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In a contract for purchase of own shares can a power of attorney be incorporated giving the company control over the shares until they are cancelled?  Particularly in circumstances where the contract is 'exchanged' but completion is conditional on, for example, a fresh issue of shares to take place in the future to fund the final purchase.

Do you have any information on the procedure for dissolving barristers' chambers?

Is the capitalisation of a director or shareholder loan deemed to be "cash consideration" pursuant to the provisions of s.583 of the Companies Act 2006?

If a person holds shares as nominee for a beneficiary in a limited company and subject to there being no decleration of trust, do they owe a fiduciary duty to vote in the best interests of the beneficiary or are they able to vote as they wish?

I note the comments in the above referenced drafting note state that "...it is not thought that section 643(1)(b)(i) of the CA 2006 is intended to capture a striking off of a company...." Therefore, if a company is undertaking a capital reduction immediately prior to applying for a voluntary strike off (and intends to make such an application at the time it undertakes the capital reduction), which solvency statement (as per s643 (1) (b)) should its directors make?  Our thinking to date has been that it is more representative of the ultimate intention for the company to cease to exist (regardless by what exact method) to make the statement in 643(1)(b)(i), even though technically a strike off is not a “winding up”.

Have you had any response from the Department for BIS to the point you raised with them about the inconsistency between the wording of sections 687(3) and 692(2) CA 2006, as referred to in the practice note on Redeemable Shares?

In respect of the filing of ordinary resolutions with Companies House I note the comments you have made in relation to s.29/30 Companies Act 2006. You state that resolutions which affect a company's constituion need to be filed and that this includes resolutions that affect the company constitution by way of 'enactment' (which may include ordinary resolutions). This suggests that enactment is a substitute term for 'ordinary resolution'. I note, however, that S.29(1)(e) states: "any other resolution...to which this Chapter applies by way of any enactment." This suggests that an enactment is different to a resolution. Could you therefore clarify in what circumstances an ordinary resolution would need to be filed at Companies House?

Can an unincorporated association own shares in a limited company?

Is there any prohibition in English law for an attorney to deal with himself on behalf of a principal or to represent opposite parties in a transaction?  

I have a quick query regarding the filing of special resolutions with the Registrar of Companies. My previous understanding was that all special resolutions were required to be filed with the Registrar of Companies but from reading this article in conjunction with the Companies Act 2006 it appears that it's only specific special resolutions which have to be filed - is this correct? I'm wondering whether a special resolution (which is required only because of a provision in the articles and would be an ordinary resolution by law) is required to be filed with the Registrar of Companies. If my presumption in the paragraph above is correct, then the resolution would not be required to be filed.

http://corporate.practicallaw.com/8-505-9034  Is this the most recent Stock Transfer Form in line with HMRC's latest Stamp Duty guidance?

I read in your Practice note, Redeemable shares "Alternatively, the company could cancel its non-redeemable shares and replace them with a new issue of redeemable shares". Is the only way to cancel shares envisaged by this paragraph a reduction of capital?

I am wondering if I could have your thoughts on the following. I act for a company. Last year (before I began acting!), a shareholder left the company (it was not a happy departure).  Before leaving, he executed a stock transfer form transferring the shares held by him in the company to the company for "nil" consideration. My understanding is that this would fall within section 659(1) of the Companies Act 2006: the company has acquired its own fully paid up shares otherwise than for valuable consideration. Assuming this to be correct, then I am unclear as to what notices should have been given to Companies House, etc. as presumably the shares acquired by the company are now cancelled and this should be recorded.  However the requirement for a return to be made to Companies House under section 707, CA 2006 relates only to purchases made pursuant to "this chapter". Section 659 does not fall within "this chapter".

I have been asked about a company that has no assets, ceased trading 6 months ago, and has filed a form DSO1 at Companies House asking to be struck off pursuant to section 1003 Companies Act 2006. I have been asked: 1.  what happens to the statutory books (eg the legally required register of members, register of directors and board minutes), and any accounting records (defined in section 386 Companies Act 2006); and 2.  for how long should such items be kept after dissolution. Is there a legal definition of statutory books as I cannot find one; as far as I know there is no legal requirement to have a register of allotments, or a register of transfers ? I have indicated the statutory books and accounting records are technically bona vacantia (section 1012 Companies Act 2006), but need not be forwarded to the Treasury Solicitor as they have no value. Do all, or only some, of the statutory books and accounting records have to be kept for a certain period after dissolution ? eg I have found no provision regarding keeping the register of members. eg Section 248 Companies Act 2006 states minutes of directors meetings must be kept 10 years. Does this apply after dissolution ? eg Section 388 Companies Act 2006 states accounting records must be kept 3 years. Does this apply after dissolution?

I am trying to obtain a list of companies for 2010 and 2011 which had their remuneration reports voted down.  I am looking at FTSE 350 companies and if possible those that received 20% plus votes against the remuneration report.  It was possible to do this for the 2012 AGM season but not going further back.

I am trying to structure a share buyback for a client where the company has insufficient funds to pay the full consideration on day one (pursuant to section 691 CA 2006). Rightly or wrongly, the conventional away around this dilemma historically has been to have a separate loan back to the company by the seller.  My client is not keen on this option, nor are they keen to dispose of the shares in tranches resulting in them having diminishing control in the company.  Given the above, is it possible to structure a share buyback with a form of split exchange and completion so that the company makes interim payments on account of the purchase which (simplifying matters somewhat) is then completed when all the instalments have been paid? Presumably the document would need to factor in scenarios where all the instalments are not received (i.e. seller could have the option to either terminate or sell a pro rata amount of shares at that stage) or if they have all been received but the company technically has insufficient reserves to complete.

We act for the Executor of a person who was sole shareholder and sole director of a company.  The company is subject to Table A under the Companies Act 1948. You may assume that the Executor has been been registered as holder of the Deceased's shares in the company. Directors need to be appointed and in order to do this, does the  Executor  have to go through the provisions of  Section 292 of Companies Act 2006 or can he just sign a written resolution appointing directors?

Can the director of a company with no secretary authorise his solicitor to sign and return an annual return to Companies House on the company's behalf? (s.270 / s.274 CA 2006). 

When alloting under s.82, can the maximum amount of shares be stated as a formula (eg. 5% of X shares) rather than a number of shares there and then?

I have spent some time looking into the redomiciliation of a company, in particular with regard to a company incorporated in the Isle of Man which seeks to redomicile to the UK. It is not a large company, and owns just one property. I have not been able to find any express statutory provision permitting redomiciliation to the UK and I wonder whether you have come across any. In the absence of any express legislation, are you aware whether redomiciliation is permitted? Any guidance would be appreciated. A lot of the information I have found concerns redomiciliation out of the UK and would seem to suggest that it is possible but I am struggling to find conclusive information concerning the reverse situation.

A private company (registered in England & Wales with Table A 1985 as amended at 2000) forfeited a number of shares belonging to a shareholder who had defaulted on payment. At the time of forfeiture (2009) the directors were planning to sell those shares to a new shareholder within a matter of months and the shares were held by the company pending disposal. The sale did not materialise. The company is still holding these forfeited shares. A number of questions arise: 1. How should the company reflect the position in its statement of capital? The shares have not been cancelled and there does not appear to be a mechanism for such cancellation ion the Companies Act 2006 in respect of private rather than public companies. Is the company the registered shareholder? 2. Can the shares be cancelled and if so under what process and how should this be recorded and then reported to Companies House? 3. If the remaining shareholders were hoping to sell the entire issued share capital of the company to a third party buyer, how might these shares be handled? If not cancelled, can they be transferred to the remaining shareholders or to the buyer, and if so, what form does the transfer take? Is this a transfer from the original shareholder to the new shareholder, executed by some person under the authority of the directors (Table A 1985 regulation 20), or a transfer from the company to the new shareholder (in which case it would appear that the company is holding its own shares). R

I act for a minority shareholder of a private limited company. My client was removed as a director by the majority shareholders 2 weeks ago. They are refusing to provide him with quarterly accounts, year end accounts and bank statements on the grounds that he is no longer a director of the company. Is my client entitled to the documents as a shareholder? If he is, can you please refer me to the relevant legislation/case law?

I am putting together a shareholders' agreement where in the event of transfer, the company has the option to buy-back shares if it has the distributable reserve to do so. My client's accountant has suggested that the agreement contains a requirement for the buy-back to be dealt with by way of capital reduction. Whilst this may be a route, I would have thought that the reserve created would simply give the par value of the shares in question and would not therefore assist where there was an intention to buy-back at a market value. Your overview on capital reductions alludes to them being used in the context of a buy-back or redemption but does not make it clear exactly how this would work. Can you please give me some additional guidance of how this could be applied in practice?

Does "fair value" of share which is to be determined by an expert on a shareholder being required to offer his shares (which comprise a minority holding) under a provision in the Articles of a company imply that there shall be no discount applied to reflect the minority holding. The provision is silent on whether or not a minority discount will apply. The valuation is on the basis of a willing buyer and seller.

I am looking for information on Share Warrants and the standard terms under which these are generally issued. I had understood that they simply give a right for the holder of the warrant certificate to subscribe for a certain number of shares at a certain price, however, I have seen documents from other sources which seem to suggest dividends can be paid to the holder of share warrants rather than the shares themselves.  Please could you provide information as to how share warrants work and where I can find documentation in this regard?

CA s 345 - uses the word "group". Where is this defined for the purpose of this section, please?

I'm looking for a checklist for expansion to UK and other European countries. Thanks.

I have a corporate client, and under the terms of the shareholders' agreement a "deemed transfer event" has occurred in respect of one of the shareholders (who is also an employee and director). His Ordinary shares will be transferred to the remaining shareholders pro-rata, but there is also a single A share. My client would like that share simply to be "cancelled". I believe this cannot be done without going through the full buy back procedure, albeit the consideration would only be £1.00.  Is there any other way of doing this please?

We are acting for a client in relation to preparation of New Articles. The client has asked that we change model article 21 regarding "all shares to be fully paid up" so that in the New Articles the obligation to fully pay up the shares is temporarily suspended by reference to a Shareholders Agreement (which we are also preparing). Our questions are (1) can we refer to a separate document (in our case the Shareholders Agreement) within the New Articles we are creating and (2) is there an easier way (other than preparing New Articles) to temporarily suspend this or any other provision contained in the existing Articles?

The articles say that "The Code applies to all companies with a premium listing of equity shares." I would like some clarification on what is meant by "premium listing". I assume that because listing is used that AIM companies are excluded.  Essentially does it mean all companies that are listed on the Official List are subject to the CGC?

Is there a document on practicallaw that summarises all disclosures/documents that a UK listed company needs to have on its website? i.e. a composite list covering all Companies Act, FSA and other requirements?

I wondered if you had a view on the following question. Do the articles of association of a company actually need to include a provision regarding indemnities for the company to be able to give one? The Companies Act does not say that this is the case, and I've had a look at some of the conultations that took place when the Model Articles were being drafted, noting that BERR removed the provision (saying that it was not appropriate to make default provision for indemnification of directors in any of the model articles because there were so many possible variations as to what is appropriate for each company and that companies wishing to provide indemnities for directors should consider making special provision in the articles to suit their circumstances). However, the Model Articles did, in the end, include short permissive indemnity provisions. Quite an interesting one, and I would probably advise that there should be such a provision in the articles, but based exactly on what is the question.

Where is the issue of waiver of dividends discussed in the Companies 2006 Act?

Please could you tell me whether any legislation has been passed since 2010 or previous legisaltion has been amended that affects the record keeping that companies must undertake?

We are acting in a transaction where a company is to enter into a contract where it will be obliged to buy back (using distributable profits) a certain number of its shares over a period of three years in various tranches. (under S694(3)) The contract does not contain any conditions in terms of the buyback and the Company is obliged to purchase the share on the various dates set out in the contract. My question is: does the Board have to be satisfied that it has the distributable profits with which to buyback all of the shares on the day of execution of the contract or will (my belief) the board need to be happy that it has distributable reserves on each tranched buyback transaction? Your analysis would be appreciated.

The company wants to buyback shares. We wish to have an unconditional contract (for reasons of Entrepreneur's relief), but to stagger the payments by having several completions, e.g say 30% of shares being repurchased in 3 tranches of 10%. As long as each 10% is paid for at the time of each tranche completion, is this permitted?

Hello, I wondered whether you could assist with a query regarding a written resolution passed under the Companies Act 1985.  Under the 1985 Act, a written resolution required unanimity, however it was still usual to refer to a written resolution being passed as an ordinary / special resolution. If a written resolution filed with Companies House refers to itself as having been passed as an ordinary or special resolution is it still valid?  My inclination is that a written resolution is a written resolution under the 1985 Act (which seems to be borne out by section 381A (6) which refers to a written resolution being passed as an alternative to an ordinary or special resolution) and provided the written resolution was validly passed, the reference to an ordianry or special resolution is irrelevant, but I wondered whether PLC had ever come across a situation where a written resolution under the 1985 Act purported to be passed as a certain type of resolution and whether this had any effect.

Rather than simply waiving a dividend, can a shareholder opt instead to waive the balance of an outstanding intercompany loan as deemed payment of a dividend (provided the company has sufficient distributable profits to declare the dividend in the first place)?

Please could you advise if there is a definition in respect of the exemption to requiring shareholder approval of significant property transactions, where the transaction is "between a company and a person in his capacity as member"? How is this determined and in what circumstances?

Are shares a type of contract?

A client of ours is looking to buyback a number of shares owned by a shareholder. It doesn't have distributable profits at present, so we are going to do a reduction of share capital by using the solvency statement procedure. This will then create a reserve we can use to buyback the shares.  My question relates to how the company's share capital will be affected by the reduction of capital. When we reduce the share capital, will this have the consequence of also cancelling shares. Or will the nominal value of the shares reduce? I am trying to complete form SH19 and I am struggling to know how to complete the statement of capital. I look forward to your help.  

What is the procedure for making an amendment to a notice prior to the meeting itself? Am I right in thinking that any deletion / amendment of a resolution would likely be dealt with as follows: (1) If minor amendment / typo - send notice of amendment but not necessarily need to adhere to 14 day notice provisions ie if reasonable amount of time given prior to notice (in context of amendment) then that would be acceptable (2) If substantial amendment (which would, I think, include deletion of whole of resolution X, Y or Z (whether special or ordinary) would require full notice ie 14 days and change of date of meeting. Is there any guidance on this? Do you think these are reasonable assumptions?

Can ordinary shares be converted into bearer share warrants under section 779 of the Companies Act 2006?

A client of mine has formed his own company on line and mistakenly formed it as a company limited by guarantee. Can this be converted to a normal limited company with an issued share capital, and if so how? Or does he have to abandon it and start again?

