Companies Act 2006, section 648

Court order confirming reduction

Part 17 A company's share capital

(1)The court may make an order confirming the reduction of capital on such terms and conditions as it thinks fit.

(2)The court must not confirm the reduction unless it is satisfied, with respect to every creditor of the company who is entitled to object to the reduction of capital that either—

(a)his consent to the reduction has been obtained, or

(b)his debt or claim has been discharged, or has determined or has been secured.

(3)Where the court confirms the reduction, it may order the company to publish (as the court directs) the reasons for reduction of capital, or such other information in regard to it as the court thinks expedient with a view to giving proper information to the public, and (if the court thinks fit) the causes that led to the reduction.

(4) The court may, if for any special reason it thinks proper to do so, make an order directing that the company must, during such period (commencing on or at any time after the date of the order) as is specified in the order, add to its name as its last words the words “and reduced”.

If such an order is made, those words are, until the end of the period specified in the order, deemed to be part of the company's name.

Read section 648 in the full Act → Definitions (2) Cases (7)

Definitions used in section 648

the court

(1) Except as otherwise provided, in the Companies Acts “the court” means—

(a)in England and Wales, the High Court or the county court;

(b)in Scotland, the Court of Session or the sheriff court;

(c)in Northern Ireland, the High Court.

Defined in s.1156(1) · see it in the full Act

(2) The provisions of the Companies Acts conferring jurisdiction on “the court” as defined above have effect subject to any enactment or rule of law relating to the allocation of jurisdiction or distribution of business between courts in any part of the United Kingdom.

Defined in s.1156(2) · see it in the full Act
company

“company” means a company formed and registered under this Act, that is—

(a)

a company so formed and registered after the commencement of this Part, or

(b)

a company that immediately before the commencement of this Part—

(i)

was formed and registered under the Companies Act 1985 (c. 6) or the Companies (Northern Ireland) Order 1986 (S.I. 1986/1032 (N.I. 6)), or

(ii)

was an existing company for the purposes of that Act or that Order,

(which is to be treated on commencement as if formed and registered under this Act).

Defined in s.1(1) · see it in the full Act

(4) In this section and that Schedule “company” includes any body corporate.

Defined in s.1159(4) · see it in the full Act

Cases considering section 648 (7)

IN THE MATTER OF INVESTEC PLC

[2022] EWHC 1679 (Ch) · 19 May 2022

Applies the court’s jurisdiction to confirm the reduction of the company’s share premium account. The reduction was confirmed after the court was satisfied that the statutory criteria were met (see paras [1], [32]–[41]).

Vodafone Group Plc, Re Companies Act 2006

[2014] EWHC 1357 (Ch) · 1 May 2014

The court identifies its power to confirm a reduction of capital on terms and conditions it considers appropriate. The reductions were confirmed at the later hearing (see para [23]). The court records the requirement that the reduction cannot be confirmed unless each creditor entitled to object has consented, been paid, the debt has determined, or it has been secured. No creditor met the entitlement test in this case (see para [23]).

Mann Group Plc & Mann Strategic Holdings

[2012] EWHC 4089 (Ch) · 5 November 2012

Applies the jurisdiction to confirm reductions of capital. The court confirmed Mann’s reduction after finding valid resolutions, equitable treatment, adequate explanation, discernible purpose, and no creditor prejudice. (see paras [1]; [20]-[26])

What each judgment says about section 648 is in the case-law panel in the full Act.