonable for it to be investigated.

(3B)The Secretary of State may, before appointing inspectors, require the applicant or applicants to give security, to an amount not exceeding £5,000, or such other sum as he may by order specify, for payment of the costs of the investigation.

An order under this subsection shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(3C)If on an application under subsection (3) it appears to the Secretary of State that the powers conferred by section 444 are sufficient for the purposes of investigating the matters which inspectors would be appointed to investigate, he may instead conduct the investigation under that section.^F557]

(4)Subject to the terms of their appointment, the inspectors’ powers extend to the investigation of any circumstances suggesting the existance of an arrangement or understanding which, though not legally binding, is or was observed or likely to be observed in practice and which is relevant to the purposes of the investigation.

443 Provisions applicable on investigation under s. 442.

(1)For purposes of an investigation under section 442, sections 433(1), 434, 436 and 437 apply with the necessary modifications of references to the affairs of the company or to those of any other body corporate, subject however to the following subsections.

(2)Those sections apply to—

(a)all persons who are or have been, or whom the inspector has reasonable cause to believe to be or have been, financially interested in the success or failure or the apparent success or failure of the company or any other body corporate whose membership is investigated with that of the company, or able to control or materially influence its policy (including persons concerned only on behalf of others), and

(b)any other person whom the inspector has reasonable cause to believe possesses information relevant to the investigation,

as they apply in relation to officers and agents of the company or the other body corporate (as the case may be).

(3)If the Secretary of State is of opinion that there is good reason for not divulging any part of a report made by virtue of section 442 and this section, he may under section 437 disclose the report with the omission of that part; and he may cause to be kept by the registrar of companies a copy of the report with that part omitted or, in the case of any other such report, a copy of the whole report.

^F558(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

444 Power to obtain information as to those interested in shares, etc.

(1)If it appears to the Secretary of State that there is good reason to investigate the ownership of any shares in or debentures of a company and that it is unnecessary to appoint inspectors for the purpose, he may require any person whom he has reasonable cause to believe to have or to be able to obtain any information as to the present and past interests in those shares or debentures and the names and addresses of the persons interested and of any persons who act or have acted on their behalf in relation to the shares or debentures to give any such information to the Secretary of State.

(2)For this purpose a person is deemed to have an interest in shares or debentures if he has any right to acquire or dispose of them or of any interest in them, or to vote in respect of them, or if his consent is necessary for the exercise of any of the rights of other persons interested in them, or if other persons interested in them can be required, or are accustomed, to exercise their rights in accordance with his instructions.

(3)A person who fails to give information required of him under this section, or who in giving such information makes any statement which he knows to be false in a material particular, or recklessly makes any statement which is false in a material particular, [^F559commits an offence^F559] .

[^F560 (4)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 to a fine not exceeding the statutory maximum (or both) and, for continued contravention, a daily default fine not exceeding [^F561 one-fiftieth of the greater of £5,000 or the amount corresponding to level 4 on the standard scale for summary offences^F561] ;

(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) and, for continued contravention, a daily default fine not exceeding one-fiftieth of the statutory maximum.^F560]

445 Power to impose restrictions on shares and debentures.

(1)If in connection with an investigation under either section 442 or 444 it appears to the Secretary of State that there is difficulty in finding out the relevant facts about any shares (whether issued or to be issued), he may by order direct that the shares shall until further order be subject to the restrictions of Part XV of this Act.

^F562 (1A)If the Secretary of State is satisfied that an order under subsection (1) may unfairly affect the rights of third parties in respect of shares then the Secretary of State, for the purpose of protecting such rights and subject to such terms as he thinks fit, may direct that such acts by such persons or descriptions of persons and for such purposes as may be set out in the order, shall not constitute a breach of the restrictions of Part XV of this Act.

(2)This section, and Part XV in its application to orders under it, apply in relation to debentures as in relation to shares [^F563save that subsection (1A) shall not so apply.^F563]

446 Investigation of share dealings.

^F564 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Requisition and seizure of books and papers

[^F568447 Power to require documents and information _cross-notes

(1)The Secretary of State may act under subsections (2) and (3) in relation to a company.