My client wishes to convert a number of 1 redeemable preference shares into a number of 1 ordinary shares. Each ordinary share is worth 41 (approximately). Accordingly 41 1 preference shares will convert into 1 1 ordinary share. In order to effect this, as I understand it, the company will need to redeem the preference shares and issue the ordinary shares in satisfaction of the amount payable on redemption. I believe this will cause a reduction in the share capital of 40 for every ordinary share issued in consideration for every 41 preference so does the company need to approve a reduction in its share capital simultaneously with the conversion. Is there a simpler way to effect the conversion?

On incorporation of a limited company one £1 nominal value ordinary share was issued. The client now wishes to issue further ordinary shares of £0.01 nominal value. Looking at section 542 of the Companies Act it appears that although it requires that all shares must have a nominal value there is nothing to stop a company having ordinary shares with differing nominal values (and that these wouldn't be different classes as nominal value would both be considered a share right).  Do you agree and if this approach is taken should there be two separate line entries on the SH01 for £1 ordinary shares and £0.01 ordinary shares? (The alternative is of course to subdivide the existing share into 100 £0.01 shares).

Do you have a precedent or model dividend policy I could take a look at?

Does a shareholder of a private limited company have a right to a dividend payment? What is the contractual or legislative breach if the company has failed to pay a dividend notwithstanding a 22.5% share of the company?

I am dealing with the removal of a director under section 168 of the Companies Act 2006. The company has 2 directors and 2 shareholders (who are the same people). One holds 65% of the shares and the other 35%. The 65% shareholder wishes to remove the 35% shareholder. The directors failed to call an EGM so the 65% shareholder has convened one himself. It is unlikely that the 35% shareholder will attend. The Articles state that a quorum at general meetings is 2 shareholders therefore at the general meeting it would seem that the 65% shareholder cannot pass the ordinary resolution. The 65% shareholder cannot transfer any of his shares as the share transfer cannot be approved by the Board. The Articles cannot be altered as we do not have a 75% majority. It would seem inequitable if a 35% shareholder could frustrate the statutory procedure which only requires an ordinary resolution to remove the director in question. Am I missing something here?

Do you have a short form set articles of association for a private company under the 2006 Act which: 1. incorporate the Model Articles by reference to the Model Articles (i.e. keeps the document short); 2. are for 2 or more individual (rather than corporate) shareholders where one may have a majority of the issued shares; 3. include permitted transfers of shares to family members; 4. include pre-emption rights and forced offering of shares in the event of death, bankruptcy or termination of employment of a shareholder.

We currently have in issue 2 Ordinary shares. These 2 shares will be redesignated as 1 A Share and 1 C share. The intention is to then allot further A shares and also C shares. We also intend to create a new class of B shares. 1. Are we able to simply allot further A shares and C shares on the basis that these have now been created following the redesignation? 2. How do we create the new class of B shares? In the past we would have redesignated X number of the unissued shares as B shares. Under the 2006 Act do we simply pass a special resolution to create X number of B shares? Once these B shares have been created are we able to simply allot further B shares in the future at will? Obviously pursuant to the articles.

A company incorporated before 1 October 2009 wishes to adopt new articles which are compliant with the Companies Act 2006.  Should the new articles expressly exclude Table A?

I wondered why the defintion of 'excluded liabilities' seems to cover all tax, even when relevant to the business being sold and where relating to the period post effective time?

Is there any legal reason why a company needs to keep hard copies of board minutes or is it possible for the signed copy to be scanned into the computer as a pdf and kept electronically and the paper copy destroyed?

The directors of a company have declared an unlawful distribution of dividends. I understand that under certain conditions the distribution must be repaid by the shareholders/directors if they had the requisite knowledge that the dividend should not have been made. In this case the directors and shareholders are the same. The directors have previously lent money to the company and so can the repayment of dividends be set off against the amount that the company owe the directors under the loan?

I have increasingly come across companies with alphabet shares where further shares have been issued without a section 551 authority. The articles of association for these companies clearly state that the alphabet shares rank pari passu but will be classed as separate classes of shares and often there is a right to declare different dividends in respect of each class. My understanding of the Companies Act was that a section 551 authority was required for the issue of shares in different classes and that the authority needed was to be in either a separate resolution or given in the company's articles. I have also come across, again specifically in the case of alphabet shares, section 551 authorities (in articles and as resolutions) where the authority is limited to 5 years (as required) but is not limited to a maximum nominal amount. Again, my understanding of the Companies Act is that this is incorrect and the authority is not valid without the required maximums. Is there a carve out of the section 551 provisions specifically relating to alphabet shares, or should my understanding of the act apply in these situations? I look forward to your comments.

On a share buyback (off-market), are there any restrictions on a party entering into a loan agreement with the Company in which it is acknowledged that the sums loaned to the Company are to be used for the buyback itself?

I am having to increase the share capital of a private company prior to selling shares to a corporate buyer. Can you point me to the a resolution precedent to increase the share capital, please?

Can a plc withdraw a resolution once it has been circulated to shareholders in the AGM Notice of Meeting?

Is it illegal for someone to distribute inaccurate meeting minutes either deliberately or unintentionally?  For example, is it illegal to include confidential information which was stated in a separate written document, in purported meeting minutes, when in fact that confidential information was not mentioned in the meeting itself? 

The general questions I am mulling over are: a) Can an existing company pay for the shares in a newco to be issued in the name of the existing company’s shareholders?  b) Can shares in a newco simply be issued without the express consent of the shareholders of the existing company? (There are no drag along rights in the existing articles). We are acting for a plc, which is in the process of seeking investment to develop the technology/IP that it has a licence to exploit. For genuine business reasons, the directors wish to “start afresh” with a new company mainly so that there is no connection on the company books with a certain previous director, which they have good reason to believe has been putting off investors. The simplest option of just setting up a subsidiary and getting investment into that rather than the existing company is not a viable option for a whole host of reasons. The wish is for the newco to exactly replicate the existing company, but one of the problems is the fact that there are 197 shareholders, some of whom never respond to notices/correspondence and so are unlikely to respond to anything that is sent now.  Long-term, it would seem that this would all be in their best interests as otherwise the existing company will simply fold and the IP licence fall away. The existing company is EIS registered, but newco would most likely not be (the EIS implications are a completely separate matter to be considered of course!). The licence (the o

When selling Company shares that are held in joint names, does the Company need the consent of both of the joint shareholders before the shares can be transferred? If the Company does not need both shareholders' consent, is there any course of redress the other named shareholder could seek, either against the company or the other named shareholder?

We have held AGM in the past and will be holding one soon for this year.  Although we have a plan to amend our Articles to adopt the new model version of articles, it has not been done and so our Articles still say Table A of 1985 Act is adopted. In our AGM minutes we would like to refer to the Articles 40 and 42 of Table A. Have they been replaced? I appreciate there is no need to hold an AGM in the 2006 Act but we think there is a benefit in holding an AGM every year.

Are there any corporate governance guidelines which suggest that an AGM should not be held before 10am?

Section 644(4) of the Companies Act 2006 states that the resolution approving the buyback does not take effect until the solvency statement and statement of capital are delivered to the Registrar. In your view does this mean that the reduction is effective from the date of lodging at Companies House or would this be backdated to the date of the special resolution? Can the reserve arising on the reduction be paid to the members prior to the reduction being lodged with the Registrar (but after the passing of the special resolution)?

We have a private company with upwards of 80 shareholders all with historical family ties. The vast majority of the shareholders have little or no part of the day to day running of the company. Within the articles of association there are clear provisions to deal with the process of transfer of shares. In the event that a shareholder wishes to sell his/her shares they must first be offered to the other shareholders on an open basis. The transfer shares are then subject to a bidding process from other shareholders. The question is whether a director of the company, who is also a shareholder, is required to provide information to the other shareholders as to the reasons for submitting a bid in excess of other shareholders bids. The fundamental issue being that the director has greater knowledge of the commercial aspects of the company and therefore the potential future value of the companies shares.

We're dealing with a slightly awkward share purchase whereby investors are selling their shares to a new majority shareholder. Immediately following the purchase, we need to change the articles and vary class rights. For the sake of ease, we want to have the new shareholder sign the resolution and give the consents for the new articles and variation and have this happen immediately after the transfer (dealt with at same directors' meeting). However, the transfers won't have been stamped at that stage. My question is whether share transfers are valid notwithstanding that they haven't yet been stamped and whether the company can treat the transfer as having been completed and amend the register of members (and the new member then sign the resolutions etc.) pending stamping?

If a company has failed to file an SH01 reflecting the allotment of the shares, what would be the implication on any company or individual purchasing those shares and have those shares been issued correctly?

I have read the following response given to someone on the issue of whether shareholders are entitled to see the Minutes of Board meetings.  In respect of a company with Table A Articles (in which Article 109 is relevant), if authorised by the shareholders by ordinary resolution, are the shareholders entitled to see the Board Minutes?  Would they be seen as "documents" of the company? http://corporate.practicallaw.com/5-519-1412  

I am looking for a precedent for a distribution agreement for use in an indirect or three-cornered demerger as described on the following webpage on your Corporate section : http://corporate.practicallaw.com/4-366-8006. The client's accountant has already obtained HMRC clearance for the distribution under Section 1075 CTA 2010 and we have been instructed to prepare the agreement and resolutions to implement the demerger - do you have these documents on your website? I shall be grateful for any suggestions as to where to find these?

I came across a company that on or about the date of filing a resolution on a change of name also filed a copy of its old articles of association (containing the new company name of the front page). The resolution deals only with the change of name and there is no mention of adoption of the new articles; the articles were filed on their own and are a copy of an old set of articles (that were amended prior to the change of name above). Under section 21 of the 2006 Act, the articles may only be amended by a special resolution. Therefore, filing to Companies House alone should not be deemed as the adoption of new articles? Is it best to file Form RP01 with the correct copy of the articles to rectify this?

There are two shareholders with 50% each ordinary shares. One has agreed to retire and the company will buy his shares out over time, subject to profits. The outgoing shareholder wants to convert his shares to fixed price preference shares with fixed rate dividends, cumulative and convertible. Can he reclassify his ordinary shares to preference shares? I have at the back of my mind he can't, but must cancel his ordinary shares and then apply for and have allotted new preference shares? Any clarification would be appreciated.

I have a question regarding capital reduction - based on my experience, capital reduction is usually employed through returning share capital to the shareholders of the company, and cancelling a corresponding number of the issued shares of the capital, such that a company that say originally had GBP1000 in share capital value represented by say 1000 ordinary shares would now have GBP800 in share capital value represented by 800 ordinary shares after the capital reduction is completed. I was wondering whether there is any material or cases on PLC which would prohibit or in any way cast doubt on the possibility of returning capital to the shareholders WITHOUT cancelling or reducing the number of issued shares? So far, I cannot find any material or cases which either affirms that this can be done, or prohibits this from being done. I would have assumed that given the abolition of the concept of par value of shares, there is no longer a fixed value represented by the shares, and the reduction in the share capital value without a corresponding number of issued shares would all the more be possible. Just for your information, the reason that I am considering the question is because it is the intention to preserve the shareholding proportions between the various shareholders of the company though maintaining the current number of shares issued to each such shareholder. Many thanks in advance for your assistance on this, it is much appreciated.

Section 254(6) of the 2006 Act is confusing me. I have a situation - Company A is entering into a transaction with Company B. A director of Company A is sole shareholder of Company B. I am assuming Company B is "connected" with the director and hence the transaction requires approval by shareholders of Company A under section 190. Is 254(6) just to deal with aggregation of voting rights ?

It appears that the directors of a company have been declaring dividends for a number of years but have not maintained board minutes relating to the same. Are these dividends deemed to be unlawful distributions? If they are so deemed, how can this issue be remedied?

I'd like your view on whether a company can lawfully capitalise its revaluation reserve for the purpose of issuing and allotting bonus shares to its existing sole shareholder. Section 849 CA 2006 states that a company cannot apply unrealised profit in paying up any amount unpaid on its issued shares, but the guidance in Tolleys, Butterworths and Buckley suggests that it can do so as bonus shares expressly fall outside the ambit of the meaning of "distribution" within section 829 of the Act. My reading of this is, therefore, so long as the application is to a bonus issue (ie treating the new shares as paid up by an amount equal to the capitalised sum) rather than an existing share which is not fully paid up it is OK. I have to say I don't understand the logic for the distinction as the two seem to amount to the same thing.

May I please ask what is the position for a (non-quoted) plc which will not have its audited accounts ready by its AGM deadline? Would it be more correct to hold an AGM within its deadline and then adjourn it, or to hold it when the deadline has passed but when the audited accounts are ready?

  Is it correct to assume that sums held in a company's share premium account are treated as positive net assets on a wind-up of that company and are distributed to the shareholders, notwithstanding the fact that such sums in the company's share premium account would (prior to wind-up) be treated as non-distributable reserves under s.610 CA 2006?  There are no creditors of the company in question.

My question concerns the redemption of preference shares by my client company. Notice to redeem has been issued and redemption has taken place in respect of all but a very small minority of the shares.  These are held by two shareholders resident in the USA.  Neither shareholder has responded to the notice, nor has my client been able to contact them by email addresses held for them. My client company is in the process of a sale and the Purchaser’s have said they require to purchase the entire issued share capital; operating a squeeze out where necessary.  Since the only shares left in this class of preference shares are those referred to above it will not be possible to operate squeeze out for this class of share. The articles state  “… upon such redemption date [the date referred to in my client’s notice], each of the C Preferred shareholders shall be bound to deliver to the Company at such place the certificates for such of the C preferred Shares concerned as are held by him …”.  Is there any way that the Company can treat the shares as being forfeited or redeemed as a result of the shareholder’s failure to comply with this obligation?

I am trying to find the wording for a variety of shareholders who will be having different rights than the majority shareholders. These shareholders will only have dividend rights and if the Company is sold will then be entitled to their equity shares. I can't seem to find a section which deals with different classes of shareholders. Please help me.

Please clarify the procedural steps required to issue a new category of shares in a limited company. The company presently has only ordinary shares but the company wish to reclassify so that there are 95% ordinary shares and 5% ordinary 'B' shares which will carry the same voting rights and dividend rights as ordinary shares but will be redeemable (the current ordinary shares were not elected to be redeemable). Once the new share category is created what further steps will be required to issue further shares in that category. Although the 'B' shares will initially be only 5% of the total shares in the company, the percentage is to increase by 5% per annum to a maximum of 20%. Many thanks.

