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Companies Act 2006

  • 2006 c. 46
  • Table of Contents

Part 1 General introductory provisions

Companies and Companies Acts
1. Companies
2. The Companies Acts
Types of Company
3. Limited and unlimited companies
4. Private and public companies
5. Companies limited by guarantee and having share capital
6. Community interest companies

Part 2 Company Formation

General
7.Method of forming company
8.Memorandum of association
Requirements for registration
9.Registration documents
10.Statement of capital and initial shareholdings
11.Statement of guarantee
12.Statement of proposed officers
13.Statement of compliance
Registration and its effect
14.Registration
15.Issue of certificate of incorporation
16.Effect of registration

Part 3 A company's Constitution

Chapter 1 Introductory
17.A company's constitution
Chapter 2 Articles of association
General
18.Articles of association
19.Power of Secretary of State to prescribe model articles
20.Default application of model articles
Alteration of articles
21.Amendment of articles
22.Entrenched provisions of the articles
23.Notice to registrar of existence of restriction on amendment of articles
24.Statement of compliance where amendment of articles restricted
25.Effect of alteration of articles on company's members
26.Registrar to be sent copy of amended articles
27.Registrar's notice to comply in case of failure with respect to amended articles
Supplementary
28.Existing companies: provisions of memorandum treated as provisions of articles
Chapter 3 Resolutions and agreements affecting a company's constitution
29.Resolutions and agreements affecting a company's constitution
30.Copies of resolutions or agreements to be forwarded to registrar
Chapter 4 Miscellaneous and supplementary provisions
Statement of company's objects
31.Statement of company's objects
Other provisions with respect to a company's constitution
32.Constitutional documents to be provided to members
33.Effect of company's constitution
34.Notice to registrar where company's constitution altered by enactment
35.Notice to registrar where company's constitution altered by order
36.Documents to be incorporated in or accompany copies of articles issued by company
Supplementary provisions

37.Right to participate in profits otherwise than as member void
38.Application to single member companies of enactments and rules of law

Part 4 A company's capacity and related matters

Capacity of company and power of directors to bind it
39.A company's capacity
40.Power of directors to bind the company
41.Constitutional limitations: transactions involving directors or their associates
42.Constitutional limitations: companies that are charities
Formalities of doing business under the law of England and Wales or Northern Ireland
43.Company contracts
44.Execution of documents
45.Common seal
46.Execution of deeds
47.Execution of deeds or other documents by attorney
Formalities of doing business under the law of Scotland
48.Execution of documents by companies
Other matters
49.Official seal for use abroad
50.Official seal for share certificates etc
51.Pre-incorporation contracts, deeds and obligations
52.Bills of exchange and promissory notes

Part 5 A company's name

Chapter 1 General requirements
Prohibited names
53.Prohibited names
Sensitive words and expressions
54.Names suggesting connection with government or public authority
55.Other sensitive words or expressions
56.Duty to seek comments of government department or other specified body
Permitted characters etc
57.Permitted characters etc

Chapter 2 Indications of company type or legal form

Required indications for limited companies
58.Public limited companies
59.Private limited companies
60.Exemption from requirement as to use of “limited”
61.Continuation of existing exemption: companies limited by shares
62.Continuation of existing exemption: companies limited by guarantee
63.Exempt company: restriction on amendment of articles
64.Power to direct change of name in case of company ceasing to be entitled to exemption
Inappropriate use of indications of company type or legal form
65.Inappropriate use of indications of company type or legal form

Chapter 3 Similarity to other names

Similarity to other name on registrar's index
66.Name not to be the same as another in the index
67.Power to direct change of name in case of similarity to existing name
68.Direction to change name: supplementary provisions
Similarity to other name in which person has goodwill
69.Objection to company's registered name
70.Company names adjudicators
71.Procedural rules
72.Decision of adjudicator to be made available to public
73.Order requiring name to be changed
74.Appeal from adjudicator's decision

Chapter 4 Other powers of the Secretary of State

75.Provision of misleading information etc
76.Misleading indication of activities

Chapter 5 Change of name

77.Change of name
78.Change of name by special resolution
79.Change of name by means provided for in company's articles
80.Change of name: registration and issue of new certificate of incorporation
81.Change of name: effect
Chapter 6 Trading disclosures
82.Requirement to disclose company name etc
83.Civil consequences of failure to make required disclosure
84.Criminal consequences of failure to make required disclosures
85.Minor variations in form of name to be left out of account

Part 6 A company's registered office

General
86.A company's registered office
87.Change of address of registered office
Welsh companies
88.Welsh companies

Part 7 Re-registration as a means of altering a company's status

Introductory
89.Alteration of status by re-registration
Private company becoming public
90.Re-registration of private company as public
91.Requirements as to share capital
92.Requirements as to net assets
93.Recent allotment of shares for non-cash consideration
94.Application and accompanying documents
95.Statement of proposed secretary
96.Issue of certificate of incorporation on re-registration
Public company becoming private
97.Re-registration of public company as private limited company
98.Application to court to cancel resolution
99.Notice to registrar of court application or order
100.Application and accompanying documents
101.Issue of certificate of incorporation on re-registration
Private limited company becoming unlimited
102.Re-registration of private limited company as unlimited
103.Application and accompanying documents
104.Issue of certificate of incorporation on re-registration
Unlimited private company becoming limited