(2)The Secretary of State may give directions to the company requiring it—

(a)to produce such documents (or documents of such description) as may be specified in the directions;

(b)to provide such information (or information of such description) as may be so specified.

(3)The Secretary of State may authorise a person (an investigator) to require the company or any other person—

(a)to produce such documents (or documents of such description) as the investigator may specify;

(b)to provide such information (or information of such description) as the investigator may specify.

(4)A person on whom a requirement under subsection (3) is imposed may require the investigator to produce evidence of his authority.

(5)A requirement under subsection (2) or (3) must be complied with at such time and place as may be specified in the directions or by the investigator (as the case may be).

(6)The production of a document in pursuance of this section does not affect any lien which a person has on the document.

(7)The Secretary of State or the investigator (as the case may be) may take copies of or extracts from a document produced in pursuance of this section.

(8) A “ document ” includes information recorded in any form.

[^F569 (9)The power under this section to require production of a document includes power, in the case of a document not in hard copy form, to require the production of a copy of the document—

(a)in hard copy form, or

(b)in a form from which a hard copy can be readily obtained.^F569,F568]]

[^F570447A Information provided: evidence _cross-notes

(1)A statement made by a person in compliance with a requirement under section 447 may be used in evidence against him.

(2)But in criminal proceedings in which the person is charged with a relevant offence—

(a)no evidence relating to the statement may be adduced by or on behalf of the prosecution, and

(b)no question relating to it may be asked by or on behalf of the prosecution,

unless evidence relating to it is adduced or a question relating to it is asked in the proceedings by or on behalf of that person.

(3)A relevant offence is any offence other than the following—

(a)an offence under section 451,

(b)an offence under section 5 of the Perjury Act 1911 (false statement made otherwise than on oath), or

(c)an offence under section 44(2) of the Criminal Law (Consolidation) (Scotland) Act 1995 (false statement made otherwise than on oath)[^F571 , or

(d)an offence under Article 10 of the Perjury (Northern Ireland) Order 1979 (false statements made otherwise than on oath).^F571,F570]]

[^F572448 Entry and search of premises. _cross-notes

(1)A justice of the peace may issue a warrant under this section if satisfied on information on oath given by or on behalf of the Secretary of State, or by a person appointed or authorised to exercise powers under this Part, that there are reasonable grounds for believing that there are on any premises documents whose production has been required under this Part and which have not been produced in compliance with the requirement.

(2)A justice of the peace may also issue a warrant under this section if satisfied on information on oath given by or on behalf of the Secretary of State, or by a person appointed or authorised to exercise powers under this Part—:

(a)that there are reasonable grounds for believing that an offence has been committed for which the penalty on conviction on indictment is imprisonment for a term of not less than two years and that there are on any premises documents relating to whether the offence has been committed,

(b)that the Secretary of State, or the person so appointed or authorised, has power to require the production of the documents under this Part, and

(c)that there are reasonable grounds for believing that if production was so required the documents would not be produced but would be removed from the premises, hidden, tampered with or destroyed.

(3)A warrant under this section shall authorise a constable, together with any other person named in it and any other constables—

(a)to enter the premises specified in the information, using such force as is reasonably necessary for the purpose;

(b)to search the premises and take possession of any documents appearing to be such documents as are mentioned in subsection (1) or (2), as the case may be, or to take, in relation to any such documents, any other steps which may appear to be necessary for preserving them or preventing interference with them;

(c)to take copies of any such documents; and

(d)to require any person named in the warrant to provide an explanation of them or to state where they may be found.

(4)If in the case of a warrant under subsection (2) the justice of the peace is satisfied on information on oath that there are reasonable grounds for believing that there are also on the premises other documents relevant to the investigation, the warrant shall also authorise the actions mentioned in subsection (3) to be taken in relation to such documents.

