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Companies Act 2006

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Companies Act 2006, Cross Heading: Effect of reduction of capital is up to date with all changes known to be in force on or before 19 October 2017. There are changes that may be brought into force at a future date. Changes that have been made appear in the content and are referenced with annotations. Help about Changes to Legislation

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  • Act amendment to earlier affecting provision S.I. 2008/373 reg. 11(1) by S.I. 2013/1971 reg. 9(a) (This amendment not applied to legislation.gov.uk. Amending Regulations revoked (1.10.2013) without ever being in force by S.I. 2013/2224, reg. 2)
  • Act amendment to earlier affecting provision S.I. 2008/373 reg. 3(4) by S.I. 2013/1971 reg. 4 (This amendment not applied to legislation.gov.uk. Amending Regulations revoked (1.10.2013) without ever being in force by S.I. 2013/2224, reg. 2)

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Effect of reduction of capitalE+W+S+N.I.

652Liability of members following reduction of capitalE+W+S+N.I.

(1)Where a company's share capital is reduced a member of the company (past or present) is not liable in respect of any share to any call or contribution exceeding in amount the difference (if any) between—

(a)the nominal amount of the share as notified to the registrar in the statement of capital delivered under section 644 [F1, 649, 1028A or 1032A of this Act or paragraph 7 of Schedule 4 to the Small Business, Enterprise and Employment Act 2015], and

(b)the amount paid on the share or the reduced amount (if any) which is deemed to have been paid on it, as the case may be.

(2)This is subject to section 653 (liability to creditor in case of omission from list).

(3)Nothing in this section affects the rights of the contributories among themselves.

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Annotations are used to give authority for changes and other effects on the legislation you are viewing and to convey editorial information. They appear at the foot of the relevant provision or under the associated heading. Annotations are categorised by annotation type, such as F-notes for textual amendments and I-notes for commencement information (a full list can be found in the Editorial Practice Guide). Each annotation is identified by a sequential reference number. For F-notes, M-notes and X-notes, the number also appears in bold superscript at the relevant location in the text. All annotations contain links to the affecting legislation.

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Commencement Information

I1S. 652 wholly in force at 1.10.2009; s. 652 not in force at Royal Assent see s. 1300; s. 652(1)(3) in force for specified purposes at 1.10.2008 by S.I. 2008/1886, art. 2 (with arts 6, 7); s. 652 in force at 1.10.2009 in so far as not already in force by S.I. 2008/2860, art. 3(k) (with arts. 5, 7, 8, Sch. 2) (as amended by S.I. 2009/1802, art. 18)

653Liability to creditor in case of omission from list of creditorsE+W+S+N.I.

(1)This section applies where, in the case of a reduction of capital confirmed by the court—

(a)a creditor entitled to object to the reduction of share capital is by reason of his ignorance—

(i)of the proceedings for reduction of share capital, or

(ii)of their nature and effect with respect to his debt or claim,

not entered on the list of creditors, and

(b)after the reduction of capital the company is unable to pay the amount of his debt or claim.

(2)Every person who was a member of the company at the date on which the resolution for reducing capital took effect under section 649(3) is liable to contribute for the payment of the debt or claim an amount not exceeding that which he would have been liable to contribute if the company had commenced to be wound up on the day before that date.

(3)If the company is wound up, the court on the application of the creditor in question, and proof of ignorance as mentioned in subsection (1)(a), may if it thinks fit—

(a)settle accordingly a list of persons liable to contribute under this section, and

(b)make and enforce calls and orders on them as if they were ordinary contributories in a winding up.

(4)The reference in subsection (1)(b) to a company being unable to pay the amount of a debt or claim has the same meaning as in section 123 of the Insolvency Act 1986 (c. 45) or Article 103 of the Insolvency (Northern Ireland) Order 1989 (S.I. 1989/2405 (N.I. 19)).

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