Office of Public Sector Information
PART 27 continued CHAPTER 3 continued
(2) The period referred to above is the period—
(a) beginning one month before, and
(b) ending on the date of,
the first meeting of the members, or any class of members, of the company for the purposes of approving the scheme.
(3) The documents referred to above are—
(a) the draft terms;
(b) the directors' explanatory report;
(c) the expert’s report;
(d) the company’s annual accounts and reports for the last three financial years ending on or before the first meeting of the members, or any class of members, of the company summoned for the purposes of approving the scheme; and
(e) any supplementary accounting statement required by section 925.
(4) The requirements in subsection (3)(b), (c) and (e) are subject to section 933 (agreement to dispense with reports etc) and section 934 (power of court to exclude certain requirements).
(1) The directors of the transferor company must report—
(a) to every meeting of the members, or any class of members, of that company summoned for the purpose of agreeing to the scheme, and
(b) to the directors of each existing transferee company,
any material changes in the property and liabilities of the transferor company between the date when the draft terms were adopted and the date of the meeting in question.
(2) The directors of each existing transferee company must in turn—
(a) report those matters to every meeting of the members, or any class of members, of that company summoned for the purpose of agreeing to the scheme, or
(b) send a report of those matters to every member entitled to receive notice of such a meeting.
(3) The requirement in this section is subject to section 933 (agreement to dispense with reports etc).
The articles of every new transferee company, or a draft of them, must be approved by ordinary resolution of the transferor company.
(1) The scheme must provide that where any securities of the transferor company (other than shares) to which special rights are attached are held by a person otherwise than as a member or creditor of the company, that person is to receive rights in a transferee company of equivalent value.
(2) Subsection (1) does not apply if—
(a) the holder has agreed otherwise, or
(b) the holder is, or under the scheme is to be, entitled to have the securities purchased by a transferee company on terms that the court considers reasonable.
The scheme must not provide for shares in a transferee company to be allotted to the transferor company (or its nominee) in respect of shares in the transferor company held by it (or its nominee).
(1) This section applies in the case of a division where all of the shares or other securities of the transferor company carrying the right to vote at general meetings of the company are held by or on behalf of one or more existing transferee companies.
(2) It is not necessary for the scheme to be approved by a meeting of the members, or any class of members, of the transferor company if the court is satisfied that the following conditions have been complied with.
(3) The first condition is that publication of notice of receipt of the draft terms by the registrar took place in respect of all the companies involved in the division at least one month before the date of the court’s order.
(4) The second condition is that the members of every company involved in the division were able during the period beginning one month before, and ending on, that date—
(a) to inspect at the registered office of their company copies of the documents listed in section 926(3) relating to every company involved in the division, and
(b) to obtain copies of those documents or any part of them on request free of charge.
(5) The third condition is that—
(a) one or more members of the transferor company, who together held not less than 5% of the paid-up capital of the company (excluding any shares in the company held as treasury shares) would have been able, during that period, to require a meeting of each class of members to be called for the purpose of deciding whether or not to agree to the scheme, and
(b) no such requirement was made.
(6) The fourth condition is that the directors of the transferor company have sent—
(a) to every member who would have been entitled to receive notice of a meeting to agree to the scheme (had any such meeting been called), and
(b) to the directors of every existing transferee company,
a report of any material change in the property and liabilities of the transferor company between the date when the terms were adopted by the directors and the date one month before the date of the court’s order.
(1) In the case of a division, it is not necessary for the scheme to be approved by the members of a transferee company if the court is satisfied that the following conditions have been complied with in relation to that company.
(2) The first condition is that publication of notice of receipt of the draft terms by the registrar took place in respect of that company at least one month before the date of the first meeting of members of the transferor company summoned for the purposes of agreeing to the scheme.
(3) The second condition is that the members of that company were able during the period beginning one month before, and ending on, that date—
(a) to inspect at the registered office of that company copies of the documents specified in section 926(3) relating to that company and every other company involved in the division, and
(b) to obtain copies of those documents or any part of them on request free of charge.
(4) The third condition is that—
(a) one or more members of that company, who together held not less than 5% of the paid-up capital of the company which carried the right to vote at general meetings of the company (excluding any shares in the company held as treasury shares) would have been able, during that period, to require a meeting of each class of members to be called for the purpose of deciding whether or not to agree to the scheme, and
(b) no such requirement was made.
(5) The first and second conditions above are subject to section 934 (power of court to exclude certain requirements).
(1) If all members holding shares in, and all persons holding other securities of, the companies involved in the division, being shares or securities that carry a right to vote in general meetings of the company in question, so agree, the following requirements do not apply.
(2) The requirements that may be dispensed with under this section are—
(a) the requirements of—
(i) section 923 (directors' explanatory report),
(ii) section 924 (expert’s report),
(iii) section 925 (supplementary accounting statement), and
(iv) section 927 (report on material changes in assets of transferor company); and
(b) the requirements of section 926 (inspection of documents) so far as relating to any document required to be drawn up under the provisions mentioned in paragraph (a)(i), (ii) or (iii) above.
(3) For the purposes of this section—
(a) the members, or holders of other securities, of a company, and
(b) whether shares or other securities carry a right to vote in general meetings of the company,
are determined as at the date of the application to the court under section 896.
(1) In the case of a division, the court may by order direct that—
(a) in relation to any company involved in the division, the requirements of—
(i) section 921 (publication of draft terms), and
(ii) section 926 (inspection of documents),
do not apply, and
(b) in relation to an existing transferee company, section 932 (circumstances in which meeting of members of transferee company not required) has effect with the omission of the first and second conditions specified in that section,
if the court is satisfied that the following conditions will be fulfilled in relation to that company.