I should be grateful any experience you may have had regarding the application of the Duomatic principle in the context of the creation of new share rights, and whether share rights must be contained in articles of association. The circumstances are: a client company believes that it had redesignated its existing ordinary shares into A ordinary shares and alloted new B ordinary shares (part of this as a bonus issue) from a certain date.  An annual return has been filed reflecting this (and summarising the share rights), the only difference between the classes is that the A shares have a right to a priority distribution on a return of capital.  However no new articles were adopted and no resolutions or forms were filed with Companies House. My initial thoughts are that:- 1. Provided it is verifiable that all the members assented to the redesignation and allotment, the Duomatic principle would apply notwithstanding the failure to pass the requisite authorising resolutions in accordance with the Companies Act.  The case law re the limits on the Duomatic principle would seem to suggest that the principle cannot apply where the relevant provisions of the Act are required to protect third parties, as opposed to the shareholders.  Provided that the company had reserves for the bonus issue, it would not appear that any third party interests would have been affected by the variation and allotment. 2. The main obstacle is whether share rights were validly created without

Does a foreign incorporated company with a UK registered branch have to comply with the Trading Disclosure obligations under the Companies Act?

1. Can a private company pay a dividend to a former shareholder? 2. Can directors of a private company declare an unascertained dividend?

The practice note (Payment for shares: timing and form) suggests it may be possible to offset amounts due to a shareholder for the purchase of his shares in a buyback against amounts owed by the shareholder to the company. I have reviewed the case (BDG Roof-Bond) and Park J's view clearly seems to allow for set-off provided that the full (pre set-off) purchase price is recorded in the contract. However, Tolley's refers to this case but notes that the prevalent view is that payment must mean cash and that the cash must be paid in full at completion. Is there anything further on this question? I am pursuing a buyback from a reluctant shareholder using a forced transfer provision in the articles (deemed transfer notice (no doubt) followed by agreed price or company accountants' valuation at the transferor’s cost). The company is instructing the accountant to value and will be looking to offset this cost (plus certain other undisputed sums owed by the shareholder to the company) against the price payable for the shares. Is this permissible?

We act for a private limited company which was incorporated in the 1970s. The articles adopted Table A from Companies Act 1948 (as amended). We are currently updating the Articles which have not changed since incorporation and will be based on the Model Articles. We understand that under the provisions of the Companies Act 2006 (Commencement No. 5, Transitional Provisions and Savings) Order 2007 (Fifth Commencement Order) the chairman can still have a casting vote at a general meeting in the event of equality of votes, whether on a show of hands or on a poll as the articles of a company provided for the chairman to have a casting vote immediately before 1 October 2007. Does any special drafting or wording need to be included in the new Articles to support the article dealing with the chairman's casting vote at a general meeting (such as reference to the Companies Act 2006 (Commencement No. 5, Transitional Provisions and Savings) Order 2007 (Fifth Commencement Order)), or would it suffice to simply adopt the standard wording based on Table A? Thanks.

I have a client company who would like to allot shares in one tranche but with payment staggered over a period of time. Do you have a suitable agreement for this and are there any issues to watch out for?

I'm struggling to find any info on how to add a new share class (under th 2006 Act) to a company ie: dollar shares. Please, can you point me in the right direction?

Where can I find a hive up agreement on the system? A company is transferring all its assets and liabilities to its parent. There are no insolvency issues.

Are you able to explain the difference between share warrants / equity warrants and warrants to bearer? Futher, are there any specific provisions of the Companies Act 2006 that should be complied with when issuing share warrants (apart from checking the company's articles of association to ensure that the company can issue share warrants)?

Am I correct in believing that the former Section 24 of the Companies Act 1985 requiring not less than 2 members of a public company and making a single member of such a company which carried on business for more than 6 months jointly and severally liable with it for its debts was repealed on the inception of s. 38 of the 2006 Act on 1 October 2009 ? I would welcome your guidance.

I have a client company (private not PLC) which has a small number of shareholders holding a very small number of shares that have been untraceable for many years. My clients want to tidy up their share register by buying back/cancelling these shares. I cannot find a procedure for this. Are you able to help? Many thanks.

"The effect of restoration by way of a court order is that the company is deemed to have continued in existence as if it had not been dissolved or struck off (section 1032(1), CA 2006)." (Practice note, Restoring a dissolved company to the register of companies)  Does a company arguably have locus standi or legal capacity when it is in the process of restoration? Could it start proceedings for the recovery of a debt, for example?

I have asked this before but am still unable to find a precedent for a private company shareholders agreement where there are a number of shareholders and which contains a reasonably comprehensive set of provisions dealing with share transfers, both voluntary, involuntary, drag along, tag along etc and with good leaver/ bad leaver definitions. Am I missing something and can someone point me to a suitable precedent? The only ones here seem to be a very short form one which is not helpful and one for a joint venture which is not appropriate. If one does not exist, would this not be a useful precedent to have?

We are acting for the shareholders of a private limited company who have agreed to transfer their shares in a Target Company to a Newco Company. In consideration for the transfer of their shares in the Target Company, the Newco Company shall issue and allot consideration shares in the Newco Company to the shareholders in the same proportions in which the shareholders curently hold shares in the Target Company. Accordingly, an application for relief from Stamp Duty shall be made under section 77 of the Finance Act. In the meantime, the newly formed Group shall enter into new banking facilities with Bank Plc and as security, Bank Plc requires (amongst other security documents) a charge over Newco Company's shareholding in the Target Company. Are the directors of the Target Company able to register the transfer of shares, and therefore write up the register of members in the statutory books of the Target Compnay (so as to evidence Newco Company as the legal owner of the shares) prior to the stock transfer forms being stamped?

I have noticed that your precedent shareholders agreement and articles both reflect an approach whereby matters such as shareholder pre-emption rights and tag/drag rights appear in the shareholders agreement but not the articles. I have always worked on the understanding that such matters are best placed in the articles. Can you explain whether best practice has changed recently, and generally what are the key considerations to take into account when deciding which document to put these provisions into? See eg Shareholders' agreement short form  (which has p-e rights on transfer) and Articles of association for a private company limited by shares with several shareholders  (which does not).

The articles of association for my client's company state that a defined term has the same meaning as set out in a shareholders' agreement. The client wants to amend the definition in the shareholders' agreement. Does this amount to an alteration of the articles of association of the Company? The shareholders' agreement has not been registered at Companies House.

I am updating the constitution (articles of association) of a company limited by guarantee which is a charity I have looked on PLC and wanted to check the following 2 points: 1 Our client wants to permit the members to elect other members rather than have the directors approve the new members. The members do not mind the directors administrating the process but do not want them to prevent a person becoming a member if they have been elected by the other members. Is this possible? I assume "yes" because this is a contractual arrangement between the members and the company limited by guarantee. Please can you direct me to any PLC information which confirms this right of the members to elect other members? All I could find was the document entitled "Companies limited by guarantee" under the section "Membership of guarantee company" states that: "The model articles for private companies limited by guarantee require each member to be approved by the directors and for prospective members to fill out a membership application form (article 21). An application form may be better than relying on the signature in a register of members, particularly where there is a substantial membership. The articles may provide for an enrolment fee to be paid on joining and/or an ongoing membership fee payable at regular intervals. Such membership fees may be a useful way to generate income. Unlike a company limited by shares, a company limited by guarantee is not under an obligation to iss

Is there an equivalent section of Companies Act 2006 to s793, but in relation to a private limited companies?

I have a question regarding the Companies Act 1985. Section 143(3)(b) of this Act provided that a company could purchase its own shares when this constituted an "acquisition of shares in a reduction of capital duly made". I have no idea what this means and what type of situation this was supposed to encompass. Section 143 (3) (a) laid down many specific procedural requirements which had to be adhered for a company to enter a buyback agreement - broadly the equivalent of Part 19 of the Companies Act 2006 today. But what did Section 143 (3)(b) except from the prohibition?

I'm working on a contract. The definition for "Group company" is as follows: “Group Company” means any direct or indirect subsidiary or any direct or indirect holding company or any such subsidiary of any such holding company or any such holding company of such subsidiary, “subsidiary” and “holding company” having the meanings defined in Section 736 of the Companies Act 1985 as amended by the Companies Act 1989. I think this legislative reference is dated and superseded. Can you tell me what it should reference with the section?

Under the Companies Act 1985 section 83 no allotment of shares could be made by a PLC unless the minimum subscription was received within 40 days of the first issue of the prospectus, otherwise the money would need to be repaid. That section has now been repealed and doesn’t appear in the CA 2006 but we need to check whether there is still this limit contained in some other legislation, for example possible the listing/prospectus rules. We've looked but haven't found anything. Would you be able to check this please?

Can a company secretary be liable for filing something at Companies House which they know to be invalid e.g. filing a director's resignation with the knowledge that the correct procedure to remove the director had not been followed?

I act for a corporate client who is considering registering a transfer of shares from a deceased shareholder to her husband, without evidence of a grant of probate. I have had sight of the will, and the husband is both executor and beneficiary but as the wife had very few assets (only the shares I am told), the husband is minded to not spend the time or expense of obtaining a grant of probate. Could you please point me in the direction of information regarding issues which the company should bear in mind if it accepts and registers such a transfer? The transfer is permitted under the articles without going through any pre-emption rights or anything similar to that. I really just need to know whether the registration would in theory be open to challenge and what the potential liability of the company would be in this regard. For example, could the transfer be set aside? Is there any circumstance in which any IHT liability or similar could end up with the company? Are there any consideration regarding accepting the transfer in good faith which we now cannot rely upon knowing that a grant of probate would be preferable? I look forward to hearing from you.

Can a board resolution be passed by email (with no actual signature) instead of by written resolution? (1) section 248(1) CA 2006 states that minutes are required. (2) sections 1134 and 1135 CA 2006 state that the company records include minutes and that the company records can be held in electronic form, but must be capable of being reproduced in hard copy, if requested. (3) Electronic Communications Act 2000 states that e-signatures are legally admissible in the UK.

We have had an enquiry from a freehold management company that was incorporated prior to the completion of the freehold purchase, with a share capital of 20 x 1 ordinary shares. All shares were allocated to the flat owners at incorporation, however following incorporation but prior to completion of the freehold purchase, one flat owner decided not to participate. Is the company required to 'buy back' this flat owner's share pursuant to Part 18 of the Companies Act? The filing of Companies House form SH03 is applicable but are all of the other elements to Part 18 needed as there is no payment of premium involved? Neither the procedures for buy back out of capital or buy back out of distributable profits seem to apply.

I have two 50/50 shareholders, who planned on entering into a cross option agreement to enable them to buy the others shares in the event of one of them dying. However, they can no longer do this because one of the shareholders is unable to get the appropriate insurance cover. Can you suggest any alternative options here or how this could be dealt with? The aim is to find a mechanism whereby the deceased shareholder's family will be able to receive value for the shares as soon as possible after death and the other shareholder assumes all or most of the company's shares.

We act for the administrators of a company. We now wish to change the name of the company. Our understanding is that, notwithstanding the fact that the company is in administration, the change of name must still be approved by a special resolution of the members. We would be very grateful if you could confirm if this is correct or if there is any way that the change of name can be carried out by the administrators without the approval of the members.

We may want to buy a company limited by guarantee with no shares. How do we go about doing it? What do we need to be wary of? Does PLC have any document which may assist - we have looked but cannot find.

I have been reading your practice note, General meetings (including AGMs): preparation and notice, in relation to how members can request the directors to call a meeting. I am currently acting for a client who is a shareholder and would like to propose a resolution at that meeting. However, if there is a scheduled AGM in 2 months would it possible for the members to propose that the resolution is passed at this meeting instead of having to call a further general meeting? The company has Table A articles.

Can shareholders of a company adopt a resolution by unanimous written consent in a lieu of an annual general meeting?

If a shareholder votes by proxy at a general meeting and decides to change vote prior to deadline for proxies to be received, is it possible for the shareholder to send in a second proxy to the company which will be treated as his vote and will cancel the previous proxy form?

I have a query about a mutiple completion buyback contract - i.e. a single unconditional contract for the sale of all of the Vendor's shares but with completion occurring on successive dates. My query is threefold:- 1. Whether or not this transaction is permissable under Company law and if so, whether my analysis of the legal and tax implications are correct thereof. 2. What cash and profits requirements apply to this proposal. 3. Do you have a precedent agreement? Dealing with points 1 and 2:- 1. My analysis of the legal and tax implications of the single contract with multiple completions in relation to the requirements of company law and sections 1033 – 1047 CTA 2010 is set out below:- (a) The 2006 Companies Act prohibits a buyback with payment of the consideration in instalments. However, where the buyback is effected by a single unconditional contract under which a vendor disposes of his beneficial interests in full at the outset, but with completion taking place on different dates in respect of different tranches of shares, there is no infringement of the provisions of the Companies Act. (b) By entering into an unconditional contract for the disposal of shares the vendor disposes of his entire beneficial interest in the shares subject to that contract. There will be a specific term in the contract which provides that the vendor relinquishes his rights as shareholder in relation to the shares sold on completion, notwithstanding the fact that completion take

I am looking into the government's proposed reforms to executive pay. I note that the government recently announced further changes to the Enterprise and Regulatory Reform Bill 2012-13 which will be used to implement the reforms. I wanted to know if the proposed reforms will delete s.439(5) of the Companies Act 2006 (the provision that prevents a person's entitlement to remuneration being conditional on shareholder approval)? And if so, where this is stipulated?

What is the position where the directors of a company cannot approve the annual accounts, e.g. where they were not directors during the period to which the accounts relate and so do not know whether they provide a true and fair view?

In relation to a convertible loan note instrument for use in venture capital transactions: (a) if a private company which currently has just one class of shares in issue wishes to issue convertible loan notes pursuant to such an instrument, will it be required to obtain authority to grant rights to convert such notes into shares in the company pursuant to section 551 of the Companies Act 2006 as pursuant to the terms of such an instrument the notes (usually) have the potential to convert into either the same class or a new class of shares?; and (b) if the conversion formula is such that it is not possible to ascertain at the time the section 551 authority is obtained the actual maximum number of shares that could be issued on conversion, is it sufficient for the purposes of section 551 (3) (a) for the directors to be given authority to grant rights to convert the loan notes into shares in the company up to the maximum amount of shares that are capable of being issued pursuant to the terms of the convertible loan note instrument? Or is a specific number always required?

A shareholder would like a shareholders' agreement provision to provide that on his death or terminal illness (as certified by a medical practitioner) his shares will automatically transfer to one of the other shareholders for no consideration. Is this permissible?

Does the Companies Act 2006 (or any other legislation) require a limited company to display its company number on company notepaper?

Can a company have two interim dividends in a year?

It appears some organizations, at their annual meeting, ask shareholders to vote on a blanket ratification of all acts of the board (e.g. an annual resolution ratifying all acts of the board for the preceding year)? My questions are: 1) how common are these blanket ratifications, and 2) why are they done (i.e. what purpose do they serve)?