105.Re-registration of unlimited company as limited
106.Application and accompanying documents
107.Issue of certificate of incorporation on re-registration
108.Statement of capital required where company already has share capital
Public company becoming private and unlimited
109.Re-registration of public company as private and unlimited
110.Application and accompanying documents
111.Issue of certificate of incorporation on re-registration

Part 8 A company's members

Chapter 1 The members of a company
112.The members of a company
Chapter 2 Register of members
General

113.Register of members
114.Register to be kept available for inspection
115.Index of members
116.Rights to inspect and require copies
117.Register of members: response to request for inspection or copy
118.Register of members: refusal of inspection or default in providing copy
119.Register of members: offences in connection with request for or disclosure of information
120.Information as to state of register and index
121.Removal of entries relating to former members
Special cases
122.Share warrants
123.Single member companies
124. Company holding its own shares as treasury shares
Supplementary

125.Power of court to rectify register
126.Trusts not to be entered on register
127.Register to be evidence
128.Time limit for claims arising from entry in register
Chapter 3 Overseas branch registers
129.Overseas branch registers
130.Notice of opening of overseas branch register
131.Keeping of overseas branch register
132.Register or duplicate to be kept available for inspection in UK
133.Transactions in shares registered in overseas branch register
134.Jurisdiction of local courts
135.Discontinuance of overseas branch register
Chapter 4 Prohibition on subsidiary being member of its holding company
General prohibition

136.Prohibition on subsidiary being a member of its holding company
137.Shares acquired before prohibition became applicable
Subsidiary acting as personal representative or trustee
138.Subsidiary acting as personal representative or trustee
139.Interests to be disregarded: residual interest under pension scheme or employees' share scheme
140.Interests to be disregarded: employer's rights of recovery under pension scheme or employees' share scheme
Subsidiary acting as dealer in securities
141.Subsidiary acting as authorised dealer in securities
142.Protection of third parties in other cases where subsidiary acting as dealer in securities
Supplementary
143.Application of provisions to companies not limited by shares
144.Application of provisions to nominees

Part 9 Exercise of members' rights

Effect of provisions in company's articles
145.Effect of provisions of articles as to enjoyment or exercise of members' rights
Information rights
146.Traded companies: nomination of persons to enjoy information rights
147.Information rights: form in which copies to be provided
148.Termination or suspension of nomination
149.Information as to possible rights in relation to voting
150.Information rights: status of rights
151.Information rights: power to amend
Exercise of rights where shares held on behalf of others
152.Exercise of rights where shares held on behalf of others: exercise in different ways
153.Exercise of rights where shares held on behalf of others: members' requests

Part 10 A company's directors

Chapter 1 Appointment and removal of directors
Requirement to have directors

154.Companies required to have directors
155.Companies required to have at least one director who is a natural person
156.Direction requiring company to make appointment
Appointment
157.Minimum age for appointment as director
158.Power to provide for exceptions from minimum age requirement
159.Existing under-age directors
160.Appointment of directors of public company to be voted on individually
161.Validity of acts of directors
Register of directors, etc
162.Register of directors
163.Particulars of directors to be registered: individuals
164.Particulars of directors to be registered: corporate directors and firms
165.Register of directors' residential addresses
166.Particulars of directors to be registered: power to make regulations
167.Duty to notify registrar of changes
Removal
168.Resolution to remove director
169.Director's right to protest against removal
Chapter 2 General duties of directors
Introductory
170.Scope and nature of general duties
The general duties

171.Duty to act within powers
172.Duty to promote the success of the company
173.Duty to exercise independent judgment
174.Duty to exercise reasonable care, skill and diligence
175.Duty to avoid conflicts of interest
176.Duty not to accept benefits from third parties
177.Duty to declare interest in proposed transaction or arrangement
Supplementary provisions
178.Civil consequences of breach of general duties
179.Cases within more than one of the general duties
180.Consent, approval or authorisation by members
181.Modification of provisions in relation to charitable companies
Chapter 3 Declaration of interest in existing transaction or arrangement
182.Declaration of interest in existing transaction or arrangement
183.Offence of failure to declare interest
184.Declaration made by notice in writing
185.General notice treated as sufficient declaration
186.Declaration of interest in case of company with sole director
187.Declaration of interest in existing transaction by shadow director
Chapter 4 Transactions with directors requiring approval of members
Service contracts

188.Directors' long-term service contracts: requirement of members' approval
189.Directors' long-term service contracts: civil consequences of contravention
Substantial property transactions
190.Substantial property transactions: requirement of members' approval
191.Meaning of “substantial”
192.Exception for transactions with members or other group companies
193.Exception in case of company in winding up or administration
194.Exception for transactions on recognised investment exchange
195.Property transactions: civil consequences of contravention
196.Property transactions: effect of subsequent affirmation
Loans, quasi-loans and credit transactions
197.Loans to directors: requirement of members' approval
198.Quasi-loans to directors: requirement of members' approval
199.Meaning of “quasi-loan” and related expressions
200.Loans or quasi-loans to persons connected with directors: requirement of members' approval
201.Credit transactions: requirement of members' approval
202.Meaning of “credit transaction”
203.Related arrangements: requirement of members' approval
204.Exception for expenditure on company business
205.Exception for expenditure on defending proceedings etc
206.Exception for expenditure in connection with regulatory action or investigation
207.Exceptions for minor and business transactions
208.Exceptions for intra-group transactions
209.Exceptions for money-lending companies
210.Other relevant transactions or arrangements
211.The value of transactions and arrangements
212.The person for whom a transaction or arrangement is entered into
213.Loans etc: civil consequences of contravention
214.Loans etc: effect of subsequent affirmation
Payments for loss of office
215.Payments for loss of office
216.Amounts taken to be payments for loss of office
217.Payment by company: requirement of members' approval
218.Payment in connection with transfer of undertaking etc: requirement of members' approval
219.Payment in connection with share transfer: requirement of members' approval
220.Exception for payments in discharge of legal obligations etc
221.Exception for small payments
222.Payments made without approval: civil consequences
Supplementary
223.Transactions requiring members' approval: application of provisions to shadow directors
224.Approval by written resolution: accidental failure to send memorandum
225.Cases where approval is required under more than one provision
226.Requirement of consent of Charity Commission: companies that are charities
Chapter 5 Directors' service contracts
227.Directors' service contracts
228.Copy of contract or memorandum of terms to be available for inspection
229.Right of member to inspect and request copy
230.Directors' service contracts: application of provisions to shadow directors
Chapter 6 Contracts with sole members who are directors

