Companies Act 2006, section 900

Powers of court to facilitate reconstruction or amalgamation

Part 26 Arrangements and reconstructions: general

(1)This section applies where application is made to the court under section 899 to sanction a compromise or arrangement and it is shown that—

(a)the compromise or arrangement is proposed for the purposes of, or in connection with, a scheme for the reconstruction of any company or companies, or the amalgamation of any two or more companies, and

(b) under the scheme the whole or any part of the undertaking or the property of any company concerned in the scheme (“a transferor company”) is to be transferred to another company (“the transferee company”).

(2)The court may, either by the order sanctioning the compromise or arrangement or by a subsequent order, make provision for all or any of the following matters—

(a)the transfer to the transferee company of the whole or any part of the undertaking and of the property or liabilities of any transferor company;

(b)the allotting or appropriation by the transferee company of any shares, debentures, policies or other like interests in that company which under the compromise or arrangement are to be allotted or appropriated by that company to or for any person;

(c)the continuation by or against the transferee company of any legal proceedings pending by or against any transferor company;

(d)the dissolution, without winding up, of any transferor company;

(e)the provision to be made for any persons who, within such time and in such manner as the court directs, dissent from the compromise or arrangement;

(f)such incidental, consequential and supplemental matters as are necessary to secure that the reconstruction or amalgamation is fully and effectively carried out.

(3)If an order under this section provides for the transfer of property or liabilities—

(a)the property is by virtue of the order transferred to, and vests in, the transferee company, and

(b)the liabilities are, by virtue of the order, transferred to and become liabilities of that company.

(4)The property (if the order so directs) vests freed from any charge that is by virtue of the compromise or arrangement to cease to have effect.

(5)In this section—

  • “property” includes property, rights and powers of every description; and

  • “liabilities” includes duties.

(6)Every company in relation to which an order is made under this section must cause a copy of the order to be delivered to the registrar within seven days after its making.

(7)If default is made in complying with subsection (6) an offence is committed by—

(a)the company, and

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

(8)A person guilty of an offence under subsection (7) is liable on summary conviction to a fine not exceeding level 3 on the standard scale and, for continued contravention, a daily default fine not exceeding one-tenth of level 3 on the standard scale.

Read section 900 in the full Act → Definitions (8) Cases (6)

Definitions used in section 900

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
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
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
undertaking

(1) In the Companies Acts“undertaking” means—

(a)a body corporate or partnership, or

(b)an unincorporated association carrying on a trade or business, with or without a view to profit.

Defined in s.1161(1) · see it in the full Act
share

(1) In the Companies Acts “share”, in relation to a company, means share in the company's share capital.

Defined in s.540(1) · see it in the full Act
the registrar

(3) In the Companies Acts“the registrar of companies” and “the registrar” mean the registrar of companies for England and Wales, Scotland or Northern Ireland, as the case may require.

Defined in s.1060(3) · 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
daily default fine

(1) This section defines what is meant in the Companies Acts where it is provided that a person guilty of an offence is liable on summary conviction to a fine not exceeding a specified amount “and, for continued contravention, a daily default fine” not exceeding a specified amount.

Defined in s.1125(1) · see it in the full Act

Cases considering section 900 (6)

Almida Group Unlimted & Ors, Re

[2023] EWHC 3561 (Ch) · 1 December 2023

Applies the amalgamation jurisdiction to the transfer of assets and liabilities from the scheme companies to Holdings, subject to the counterparty-consent limitation. (see paras [1]; [4]-[5]; [10]) Confirms that the proposals constituted a reconstruction or amalgamation for the statutory purpose, adopting the earlier convening-hearing finding. (see para [2]) Confirms that the relief sought fell within the court’s statutory powers and orders the requested relief. (see para [10])

Primacom Holding GmbH & Anor v A Group of the Senior Lenders & Credit Agricole

[2011] EWHC 3746 (Ch) · 20 December 2011Limits

The court limited the significance of section 900 by distinguishing its reconstruction or amalgamation powers from the jurisdiction required to implement the proposed creditor scheme. A scheme could proceed without reliance on section 900 (see paras [61]-[62]).

Easynet Global Services Ltd, Re

[2018] EWCA Civ 10 · 18 January 2018

The court referred to a scheme of reconstruction under section 900 as an alternative domestic merger procedure, noting that it was less attractive in this case because of difficulties concerning transfer of contracts. (see paras [6]-[7])

What each judgment says about section 900 is in the case-law panel in the full Act.

Amendments and notes

2 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))))
  2. C1315S. 900(6) modified by 2008 c. 17, s. 160(6) (as substituted (6.4.2017) by Housing and Planning Act 2016 (c. 22), s. 216(3), Sch. 4 para. 24; S.I. 2017/75, reg. 4)