Is there anything in the law to prohibit a company to issue preference shares with the following rights as regards dividends: - for a right to a dividend to be declared equal to the funds that the holder of the preference shares paid to acquire the shares initially (nominal value and premium) - once these funds have been paid through a dividend, for the preference shares thereafter to have a right to receive a fixed amount as a dividend on an annual basis (provided there are available profits for distribution). If it is possible to stipulate that a fixed amount (as opposed to a rate of return) shall be distributed as a dividend as regards preference shares, are there any restrictions and/or considerations which should be adhered to as regards the magnitude of this fixed amount? - for this right (i.e. to a fixed amount to be declared as dividend on an annual basis) to be effective without any time limitation (i.e. each year), unless the articles which provide for the preference shares are amended. Thanking you in advance for your assistance.

I have a client forming a new company with a group of investors taking shares. They will want a full shareholder agreement, but before then require a preliminary document as a sort of 'memorandum of understanding' that sets out how much they are investing and what shares they are getting in. Do you have a suitable document and notes for this?

My question is regarding articles. It is common to see provisions stating that if a member becomes a Leaver (i.e. ceases to be an employee or consultant) and is required under the compulsory transfer provisions to transfer their shares but refuses to sign the stock transfer form, the directors may appoint some other person (including one of their number) to sign such forms for that member. The Articles I have in mind also provide that where a Leaver retains shares, they are deemed to vote the same way as the majority of the holders of shares of that class at a meeting or on a written resolution. Sometimes these types of articles say the directors are acting as the Leaver's "agent and attorney" in relation to some matters, sometimes they don't say at all - just say it can be done. My query is this - what is the nature of the power they are acting under? Is it valid to just give the director/s such a power in the articles? Are they acting under a genuine power of attorney - it would seem not as there is nothing in writing signed by the member appointing them under a power of attorney? Any thoughts appreciated!

I am acting for a company and their articles of association are a variation on Table A under the Companies Act 1948. The company now wants to adopt more modern articles. Are they able to approve this by written resolution or will there need to be a general meeting?

I have an unusual query in relation to the appointment of new directors in a Private Limited Company limited by shares where the sole director and shareholder has died. Other members of our firm have been appointed as Executors under the deceased’s Will. The Company was incorporated under the Companies Act 1948 and has bespoke Articles (i.e. the Regulations in Part 1 of Table A of the First Schedule to the Act are excluded except where they are expressly stated to apply). Under the Articles it states that the Directors of the Company shall not be less than two. It would appear that the Company has been operating for some time in express contravention to the Articles, however it is also now in breach of the Companies Act 2006, as there must be at least one director who is a natural person. I understand that the deceased’s shares will automatically pass to the Personal Representatives, who are not required to register as members in their own right prior to any transfer to the beneficiaries (albeit any transfer will be subject to the restrictions in the Articles). Unfortunately this appears to be a catch 22 situation, since there is no Board at which a director can be appointed and there is no director to call, give notice etc of a General Meeting (GM) at which an ordinary resolution can be passed. However, the Articles expressly include Regulation 49 which states that an GM may be requisitioned by any two members of the Company. This use to be governed by s.

How does a share certificate need to be executed by a company with one director and no company secretary?

Please can you tell me if there is a form of wording on PLC for a good leaver/ bad leaver provision for use in the articles of association for a private limited company?

Companies Act 2006 Sec 22. Having read your on-line guidance, does sec 22 mean that 'entrenched provisions' may only be added to existing articles of association if ALL shareholders agree?

Under section 695(3), a resolution approving a buyback is not effective if: A member holding shares to which the resolution relates exercises the voting rights carried by those shares (whether on a poll or on a vote by a show of hands; and The resolution would not have passed if those votes had not been exercised. How will this be affected by and how does one get round the situation, where all shareholders are having a % of their shares purchased by the company? Do they vote with their shares which are not being bought?

When one company transfers its subsidiary company by way of a distribution in specie to another company, is stamp duty due? What should be entered in the consideration box on the stock transfer form?

In addition to registering at Companies House, what other formalities would a HK based company need to comply with to trade in the UK?

I am looking for a model trustee or nominee agreement whereby one corporate shareholder assigns its right to receive dividends to its parent/holding company. English law applies. Do you have a sample on the website?

Share buy-backs: where a written resolution approving the terms of an off-market share purchase refers to "the agreement attached" (in order to comply with the requirements for the members to approve the agreement and the agreement to be circulated to the members), does that mean that the agreement should be filed with the resolution because it has (effectively) become part of the resolution? We haven't seen the point taken (yet) by the Companies House but would be interested in your views.

Can a member of a company limited by guarantee that has donated monies to the company be repaid those monies? I note that for companies that wish to be charities, the Charities Commission requires the articles to prohibit the distribution of income and profits to members. 1. What if a company limited by guarantee has not yet registered as a charity? 2. Do monies donated count as income?

If a director is not required to make a declaration of interest in a proposed transaction because the other directors are already aware of his interest pursuant to section 177(6)(b) Companies Act 2006, please could you clarify whether the director will still need to comply with Model Article 14 in order to be counted as participating in the decision-making process for quorum and voting purposes i.e. by falling within one of the exceptions in Model Article 14.3? If the director is not required to comply with Model Article 14 in these circumstances, would it be correct to state in the board minutes that the director confirmed that he had no interest in the proposed transaction which he was required by section 177 of the Companies Act 2006 and the Model Articles to disclose or would there need to be a further reference to the director's ability to vote under the company's articles (as per the PLC skeleton form of board minutes)?

I am hoping that you will be able to assist me with the issue below. Currently the Company has 100 ordinary shares. There are two shareholders each holding 50 shares. We want to change this to one having 50 A ordinary share and the other 50 B ordinary shares. The plan is to convert these from the original 100 shares so there will be no new shares issued. The rights will be identical before and after the changes. I am aware that we will need to produce new articles and a written resolution adopting the articles and converting the shares. There is no change in the capital of the company so presumably no statement of capital is required. Are there any filings required?

You state that for companies incorporated before 1 October 2007, the default model articles continued to be Table A from the 1984 Act. I have a Company that was incorporated under the 1948 Act and it adopts Table A from the 1948 Act as its model articles. Is it not, therefore, the 1948 Act Table A that I should refer to rather than the 1984 Act Table A?

I am trying to find out if a “person authorised” under ss 270 and 274 of the Companies Act 2006 includes the solicitor acting for the company. I would like to sign the change of name form to be lodged with the company on my client’s behalf, and do not want to send this to the client to do so and incur further delay.

Where a shareholder of a company (holding more than 5% of the shares) is requisitioning frequent general meetings for vexatious reasons and to create problems for the other shareholders and directors (for example raising issues which have been discussed at quarterly meetings and requesting specific documents provided to the board), is there a way of preventing the shareholder from doing this? We are aware that section 303(5) Companies Act 2006 states that a resolution may not be properly moved at a meeting if it is frivolous or vexatious, but is there a way of preventing the shareholder even calling a meeting if it is for nonsensical reasons? Furthermore, can the company pass a resolution noting that the shareholder has certain rights to information under statute, articles and contract but confirming that the board of directors and not the shareholders are to be the final arbiters of what information is provided?

Can dividends be declared and paid on shares which are issued (in a private limited company) as partly paid or in respect of which subscription monies remain outstanding?

How should a proxy appointed as chairman be mentioned in the minutes?

Are there any restrictions on a holding company owning preference shares in its own subsidiary company?

Do shares in a private limited company need to be paid up at the time of issue or can they be paid up on the basis of instalments over an agreed period of time ?

Company A owns 20% of the shares in Company B. 5 other shareholders own the remaining 80% of the shares in Company B. Company A is currently owned 100% by a single individual shareholder. By a share for share exchange, Company A acquires the rest of the shares from the other 5 sharehoders in Company B in exchange for shares in Company A. The shareholding of the 5 shareholders in Company A will mirror their shareholding in Company B. The individual shareholder in Company A who previously owned 100% will now own 20% of the shares in Company A following the share for share exchange. In the absence of any stamp duty relief under section 77 FA 1986 (as our understanding based on the wording in the legislation and in the HMRC Stamp Taxes Manual is that Company A needs to acquire the whole of the issued share capital of Company B to qualify for the relief), are there any other stamp duty reliefs available on the share for share exchange? Is there any better way of dealing with this to enable the share for share exchange to qualify for stamp duty relief under section 77 FA 1986? Assuming there are no other stamp duty reliefs available, on what basis should the consideration calculated to enable stamp duty to be paid on the share for share exchange. Is it based on the market value of the shares in Company B being transferred or the market value of the shares in Company A issued in consideration for the share for share exchange?

Are there any restrictions on a guarantee company removing from its constitution a prohibition on distributions to members if the company is not a charity and then subsequently making a distribution? To give an example, I have noted that a number of guarantee companies have provisions in their Articles (or, where they were incorporated before 2008, their memoranda of association) which state that the income and assets of the company must be applied solely in promoting its objects and no portion may be transferred directly or indirectly to its members whether as dividend or otherwise. They usually further provide that on a winding up, any surplus assets must be transferred to a body with similar objects and having similar restrictions on the application of assets and income. However, many of these companies are not registered charities. There would therefore seem to be no obvious reason why the constitution could not be amended to change the entitlement of members to receive a distribution on winding up. Are you aware of any restrictions which could apply?

This is a question regarding non-cash payment for shares.  Section 582 CA 2006 states that shares allotted by a company and any premium on them may be paid up in money or money's worth. Your practice note goes into some detail on the requirements for a public company to allot shares for-non cash consideration. Are there any similar requirements for private companies? E.g. any formalities, forms that need to be filed at companies house etc?

Under the Model Articles and the Companies Act 2006, can a board meeting be held via email over a period of days? For example, the Chairman would convene a meeting with an email containing the subject matter using a directors' email group. He/she would invite the other directors to comment over a period of days and then vote by a certain day.

My question relates to the filing obligations on an issue of loan notes as consideration in a share acquisition. By way of background, I am acting for a client in a management buy-out, under which a Newco will purchase 100% of the issued share capital of the target (a private company limited by shares). Part of the consideration for the seller’s shares will be satisfied by the issue of convertible loan notes in Newco, secured by a debenture granted by the target. I understand that the procedure for the issue of the loan notes, to be documented in the board minutes of Newco, is the same as for the issue of shares (so the shareholders of Newco need to waive pre-emption rights and provide authority to allot), however, I am unsure as to the filing requirements. What form(s) and resolutions need to be sent to Companies House? I do not believe form SH01 (return of allotment) needs to be filed as no shares are actually allotted despite the similar procedure. I therefore assume that no SH19 (statement of capital) form needs to be submitted. Does a form need to be submitted to Companies House documenting the issue of the loan notes, such as MG07, and if so, who signs and submits the form? Presumably an SH19 will need to be submitted when/if the seller converts the loan notes into shares? Finally, should the first redemption payment of the loan notes not occur until 6 months have passed since the conclusion of the deal – if the seller (which is a body corporate) ha

My client wishes to open a UK establishment and has asked for the definition of 'opened'. Although from a practical perspective I know that Companies House would not make a point of this matter, they are keen to follow the letter of the law. I have checked the primary source, Overseas Companies Regulations 2009, but it is silent on this point. My initial advice for the definition of 'opened' has been to include such matters as the entity employing representatives to represent the establishment, taking a lease on a building where the establishment will be based, etc. Your thoughts on this matter would be much appreciated.

I have been asked to organise the buyback of a share and am struggling to see within the notes an explanation to help me decide if the money is coming from distributable reserves or capital. The background: a development of 6 houses uses the same sewerage system. A separate company was created which owns the land and joint sewerage plant. Each house owner has one director and is a shareholder of the sewerage company. Regular contributions to the company are made by each house owner and a reserve of about £20,000 has been built up in order to deal with any running repairs or replacement of the plant. Each year further monies are being collected. One house owner has bought its adjoining property and the houses have been amalgamated into one and so the directorship and shareholding of the house that has been bought needs to be “extinguished”. I was proposing to deal with the shareholding by having the company purchase the share for its £1.00 nominal value. I’ve seen that you have two sets of notes etc. for dealing with this depending on whether it is a purchase from distributable profits or capital. I suppose my first question is whether the notes are geared towards a different type of share acquisition? If the procedures do have to be followed in full in my circumstances, how do I know which set of notes to follow? My clients are keen not to have to also engage accountants for the process which is becoming rather more time consuming and costly than they

Please could you indicate whether it is possible to have ordinary shares which solely have rights to vote and not receive a return of capital upon liquidation. The rights attaching to the ordinary shares would be only voting rights and upon a voluntary or compulsory liquidation, such holders of ordinary shares would not be entitled to a return of capital.

In the context of a quoted public company, in which shareholders (and one of the directors who is also a shareholder) requisitioned a general meeting to remove two of the three directors, are there any provisions under the Listing Rules or the Companies Act 2006 or otherwise that would restrict the ability of the requisitioning shareholders to send members' statements to the other shareholders making representations about the directors proposed to be removed? The company has not been requested to circulate the members' statements.

Would introducing drag-along rights into the articles of association of a company prior to a proposed acquisition constitute unfair prejudice to minority shareholders?

What document do you use to make an application to the Companies Court (section 1029 CA 2006) to restore a company to the Register of Companies, e.g. Part 8 Claim Form or by way of an ordinary application?

Does a company have to reduce its share capital before strike off if its share capital is more than £4,000? It mentions this in your note but given the Bona Vacantia department has removed this threshold in terms of the assets it can pursue I was under the impression a reduction is no longer necessary. Do you have any further materials on this?

I am looking at a private company limited by shares incorporated in July 1986 which adopted the Table A extant at that date including Regulation 50 relating to shareholder meetings viz: "In the case of an equality of votes ..... the chairman shall be entitled to a casting vote......" Am I right this became legally ineffective for all companies because of section 282 Companies Act 2006, but is now effective for a company which adopted Regulation 50 in July 2006?

Is it possible for a company to reduce its capital using the solvency statement method under ss 642-44 CA06 in relation to redeemable shares? This would seem to be an easier route than redeeming shares from capital under s 714 CA06 (avoiding auditors report, public notices and timing restrictions).

I am looking at an intra-group situation where a subordinated loan from Subsidiary A to Subsidiary B will be repaid. Subsidiary A is a private company and a wholly owned subsidiary of HoldCo (public company). I understand that under s.654 of the Companies Act 2006 and The Companies (Reduction of Share Capital) Order 2008 it is possible to reduce share capital by a solvency statement, that the resulting reserve is treated as a realised profit and that realised profits are distributable by means of a dividend. What I am less clear on is how s654 interacts with s829(2)(b) of the 2006 Act which says that repayment of paid-up share capital is not a distribution under Part 23 of the Act. Essentially, I am looking at a way to create a distribution from Subsidary A to HoldCo in order that HoldCo can make a distribution to its shareholders.