231.Contract with sole member who is also a director
Chapter 7 Directors' liabilities

Provision protecting directors from liability
232.Provisions protecting directors from liability
233.Provision of insurance
234.Qualifying third party indemnity provision
235.Qualifying pension scheme indemnity provision
236.Qualifying indemnity provision to be disclosed in directors' report
237.Copy of qualifying indemnity provision to be available for inspection
238.Right of member to inspect and request copy
Ratification of acts giving rise to liability

239.Ratification of acts of directors
Chapter 8 Directors' residential addresses: protection from disclosure
240.Protected information
241.Protected information: restriction on use or disclosure by company
242.Protected information: restriction on use or disclosure by registrar
243.Permitted use or disclosure by the registrar
244.Disclosure under court order
245.Circumstances in which registrar may put address on the public record
246.Putting the address on the public record
Chapter 9 Supplementary provisions
Provision for employees on cessation or transfer of business

247.Power to make provision for employees on cessation or transfer of business
Records of meetings of directors
248.Minutes of directors' meetings
249.Minutes as evidence
Meaning of “director” and “shadow director”

250.“Director”
251.“Shadow director”
Other definitions
252.Persons connected with a director
253.Members of a director's family
254.Director “connected with” a body corporate
255.Director “controlling” a body corporate
256.Associated bodies corporate
257.References to company's constitution
General
258.Power to increase financial limits
259.Transactions under foreign law

Part 11 Derivative claims and proceedings by members

Chapter 1 Derivative claims in England and Wales or Northern Ireland
260.Derivative claims
261.Application for permission to continue derivative claim
262.Application for permission to continue claim as a derivative claim
263.Whether permission to be given
264.Application for permission to continue derivative claim brought by another member
Chapter 2 Derivative proceedings in Scotland
265.Derivative proceedings
266.Requirement for leave and notice
267.Application to continue proceedings as derivative proceedings
268.Granting of leave
269.Application by member to be substituted for member pursuing derivative proceedings

Part 12 Company secretaries

Private companies
270.Private company not required to have secretary
Public companies
271.Public company required to have secretary
272.Direction requiring public company to appoint secretary
273.Qualifications of secretaries of public companies
Provisions applying to private companies with a secretary and to public companies
274.Discharge of functions where office vacant or secretary unable to act
275.Duty to keep register of secretaries
276.Duty to notify registrar of changes
277.Particulars of secretaries to be registered: individuals
278.Particulars of secretaries to be registered: corporate secretaries and firms
279.Particulars of secretaries to be registered: power to make regulations
280.Acts done by person in dual capacity

Part 13 Resolutions and meetings

Chapter 1 General provisions about resolutions
281.Resolutions
282.Ordinary resolutions
283.Special resolutions
284.Votes: general rules
285.Voting by proxy
285A.Voting rights on poll or written resolution
286.Votes of joint holders of shares
287.Saving for provisions of articles as to determination of entitlement to vote
Chapter 2 Written resolutions
General provisions about written resolutions

288.Written resolutions of private companies
289.Eligible members
Circulation of written resolutions
290.Circulation date
291.Circulation of written resolutions proposed by directors
292.Members' power to require circulation of written resolution
293.Circulation of written resolution proposed by members
294.Expenses of circulation
295.Application not to circulate members' statement
Agreeing to written resolutions
296.Procedure for signifying agreement to written resolution
297.Period for agreeing to written resolution
Supplementary
298.Sending documents relating to written resolutions by electronic means
299.Publication of written resolution on website
300.Relationship between this Chapter and provisions of company's articles
Chapter 3 Resolutions at meetings
General provisions about resolutions at meetings

