Companies (Amendment) Act, 1983

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Treatment of shares held by or on behalf of a public limited company.

43.—(1) Subject to subsections (12) and (15), this section applies to a public limited company—

(a) where shares in the company are forfeited, or are surrendered to the company in lieu, in pursuance of the articles for failure to pay any sum payable in respect of those shares;

(b) where shares in the company are acquired by the company otherwise than by any of the methods mentioned in section 41 (4) and the company has a beneficial interest in those shares;

(c) where the nominee of the company acquires shares in the company from a third person without financial assistance being given directly or indirectly by the company and the company has a beneficial interest in those shares; or

(d) where any person acquires shares in the company with financial assistance given to him directly or indirectly by the company for the purpose of or in connection with the acquisition and the company has a beneficial interest in those shares.

(2) In determining for the purposes of subsection (1) (b) and (c) whether a company has a beneficial interest in any shares, there shall be disregarded, in any case where the company is a trustee (whether as personal representative or otherwise), any right of the company (as trustee) to recover its expenses or be remunerated out of the trust property.

(3) Unless the shares or any interest of the company in them are previously disposed of, the company must not later than the end of the relevant period from their forfeiture or surrender or, in a case to which subsection (1) (b), (c) or (d) applies, their acquisition—

(a) cancel them and reduce the amount of the share capital by the nominal value of the shares; and

(b) where the effect of cancelling the shares will be that the nominal value of the company's allotted share capital is brought below the authorised minimum, apply for re-registration as another form of company, stating the effect of the cancellation,

and the directors may take such steps as are requisite to enable the company to carry out its obligations under this subsection without complying with sections 72 and 73 of the Principal Act, including passing a resolution in accordance with subsection (5).

(4) The company and, in a case falling within subsection (1) (c) or (d), the company's nominee or, as the case may be, the other shareholder must not exercise any voting rights in respect of the shares and any purported exercise of those rights shall be void.

(5) The resolution authorised by subsection (3) may alter the company's memorandum so that it no longer states that the company is to be a public limited company and may make such other alterations in the memorandum and articles as are requisite in the circumstances.

(6) The application for re-registration required by subsection (3) (b) must be in the prescribed form and signed by a director or secretary of the company and must be delivered to the registrar together with a printed copy of the memorandum and articles of the company as altered by the resolution.

(7) If a public limited company required to apply to be re-registered as another form of company under this section fails to do so before the end of the relevant period, section 21 shall apply to it as if it were a private company such as is mentioned in that section, but, except as aforesaid, the company shall continue to be treated for the purposes of the Companies Acts as a public limited company until it is re-registered as another form of company.

(8) If a company when required to do so by subsection (3) fails to cancel any shares in accordance with paragraph (a) of that subsection or to make an application for re-registration in accordance with paragraph (b) of that subsection, the company and every officer of the company who is in default shall be guilty of an offence and shall be liable on summary conviction to a fine not exceeding £250 together with, in the case of a continuing offence, a fine not exceeding £25 forevery day on which the offence continues, but not exceeding £500 in total.

(9) If the registrar is satisfied that a company may be re-registered in accordance with this section he shall—

(a) retain the application and other documents delivered to him under subsection (6); and

(b) issue the company with an appropriate certificate of incorporation.

(10) Upon the issue of a certificate of incorporation under subsection (9)—

(a) the company shall by virtue of the issue of that certificate become the form of company stated in the certificate; and

(b) the alterations in the memorandum and articles set out in the resolution shall take effect accordingly.

(11) A certificate of incorporation issued to a company under subsection (9) shall be conclusive evidence—

(a) that the requirements of this section in respect of re-registration and of matters precedent and incidental thereto have been complied with; and

(b) that the company is the form of company stated in the certificate.

(12) Where, after shares in a company—

(a) are forfeited in pursuance of the articles of the company or are surrendered to the company in lieu of forfeiture or are otherwise acquired by the company;

(b) are acquired by a nominee of the company in the circumstances mentioned in subsection (1)(c); or

(c) are acquired by any person in the circumstances mentioned in subsection (1) (d),

the company is re-registered as a public limited company, the foregoing provisions of this section shall apply to the company as if it had been a public limited company at the time of the forfeiture, surrender or acquisition and as if for any reference to the relevant period from the forfeiture, surrender or acquisition there were substituted a reference to the relevant period from the re-registration of the company as a public limited company.

(13) Where a public limited company or a nominee of a public limited company acquires shares in the company or an interest in such shares and those shares are or that interest is shown in a balance sheet of the company as an asset, an amount equal to the value of the shares or, as the case may be, the value to the company of its interest in the shares shall be transferred out of profits available for dividend to a reserve fund and shall not be available for distribution.

(14) In this section “relevant period”, in relation to any shares, means—

(a) in the case of shares forfeited or surrendered to the company in lieu of forfeiture or acquired as mentioned in subsection (1) (b) or (c), three years;

(b) in the case of shares acquired as mentioned in subsection (1)(d), one year.

(15) Notwithstanding anything in section 12 (2), a reference in this section to a public limited company does not include a reference to an old public limited company.