A private company has called a general meeting (having been requested by the shareholders holding more than 10% of the issued share capital). Notices have been sent to the shareholders stating the venue at which the general meeting will be held. Can the venue of the meeting be changed one week in advance of the meeting date or does this effectively amount to a new notice which must adhere to the normal time limits prescribed by the Companies Act? If the venue can be changed what is the porcedure for informing the shareholders?

Do you have a share warrant instrument? I can’t seem to find one on your database.

I am acting for a private company in which there are 4 directors and these 4 directors own just under 90% of the shares (2 of them own less than 1% put together and other two own approx 60% and 30% respectively). Therefore reminder of shareholders hold just over 2%, but there is a substantial number of shareholders. The directors wish to pass an ordinary resolution to allow an asset to be charged. What is the simplest and quickest way to allow this transaction to be carried out?

Please see section 779 Companies 2006(issuing share warrant to bearer). Reviewing your materials I cannot locate a specimen form of private company share warrant to bearer whereby exisitng shareholders issue a warrant to a third party which may, by a specified date, call on those shareholders to deliver a fixed number of shares. I anticipate the articles of association will need to be modified to permit such share warrants being issued by the company. Your views would be appreciated.

Do you have a precedent for the purchase of shares held by one shareholder by the other shareholder please?

Do you have any precedent weighted voting rights clauses suitable for Entrepreneur's Relief?

I have a company incorporated under the Companies Act 1985 with '85 Act Mem and Arts. The Articles contain the usual authority allowing the allotment of relevant securities up to the authorised share capital amount for five years. This time limit has now expired and we need to grant EMI Options. Whilst I understand that the CA 2006 allows for allotment without authority under s550 or s551 of CA 2006 in the case of employee share options this I assume is subject to any restrictions in the Articles so do I amend the existing Articles to amend that authority so that the time restriction is lifted or remove the entire article giving the authority (the client knows they ought to adopt 2006 Articles but we are not there yet)? I assume that either way it needs to be a special resolution - is there precedent wording on PLC for this?

Can directors be given the discretion (in the articles of association) to allocate different levels of dividends to different classes of shares without the need to stipulate, in stating those class rights in the articles, what level of dividend those shares may be entitled to?

I have a client that is a private company that wishes to offer its shares to its existing employees for staff incentisation/buy in reasons and to assist with its capital postion (the company, or at least its main operating subsidiary, is regulated by the FSA). Assuming that the offer is to employees only and to less than 150 people then my assumption is that this offer is not covered by the Prospectus Directive or any such regulations. In short, all I need to be concerned with from a statutory point of view is the normal Companies Act principles around share subscription/allotment covered by the PLC "Allotment and Issue of shares" Practice Note. Subject to that this can in effect be treated as a private transaction between the company and each subscribing employee. Is that correct? Also, do you have any standard form documents that may be used for this purpose, specifically to describe the initial offer proposal to the company's employees and any applicable subcription agreement for use between the company and each employee.

Does a business/trading name need board approval?

When an overseas company closes a UK establishment, how do we transfer the assets and liabilities of the UK establishment to another English company of the same Group?

Should a guarantee granted by a Target company in respect of the obligations of the Buyer to a lender funding an acquisition be classed as a distribution (and therefore be capable of being an unlawful distribution) for the purposes of Part 23 Chapter 1 of the Companies Act 2006 given that payment under the guarantee is going to the lender rather than the members?

I am reviewing a number of historic share buybacks from capital. The company has 2 directors who are also the two 50% shareholders. Each buyback is for an equal number of shares of equal value for each shareholder. In general the correct procedures have been followed to complete the buybacks, however the shareholder resolution to approve the buybacks are single written resolutions authorising the repurchase of both shareholders shares signed by both shareholders. The Companies Act (s.717) provides that a shareholder is not an 'eligible member' for the purpose of voting on any resolution authorising the repurchase of their own shares. To be strictly compliant 2 separate resolutions should have been completed and authorised by the shareholder to whom the resolution did not relate. My question is whether the written resolution procedure used invalidates the buyback in its entirety?

We have a client who wants to issue bonus shares out of his company's capital redemption reserve. He would like to know: (i) can the company buy these back at a later date; and (ii) if so, what are the consequences of continually issuing bonus shares with the company nuying them back to create a new capital redemption reserve? Your thoughts would be much appredciated.

I'm dealing with a 'Not for Profit Company' Limited by Guarantee. One of the members wants to leave the Company and I need to advise on how their exit should be dealt with. Please could you point me in the direction of an appropriate practice notice I could use? Many thanks

Can a written resolution be passed by the members when it has been circulated by a 30% shareholder directly and passed with the requisite majority, even though the Act only envisages that written resolutions are circulated by the board under section 291 or 292 CA06? Thanks.

A new company (Newco) has been set up to acquire the entire issued share capital of a target company (Target) by way of a share for share exchange with the owners of Target. Newco's shares have been issued to the owners of Target at a premium. Under section 612 of the Companies Act 2006, Newco intends to claim merger relief from the requirement to set up a share premium account. Please confirm that the Form SH01 does not need to show any details of the share premium, and that the premium can instead be credited to a "merger reserve".

Please can you list the documents that must individually be signed by the board of a listed company in connection with the approval of its annual report and accounts. I understand these to be: the balance sheet; the directors' report; the corporate governance statement (if set out separately from the directors' report); and the remuneration report.

Company dissolution: voluntary strike off - does this procedure apply to companies limited by guarantee?

Could a company enter into a contract prior to its incorporation? The contract in question is predominantly verbal (there is some written evidence but nothing definitive).

In view of Part 7 of the Equality Act 2010 why can private members clubs be single sex clubs - e.g. golf clubs? Thanks.

Is there a danger when drafting that by making direct reference to a Shareholder Agreement in the Articles of Association that the Shareholders Agreement could be deemed to be "incorporated" into the Articles of Association?

When reduction of capital is carried out by cancelling and extinguishing shares, what change should be made to existing share certificates?

Should the company registered address and the vat registered address be the same in all circumstances for a UK incorporated company? Should a company display their registered address and registered number on an invoice to a consumer?

I am reviewing a number of historic share buybacks from capital. The company has 2 directors who are also the two 50% shareholders. Each buyback is for an equal number of shares of equal value for each shareholder. In general the correct procedures have been followed to complete the buybacks, however the shareholder resolution to approve the buybacks are single written resolutions authorising the repurchase of both shareholders shares signed by both shareholders. The Companies Act (s.717) provides that a shareholder is not an 'eligible member' for the purpose of voting on any resolution authorising the repurchase of their own shares. To be strictly compliant 2 separate resolutions should have been completed and authorised by the shareholder to whom the resolution did not relate. My question is whether the written resolution procedure used invalidates the buyback in its entirety?

Can a general meeting of the members of a company limited by guarantee by held by teleconference if the Articles permit it?

I have a query in connection with Public Limited Company and Treasury Shares. If a PLC holds treasury shares and delists from the stock exchange - are these shares automatically cancelled? If the PLC relists on another exchange do the treasury shares carry over? Many thanks for your assistance.

If there is a company (limited by shares and incorporated 2008) that passed a special resolution to amend its articles and filed the resolution but not the articles at Companies House are the new articles binding now? I am aware that the late filing is a criminal offence and that the situation could be rectified but what we need to know is the position between the time when the resolution was passed and any rectification made. As s26 does not state that the new articles will be voided then I believe that the new articles will be in force but that the officers will be committing a criminal offence. However, I cannot find any documentation on PLC to support this and was wondering if you would be able to assist or clarify the situation if the above is incorrect. I look forward to hearing from you.

Do you have a precedent Hive Down agreement? I am dealing with a matter which does not involve insolvency of any party but if you only have a precedent in the context of insolvency I presume it can be adapted. Thank you for your assistance in advance.

If there are two directors appointed, is there any reason why the quorum for a directors' meeting cannot be set at one director, other than the fact that that director can carry decisions on his own? Is there any specific wording for this?

I need to draft a shareholder's requisition under S. 303 CA 2006. Do you have a precedent for this, please?

I notice that the resolution to redesignate the shares as A ordinary shares is stated to be an ordinary resolution. However, in an answer to one of the "Ask PLC" questions you state that: "To effect the reclassification, you will require a set of board minutes, a special resolution to vary the rights attached to shares and to vary the articles setting out the rights, a new set of articles and possibly class consents under section 630." I also note that Tolley states: "If the articles of association of the company give the company the power to do so, an ordinary resolution of shareholders to convert shares from one class to another may be sufficient (a special resolution will be necessary if a change to the articles is needed to set out the new share rights, or if the articles of association of the company require a special resolution for the conversion procedure)." The Manual of the ICSA states: "Where existing issued shares are to be converted to shares of another class, this should be effected, out of caution, by special resolution". I would be grateful if you could clarify whether, in your opinion, the redesignation/ reclassification of shares requires an ordinary or a special resolution, or whether it depends on the circumstances.

I am trying to find the details of the European law that is the basis for s1159 Companies Act 2006 i.e. that there must be a shareholding for a company to be a subsidiary?

I am wondering why PLC opted to exclude model articles for public company. We are a unlisted public company which was incorporated about 20 years ago under the 1985 Act. I am considering adopting the model article for public company to start with. Please let me know where I can find it on the PLC site.

If the articles of association of a company provide that all business shall be deemed special that is transacted at an Exraordinary General Meeting, should such business, in the absence of any express provision to the contrary, be passed by way of a special resolution?

After a share for share exchange has occurred and the target is waiting for adjudication back from HMRC on whether stamp duty is payable or not on the transfer, can the target company pay a dividend (either cash or dividend in specie) to its new parent during this period, when the parent is not a registered member, or will the target have to wait until the stock transfer forms have been adjudicated and the statutory books written up? Alternatively could the target update the statutory books on the basis that it reasonably considers adjudication to be forthcoming?

Would a director be considered reckless if they sought to reduce the capital of a private company by passing a special resolution supported by a solvency statement if they were planning to sell the company in the near future?

It is usual for charities to have provisions in their articles that certain provisions cannot be changed without Charity Commission consent and also for new Academy Schools to have a provision that the articles in their entirety cannot be changed without Department for Education consent. These external consents impose additional restrictive procedures beyond a special resolution. Do these constitute entrenchment provisions?

We are acting for a company with five shareholders. One shareholder (A) is currently leaving and another shareholder (B) has given notice to leave. We are looking at funding the acquisition of A's shares by (1) repaying the premium that A paid on subscribing for his shares and (2) repaying the premium that two other shareholders (C and D) paid for their shares and then using that sum towards the purchase of A's shares. If we reduce the share premium account by way of a reduction of capital and create a reserve which can then be treated as a realised profit and distributed, presumably we would have to distribute it pro-rata between all the shareholders? However, is there anything to prevent us reducing the capital by simply repaying the amount of premium paid by A, C and D to them (as a repayment of paid-up share capital in excess of the Company's wants) without repaying B's premium (the fifth shareholder did not pay a premium)? It is, of course, possible that we will later repay B's premium as part of the arrangements for buying back his shares.

We are reviewing the articles of association of a company, focusing in particular on the transfer provisions contained therein. The sole transfer provision contained within this company's articles provides as follows: "The Directors may, in their absolute discretion and without assigning any reason therefor, decline to register the transfer of a share, whether or not it is a fully paid share, and Clause 24 in Table A shall not apply to the Company." Table A in this context refers to the Regulations contained in Table A of the Companies (Tables A to F) (amendment) Regulations 1985. Could you please advise me (or point me in the right direction) as to whether such a provision confers upon the company's directors an unfettered right to register a transfer, or whether in fact, it will always be subject to 'reasonableness'?

Do you have any standard documents which document shareholder approval of a transfer of shares via a special resolution?

I wonder if you are able to help with a query regarding the prohibition on a subsidiary holding shares in its parent? The initial circumstances were that S1 and S2 were shareholders in Company A. Company A had a minority holding in Company B along with other shareholders (S3 and S4). A reorganisation took place such that S1 and S2 transferred their shares in Company A to Company B. This resulted in Company B holding the entire issued share capital of Company A, but Company A continued to hold a minority shareholding in Company B. Therefore, there was a situation where a wholly-owned subsidiary (Company A) owned a minority stake in its parent (Company B). This happened when the Companies Act 1985 section 23 was in force. Section 23 of the CA 1985 states that a company cannot be a member of its holding company and any allotment or transfer of shares in a company to its subsidiary is void. Although there was a transfer by S1 and S2 of shares in Company A to Company B, Company B was not a “subsidiary” in terms of the definition in the CA 1985 (that is to say, Company A did not control the board of Company B as it only held a minority stake and no agreement was in place between Company A and any other shareholders of Company B regarding control). Therefore, the transfer by S1 and S2 would seem not be void in terms of section 23 of CA 1985. Nonetheless, as a result of that transfer, Company A became a wholly-owned subsidiary of Company B, yet it holds a minori

Can a Limited Company trade under two different trading names and if so, are there any specific formalities that must be complied with?

Can a company limited by guarantee grant security generally and, specifically, over the amount of guarantee?

What are a shareholder's rights to group company surplus profits post realisations and how is this affected when a charging order is granted against that shareholder over his shares?

Do you share the view that it is possible to circumvent pre-emption type provisions arising on a transfer of shares under the Articles of Association where all shareholders are in agreement and sign a waiver type document to that effect?

A client is the majority sharehoilder in a small private English limited company she founded. The shares are held 60:30:10 with 2 other shareholders. She wants to pay dividends 45:45:10, essentially giving up part of her dividend entitlement to the colleague holding 30% of the shares. This is for commercial reasons (they are unconnected apart from the business) and reflects his increased role in the running of the business, but she does not wish to change the share balance in terms of voting and control. This arrangement is expected to last approximately 2-3 years, until he retires. Rather than creating a new class of shares, carrying dividend rights, it seemed to me much simpler to use a dividend waiver by each of the 2 (60% and 10%) shareholders. This can be contained in a shareholders' agreement currently being drafted to cover other issues. Would this be effective to last 2-3 years and can it be contained in such a document?

If the companies articles are silent about dividends in specie is it OK to create dividends in this way? Or do you need an express power?

If a plc company is applying for a trading certificate, must the nominal value of the authorised minimum share capital of £50,000 be fully paid up or can it be one quarter paid up (as in the case of the re-registration of a private company to a public company)?