301.Resolutions at general meetings
Calling meetings
302.Directors' power to call general meetings
303.Members' power to require directors to call general meeting
304.Directors' duty to call meetings required by members
305.Power of members to call meeting at company's expense
306.Power of court to order meeting
Notice of meetings
307.Notice required of general meeting
307A.Notice required of general meeting: certain meetings of traded companies
308.Manner in which notice to be given
309.Publication of notice of meeting on website
310.Persons entitled to receive notice of meetings
311.Contents of notices of meetings
311A.Traded companies: publication of information in advance of general meeting
312.Resolution requiring special notice
313.Accidental failure to give notice of resolution or meeting
Members' statements
314.Members' power to require circulation of statements
315.Company's duty to circulate members' statement
316.Expenses of circulating members' statement
317.Application not to circulate members' statement
Procedure at meetings
318.Quorum at meetings
319.Chairman of meeting
319A.Traded companies: questions at meetings
320.Declaration by chairman on a show of hands
321.Right to demand a poll
322.Voting on a poll
322A.Voting on a poll: votes cast in advance
323.Representation of corporations at meetings
Proxies
324.Rights to appoint proxies
324A.Obligation of proxy to vote in accordance with instructions
325.Notice of meeting to contain statement of rights
326.Company-sponsored invitations to appoint proxies
327.Notice required of appointment of proxy etc
328.Chairing meetings
329.Right of proxy to demand a poll
330.Notice required of termination of proxy's authority
331.Saving for more extensive rights conferred by articles
Adjourned meetings
332.Resolution passed at adjourned meeting
Electronic communications
333.Sending documents relating to meetings etc in electronic form
333A.Traded company: duty to provide electronic address for receipt of proxies etc
Application to class meetings
334.Application to class meetings
335.Application to class meetings: companies without a share capital
Chapter 4 Public companies and traded companies: additional requirements for AGMs
336.Public companies and traded companies: annual general meeting
337.Public companies and traded companies: notice of AGM
338.Public companies: members' power to require circulation of resolutions for AGMs
338A.Traded companies: members' power to include other matters in business dealt with at AGM
339.Public companies: company's duty to circulate members' resolutions for AGMs
340.Public companies: expenses of circulating members' resolutions for AGM
340A.Traded companies: duty to circulate members' matters for AGM
340B.Traded companies: expenses of circulating members' matters to be dealt with at AGM
Chapter 5 Additional requirements for quoted companies AND TRADED COMPANIES
Website publication of poll results

341.Results of poll to be made available on website
Independent report on poll
342.Members' power to require independent report on poll
343.Appointment of independent assessor
344.Independence requirement
345.Meaning of “associate”
346.Effect of appointment of a partnership
347.The independent assessor's report
348.Rights of independent assessor: right to attend meeting etc
349.Rights of independent assessor: right to information
350.Offences relating to provision of information
351.Information to be made available on website
Supplementary
352.Application of provisions to class meetings
353.Requirements as to website availability
354.Power to limit or extend the types of company to which provisions of this Chapter apply
Chapter 6 Records of resolutions and meetings
355.Records of resolutions and meetings etc
356.Records as evidence of resolutions etc
357.Records of decisions by sole member
358.Inspection of records of resolutions and meetings
359.Records of resolutions and meetings of class of members
Chapter 7 Supplementary provisions
360.Computation of periods of notice etc: clear day rule
360A.Electronic meetings and voting
360B.Traded companies: requirements for participating in and voting at general meetings
360C.Meaning of “traded company”
361.Meaning of “quoted company”

Part 14 Control of political donations and expenditure

Introductory
362.Introductory
Donations and expenditure to which this Part applies
363.Political parties, organisations etc to which this Part applies
364.Meaning of “political donation”
365.Meaning of “political expenditure”
Authorisation required for donations or expenditure
366.Authorisation required for donations or expenditure
367.Form of authorising resolution
368.Period for which resolution has effect
Remedies in case of unauthorised donations or expenditure
369.Liability of directors in case of unauthorised donation or expenditure
370.Enforcement of directors' liabilities by shareholder action
371.Enforcement of directors' liabilities by shareholder action: supplementary
372.Costs of shareholder action
373.Information for purposes of shareholder action
Exemptions
374.Trade unions
375.Subscription for membership of trade association
376.All-party parliamentary groups
377.Political expenditure exempted by order
378.Donations not amounting to more than £5,000 in any twelve month period
Supplementary provisions
379.Minor definitions

Part 15 Accounts and reports

Chapter 1 Introduction
General

380.Scheme of this Part
Companies subject to the small companies regime
381.Companies subject to the small companies regime
382.Companies qualifying as small: general
383.Companies qualifying as small: parent companies
384.Companies excluded from the small companies regime
Quoted and unquoted companies
385.Quoted and unquoted companies
Chapter 2 Accounting records
386.Duty to keep accounting records
387.Duty to keep accounting records: offence
388.Where and for how long records to be kept
389.Where and for how long records to be kept: offences
Chapter 3 A company's financial year
390.A company's financial year
391.Accounting reference periods and accounting reference date
392.Alteration of accounting reference date
Chapter 4 Annual accounts
General

393.Accounts to give true and fair view
Individual accounts
394.Duty to prepare individual accounts
395.Individual accounts: applicable accounting framework
396.Companies Act individual accounts
397.IAS individual accounts
Group accounts: small companies
398.Option to prepare group accounts
Group accounts: other companies
399.Duty to prepare group accounts
400.Exemption for company included in EEA group accounts of larger group
401.Exemption for company included in non-EEA group accounts of larger group
402.Exemption if no subsidiary undertakings need be included in the consolidation
Group accounts: general
403.Group accounts: applicable accounting framework
404.Companies Act group accounts
405.Companies Act group accounts: subsidiary undertakings included in the consolidation
406.IAS group accounts
407.Consistency of financial reporting within group
408.Individual profit and loss account where group accounts prepared
Information to be given in notes to the accounts
409.Information about related undertakings
410.Information about related undertakings: alternative compliance
410A.Information about off-balance sheet arrangements
411.Information about employee numbers and costs
412.Information about directors' benefits: remuneration
413.Information about directors' benefits: advances, credit and guarantees
Approval and signing of accounts
414.Approval and signing of accounts