(2) The first condition is that the members of that company will have received, or will have been able to obtain free of charge, copies of the documents listed in section 926—
(a) in time to examine them before the date of the first meeting of the members, or any class of members, of that company summoned for the purposes of agreeing to the scheme, or
(b) in the case of an existing transferee company where in the circumstances described in section 932 no meeting is held, in time to require a meeting as mentioned in subsection (4) of that section.
(3) The second condition is that the creditors of that company will have received or will have been able to obtain free of charge copies of the draft terms in time to examine them—
(a) before the date of the first meeting of the members, or any class of members, of the company summoned for the purposes of agreeing to the scheme, or
(b) in the circumstances mentioned in subsection (2)(b) above, at the same time as the members of the company.
(4) The third condition is that no prejudice would be caused to the members or creditors of the transferor company or any transferee company by making the order in question.
(1) Where it appears to an expert—
(a) that a valuation is reasonably necessary to enable him to draw up his report, and
(b) that it is reasonable for that valuation, or part of it, to be made by (or for him to accept a valuation made by) another person who—
(i) appears to him to have the requisite knowledge and experience to make the valuation or that part of it, and
(ii) meets the independence requirement in section 936,
he may arrange for or accept such a valuation, together with a report which will enable him to make his own report under section 909 or 924.
(2) Where any valuation is made by a person other than the expert himself, the latter’s report must state that fact and must also—
(a) state the former’s name and what knowledge and experience he has to carry out the valuation, and
(b) describe so much of the undertaking, property and liabilities as was valued by the other person, and the method used to value them, and specify the date of the valuation.
(1) A person meets the independence requirement for the purposes of section 909 or 924 (expert’s report) or section 935 (valuation by another person) only if—
(a) he is not—
(i) an officer or employee of any of the companies concerned in the scheme, or
(ii) a partner or employee of such a person, or a partnership of which such a person is a partner;
(b) he is not—
(i) an officer or employee of an associated undertaking of any of the companies concerned in the scheme, or
(ii) a partner or employee of such a person, or a partnership of which such a person is a partner; and
(c) there does not exist between—
(i) the person or an associate of his, and
(ii) any of the companies concerned in the scheme or an associated undertaking of such a company,
a connection of any such description as may be specified by regulations made by the Secretary of State.
(2) An auditor of a company is not regarded as an officer or employee of the company for this purpose.
(3) For the purposes of this section—
(a) the “companies concerned in the scheme” means every transferor and existing transferee company;
(b) “associated undertaking”, in relation to a company, means—
(i) a parent undertaking or subsidiary undertaking of the company, or
(ii) a subsidiary undertaking of a parent undertaking of the company; and
(c) “associate” has the meaning given by section 937.
(4) Regulations under this section are subject to negative resolution procedure.
(1) This section defines “associate” for the purposes of section 936 (experts and valuers: independence requirement).
(2) In relation to an individual, “associate” means—
(a) that individual’s spouse or civil partner or minor child or step-child,
(b) any body corporate of which that individual is a director, and
(c) any employee or partner of that individual.
(3) In relation to a body corporate, “associate” means—
(a) any body corporate of which that body is a director,
(b) any body corporate in the same group as that body, and
(c) any employee or partner of that body or of any body corporate in the same group.
(4) In relation to a partnership that is a legal person under the law by which it is governed, “associate” means—
(a) any body corporate of which that partnership is a director,
(b) any employee of or partner in that partnership, and
(c) any person who is an associate of a partner in that partnership.
(5) In relation to a partnership that is not a legal person under the law by which it is governed, “associate” means any person who is an associate of any of the partners.
(6) In this section, in relation to a limited liability partnership, for “director” read “member”.
(1) The court may order a meeting of—
(a) the members of an existing transferee company, or any class of them, or
(b) the creditors of an existing transferee company, or any class of them,
to be summoned in such manner as the court directs.
(2) An application for such an order may be made by—
(a) the company concerned,
(b) a member or creditor of the company, or
(c) if an administration order is in force in relation to the company, the administrator.
(1) Where the court sanctions the compromise or arrangement, it must—
(a) in the order sanctioning the compromise or arrangement, or
(b) in a subsequent order under section 900 (powers of court to facilitate reconstruction or amalgamation),
fix a date on which the transfer (or transfers) to the transferee company (or transferee companies) of the undertaking, property and liabilities of the transferor company is (or are) to take place.
(2) Any such order that provides for the dissolution of the transferor company must fix the same date for the dissolution.
(3) If it is necessary for the transferor company to take steps to ensure that the undertaking, property and liabilities are fully transferred, the court must fix a date, not later than six months after the date fixed under subsection (1), by which such steps must be taken.
(4) In that case, the court may postpone the dissolution of the transferor company until that date.
(5) The court may postpone or further postpone the date fixed under subsection (3) if it is satisfied that the steps mentioned cannot be completed by the date (or latest date) fixed under that subsection.
(1) In the case of a division, each transferee company is jointly and severally liable for any liability transferred to any other transferee company under the scheme to the extent that the other company has made default in satisfying that liability.
This is subject to the following provisions.
(2) If a majority in number representing 75% in value of the creditors or any class of creditors of the transferor company, present and voting either in person or by proxy at a meeting summoned for the purposes of agreeing to the scheme, so agree, subsection (1) does not apply in relation to the liabilities owed to the creditors or that class of creditors.
(3) A transferee company is not liable under this section for an amount greater than the net value transferred to it under the scheme.
The “net value transferred” is the value at the time of the transfer of the property transferred to it under the scheme less the amount at that date of the liabilities so transferred.
In this Part—
“liabilities” includes duties;
“property” includes property, rights and powers of every description.
Companies Act 2006