Is it possible for a UK subsidiary to hold shares (minority interest) in its parent company (also a UK company)? The period of time in which the holding will exist is short. The shares will probably be cancelled and the subsidiary wound up.

I have a question regarding disapplication of pre-emption rights for share allotments pursuant to an employee share scheme. The Articles of the company in question have disapplied the statutory pre-emption rights under section 561 and 562 CA 2006, and alternative pre-emption rights have been incorporated into the Articles, but there is still an obligation to offer the shares to existing members in proportion to their existing holdings. These pre-emption rights need to be disapplied as the company is in the course of granting share options to its employees (so that there is no requirement for the shares to be offered round to existing members at the time of exercise of the option). I understand that there is no issue regarding authority to allot under section 549. My question is whether the disapplication of pre-emption rights for the shares to be allotted under the share option needs to be contained in a new set of Articles or whether it is competent to set this out in the text of the special resolution itself. The company has only recently adopted a new set of Articles so from an administrative perspective it would be easier to circulate a written resolution without having to circulate a copy of a new set of Articles as well.

If shares in a company are listed on the ICAP Securities and Derivatives Exchange can the shares be transferred in the usual way, ie by stock transfer form, or is there a different process/additional requirements to comply with?

If you need to add some new members to a company limited by guarantee, is there a form that needs to be filed at Companies House?

I have a client who wishes to transfer a freehold (which has no value) to a group company for £1. There is only a minor service charge responsibility where they are to provide upkeep to the roof, etc and be reimbursed by the tenants. The group company will subsequently be dissolved and the property (being its only asset) shall pass to the crown. My query is, will the directors have any residuary liability? I can’t see how TUV applies, but could the tenants have any possible action?

We are currently considering ways to achieve a group re-organisation. One of the steps involves the transfer of the business and assets of a subsidiary to its parent. The transfer will be done at book value and the parent will assume all liabilities in connection with the business and assets transferred. One way of doing this is via a straight forward asset purchase agreement. We appreciate that as the transfer is at book value, it will be treated as a distribution in kind and the rules in s845 will apply. We also appreciate that it will be treated as a transfer at undervalue and so care has to be taken to deal with the issues you highlight in your practice note such as directors' duties, insolvency and fraud on creditors. Your practice note on demergers also suggests that the transfer could potentially be achieved by a direct dividend, ie subsidiary declares a dividend in specie of the business and assets. Given that the intention is for the parent to assume the liabilities of the business and asets to be distributed I have a number of queries as follows. 1. I assume that there will need to be an agreement between parent and subsidiary along the lines of an asset purchase agreement to deal with the mechanics of the transfer. Would this agreement usually be referred to in the members' resolution approving the dividend? 2. Is there any "best practice" regarding the wording used in the resolution ie is it preferable to state the amount of the dividend that is being d

Under the 2006 Companies Act, private companies no longer need AGMs. Meetings of members are called General Meetings where they are called to pass, say, an ordinary or special resolution. Where the company is incorporated before the 2006 Act came into force and its articles describe and require any meeting other than an AGM to be described as an EGM, does the latter still prevail over the 2006 Act description of the meeting?

If Company A grants an irrevocable power of attorney to Company B to sign a transfer of freehold land to Company B once a development has been concluded (and after in fact it has) and if that PoA is stated as "only to be exercisable if an Event of Insolvency occurs in respect of [Company A]" then is the power still actually valid if Company A goes into liquidation? The document containing the PoA is registered at HMLR against the title.

Is there a specific procedure for transferring the beneficial ownership of shares in a private company to a different beneficial owner?

With respect to a company limited by guarantee, what must be approved (a) by the board of trustees, (b) by the member(s) at a general meeting or by member written resolution, and (c) for completeness (although I understand that an AGM is not mandatory), by the member(s) at an AGM?

We have a company that has two different classes of shares, with the rights of both being varied upon the adoption of new articles. All the shareholders are signing the written resolution in relation to the adoption of the new articles. The usual statutory requirement is that the consent of holders of 3/4 in nominal value of the issued shares of the particular class and a special resolution sanctioning the variation is required under s630(4). The current articles do not provide for any differentiation from the model articles in relation to this area. Is a separate class consent in addition to the written resolution still required in this situation given the fact that all shareholders have signed and authorised (by written resolution) the variation of the rights attached to their shares by agreeing to the adoption of the new articles?

Under article 11(2) of the 2006 model articles "the quorum for directors' meetings may be fixed from time to time by a decision of the directors, but it must never be less than two, and unless otherwise fixed it is two". Where the company has a sole director, then under article 7(2) "the general rule does not apply, and the director may take decisions without regard to any of the provision of the articles relating to directors' decision-making". There is no specific reference here to articles 7(1) and 8 to 16 (inclusive) being disapplied, but presumably this is what is intended by "the articles relating to directors' decision-making". Is this right in your view? If so, is it also correct to say that quorum requirements are irrelevant because the sole director will simply pass written sole director resolutions on his own (and therefore article 11(2) can be ignored as he can take decisions "without regard" to this)?

In a company incorporated under the 2006 Act with two classes of shares, where only one class is in issue, the directors are generally authorised under the Articles of Association in terms of s551(1) of the 2006 Act to allot shares and a further issue of both types of shares is proposed:- a) is it necessary to disapply statutory pre-emption rights prior to completing the further issue of shares? b) if so, is the correct way to disapply statutory pre-emption rights by way of a special resolution under s570 of the 2006 Act ?

Can a company legally use a laser printed seal or laser printed signatures to execute a share certificate? I note what you say in the practice note (ie that the Law Commission rejected laser printers), however, it has been suggested to us that it is permissible for a company to use a laser seal and/or laser signatures if the company's articles specifically allow for it?

Are there any blocking provisions in the Companies Act 2006 that prevent a company from registering several names?

Can Companies House accept a late filing of the return of the purchase of its own shares rather than compelling a company to "unwind" the transaction and redo it lawfully along with all of its accounts?

Please could you let me have your views on whether a company may reclassify shares of one class held in treasury as another class of shares to be held in treasury and then sold? If possible, and assuming no restrictions exist in the articles, would this necessitate a shareholder resolution to effect? The Companies Act seems to envisage holding, disposing or cancelling, but not whether reclassification could occur?

As part of a tax driven scheme, the accountants have requested that the ordinary shares be "exchanged" for A Shares and B Shares in the company, the B Shares carrying weighted voted rights. There is only one class of shares at present. The company is a private company. The ordinary shareholders have consented in writing to the variation of the rights on their ordinary shares through the creation of the new classes of shares. Please can you suggest an appropriate mechanism? I am proposing to buy back the ordinary shares and to finance that buyback through the issue of the A Shares and B Shares to the existing shareholders. I understand that the share issue and allotment must be made before the buyback can take place. Can the subscription price for the new A and B Shares be left outstanding and set off against the redemption price for the ordinary shares? Ideally the shareholders should not be required to pay any financial consideration.

I have a query regarding treatment of beneficial shareholders in a capital reduction by solvency statement. This is in regards to a private limited company which legally has one shareholder, a nominee, which holds shares for the underlying beneficial shareholders. However, each of the underlying shareholders is given a different designation on the register of members, i,e X Nominees 1, X Nominees 2 etc. These designations are not incorporated companies. If one of the underlying beneficial shareholders no longer wanted to be a shareholder in the company, and there was no incoming shareholder to whom we could transfer the shares, we wanted to use a capital reduction to return that underlying investor's capital. As designations of the nominee are used on the register, should the nominee be counted as one legal shareholder, or should each designation be counted as a separate shareholder (ie is this sole shareholder approval or not)?Additionally, if it was approved, when the capital is returned to the nominee, could they pay the monies received in respect of the capital reduction and cancelled shares to one of the underlying shareholders as opposed to all of them? Would this be covered by company or case law or would this be to the discretion of the nominee company? Equally, the manager can instruct the nominee what to do in relation to shares; could we instruct the nominee to pay back to one underlying investor, whose capital is being returned?

Please can you confirm whether the Companies Act 1948 contains any statutory rights of pre-emption? I am working with a company whose Articles are those of Table A Part II under the Companies Act 1948 and so far can find no reference to any pre-emption rights.

Do you provide any guidance on the steps required to perfect/correct a void buyback of a company's own shares? The company in question was incorporated under the 1948 CA and its articles do not authorise a buyback. The buyback was purportedly completed 15 years ago and bought back the shares from the estate of a deceased shareholder.

I am amending the Articles of Association of a company incorporated under the 1985 Act. At present, the company has a variation on the Table A Articles. I am amending the Articles to a variation of the new Model Articles. The company has only one class of share (currently only 1 £1 share issued). Will a Companies House Form SH10 need to be lodged with the new Articles because the rights attached to shares are changing (s.637 CA 2006)? I know that a Form CC04 must be lodged because the Articles will give the company unrestricted objects (at the moment the objects are limited by the Memorandum of Association).

I am trying to find a precedent Shareholders Agreement for use between 2 individuals in a 50 50 Company, which will include deadlock provisions, and preemption rights. Can you help?

I am familiar with the procedure for a company to purchase its own shares under section 690 CA 2006. Have you come across the situation where the person selling back to the company wants a top up payment - over say the next four years - if an offer is made for the company? I am familiar with anti-embarrassment clauses but not in a company purchase of own shares agreement. Do you think such a clause is possible? Would it create a contingent purchase contract?

What information can shareholders of a UK private limited company demand to receive as of right?

Can a company have non-voting ordinary shares (rather than non-voting preference shares)?

A stock transfer form requires that you fill in the amount of consideration for the shares and where several classes of shares are being transferred at the same time, a stock transfer form for each class of shares should ideally be used. How should this be dealt with where total consideration for the different classes of shares has not been spilt out/allocated amongst the class of shares but is rather one sum for all the shares? Is it acceptable for each consideration box of each form to state that the class of shares is in exchange for part of the overall consideration for the transfers?

Is an Unlimited company obliged to use the word "Unlimited" in its title, in the same way in which a limited company (unless it has dispensation) is obliged to use "Limited" in its title?

I wondered whether it is possible for an unincorporated organisation to be a member of a company limited by guarantee. I am conscious this is not possible in respect of a company limited by shares, where the shareholder on the register needs to be a legal person, if necessary, holding on behalf of the partnership or other organisation. However, in the case of a company limited by guarantee, provided the individual who signs the memorandum is authorised to do so by the partnership, is it possible for the named member to be "X Partnership" - with one of the partners signing the memorandum on its behalf - with the implication that all partners of the partnership are liable under the guarantee? The articles will contain a provision to the effect that any member other than a natural person needs to appoint an authorised representative to exercise their rights as a member.

Which date should be entered in the register of members upon a transfer of shares - the date at which the stock transfer form was signed or the date at which it was stamped?

The PLC standard document (Articles for a private company limited by guarantee) makes (inter alia) the assumption that the Company was formed under the 2006 Act and not earlier Companies Acts. If the Company was formed under an earlier Companies Act (in this case, 1948) and it now wishes to adopt the PLC standard document (with some minor changes) would this document be appropriate and if not, why not? Or would the new articles need to duplicate those provisions in the 2006 Act, which deal with a number of matters previously covered by the Articles? My understanding is that these are implied into a Company's capacity by the 2006 Act, whenever the company was initially registered, so this should not be necessary.

I am currently working on a residential matter where my clients are purchasing a leasehold flat. They (all three of them) have signed a power of attorney allowing their father to execute documents on their behalf. Am I correct in saying that if their father executes the contract this should be sufficient, as long as certified copies of the powers are provided to the other side? There is no need to have one power of attorney naming all three clients; individual powers are sufficient?

I am doing some research into the best way to acquire shares in a limited company - by purchasing the shares from an individual, or by acquiring newly issued shares in the company? What are the benefits or disadvantages, and what type of agreements would accomplish each of the scenarios?

Where a company has its registered office at a law firm, for instance, does the law firm need to have a plaque displaying their name? What is the law for this?

Are you able to shed any light on whether a minority discount would be applied to the valuation of a 50% shareholder in a company?

What are the most appropriate mechanics/provisions for converting a number of shares of a specific class into a larger number of shares of exactly the same class, in a certain event? For example, 10 A ordinary shares to become 100 A ordinary shares in the event of a possible takeover. The only other class is B ordinary shares.

What are the consequences of a share buyback occurring without a buyback contract? If the buyback is invalid as a result, what are the consequences?

Our client, which is a private limited company, has partly paid shares in issue to one shareholder. These were £1.00 shares of which 1p has been paid. There was also a premium of which only 1% has been paid. Can we use a procedure whereby the company calls for the unpaid amounts to be paid in circumstances where we intend that this will not happen so that the shares are then forfeited and the directors agree not to pursue the debt against the shareholder? Is this a breach of the directors’ duties and in the event of insolvency would this transaction be valid? Further, the intention would be to sell the shares back to the same shareholder at par (without a premium). Would this constitute a reduction of share capital? What are the alternatives?

I act for a residents management company which is currently registered as an unlimited company. The residents wish to re-register the company as a limited company (either by share or guarantee). Does the re-registration process alter the company to the extent that any rights it has the benefit of need to be re-granted or assigned or does the status of the company change only and all rights and oblgiations of the company remain?

Where can I find table A articles for company limited by guarantee?

What would be the consequences to a third party where an individual with a power of attorney entererd into a contract with the third party ultra-vires of the power conferred on them? Would the third party (acting in good faith) have an enforceable contract against the donor, with the donor having recourse to the donee?

My client is intending to purchase assets from a company, to include its name. The company name has the word 'British' in it, which is a sensitive word when incorporating a company and would necessitate an approval process before being accepted by Companies House. The target business has been trading through its company name for a number of years. My client will incorporate a new co and change its name to the target name on completion. Will consent/approval be needed from Companies House to use the target name or does this not apply for transfer of a name?

Is the seller of shares in a buyback an Eligible Member for the purposes of voting on the special resolution to authorise the buyback? The resolution is to be passed by written resolution.

In your note on intercompany reorganisations in the box on distributions in kind (Practice note, Intra-group reorganisations: overview: Returns of capital and distributions in kind), you state: A. "It is generally accepted law that the transfer of an asset to a company controlled by the transferor's parent for less than market value also constitutes a statutory distribution, although this is not confirmed by the 2006 Act." B. "This being so, it follows logically, and is accepted, that such transfers are subject to the statutory rule that distributions must be made out of profits available for the purpose." Please can you indicate the authority for statements A and B above? Also, what is your definition of "control" for this purpose?

If a buyer's protection under a call option agreement is breached by a seller, by selling the option shares to a bona fide purchaser who purchases the option shares in good faith, is this sale overreached by the buyer? Or would the buyer's only course of action be a claim for damages?

Can a European Company convert into a UK private limited company and, if so, what is the procedure?