Part 16 Audit

Chapter 1 Requirement for audited accounts
Requirement for audited accounts

475.Requirement for audited accounts
476.Right of members to require audit
Exemption from audit: small companies
477.Small companies: conditions for exemption from audit
478.Companies excluded from small companies exemption
479.Availability of small companies exemption in case of group company
Exemption from audit: dormant companies
480.Dormant companies: conditions for exemption from audit
481.Companies excluded from dormant companies exemption
Companies subject to public sector audit
482.Non-profit-making companies subject to public sector audit
483.Scottish public sector companies: audit by Auditor General for Scotland
General power of amendment by regulations
484.General power of amendment by regulations
Chapter 2 Appointment of auditors
Private companies

485.Appointment of auditors of private company: general
486.Appointment of auditors of private company: default power of Secretary of State
487.Term of office of auditors of private company
488.Prevention by members of deemed re-appointment of auditor
Public companies
489.Appointment of auditors of public company: general
490.Appointment of auditors of public company: default power of Secretary of State
491.Term of office of auditors of public company
General provisions
492.Fixing of auditor's remuneration
493.Disclosure of terms of audit appointment
494.Disclosure of services provided by auditor or associates and related remuneration
Chapter 3 Functions of auditor
Auditor's report

495.Auditor's report on company's annual accounts
496.Auditor's report on directors' report
497.Auditor's report on auditable part of directors' remuneration report
497A.Auditor's report on separate corporate governance statement
Duties and rights of auditors
498.Duties of auditor
498A.Auditor's duties in relation to separate corporate governance statement
499.Auditor's general right to information
500.Auditor's right to information from overseas subsidiaries
501.Auditor's rights to information: offences
502.Auditor's rights in relation to resolutions and meetings
Signature of auditor's report
503.Signature of auditor's report
504.Senior statutory auditor
505.Names to be stated in published copies of auditor's report
506.Circumstances in which names may be omitted
Offences in connection with auditor's report
507.Offences in connection with auditor's report
508.Guidance for regulatory and prosecuting authorities: England, Wales and Northern Ireland
509.Guidance for regulatory authorities: Scotland
Chapter 4 Removal, resignation, etc of auditors
Removal of auditor

510.Resolution removing auditor from office
511.Special notice required for resolution removing auditor from office
512.Notice to registrar of resolution removing auditor from office
513.Rights of auditor who has been removed from office
Failure to re-appoint auditor
514.Failure to re-appoint auditor: special procedure required for written resolution
515.Failure to re-appoint auditor: special notice required for resolution at general meeting
Resignation of auditor
516.Resignation of auditor
517.Notice to registrar of resignation of auditor
518.Rights of resigning auditor
Statement by auditor on ceasing to hold office
519.Statement by auditor to be deposited with company
520.Company's duties in relation to statement
521.Copy of statement to be sent to registrar
522.Duty of auditor to notify appropriate audit authority
523.Duty of company to notify appropriate audit authority
524.Information to be given to accounting authorities
525.Meaning of “appropriate audit authority” and “major audit”
Supplementary
526.Effect of casual vacancies
Chapter 5 Quoted companies: right of members to raise audit concerns at accounts meeting
527.Members' power to require website publication of audit concerns
528.Requirements as to website availability
529.Website publication: company's supplementary duties
530.Website publication: offences
531.Meaning of “quoted company”
Chapter 6 Auditors' liability
Voidness of provisions protecting auditors from liability

532.Voidness of provisions protecting auditors from liability
Indemnity for costs of defending proceedings
533.Indemnity for costs of successfully defending proceedings
Liability limitation agreements
534.Liability limitation agreements
535.Terms of liability limitation agreement
536.Authorisation of agreement by members of the company
537.Effect of liability limitation agreement
538.Disclosure of agreement by company
538A.Meaning of “corporate governance statement” etc
Chapter 7 Supplementary provisions
539.Minor definitions

Part 17 A company's share capital

Chapter 1 Shares and share capital of a company
Shares

540.Shares
541.Nature of shares
542.Nominal value of shares
543.Numbering of shares
544.Transferability of shares
545.Companies having a share capital
546.Issued and allotted share capital
Share capital
547.Called-up share capital
548.Equity share capital
Chapter 2 Allotment of shares: general provisions
Power of directors to allot shares

549.Exercise by directors of power to allot shares etc
550.Power of directors to allot shares etc: private company with only one class of shares
551.Power of directors to allot shares etc: authorisation by company
Prohibition of commissions, discounts and allowances
552.General prohibition of commissions, discounts and allowances
553.Permitted commission
Registration of allotment
554.Registration of allotment
Return of allotment
555.Return of allotment by limited company
556.Return of allotment by unlimited company allotting new class of shares
557.Offence of failure to make return
Supplementary provisions
558.When shares are allotted
559.Provisions about allotment not applicable to shares taken on formation
Chapter 3 Allotment of equity securities: existing shareholders' right of pre-emption
Introductory
560.Meaning of “equity securities” and related expressions
Existing shareholders' right of pre-emption
561.Existing shareholders' right of pre-emption
562.Communication of pre-emption offers to shareholders
563.Liability of company and officers in case of contravention
Exceptions to right of pre-emption
564.Exception to pre-emption right: bonus shares
565.Exception to pre-emption right: issue for non-cash consideration
566.Exceptions to pre-emption right: employees' share schemes
Exclusion of right of pre-emption
567.Exclusion of requirements by private companies
568.Exclusion of pre-emption right: articles conferring corresponding right
Disapplication of pre-emption rights
569.Disapplication of pre-emption rights: private company with only one class of shares
570.Disapplication of pre-emption rights: directors acting under general authorisation
571.Disapplication of pre-emption rights by special resolution
572.Liability for false statement in directors' statement
573.Disapplication of pre-emption rights: sale of treasury shares
Supplementary
574.References to holder of shares in relation to offer
575.Saving for other restrictions on offer or allotment
576.Saving for certain older pre-emption requirements
577.Provisions about pre-emption not applicable to shares taken on formation
Chapter 4 Public companies: allotment where issue not fully subscribed
578.Public companies: allotment where issue not fully subscribed
579.Public companies: effect of irregular allotment where issue not fully subscribed
Chapter 5 Payment for shares
General rules