(5)A warrant under this section shall continue in force until the end of the period of one month beginning with the day on which it is issued.

(6)Any documents of which possession is taken under this section may be retained—

(a)for a period of three months; or

(b)if within that period proceedings to which the documents are relevant are commenced against any person for any criminal offence, until the conclusion of those proceedings.

(7)Any person who intentionally obstructs the exercise of any rights conferred by a warrant issued under this section or fails without reasonable excuse to comply with any requirement imposed in accordance with subsection (3)(d) is guilty of an offence ^F573. . .

[^F574 (7A)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.^F574]

(8)For the purposes of sections 449 and 451A (provision for security of information) documents obtained under this section shall be treated as if they had been obtained under the provision of this Part under which their production was or, as the case may be, could have been required.

(9)In the application of this section to Scotland for the references to a justice of the peace substitute references to a justice of the peace or a sheriff, and for the references to information on oath substitute references to evidence on oath.

(10) In this section “document” includes information recorded in any form. ^F572]

[^F575448A Protection in relation to certain disclosures: information provided to Secretary of State _cross-notes

(1)A person who makes a relevant disclosure is not liable by reason only of that disclosure in any proceedings relating to a breach of an obligation of confidence.

(2)A relevant disclosure is a disclosure which satisfies each of the following conditions—

(a)it is made to the Secretary of State otherwise than in compliance with a requirement under this Part;

(b)it is of a kind that the person making the disclosure could be required to make in pursuance of this Part;

(c)the person who makes the disclosure does so in good faith and in the reasonable belief that the disclosure is capable of assisting the Secretary of State for the purposes of the exercise of his functions under this Part;

(d)the information disclosed is not more than is reasonably necessary for the purpose of assisting the Secretary of State for the purposes of the exercise of those functions;

(e)the disclosure is not one falling within subsection (3) or (4).

(3)A disclosure falls within this subsection if the disclosure is prohibited by virtue of any enactment [^F576 whenever passed or made^F576] .

(4)A disclosure falls within this subsection if—

(a)it is made by a person carrying on the business of banking or by a lawyer, and

(b)it involves the disclosure of information in respect of which he owes an obligation of confidence in that capacity.

[^F577 (5) In this section “ enactment ” has the meaning given by section 1293 of the Companies Act 2006 . ^F577,F575]]

[^F578449 Provision for security of information obtained. _cross-notes

(1)This section applies to information (in whatever form) obtained—

(a)in pursuance of a requirement imposed under section 447;

(b)by means of a relevant disclosure within the meaning of section 448A(2);

(c)by an investigator in consequence of the exercise of his powers under section 453A.

(2)Such information must not be disclosed unless the disclosure—

(a)is made to a person specified in Schedule 15C, or

(b)is of a description specified in Schedule 15D.

(3)The Secretary of State may by order amend Schedules 15C and 15D.

(4)An order under subsection (3) must not—

(a)amend Schedule 15C by specifying a person unless the person exercises functions of a public nature (whether or not he exercises any other function);

(b)amend Schedule 15D by adding or modifying a description of disclosure unless the purpose for which the disclosure is permitted is likely to facilitate the exercise of a function of a public nature.

(5)An order under subsection (3) must be made by statutory instrument subject to annulment in pursuance of a resolution of either House of Parliament.

(6)A person who discloses any information in contravention of this section[^F579 is guilty of an offence.^F579]

[^F580 (6A)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 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).^F580]

(7)^F581. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(8)Any information which may by virtue of this section be disclosed to a person specified in Schedule 15C may be disclosed to any officer or employee of the person.

(9)This section does not prohibit the disclosure of information if the information is or has been available to the public from any other source.

(10)For the purposes of this section, information obtained by an investigator in consequence of the exercise of his powers under section 453A includes information obtained by a person accompanying the investigator in pursuance of subsection (4) of that section in consequence of that person’s accompanying the investigator.

