Companies Act 2006, section 897

Statement to be circulated or made available

Part 26 Arrangements and reconstructions: general

(1)Where a meeting is summoned under section 896—

(a)every notice summoning the meeting that is sent to a creditor or member must be accompanied by a statement complying with this section, and

(b)every notice summoning the meeting that is given by advertisement must either—

(i)include such a statement, or

(ii)state where and how creditors or members entitled to attend the meeting may obtain copies of such a statement.

(2)The statement must—

(a)explain the effect of the compromise or arrangement, and

(b)in particular, state—

(i)any material interests of the directors of the company (whether as directors or as members or as creditors of the company or otherwise), and

(ii)the effect on those interests of the compromise or arrangement, in so far as it is different from the effect on the like interests of other persons.

(3)Where the compromise or arrangement affects the rights of debenture holders of the company, the statement must give the like explanation as respects the trustees of any deed for securing the issue of the debentures as it is required to give as respects the company's directors.

(4)Where a notice given by advertisement states that copies of an explanatory statement can be obtained by creditors or members entitled to attend the meeting, every such creditor or member is entitled, on making application in the manner indicated by the notice, to be provided by the company with a copy of the statement free of charge.

(5)If a company makes default in complying with any requirement of this section, an offence is committed by—

(a)the company, and

(b)every officer of the company who is in default.

This is subject to subsection (7) below.

(6)For this purpose the following are treated as officers of the company—

(a)a liquidator or administrator of the company, and

(b)a trustee of a deed for securing the issue of debentures of the company.

(7)A person is not guilty of an offence under this section if he shows that the default was due to the refusal of a director or trustee for debenture holders to supply the necessary particulars of his interests.

(8)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.

Read section 897 in the full Act → Definitions (6) Cases (32)

Definitions used in section 897

member

(2) In sub-paragraph (1) “member” has the same meaning as it has by virtue of section 7(1) of that Act .

Defined in Sch.2 Pt.1 · see it in the full Act
arrangement

“arrangement” includes a reorganisation of the company's share capital by the consolidation of shares of different classes or by the division of shares into shares of different classes, or by both of those methods; and

Defined in s.895(2) · see it in the full Act
director

In the Companies Acts “director” includes any person occupying the position of director, by whatever name called.

Defined in s.250 · see it in the full Act
company

“company”—

(a)

in section 900 (powers of court to facilitate reconstruction or amalgamation) means a company within the meaning of this Act, and

(b)

elsewhere in this Part means any company liable to be wound up under the Insolvency Act 1986 (c. 45) or the Insolvency (Northern Ireland) Order 1989 (S.I. 1989/2405 (N.I. 19)).

Defined in s.895(2) · see it in the full Act

“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
debenture

In the Companies Acts“debenture” includes debenture stock, bonds and any other securities of a company, whether or not constituting a charge on the assets of the company.

Defined in s.738 · see it in the full Act
officer

“officer”, in relation to a body corporate, includes a director, manager or secretary;

Defined in s.1173(1) · see it in the full Act

Cases considering section 897 (32)

Diversified Energy Company Plc, Re

[2025] EWHC 3081 (Ch) · 21 November 2025

The court confirmed that the circular and information supplied to shareholders satisfied the section 897 requirements. (see paras [20]-[23])

Reliance National Insurance Company (Europe), Re

[2025] EWHC 789 (Ch) · 19 March 2025

The court applied the requirement that approval must be by a majority in number representing 75 per cent in value of the claims represented at the meeting. It concluded that the statutory majority was achieved. (see paras [54]; [81]) The court confirmed that the Explanatory Statement complied with the requirement concerning disclosure of directors’ material interests. (see para [80])

Light SA, Re

[2024] EWHC 2733 (Ch) · 28 October 2024Interprets

Interprets the explanatory-statement requirement as requiring the effect of the compromise or arrangement to be explained, but permits waiver of non-material defects where creditors receive sufficient information in time. (see paras [13]-[20])

12 more judgments, and what each says about section 897, are in the case-law panel in the full Act.

Amendments and notes

1 notes from legislation.gov.uk

Modifications

  1. C1311Ss. 895-900 applied (with modifications) (1.10.2009) by The Limited Liability Partnerships (Application of Companies Act 2006) Regulations 2009 (S.I. 2009/1804), regs. 2, 45 (as amended: (26.6.2020) by The Limited Liability Partnerships (Amendment etc.) Regulations 2020 (S.I. 2020/643), reg. 1(1), Sch. 3 para. 2(3)(a)(b)(c) (which amending S.I. is revoked (16.2.2021) by S.I. 2021/60, reg. 1(1), 2); and (16.2.2021) by The Limited Liability Partnerships (Amendment etc.) Regulations 2021 (S.I. 2021/60), reg. 1(1), Sch. 3 para. 2(2)(3) (with reg. 4(2))))