580.Shares not to be allotted at a discount
581.Provision for different amounts to be paid on shares
582.General rule as to means of payment
583.Meaning of payment in cash
Additional rules for public companies
584.Public companies: shares taken by subscribers of memorandum
585.Public companies: must not accept undertaking to do work or perform services
586.Public companies: shares must be at least one-quarter paid up
587.Public companies: payment by long-term undertaking
Supplementary provisions
588.Liability of subsequent holders of shares
589.Power of court to grant relief
590.Penalty for contravention of this Chapter
591.Enforceability of undertakings to do work etc
592.The appropriate rate of interest
Chapter 6 Public companies: independent valuation of non-cash consideration
Non-cash consideration for shares

593.Public company: valuation of non-cash consideration for shares
594.Exception to valuation requirement: arrangement with another company
595.Exception to valuation requirement: merger or division
596.Non-cash consideration for shares: requirements as to valuation and report
597.Copy of report to be delivered to registrar
Transfer of non-cash asset in initial period
598.Public company: agreement for transfer of non-cash asset in initial period
599.Agreement for transfer of non-cash asset: requirement of independent valuation
600.Agreement for transfer of non-cash asset: requirements as to valuation and report
601.Agreement for transfer of non-cash asset: requirement of approval by members
602.Copy of resolution to be delivered to registrar
603.Adaptation of provisions in relation to company re-registering as public
604.Agreement for transfer of non-cash asset: effect of contravention
Supplementary provisions
605.Liability of subsequent holders of shares
606.Power of court to grant relief
607.Penalty for contravention of this Chapter
608.Enforceability of undertakings to do work etc
609.The appropriate rate of interest
Chapter 7 Share premiums
The share premium account

610.Application of share premiums
Relief from requirements as to share premiums
611.Group reconstruction relief
612.Merger relief
613.Merger relief: meaning of 90% equity holding
614.Power to make further provision by regulations
615.Relief may be reflected in company's balance sheet
Supplementary provisions
616.Interpretation of this Chapter
Chapter 8 Alteration of share capital
How share capital may be altered

617.Alteration of share capital of limited company
Subdivision or consolidation of shares
618.Sub-division or consolidation of shares
619.Notice to registrar of sub-division or consolidation
Reconversion of stock into shares
620.Reconversion of stock into shares
621.Notice to registrar of reconversion of stock into shares
Redenomination of share capital
622.Redenomination of share capital
623.Calculation of new nominal values
624.Effect of redenomination
625.Notice to registrar of redenomination
626.Reduction of capital in connection with redenomination
627.Notice to registrar of reduction of capital in connection with redenomination
628.Redenomination reserve
Chapter 9 Classes of share and class rights
Introductory

629.Classes of shares
Variation of class rights
630.Variation of class rights: companies having a share capital
631.Variation of class rights: companies without a share capital
632.Variation of class rights: saving for court's powers under other provisions
633.Right to object to variation: companies having a share capital
634.Right to object to variation: companies without a share capital
635.Copy of court order to be forwarded to the registrar
Matters to be notified to the registrar
636.Notice of name or other designation of class of shares
637.Notice of particulars of variation of rights attached to shares
638.Notice of new class of members
639.Notice of name or other designation of class of members
640.Notice of particulars of variation of class rights
Chapter 10 Reduction of share capital
Introductory

641.Circumstances in which a company may reduce its share capital
Private companies: reduction of capital supported by solvency statement
642.Reduction of capital supported by solvency statement
643.Solvency statement
644.Registration of resolution and supporting documents
Reduction of capital confirmed by the court
645.Application to court for order of confirmation
646.Creditors entitled to object to reduction
647.Offences in connection with list of creditors
648.Court order confirming reduction
649.Registration of order and statement of capital
Public company reducing capital below authorised minimum
650.Public company reducing capital below authorised minimum
651.Expedited procedure for re-registration as a private company
Effect of reduction of capital
652.Liability of members following reduction of capital
653.Liability to creditor in case of omission from list of creditors
Chapter 11 Miscellaneous and supplementary provisions
654.Treatment of reserve arising from reduction of capital
655.Shares no bar to damages against company
656.Public companies: duty of directors to call meeting on serious loss of capital
657.General power to make further provision by regulations

