1986 No. 1032 (N.I. 6)
The Companies (Northern Ireland) Order 1986 (revoked)
Order, in so far as still in operation, applied (with modifications) (8.2.2011) by The Investment Bank Special Administration Regulations 2011 (S.I. 2011/245), reg. 27(a), Sch. 6 Pt. 1; and arts. 17(3), 36(3) applied (with modifications) (24.6.2013) by Charities Act (Northern Ireland) 2008 (c. 12 (N.I.)), ss. 20(7), 96(6), 185(1); S.R. 2013/145, art. 2, Sch.
PART IINTRODUCTORY AND INTERPRETATION
Title and commencement1
1
This Order may be cited as the Companies (Northern Ireland) Order 1986.
2
F2. . . this Order comes into operation on the expiration of three months from the day on which it is made.
General interpretation2
1
The [1954 c.33 (N.I.)] Interpretation Act (Northern Ireland) 1954 applies to Article 1 and the following provisions of this Order as it applies to a Measure of the Northern Ireland Assembly.
Para. (2) rep. by 1990 NI 10
3 F3
In this Order—
“the Act of 1960” means the [1960 c.22 (N.I.)] Companies Act (Northern Ireland) 1960;
“agent” does not include a person's counsel acting as such;
“annual return” means the return to be made by a company under Article 371 or 372 (as the case may be);
“articles” and “articles of association” mean, in relation to a company, its articles of association, as originally framed or as altered by resolution, including (so far as applicable to the company) regulations contained in or annexed to any statutory provision relating to companies passed or made before this Order, as altered by or under any such statutory provision;
Definition rep. by 1990 NI 5
F9. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
“bank holiday” means a day which is a bank holiday in Northern Ireland under the [1971 c.80] Banking and Financial Dealings Act 1971;
Definition rep. by SI 2001/3649
“books and papers” and “books or papers” include accounts, deeds, writings and documents;
F4“communication” means the same as in the Electronic Communications Act (Northern Ireland) 2001;
“the Companies Orders” means this Order, theF5 insider dealing legislation and the consequential Provisions Order;
“company limited by guarantee” and “company limited by shares” have the meaning assigned to them respectively by Article 12(2);
“the Consequential Provisions Order” means the [1986 NI 9] Companies Consolidation (Consequential Provisions) (Northern Ireland) Order 1986;
“contributory” has the meaning assigned to it by Article 473;
“the court,” in relation to a company, means the court having jurisdiction to wind up the company;
F10. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
“the Department” means the Department of Economic Development;
“document” includes summons, notice, order and other legal process, and registers;
F8. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F4“electronic communication” means the same as in the Electronic Communications Act (Northern Ireland) 2001;
“equity share capital” means, in relation to a company, its issued share capital excluding any part of that capital which, neither as respects dividends nor as respects capital, carries any right to participate beyond a specified amount in distribution;
“expert” has the meaning given by Article 72;
“former Companies Acts” means the [1862 c.89] Joint Stock Companies Acts, the [1908 c.69] Companies Act 1862, the Companies (Consolidation) Act 1908, the [1932 c.7 (N.I.)] Companies Act (Northern Ireland) 1932 and the Companies Acts (Northern Ireland) 1960 to 1983;
“hire purchase agreement” has the same meaning as in the [1974 c.39] Consumer Credit Act 1974;
F5“the insider dealing legislation” means Part V of the Criminal Justice Act 1993 (insider dealing);
F11. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
“the Insolvency Account” means the account kept by the Department underF6 Article 358 of the Insolvency Order;
Definition rep. by SI 2001/3649
“joint stock company” has the meaning given by Article 632;
“the Joint Stock Companies Acts” means the [1856 c.47] Joint Stock Companies Act 1856, the [20 & 21 VICT. c.14] Joint Stock Banking Companies Act 1856, 1857, the [1857 c.49] Joint Stock Banking Companies Act 1857 and the Act to enable Joint Stock Banking Companies to be formed on the principle [1858 c.91] of limited liability, or any one or more of those Acts (as the case may require), but does not include the [1844 c. 110] Joint Stock Companies Act 1844;
“memorandum”, in relation to a company, means its memorandum of association, as originally framed or as altered in pursuance of any statutory provision;
“number”, in relation to shares, includes amount, where the context admits of the reference to shares being construed to include stock;
“officer” in relation to a body corporate, includes a director or secretary;
“the Official Assignee” means the officer appointed under Article 488 and, for the purposes of this Order, includes an Assistant Official Assignee;
“the Order of 1978” means the [1978 NI 12] Companies (Northern Ireland) Order 1978;
“the Order of 1981” means the [1981 NI 19] Companies (Northern Ireland) Order 1981;
“the Order of 1982” means the [1982 NI 17] Companies (Northern Ireland) Order 1982;
“the Order of 1983” means the [1983 NI 12] Companies (Beneficial Interests) (Northern Ireland) Order 1983;
“Part XXIII company” has the meaning given by Article 640;
“place of business” includes a share transfer or share registration office;