Can a company in liquidation change its name? If so, how? Is the liquidator's consent required?

Is it possible for a proxy to sign a written resolution on behalf of his appointing shareholder? If so, does the written resolution need to be circulated to the shareholder who appointed the proxy and the proxy, or can it be circulated only to the proxy himself?

If a Company wishes to adopt new articles of association in which there are restricted objects, it appears that there is a requirement on the Company to lodge a form CC04 with the new articles of association and the filing copy of the adopting resolution. However, the CC04 form itself does not seem to provide for a situation where a company wishes to adopt completely new restricted objects within its articles of association. The Companies House form merely allows for alterations and additions to, or the removal of, existing restricted objects. Is the CC04 therefore the correct notice to lodge when filing completely new restricted objects?

Can you tell me where I can find pre emption rights in private company articles, whereby a seller has to sell shares back to the company?

Can a English incorporated company give a QTPIP to a director of an overseas company (in this case a Spanish company)? The English incorporated company is the shareholder of the Spanish company.

I have a question regarding the position where a company has not validly passed a written resolution. The company in question had two shareholders (50/50 split) and wanted to amend their original articles (based on Table A, as in force in October 2006). A written resolution was signed by only one of the shareholders. However, notice was filed at Companies House stating that a resolution was passed amending the articles with a copy of the amended articles. The question is, do the amended articles bind the company and its members or do the original articles still apply (for our purposes it is preferable if the original articles apply)? I assume the latter as the resolution has not been formally passed and therefore Companies House should be informed and the register rectified but cannot find anything to confirm this.

Our client is a private company. A small number of its shareholders have been untraceable for many years and our client wishes to sell these shares and hold the consideration in trust until claimed by the untraceable shareholders. We see that other users have asked about dealing with untraceable shareholders and it has been suggested that the company articles are checked for a specific power of sale. Unfortunately, the articles in this case make no provision for dealing with untraceable shareholders. We have considered amending the articles now to confer this power on the company. However, as untraceable shareholders have already been identified, it will not be possible to notify and have them vote on the resolution to amend the articles conferring the power of sale. Can you advise if conferring a power of sale in the articles would be the best procedure to use in this case, notwithstanding that the company is already aware of untraceable shareholders who will not be contactable in order to vote on the change to the articles?

We have a company limited by guarantee which over time has built up profits. The company is considering being sold and the concern is to get the profits out of the company. The law seems to suggest that it cannot be distributed. Is there any other way the money can be taken out of the company?

When a company is restored under a bona vista waiver, are all the directors automatically reinstated? If so, is there any requirement to notify the former directors that they have now been reinstated? If the company is also a charity, is it's charitable status also reinstated?

Can shareholders verbally agree to waive pre-emption rights?

Please can you advise whether the duration of a Power of Attorney can be for 5 years or is the statutory minimum for a general power (with one specific aspect to it) only 1 year?

The Companies Act 2006 does not specify that subscriber shareholders must receive share certificates. Assuming a subscriber shareholder does not have a share certificate, upon a transfer of this subscriber share, should there be an indemnity (similar to a lost share certificate indemnity) or can this be dealt with in board minutes (i.e. to note that subscriber share certificates have not been issued)? Otherwise, should a share certificate be issued in respect of the subscriber share, prior to the transfer of the share?

Before a company secretary is appointed, does that person need to write to the company confirming that they agree to such appointment? Is board consent approving the appointment of a company secretary required from the ultimate parent company before the subsidiary companies can appoint the same person as company secretary for those subsidiaries? What happens if another person is to be appointed as company secretary for the subsidiary companies only? The question may quite simply be: does each corporate entity have the power to appoint a company secretary regardless of where they sit in the corporate structure or is consent needed from "top co" first?

Please can you give me some guidance/practical examples as to how the information required to be given in business e-mails might be given by a business where it trades through a number of group companies, where emails may be sent by employees who correspond either on behalf of a particular trading group company, or whose position is group-wide (where functions are centralised)? The trading companies within our group use the same trading/brand name and we should like to be able to use one notice/disclaimer for all emails if possible, albeit I understand that the information given should enable the recipient to identify which legal entity the email is sent on behalf of and that the email should contain the requisite information in respect of that entity.

Can a shareholder waive his entitlement to part of a dividend or does it have to be in repect of the whole dividend declared?

The client is going to adopt a new set of articles of association and as part of the articles there is a separate annex attached which contains a list of attorneys and powers. As this list forms part of the articles, if they ever amended it they would need to adopt new articles each time and pass the relevant resolutions (and companies house filings). However, the client wants to know if its possible to get around this. We seem to think that there might be a rule that says you can have a an appendix to the articles which can be altered/amended from time to time without formally changing the articles?

How does a company limited by guarantee (e.g. a charity) change its objects?

Can the attorney under a general power of attorney appoint another person as his attorney to act under that general power?

I am looking to reduce the share capital of a private limited company to 1 and to create a reserve from the reduction in capital that will be distributed. The company has an authorised share capital of 1000 with each share having a nominal value of 1. 500 of the shares are allotted, called up and fully paid. Please confirm that: 1) the value of the reserve that will be created will be 999; 2) the authorised share capital will be 1 share of 1; and 3) the alloted, called-up and fully paid share capital will be 1.

I understand that a compliance statement is required in connection with the solvency statement. Is this correct? Can you please let me know if it is contained in any of the standard documents?

If you are cancelling deferred shares via a reduction of capital, would you need to file a Form SH06 as well as a Form SH19?

In a private equity transaction, if Holdco Limited (a UK company) provides an interest free loan to its shareholder (which is a foreign fund or LP) would this be viewed as a deemed dividend? If it was, this would obviously be a problem if there were no distributable profits in Holdco. In other words, would the loan need to be on "commercial terms" (i.e. market interest rates) to avoid being declared a dividend?

If at the point of declaration of a dividend, a company had sufficient distributable reserves to pay a dividend (by reference to the relevant accounts and considering any post balance sheet events), but an event subsequently occurs which results in the company having insufficient distributable reserves at the point of payment of the dividend, does it have to stop the payment?

I am drafting articles and a shareholders' agreement for a new company in terms of which the investor may convert certain of its ordinary shares into deferred shares if certain conditions are met by the management shareholders (effectively to operate as an incentive/performance ratchet). Do you have any precedent wording in relation to deferred shares?

Can a company pay a dividend to one shareholder and defer it in relation to another in the same class?

I have a client that is a registered charity. They wish to change their trading name only (not the name registered at Companies House). What are the main considerations for a charity when changing their trading name?

Re: Regulation 10 of The Companies (Trading Disclosures) Regulations 2008 (SI 2008/495) which (a) refers to a criminal offence and (b) refers to the company and the officer in default being liable to a fine: Does being gulity of a criminal offence, mean the culprit has a 'criminal record'? I am not sure what a 'criminal record' means. What is the amount of the fine? Is it a repeat fine? Please identify the legislation from which your response derives.

I have been trying to put together an overview of share buyback requirements for plcs - in particular regarding the rules in terms of funding (ie by loan or share subscription). More specifically however, I was trying to find information on whether there are any restrictions on a plc buying back its own shares given that it is in CVA?

Our client wishes to hive up its business to a holding company by way of a dividend in specie. The business comprises a freehold property (subject to a legal charge), other assets and liabilities. We believe s.845 of the Companies Act 2006 will apply. What level of profits available for distribution will be required in order for the dividend in specie to be lawful? Will it be:  The value of the property stated in the accounts (less depreciation), or  the property value (less depreciation) less the debt secured by the legal charge which the transferee will assume to pay, or  the amount in (2) less the other liabilities to be assumed?

I act for a company that owes a substantial sum of money to another. It has been agreed that the creditor company will swap its debt for one share in the debtor company. I need to know the resolutions to be passed and whether a formal agreement is required. I suspect that a shareholder agreement will be necessary. Can you direct me to the form of documents required?

If directors refuse to register a transfer to the executors of a deceased shareholder, can we get a court order compelling them to transfer?

Can you transfer 0.5% of 1 share or less than 100% of a whole share?

Can someone resident in Jamaica grant a power of attorney to someone living in England to instruct lawyers to commence litigation for them in England? If so, should that Power of Attorney be an English Power, or can the authority be given by a Power made in Jamaica under Jamaican law? If, as I believe, the Power must be in accordance with English law, not Jamaican, can it be given under section 10 of the Power of Attorney Act 1971 or does it need a specific wording? Does a power under section 10 permit the attorney to instruct a solicitor to commence litigation on the donor's behalf?

My understanding is that, based on the Duomatic principle, one could also have a resolution by all the shareholders disapplying existing shareholders' rights of first refusal on a transfer of shares. Is that your understanding too?

Has your view changed on whether adopting new articles, without reference to the existing memorandum, will suffice to delete the provisions of that memorandum, which would otherwise form part of the company's articles from 1 October 2009? I have seen this done on several occasions and wonder about the validity?

For a company we have an ordinary and a preference shareholder. We would only like to pay the dividend payment to the preference shareholder. What do we need to do, regarding the ordinary shareholder - will their entitlement need to be waived? Secondly, we would like to pay a dividend to the parent but would like the distribution to go to the shareholder's 'Ultimate Parent', what do we need to ensure this can happen?

I know that the Companies Act 2006 permits a company to have a single member. If the Articles of a company incorporated under the 1948 or 1985 Companies Acts requires there to be two or more members of the company- does that restriction rule or is it superseded by the change in statute?

Can a revaluation reserve be deemed as capital for the purpose of a buyback made out of capital?

If a board resolution and subsequently a shareholders' resolution approves a dividend which is found out to be unlawful, is the approval void or does the company still have to pay the dividend? I understand the position in regards to when the dividend is actually distributed, but what is the position before the distribution is made to shareholders?

Assuming a company has sufficient distributable reserves and Table A articles, can the directors declare a dividend in specie or is shareholder approval required?

Following the enactment of the Share Buy Back Regulations http://www.legislation.gov.uk/uksi/2013/999/contents/made Do you have any draft clause for the Articles to permit buy back out of cash?

Can a company incorporated under the 1985 Act, adopt new articles which incorporate the Model Articles by reference only? If so, would this revoke the application of Table A absolutely?

What is the procedure to redeem preference shares out of capital and which resolutions and forms will I need?

Please can you confirm if a dormant company is entitled to acquire shares in a non listed plc - on the assumption that the plc has a share capital of £50,000 and £12,500 is fully paid?

Please can you let me know whether a charitable company's articles and memorandum will be enough to make up its constitution so long as the charitable objectives required by law are included in the memorandum?

I met with a client who is wishing to return value to its shareholders. It is a private company. It currently has an issued share capital of c£100m (comprising A and B Shares of £1 each - all of which are issued fully paid up). It has been proposed by the client's accountants that each £1 share be converted into one share of £0.01. I am told that this will then create reserves which can be distributed in due course. This is different from previous reductions of share capital that I have undertaken so I would be grateful if you could let me have your thoughts on the proposed process. Also, as the B Shares are non voting - is it possible that this would constitute a variation of class rights?

Hello, I was wondering if you could assist me with the following situation. I act for an English plc whose shares are not publicly traded on an exchange. The company wants to make a tender offer to buyback shares. The offer will be made by a broker as principal and the company will then repurchase the shares purchased by the broker. The buy back will be an off market purchase. I was hoping you could assist with some issues: The contract with the broker will need to be on display at the AGM (and before at the registered office). I cannot think of a way around the fact that the broker will need to actually 'complete' the purchase of shares from the shareholders after the offer closes and the results are known but before the resolution to approve the buyback agreement with the broker is passed. This means that the broker will need to be the registered holder for at least 23/4 days (the period between the offer closing and the gm to approve the buyback agreement). If the resolution to approve the buyback contract is not passed, the company cannot buy them back from the broker. This poses obvious risk issues for the broker. Any shareholder whose shareholding has been extinguished as a result of the purchase by the broker will not be able to vote (obviously) so we will be relying on the votes of shareholders who have tendered under the tender off but still have shares left after the offer closes and those who did not tender. The broker cannot vote. Have you ever come ac

Following a fraudulent issue of shares, what is the proper procedure for returning those shares to the company? Should the fraudulent share holder transfer them back using a stock transfer form or should the buyback procedure be followed?

I would like to know what a control contract is (see point 3, Subsidiary undertaking). I am assuming that it is simply a contract between the parent undertaking and the subsidiary undertaking. Is this correct or are there any essential components that conventionally would be expected to be found in such a document.

Would it be possible to attach an expiry date to deferred shares such that the deferred shares will extinguish by a specified date? If so, presumably the issued share capital of the relevant company will be reduced by the relevant amount?

What would be the procedure for cancelling 40,000 preference shares in a private company now which are currently redeemable after 2015? It is agreed that the holders will not receive any consideration.

Before winding up a private limited subsidiary company I need to address the outstanding loan it made to it's sole shareholder parent company. Can repayment simply be waived by resolution of the subsidiary or is a more involved procedure required?

Are there any restrictions on the right to dividend on partly paid / nil paid shares?

Is it possible to amend the articles of association of a company to set out therein a simplified process for doing a share buyback out of capital? Do you have any precedents/articles on this which might assist?

When amending Articles of Association to include multiple entrenched provisions, is it appropriate to: (i) file a single Form CC01 and provide a copy of the Articles of Association to Companies House; or (ii) provide a separate Form CC01 notifying each entrenched provision?

A client wishes to re-designate the entire issued share capital of their company as ordinary shares. As the holders of D preference shares will be loosing certain beneficial rights it has been suggested that in exchange for this loss for every 1 D preference share they are to receive 1.1 ordinary shares. Both the ordinary and D preference shares have a nominal value of £0.01 each. Is it possible to do this, just with the provision that the additional shares are partially paid up. For example could 10 D preference shares of £0.01 each be redesignated as 11 ordinary shares of £0.01 each partially paid with 10/11 paid up?

A company is proposing to buy back the shares of several shareholders at the same time. We understand that a shareholder is not eligible to vote on the resolution to authorise the buy back of his own shares. However, is he required to approve the resolution to buy back the shares of the other shareholders whose shares are being bought back at the same time?

A company, P Limited, has 2 trading divisions which are contracting and software. P Limited plans to issue shares to 2 employees who work in the software division to reward them for their hard work. These shares once issued will represent approx 10% of the issued share capital. I am told that these new shares will not be voting shares and only entitle the holders to (i) a fixed dividend based on any net profit the software division makes subject of course to their being sufficient reserves (ii) a share of any consideration if the entire share capital company is sold, probably linked to the value to be apportioned to the software side so in other words if the total consideration is 1m and the value attributable to the software side is 750k, then these shares will entitle the holders to a share of the 750k and (iii) a similar right as in (ii) if the whole business is sold - thus a return on capital after the company has paid all its liabilities but only to the software side. They are not keen on splitting the divisions into 2 separate companies. I can possibly see some complications ahead. I am aware that new bespoke Articles would be required detailing the exact rights attaching to these shares. The directors would need to have authority to allot the shares and disapply any pre emption rights too. None of that will be an issue I understand. I am not sure if a shareholder agreement will be entered into - possibly not. Do you see any other issues in setting up a

Do you have an article that deals with permitted transfers being to a family trust and not just to group companies?