(11)Nothing in this section authorises the making of a disclosure in contravention of [^F582 the data protection legislation^F582] .^F578]

450 Punishment for destroying, mutilating, etc. company documents. _cross-notes

[^F583 (1)An officer of a company^F583] . . . who—

(a)destroys, mutilates or falsifies, or is privy to the destruction, mutilation or falsification of a document affecting, or relating to the [^F584company’s^F584] property or affairs, or

(b)makes, or is privy to the making of, a false entry in such a document,

is guilty of an offence, unless he proves that he had no intention to conceal the state of affairs of [^F585the company^F585] or to defeat the law.

[^F586 (1A)Subsection (1) applies to an officer of an authorised insurance company which is not a body corporate as it applies to an officer of a company.^F586]

(2)Such a person as above mentioned who fraudulently either parts with, alters or makes an omission in any such document or is privy to fraudulent parting with, fraudulent altering or fraudulent making of an omission in, any such document, is guilty of an offence.

[^F587 (3)A person guilty of an offence under this section is liable—

(a)on conviction on indictment, to imprisonment for a term not exceeding seven 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).^F587]

(4)^F588. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[^F589 (5) In this section “document” includes information recorded in any form. ^F589]

[^F590451 Punishment for furnishing false information. _cross-notes

(1)A person commits an offence if in purported compliance with a requirement under section 447 to provide information—

(a)he provides information which he knows to be false in a material particular;

(b)he recklessly provides information which is false in a material particular.

[^F591 (2)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 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).^F591]

(3)^F592. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .^F590]

[^F593451A Disclosure of information by Secretary of State or inspector. _cross-notes

[^F594 (1)This section applies to information obtained—

(a)under sections 434 to [^F595 446E^F595] ;

(b)by an inspector in consequence of the exercise of his powers under section 453A.^F594]

(2)The Secretary of State may, if he thinks fit—

(a)disclose any information to which this section applies to any person to whom, or for any purpose for which, disclosure is permitted under section 449, or

(b)authorise or require an inspector appointed under this Part to disclose such information to any such person or for any such purpose.

[^F596 (3)Information to which this section applies may also be disclosed by an inspector appointed under this Part to—

(a)another inspector appointed under this Part;

(b)a person appointed under—

(i)section 167 of the Financial Services and Markets Act 2000 (general investigations),

(ii)section 168 of that Act (investigations in particular cases),

(iii)section 169(1)(b) of that Act (investigation in support of overseas regulator),

(iv)section 284 of that Act (investigations into affairs of certain collective investment schemes), or

(v)regulations made as a result of section 262(2)(k) of that Act (investigations into open-ended investment companies),

to conduct an investigation; or

(c)a person authorised to exercise powers under—

(i)section 447 of this Act; or

(ii)section 84 of the Companies Act 1989 (exercise of powers to assist overseas regulatory authority).^F596]

(4)Any information which may by virtue of subsection (3) be disclosed to any person may be disclosed to any officer or servant of that person.

(5)The Secretary of State may, if he thinks fit, disclose any information obtained under section 444 to—

(a)the company whose ownership was the subject of the investigation,

(b)any member of the company,

(c)any person whose conduct was investigated in the course of the investigation,

(d)the auditors of the company, or

(e)any person whose financial interests appear to the Secretary of State to be affected by matters covered by the investigation.^F593]

[^F597 (6)For the purposes of this section, information obtained by an inspector in consequence of the exercise of his powers under section 453A includes information obtained by a person accompanying the inspector in pursuance of subsection (4) of that section in consequence of that person’s accompanying the inspector.

(7)The reference to an inspector in subsection (2)(b) above includes a reference to a person accompanying an inspector in pursuance of section 453A(4).^F597]

452 Privileged information. _cross-notes

[^F598 (1)Nothing in sections 431 to [^F599 446E^F599] compels the disclosure by any person to the Secretary of State or to an inspector appointed by him of information in respect of which in an action in the High Court a claim to legal professional privilege, or in an action in the Court of Session a claim to confidentiality of communications, could be maintained.^F598]

[^F600 (1A)Nothing in section 434, 443 or 446 requires a person (except as mentioned in subsection (1B) below) to disclose information or produce documents in respect of which he owes an obligation of confidence by virtue of carrying on the business of banking unless—

(a)the person to whom the obligation of confidence is owed is the company or other body corporate under investigation,

(b)the person to whom the obligation of confidence is owed consents to the disclosure or production, or

(c)the making of the requirement is authorised by the Secretary of State.