F12. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
“prospectus” means any prospectus, notice, circular, advertisement or other invitation, offering to the public for subscription or purchase any shares in or debentures of a company;
F7“prospectus issued generally” means a prospectus issued to persons who are not existing members of the company or holders of its debentures;Definition rep. by 1987 c. 22
Definition rep. by 1986 c. 60
F13regulated activity has the meaning given in section 22 of the Financial Services and Markets Act 2000;
“the registrar” means the registrar of companies appointed under Article 653, and, for the purposes of this Order, includes an assistant registrar;
“a resolution for reducing share capital” has the meaning assigned to it by Article 145(3);
Definition rep. by 1989 NI 19
“share” means share in the share capital of a company and includes stock (except where a distinction between shares and stock is express or implied);
“statutory provision” has the meaning assigned to it by section 1(f) of the [1954 c.33 (N.I.)] Interpretation Act (Northern Ireland) 1954;
“undischarged bankrupt” includes—
- a
a bankrupt who has not obtained the certificate of conformity mentioned in section 56 of the [1872 c.58] Bankruptcy (Ireland) Amendment Act 1872;
- b
a bankrupt who has not been discharged from his bankruptcy by an absolute order of discharge under Article 28 or 30 of the [1980 NI 4] Bankruptcy Amendment (Northern Ireland) Order 1980F6 or Article 254 of the Insolvency Order, or by virtue of the expiration of the period or the satisfaction of any requirement specified in a suspended or conditional order of discharge underF6 any of those Articles, or by virtue of Article 29(2) or (4) (automatic discharge) of that OrderF6 of 1980 or of Article 253 (duration of discharge) of the Insolvency Order;
- c
a person who is an undischarged bankrupt under the law of England or Scotland;
- a
F14. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
“unlimited company” has the meaning assigned to it by Article 12(2)(c).
4
For the purposes of section 42 of the [1973 c.36] Northern Ireland Constitution Act 1973 (validity of Acts of Parliament of Northern Ireland), provisions of this Order which re-enact provisions of an Act of the Parliament of Northern Ireland are deemed to be provisions of such an Act.
{prosp. insertion of 2nd art. 2A by 1990 NI10}2AF15F16F17F18F19F20
F21Relationship of this Order to Insolvency Order2A
1 F22
In this Order “the Insolvency Order” means the Insolvency (Northern Ireland) Order 1989.
2
.
3
In ArticlesF25 653(4) and (5), 655(1),F26 656B,F23 656A(1), 657(1)(a) and (3),F23 658(1) and (3),F23 659A, 662(1), 677 and 680(3) references to the Companies Orders include Parts II to VII and Articles 359 to 362 of the Insolvency OrderF24 and the Company Directors Disqualification (Northern Ireland) Order 2002.
F27Relationship of this Order to Parts IV and V of the Financial Services Act 19862B
“Company”, etc.3
1
In this Order—
a
“company” means a company formed and registered under this Order, or an existing company;
b
“existing company” means a company formed and registered, or deemed to have been registered, in Northern Ireland under the former Companies Acts;
2
“Public company” and “private company” have the meanings given by Article 12.
F30“ Subsidiary ”, “ holding company ” and “ wholly-owned subsidiary ”4
1 F31
A company is a “subsidiary” of another company, its “holding company”, if that other company—
a
holds a majority of the voting rights in it, or
b
is a member of it and has the right to appoint or remove a majority of its board of directors, or
c
is a member of it and controls alone, pursuant to an agreement with other shareholders or members, a majority of the voting rights in it,
or if it is a subsidiary of a company which is itself a subsidiary of that other company.
F312 F31
A company is a “wholly-owned subsidiary” of another company if it has no members except that other and that other's wholly-owned subsidiaries or persons acting on behalf of that other or its wholly-owned subsidiaries.
3
In this Article “company” includes any body corporate.
F32Provisions supplementing Article 44A
1
The provisions of this Article explain expressions used in Article 4 and otherwise supplement that Article.
F332
In Article 4(1)(a) and (c) the references to the voting rights in a company are to the rights conferred on shareholders in respect of their shares or, in the case of a company not having a share capital, on members, to vote at general meetings of the company on all, or substantially all, matters.
F333
In Article 4(1)(b) the reference to the right to appoint or remove a majority of the board of directors is to the right to appoint or remove directors holding a majority of the voting rights at meetings of the board on all, or substantially all, matters; and for the purposes of that provision—
a
a company shall be treated as having the right to appoint to a directorship if—
i
a person's appointment to it follows necessarily from his appointment as director of the company, or
ii
the directorship is held by the company itself; and
b
a right to appoint or remove which is exercisable only with the consent or concurrence of another person shall be left out of account unless no other person has a right to appoint or, as the case may be, remove in relation to that directorship.