Part 18 Acquisition by limited company of its own shares

Chapter 1 General provisions
Introductory

658.General rule against limited company acquiring its own shares
659.Exceptions to general rule
Shares held by company's nominee
660.Treatment of shares held by nominee
661.Liability of others where nominee fails to make payment in respect of shares
Shares held by or for public company
662.Duty to cancel shares in public company held by or for the company
663.Notice of cancellation of shares
664.Re-registration as private company in consequence of cancellation
665.Issue of certificate of incorporation on re-registration
666.Effect of failure to re-register
667.Offence in case of failure to cancel shares or re-register
668.Application of provisions to company re-registering as public company
669.Transfer to reserve on acquisition of shares by public company or nominee
Charges of public company on own shares
670.Public companies: general rule against lien or charge on own shares
Supplementary provisions
671.Interests to be disregarded in determining whether company has beneficial interest
672.Residual interest under pension scheme or employees' share scheme
673.Employer's charges and other rights of recovery
674.Rights as personal representative or trustee
675.Meaning of “pension scheme”
676.Application of provisions to directors
Chapter 2 Financial assistance for purchase of own shares
Introductory

677.Meaning of “financial assistance”
Circumstances in which financial assistance prohibited
678.Assistance for acquisition of shares in public company
679.Assistance by public company for acquisition of shares in its private holding company
680.Prohibited financial assistance an offence
Exceptions from prohibition
681.Unconditional exceptions
682.Conditional exceptions
Supplementary
683.Definitions for this Chapter
Chapter 3 Redeemable shares
684.Power of limited company to issue redeemable shares
685.Terms and manner of redemption
686.Payment for redeemable shares
687.Financing of redemption
688.Redeemed shares treated as cancelled
689.Notice to registrar of redemption
Chapter 4 Purchase of own shares
General provisions

690.Power of limited company to purchase own shares
691.Payment for purchase of own shares
692.Financing of purchase of own shares
Authority for purchase of own shares
693.Authority for purchase of own shares
Authority for off-market purchase
694.Authority for off-market purchase
695.Resolution authorising off-market purchase: exercise of voting rights
696.Resolution authorising off-market purchase: disclosure of details of contract
697.Variation of contract for off-market purchase
698.Resolution authorising variation: exercise of voting rights
699.Resolution authorising variation: disclosure of details of variation
700.Release of company's rights under contract for off-market purchase
Authority for market purchase
701.Authority for market purchase
Supplementary provisions
702.Copy of contract or memorandum to be available for inspection
703.Enforcement of right to inspect copy or memorandum
704.No assignment of company's right to purchase own shares
705.Payments apart from purchase price to be made out of distributable profits
706.Treatment of shares purchased
707.Return to registrar of purchase of own shares
708.Notice to registrar of cancellation of shares
Chapter 5 Redemption or purchase by private company out of capital
Introductory

709.Power of private limited company to redeem or purchase own shares out of capital
The permissible capital payment
710.The permissible capital payment
711.Available profits
712.Determination of available profits
Requirements for payment out of capital
713.Requirements for payment out of capital
714.Directors' statement and auditor's report
715.Directors' statement: offence if no reasonable grounds for opinion
716.Payment to be approved by special resolution
717.Resolution authorising payment: exercise of voting rights
718.Resolution authorising payment: disclosure of directors' statement and auditor's report
719.Public notice of proposed payment
720.Directors' statement and auditor's report to be available for inspection
Objection to payment by members or creditors
721.Application to court to cancel resolution
722.Notice to registrar of court application or order
Supplementary provisions
723.When payment out of capital to be made
Chapter 6 Treasury shares
724.Treasury shares
725.Treasury shares: maximum holdings
726.Treasury shares: exercise of rights
727.Treasury shares: disposal
728.Treasury shares: notice of disposal
729.Treasury shares: cancellation
730.Treasury shares: notice of cancellation
731.Treasury shares: treatment of proceeds of sale
732.Treasury shares: offences
Chapter 7 Supplementary provisions
733.The capital redemption reserve
734.Accounting consequences of payment out of capital
735.Effect of company's failure to redeem or purchase
736.Meaning of “distributable profits”
737.General power to make further provision by regulations

Part 19 Debentures

General provisions
738.Meaning of “debenture”
739.Perpetual debentures
740.Enforcement of contract to subscribe for debentures
741.Registration of allotment of debentures
742.Debentures to bearer (Scotland)
Register of debenture holders
743.Register of debenture holders
744.Register of debenture holders: right to inspect and require copy
745.Register of debenture holders: response to request for inspection or copy
746.Register of debenture holders: refusal of inspection or default in providing copy
747.Register of debenture holders: offences in connection with request for or disclosure of information
748.Time limit for claims arising from entry in register
Supplementary provisions
749.Right of debenture holder to copy of deed
750.Liability of trustees of debentures
751.Liability of trustees of debentures: saving for certain older provisions
752.Power to re-issue redeemed debentures
753.Deposit of debentures to secure advances
754.Priorities where debentures secured by floating charge

Part 20 Private and public companies

Chapter 1 Prohibition of public offers by private companies
755.Prohibition of public offers by private company
756.Meaning of “offer to the public”
757.Enforcement of prohibition: order restraining proposed contravention
758.Enforcement of prohibition: orders available to the court after contravention
759.Enforcement of prohibition: remedial order
760.Validity of allotment etc not affected
Chapter 2 Minimum share capital requirement for public companies

761.Public company: requirement as to minimum share capital
762.Procedure for obtaining certificate
763.The authorised minimum
764.Power to alter authorised minimum
765.Authorised minimum: application of initial requirement
766.Authorised minimum: application where shares denominated in different currencies etc
767.Consequences of doing business etc without a trading certificate