If a preference dividend is paid in error when there are not sufficient distributable reserves what are the consequences of this and how can it be resolved?

I would be grateful for your thoughts on the following. Where there has been an intra-group dividend (UK companies) of £1 which is subsequently treated differenly for accounting purposes (now treated as a £100m dividend) how should this be approached by the company - do they have to ratify, hold new board minutes, notify shareholders etc?

In the event a fully executed written resolution of shareholders contains an inaccuracy, can this inaccuracy be amended by a subsequent written resolution approving the rectification?

Does a bonus issue of shares have to be issued to all of the existing shareholders or can a company choose which shareholders to issue bonus shares to? Presumably unless shares are being issued for some other form of non-cash consideration then a bonus issue can only be made if there are reserves? Do you have precedent documentation on PLC for bonus issues?

Our company has paper statutory books and whilst I understand that it is a requirement of the Companies Act that the Statutory Registers of a Company must be kept at the registered office and be available for inspection can the overfill from the statutory books, correspondence with Companies House, directors and board packs etc., be archived offsite if older than six years or should they be kept at the registered office for the life of the Company?

Company A is a parent of company B (A owns B 100%). Company A intends to reduce a loan owed to it by company B (company B is unable to pay the full amount and so A would like to reduce the amount owed). How should this be documented? Does company A need a board meeting approving the reducing of the loan? Does company A then need to write to company B confirming that the loan has been reduced (with company B counter signing the letter acknowledging that the loan has been reduced?)

If a company wants to change its articles by a written resolution (as opposed to a resolution passed at a general meeting), then is it properly passed if the holders of only 75% of the voting shares sign the written resolution?

Does a transfer of shares in a company always need to be at full market value or is a shareholder free to agree such commercial terms (including consideration) for a transfer as he sees fit? A client is looking to transfer shares in a family business to his daughter - can he do so at nominal value or is 0.5% stamp duty payable on the market value of such shares?

If the articles state that should an employee shareholder of a Company leave there is a deemed transfer notice and the shares are offered initially to the Company would that count as shareholder approval?

We act for a FTSE 350 company whose AGM is due to take place in July 2013. The Annual Report, accounts, Resolutions etc are to be sent out at the end of June 2013. At the AGM all of the Directors will stand down and be nominated for re-appointment. There is a possibility that the company may appoint a new Director in July of this year and the query is what is the best way to deal with in terms of him standing down and being re-appointed as the resolutions will have already been circulated to the members and the Director will not have been in office at that time so no resolution can have been proposed in respect of him? Does he have to step down?

My questions relate to reduction of capital. To assist me in posing the questions I would like to refer to a fictional company which has an issued share capital of 100 ordinary shares of £1-00 each of which A holds 70, B holds 20 and C holds 9 and D holds 1. There is a share premium account of £100,000 and the company is considering a reduction of capital. My questions are as follows: 1. What is the linkage between the Share Premium Account and shares at law. By way of example is it possible to reduce the Share Premium Account by 50% without reducing the issued share capital by 50%, that is to say reduce the Share Premium Account by £50,000, repay that to the shareholders and leave 100 ordinary shares of £1-00 each in issue? 2. If there is a directly proportionate relationship between the issued share capital and the Share Premium Account, would it be lawful to re-designate the ordinary shares of £1-00 each to 10,000 ordinary shares of £0.01p each immediately before the capital reduction, reduce the issued share capital to 100 ordinary shares of £0.01p each and repay 99% of the Share Premium Account to the shareholders. 3. What is the relationship between the issued share capital and the impact of a share reduction - is it proportional? To use the above example if the share capital was reduced by 50%, would this mean a reduction in all holdings of %50? If that is the case, what would happen in relation to D who only holds one share and C who holds a number o

Is there a specific procedure to follow when reconstituting the books? i.e. does a board meeting need to take place etc.?

My client, a wholly-owned, single-member public limited company (the "Seller"), intends to transfer the shares in its wholly-owned private subsidiary to subsidiary of its parent (i.e. a sister company). My understanding is that, if that sale is conducted at a price lower than the market value of the shares in the target subsidiary, the sale will be classified as a distribution under the Companies Act 2006 and/or the principle in Aveling Barford. The Seller intends to conduct the transaction at market value. The price will be paid in cash. Although it would be useful or, indeed, advisable to obtain a valuation of the assets to confirm this, my understanding is that, in these circumstances, there is no legal requirement (either under common law or the Companies Acts) to obtain a valuation to confirm that the sale is being conducted at market value. Is that correct? In any case, in order to be on the safe side, the Seller wishes to ensure that it does indeed have distributable reserves at the time of the sale so that, in the unlikely scenario that the price for the sale is successfully challenged as being below market value, and the sale is therefore a distribution, it can justify that distribution. (The sale will certainly be for book value or greater, so it will only need to demonstrate distributable reserves of at least 1p.) I am aware that, if a company wishes to make a distribution, it must justify the distribution by references to annual or interim accounts.

Please would you be able to provide me with a comprehensive list of companies that have amended their articles between 2011 and now to increase the cap on directors' fees? Your help is much appreciated.

My client is a private company limited by shares with 1 million issued shares or 1. The issue of a further 500,000 shares has been authorised. The client has cashflow issues and there is a consortium of investors looking at purchasing 500,000 shares. They do not want to purchase the 500,000 authorised shares as this will not give them control. However, as one member of the consortium already has some shares, if a new class of shares is created and 500,000 of these "B" shares - which will carry 2 votes per share - are issued, they will have control. I would be grateful if you could provide guidance as to whether there could be any issues involved with this and on what will be required to make this effective.

We are in the process of updating a company's articles which were incoporated under the Companies Act 1948. I'm aware that under section 28 of the Companies Act 2006, provisions of the memorandum of association (that are not of a kind prescribed in section 8 of the Companies Act) are deemed to be incorporated into the provisions of the articles. However, in practical terms, would we need to do anything in relation to the memorandum of association, other than, when drafting the special resolution enacting the adoption of the new articles, stating that "the draft regulations attached to these written resolutions be adopted as the articles of association of the Company in substitution for, and to the exclusion of, the existing articles and memorandum of association of the Company”? I have read on an answer to another question to the team that "You could add a footnote to the original memorandum of association to state that those provisions deemed to be in the articles of association under section 28 are now contained in the articles of association of the company adopted by special resolution on [date] 2010." However, in order to add this footnote, would a special resolution need to be passed or would it simply be a case of adding the footnote to a copy of the memonrandum in its current form? Finally, would all this apply if (i) the model articles were being adopted with some amendments, or (ii) if just certain of the articles in their current form were amended?

A company has Voting Redeemable Preference shares which were due to be redeemed later this year. It is apparent that the company will not in the foreseeable future have the funds to redeem and the company and shareholders have agreed that the Voting Redeemable Preference shares be converted to Ordinary shares. My understanding is that there isn't a step that will enable the shares to simply be converted i.e resolve so that VRP shares are now Ordinary shares, and the way to achieve the required outcome is to rename/redesignate the share as Ordinary shares and vary the rights so they match the Ordinary shares. This would require a resolution, changing articles and filing SH08 and SH10.(Also obtaining class consent) I'd be grateful if you could confirm that this approach is right and that there isn't a simple "magic wand approach" which converts the shares in one process! Also, there are 73 million Voting Redeemable Preference Shares that are authorised, although only 72,062,229 are issued. Given that the resolutions dealing with the conversion (redesignation/Variation) of the issued shares also included the adoption of new articles (and so concept of authorised capital disappears) presumably any resolution does not need to state that the authorised but unissued shares will no longer exist after the conversion? Hope you can help clarify.

I am amending the Articles of Association of two companies so that there are A Ordinary shares and B Ordinary shares. Must I produce new Articles or can I just make amendments via a written resolution? I recall doing this previously but I am not sure whether it is still ok.

Our client company has recently incorporated a new subsidiary, adopting the Companies Act 2006 Model Articles for private companies limited by shares as its articles of association on incorporation. Our client now requires its subsidiary to adopt a new set of articles containing a bespoke conflicts of interest article permitting directors to vote (subject to any disclosures required under the articles and subject to any terms and conditions imposed by the board) in respect of any proposed or existing transaction or arrangement with the company in which they are interested, on the basis that Article 14 of the Model Articles will not apply to the company. The new articles are due to be adopted by the subsidiary company as a preliminary step, before the subsidiary enters into various transactions and arrangements with the parent company. As the two companies have common directors, it could be argued that none of the directors of the subsidiary are entitled to vote on a resolution approving the circulation of a written resolution adopting the new articles of association, under the conflicts restrictions in Article 14 of the Model Articles. Therefore, the board meeting of the subsidiary will be inquorate. In order to avoid this problem, it is proposed that the shareholders written resolution of the subsidiary company adopting the new articles of association should be proposed and circulated by the parent company under the procedure set out in sections 292 to 295 of t

We act for a charitable company which is limited by guarantee. The Articles of Association are bespoke and were drafted under the Companies Act 1985. There is a general meeting scheduled for later on in the year, in which it is hoped the members will vote on changing/updating the articles of association. It is going to be very difficult for all members to attend physically, therefore I would like to know whether the general meeting can be held via telephone conference call? I have looked into section 360A of the CA 2006 which states that nothing in Part 13 of the CA 2006 (resolutions and meetings) precludes electronic meetings. The company's Articles of Association are silent on the issue of electronic meeting/voting; and I didn't know whether the articles had to explicitly permit this. I am aware that the CA 2006 model articles permit “virtual” attendance at meetings, under article 37 of the model articles for private companies limited by shares, but the company's articles do not contain such a permission.

If a company incorporated under the Companies Act 1985 with one class of share passed resolutions to limit its share capital to a set amount and also adopt new articles (which do not mention a cap on authorised share capital, do they need to pass a resolution to increase its share capital if they wish to exceed the limit in the resolution and allot further shares? The confusion is arising from the fact that the limit is in a resolution passed by shareholders rather than as part of the articles.

My query relates to dividends in specie. In a scenario where you have a wholly owned subsidiary (Currentco) which owns a property and it proposes a dividend in specie of the property to its Parentco, can the Parentco create a new wholly owned subsidiary (Nomineeco) and direct that the dividend in specie of the property is satisfied by transferring title to the property in favour of and to Nomineeco thereby enabling Nomineeco to leaseback the property to Currentco and ultimately enabling Parentco to be liquidated under a section 110 demerger process and the shares in Currentco and Nomineeco transferred to different newcos by the liquidator in exchange for shares in those newcos and those shares in those newcos then distributed to the shareholders of Parentco?

What issues should advisers be aware of where there is a 5% shareholder in a private limited company?

Unless prohibited by the company's articles of association, under section 550 of the CA 2006 the directors of a private company with only one class of shares have the power to allot shares of that class without requiring prior shareholder approval. A prior authority is required if the directors cannot rely on section 550 of the CA 2006 (or the allotment or grant of rights does not fall within one of the limited exceptions) and will therefore be relevant to a private company with more than one class of shares. Does the requirement for prior authority apply without exception where there are two classes of shares (Ordinary and Deferred), notwithstanding that the Deferred Shares do not ordinarily have a right to vote on any matters?

We are transferring shares internally and wanted to check the law applied to transferring a share at its nominal value rather than the book value. We would like to transfer the shares of 1 for 1 even though the book value is higher. The Directors believe it is in the best interest and secondly, it is an internal transfer. What law applies to this scenario that allows us to do this?

I have been advised by a notary that a general board resolution will not suffice in authorising a company secretary to sign powers of attorney on behalf of a company and in effect the company must grant a general power of attorney to the company secretary and then ratify it by a board resolution to allow the company secretary to sign POAs on behalf of the company. I am unable to locate any precedent documents (board resolution or POA) on the PLC website to effect this, therefore, would you be able to assist?

Last year we assisted a client with a reduction in share capital by decreasing the share premium account to nil. It has come to light that the accountant's calculations were wrong and the share capital has not been reduced by as much as anticipated (i.e. there is still an amount left in the share premium account). Does this invalidate the reduction and the special resolution that was passed by the shareholders? Is it possible to rectify this error and if so how?

I note your comments with regard to multiple completions under the same buy back agreement. A client’s accountants have structured a deal that involves an unconditional buy back agreement entered into now providing for multiple “Completion Dates” over the next 12 months where the beneficial interest in all of the shares must pass on the signing of the agreement and the legal interest will transfer with each tranche of shares to be re-purchased on each Completion Date. The Company has substantial distributable profits compared to the amount being paid on the proposed buy-back so there should be no issue with not having sufficient distributable profits come (e.g.) months 11 and 12. The first question is whether one shareholder approval at the outset is sufficient or whether shareholder approval is required ahead of each Completion Date? Secondly, if the contract can be done in one contract with one shareholder approval at the outset, presumably an individual SH03 needs completing, stamping and filing after each Completion Date with an appropriate SH08 following each Completion Date. Is this correct and is there anything else that needs to be done (save for depositing the contract at the registered office for 10 years etc) in this type of situation compared to one where all the shares are re-purchased at the same time in one transaction?

I have a client who has entered into an agreement with a company and who are the trustee of a charity. The company have essentially stated that the agreement is unenforceable by reason of the fact that it is ultra vires. Whilst recognising the limitations in the Companies Act about the authority of directors of charitable companies, I am unclear as to whether these limitations would also apply to a company acting as a trustee and which is not itself a registered charity? In other words does the fact that a company acts as a trustee mean that it can avail itself of the provisions of s.42 of the Companies Act?

We are considering options for acquiring an investor's shares in our client's company (we act for the founders). The deal proposed is a payment of, say, 1 million now followed by 300k in a year's time. We only have cash available now of 1 million. The simplest option in the circumstances would be a share buyback, however, deferred payments are not permitted. Is it possible to issue loan notes for the 300k? I assume that, if we were able to pay out 1.3 million cash and then receive 300k cash back as a loan, there would be no problem. Ideally, however, we would only pay out 1 million cash and then issue loan notes for the 300k without actually paying the 300k cash out. Would this be permitted?

If the Articles of Association of a company limited by guarantee under the 1985 Act do not contain a clause which excludes or modifies Table C, does Table C apply to the company?