4
Rights which are exercisable only in certain circumstances shall be taken into account only—
a
when the circumstances have arisen, and for so long as they continue to obtain, or
b
when the circumstances are within the control of the person having the rights;
and rights which are normally exercisable but are temporarily incapable of exercise shall continue to be taken into account.
5
Rights held by a person in a fiduciary capacity shall be treated as not held by him.
6
Rights held by a person as nominee for another shall be treated as held by the other; and rights shall be regarded as held as nominee for another if they are exercisable only on his instructions or with his consent or concurrence.
7 F33
Rights attached to shares held by way of security shall be treated as held by the person providing the security—
a
where apart from the right to exercise them for the purpose of preserving the value of the security, or of realising it, the rights are exercisable only in accordance with his instructions;
b
where the shares are held in connection with the granting of loans as part of normal business activities and apart from the right to exercise them for the purpose of preserving the value of the security, or of realising it, the rights are exercisable only in his interests.
8 F33
Rights shall be treated as held by a company if they are held by any of its subsidiaries; and nothing in paragraph (6) or (7) shall be construed as requiring rights held by a company to be treated as held by any of its subsidiaries.
9 F33
For the purposes of paragraph (7) rights shall be treated as being exercisable in accordance with the instructions or in the interests of a company if they are exercisable in accordance with the instructions of or, as the case may be, in the interests of—
a
any subsidiary or holding company of that company, or
b
any subsidiary of a holding company of that company.
10 F33
The voting rights in a company shall be reduced by any rights held by the company itself.
11
References in any provision of paragraphs (5) to (10) to rights held by a person include rights falling to be treated as held by him by virtue of any other provision of those paragraphs but not rights which by virtue of any such provision are to be treated as not held by him.
12 F33
In this Article “company” includes any body corporate.
F34Power to amend Articles 4 and 4A4B
1
The Department may by regulations amend Articles 4 and 4A so as to alter the meaning of the expressions “holding company”, “subsidiary” or “wholly-owned subsidiary”.
2
Any amendment made by regulations under this Article does not apply for the purposes of statutory provisions outside the Companies Orders unless the regulations so provide.
3
So much of section 29(1) of the Interpretation Act (Northern Ireland) 1954 (effect of repeal and re-enactment) as relates to statutory documents shall not apply in relation to any repeal and re-enactment effected by regulations made under this Article.
“Called-up share capital”5
1
In this Order, “called-up share capital”, in relation to a company, means so much of its share capital as equals the aggregate amount of the calls made on its shares (whether or not those calls have been paid), together with any share capital paid up without being called and any share capital to be paid on a specified future date under its articles, the terms of allotment of the relevant shares or any other arrangements for payment of those shares.
2
“Uncalled share capital” is to be construed accordingly.
“Allotment” and “paid up”6
1
In relation to an allotment of shares in a company, the shares are to be taken for the purposes of this Order to be allotted when a person acquires the unconditional right to be included in the company's register of members in respect of those shares.
2
For the purposes of this Order, a share in a company is deemed paid up (as to its nominal value or any premium on it) in cash, or allotted for cash, if the consideration for the allotment or payment up is cash received by the company, or is a cheque received by it in good faith which the directors have no reason for suspecting will not be paid, or is a release of a liability of the company for a liquidated sum, or is an undertaking to pay cash to the company at a future date.
3
In relation to the allotment or payment up of any shares in a company, references in this Order (except Articles 99 to 104) to consideration other than cash and to the payment up of shares and premiums on shares otherwise than in cash include the payment of, or any undertaking to pay, cash to any person other than the company.
4
For the purpose of determining whether a share is or is to be allotted for cash, or paid up in cash, “cash” includes foreign currency.
“Non-cash asset”7 F35
1
In this Order “non-cash asset” means any property or interest in property other than cash; and for this purpose “cash” includes foreign currency.
2
A reference to the transfer or acquisition of a non-cash asset includes the creation or extinction of an estate or interest in, or a right over, any property and also the discharge of any person's liability, other than a liability for a liquidated sum.
“Body corporate” and “corporation”8 F36
References in this Order to a body corporate or to a corporation do not include a corporation sole, but include a company incorporated elsewhere than in Northern Ireland.
Such references to a body corporate do not include a Scottish firm.