(1B)Subsection (1A) does not apply where the person owing the obligation of confidence is the company or other body corporate under investigation under section 431, 432 or 433.^F600]

[^F601 (2)Nothing in sections 447 to 451—

(a)compels the production by any person of a document or the disclosure by any person of information in respect of which in an action in the High Court a claim to legal professional privilege, or in an action in the Court of Session a claim to confidentiality of communications, could be maintained;

(b)authorises the taking of possession of any such document which is in the person’s possession.

(3)The Secretary of State must not under section 447 require, or authorise a person to require—

(a)the production by a person carrying on the business of banking of a document relating to the affairs of a customer of his, or

(b)the disclosure by him of information relating to those affairs,

unless one of the conditions in subsection (4) is met.

(4)The conditions are—

(a)the Secretary of State thinks it is necessary to do so for the purpose of investigating the affairs of the person carrying on the business of banking;

(b)the customer is a person on whom a requirement has been imposed under section 447;

(c)the customer is a person on whom a requirement to produce information or documents has been imposed by an investigator appointed by the Secretary of State in pursuance of section 171 or 173 of the Financial Services and Markets Act 2000 (powers of persons appointed under section 167 or as a result of section 168(2) to conduct an investigation).

(5)Despite subsections (1) and (2) a person who is a lawyer may be compelled to disclose the name and address of his client.^F601]

453 Investigation of [^F602overseas^F602] companies.

[^F603 (1)The provisions of this Part apply to bodies corporate incorporated outside [^F604 the United Kingdom^F604] which are carrying on business in [^F604 the United Kingdom^F604] , or have at any time carried on business there, as they apply to companies under this Act; but subject to the following exceptions, adaptations and modifications.

(1A)The following provisions do not apply to such bodies—

(a)section 431 (investigation on application of company or its members),

(b)^F605. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(c)sections 442 to 445 (investigation of company ownership and power to obtain information as to those interested in shares, &c.), ^F606. . .

(d)^F606. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(1B)The other provisions of this Part apply to such bodies subject to such adaptations and modifications as may be specified by regulations made by the Secretary of State.^F603]

(2)Regulations under this section shall be made by statutory instrument subject to annulment in pursuance of a resolution of either House of Parliament.

[^F607453A Power to enter and remain on premises _cross-notes

(1)An inspector or investigator may act under subsection (2) in relation to a company if—

(a)he is authorised to do so by the Secretary of State, and

(b)he thinks that to do so will materially assist him in the exercise of his functions under this Part in relation to the company.

(2)An inspector or investigator may at all reasonable times—

(a)require entry to relevant premises, and

(b)remain there for such period as he thinks necessary for the purpose mentioned in subsection (1)(b).

(3)Relevant premises are premises which the inspector or investigator believes are used (wholly or partly) for the purposes of the company’s business.

(4)In exercising his powers under subsection (2), an inspector or investigator may be accompanied by such other persons as he thinks appropriate.

(5)A person who intentionally obstructs a person lawfully acting under subsection (2) or (4)[^F608 is guilty of an offence.^F608]

[^F609 (5A)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.^F609]

(6)^F610. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7)An inspector is a person appointed under section 431, 432 or 442.

(8)An investigator is a person authorised for the purposes of section 447.

453B Power to enter and remain on premises: procedural _cross-notes

(1)This section applies for the purposes of section 453A.

(2)The requirements of subsection (3) must be complied with at the time an inspector or investigator seeks to enter relevant premises under section 453A(2)(a).

(3)The requirements are—