Part 21 Certification and transfer of securities

Chapter 1 Certification and transfer of securities: general
Share certificates

768.Share certificate to be evidence of title
Issue of certificates etc on allotment
769.Duty of company as to issue of certificates etc on allotment
Transfer of securities
770.Registration of transfer
771.Procedure on transfer being lodged
772.Transfer of shares on application of transferor
773.Execution of share transfer by personal representative
774.Evidence of grant of probate etc
775.Certification of instrument of transfer
Issue of certificates etc on transfer
776.Duty of company as to issue of certificates etc on transfer
777.Issue of certificates etc: cases within the Stock Transfer Act 1982
Issue of certificates etc on allotment or transfer to financial institution
778.Issue of certificates etc: allotment or transfer to financial institution
Share warrants
779.Issue and effect of share warrant to bearer
780.Duty of company as to issue of certificates on surrender of share warrant
781.Offences in connection with share warrants (Scotland)
Supplementary provisions
782.Issue of certificates etc: court order to make good default
Chapter 2 Evidencing and transfer of title to securities without written instrument
Introductory
783.Scope of this Chapter
784.Power to make regulations
Powers exercisable
785.Provision enabling procedures for evidencing and transferring title
786.Provision enabling or requiring arrangements to be adopted
787.Provision enabling or requiring arrangements to be adopted: order-making powers
Supplementary
788.Provision that may be included in regulations
789.Duty to consult
790.Resolutions to be forwarded to registrar

Part 22 Information about interests in a company's shares

Introductory
791.Companies to which this Part applies
792.Shares to which this Part applies
Notice requiring information about interests in shares
793.Notice by company requiring information about interests in its shares
794.Notice requiring information: order imposing restrictions on shares
795.Notice requiring information: offences
796.Notice requiring information: persons exempted from obligation to comply
Orders imposing restrictions on shares
797.Consequences of order imposing restrictions
798.Penalty for attempted evasion of restrictions
799.Relaxation of restrictions
800.Removal of restrictions
801.Order for sale of shares
802.Application of proceeds of sale under court order
Power of members to require company to act
803.Power of members to require company to act
804.Duty of company to comply with requirement
805.Report to members on outcome of investigation
806.Report to members: offences
807.Right to inspect and request copy of reports
Register of interests disclosed
808.Register of interests disclosed
809.Register to be kept available for inspection
810.Associated index
811.Rights to inspect and require copy of entries
812.Court supervision of purpose for which rights may be exercised
813.Register of interests disclosed: refusal of inspection or default in providing copy
814.Register of interests disclosed: offences in connection with request for or disclosure of information
815.Entries not to be removed from register
816.Removal of entries from register: old entries
817.Removal of entries from register: incorrect entry relating to third party
818.Adjustment of entry relating to share acquisition agreement
819.Duty of company ceasing to be public company
Meaning of interest in shares
820.Interest in shares: general
821.Interest in shares: right to subscribe for shares
822.Interest in shares: family interests
823.Interest in shares: corporate interests
824.Interest in shares: agreement to acquire interests in a particular company
825.Extent of obligation in case of share acquisition agreement
Other supplementary provisions
826.Information protected from wider disclosure
827.Reckoning of periods for fulfilling obligations
828.Power to make further provision by regulations

Part 23 Distributions

Chapter 1 Restrictions on when distributions may be made
Introductory

829.Meaning of “distribution”
General rules
830.Distributions to be made only out of profits available for the purpose
831.Net asset restriction on distributions by public companies
Distributions by investment companies
832.Distributions by investment companies out of accumulated revenue profits
833.Meaning of “investment company”
834.Investment company: condition as to holdings in other companies
835.Power to extend provisions relating to investment companies
Chapter 2 Justification of distribution by reference to accounts
Justification of distribution by reference to accounts

836.Justification of distribution by reference to relevant accounts
Requirements applicable in relation to relevant accounts
837.Requirements where last annual accounts used
838.Requirements where interim accounts used
839.Requirements where initial accounts used
Application of provisions to successive distributions etc
840.Successive distributions etc by reference to the same accounts
Chapter 3 Supplementary provisions
Accounting matters

841.Realised losses and profits and revaluation of fixed assets
842.Determination of profit or loss in respect of asset where records incomplete
843.Realised profits and losses of long-term insurance business
844.Treatment of development costs
Distributions in kind
845.Distributions in kind: determination of amount
846.Distributions in kind: treatment of unrealised profits
Consequences of unlawful distribution
847.Consequences of unlawful distribution
Other matters
848.Saving for certain older provisions in articles
849.Restriction on application of unrealised profits
850.Treatment of certain older profits or losses
851.Application of rules of law restricting distributions
852.Saving for other restrictions on distributions
853.Minor definitions

Part 24 A company's annual return

854.Duty to deliver annual returns
855.Contents of annual return: general
855A.Required particulars of directors and secretaries
856.Contents of annual return: information about shares and share capital . . .
856A.Contents of annual return: information about shareholders: non-traded companies
856B.Contents of annual return: information about shareholders: certain traded companies
857.Contents of annual return: power to make further provision by regulations
858.Failure to deliver annual return
859.Application of provisions to shadow directors

Part 25 Company charges

Chapter 1 Companies registered in England and Wales or in Northern Ireland
Requirement to register company charges

860.Charges