“Director” and “shadow director”9
F37. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F38Expressions used in connection with accounts10 F39
1
In this Order the following expressions have the same meaning as in F41Part 15 of the Companies Act 2006 (accounts and reports)—
“annual accounts”,
“accounting reference date” and “accounting reference period”,
“balance sheet” and “balance sheet date”,
F40“Companies Order accounts”
F40“Companies Order individual accounts”
“current assets”,
“financial year”, in relation to a company,
“fixed assets”,
F40“IAS accounts”
F40“IAS individual accounts”
“parent company” and “parent undertaking”,
“profit and loss account”, and
“subsidiary undertaking”.
2
References in this Order to “realised profits” and “realised losses”, in relation to a company's accounts, shall be construed in accordance with F42section 853(4) and (5) of the Companies Act 2006.
3
F43. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Meaning of “offer to the public”10A
F44. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Meaning of “banking company”10B
F45. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Meaning of “insurance company” and “authorised insurance company”10C
F46. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
“Employees' share scheme”11
For the purposes of this Order, an employees' share scheme is a scheme for encouraging or facilitating the holding of shares or debentures in a company by or for the benefit of—
a
the bona fide employees or former employees of the company, the company's subsidiary or holding company or a subsidiary of the company's holding company, or
b
theF47 spouses, civil partners, surviving spouses, surviving civil partners or children, step-children or adopted children under the age of 18 of such employees or former employees.
PART IIFORMATION AND REGISTRATION OF COMPANIES; JURIDICAL STATUS AND MEMBERSHIP
CHAPTER ICOMPANY FORMATION
Memorandum of association
Mode of forming incorporated company12
1
Any two or more persons associated for a lawful purpose may, by subscribing their names to a memorandum of association and otherwise complying with the requirements of this Order in respect of registration, form an incorporated company, with or without limited liability.
2
A company so formed may be either—
a
a company having the liability of its members limited by the memorandum to the amount, if any, unpaid on the shares respectively held by them ( “a company limited by shares”);
b
a company having the liability of its members limited by the memorandum to such amount as the members may respectively thereby undertake to contribute to the assets of the company in the event of its being wound up ( “a company limited by guarantee”); or
c
a company not having any limit on the liability of its members ( “an unlimited company”).
3
A “public company” is a company limited by shares or limited by guarantee and having a share capital, being a company—
a
the memorandum of which states that it is to be a public company, and
b
in relation to which the provisions of this Order or the former Companies Acts as to the registration or re-registration of a company as a public company have been complied with on or after 1st July 1983;
and a “private company” is a company that is not a public company.
F483A
Notwithstanding paragraph (1), one person may, for a lawful purpose, by subscribing his name to a memorandum of association and otherwise complying with the requirements of this Order in respect of registration, form an incorporated company being a private company limited by shares or by guarantee.
4
With effect from 1st July 1983, a company cannot be formed as, or become, a company limited by guarantee with a share capital.
Requirements with respect to memorandum13
1
The memorandum of every company must state—
a
the name of the company;
b
that the registered office of the company is to be situated in Northern Ireland;
c
the objects of the company.
2
The memorandum of a company limited by shares or by guarantee must also state that the liability of its members is limited.
3
The memorandum of a company limited by guarantee must also state that each member undertakes to contribute to the assets of the company in the event of its being wound up while he is a member, or within one year after he ceases to be a member, for payment of the debts and liabilities of the company contracted before he ceases to be a member, and of the costs, charges and expenses of winding up, and for adjustment of the rights of the contributories among themselves, such amount as may be required, not exceeding a specified amount.
4
In the case of a company having a share capital—
a
the memorandum must also (unless the company is an unlimited company) state the amount of the share capital with which the company proposes to be registered and the division of the share capital into shares of a fixed amount;
b
no subscriber of the memorandum may take less than one share; and
c
there must be shown in the memorandum against the name of each subscriber the number of shares he takes.
5
F49Subject to paragraph (5A), the memorandum must be signed by each subscriber in the presence of at least one witness, who must attest the signature.
F495A
Where the memorandum is delivered to the registrar otherwise than in legible form and is authenticated by each subscriber in such manner as is directed by the registrar, the requirements in paragraph (5) for signature in the presence of at least one witness and for attestation of the signature do not apply.
6
A company may not alter the conditions contained in its memorandum except in the cases, in the mode and to the extent, for which express provision is made by this Order.
Forms of memorandum14
Subject to the provisions of Articles 12 and 13, the form of the memorandum of association of—
a
a public company, being a company limited by shares,
b
a public company, being a company limited by guarantee and having a share capital,
c
a private company limited by shares,
d
a private company limited by guarantee and not having a share capital,
e
a private company limited by guarantee and having a share capital, and
f
an unlimited company having a share capital,
shall be as prescribed respectively for such companies by regulations, made by the Department, or as near to that form as circumstances admit.
F50Statement of company's objects: general commercial company14A
Where the company's memorandum states that the object of the company is to carry on business as a general commercial company—
a
the object of the company is to carry on any trade or business whatsoever, and
b
the company has power to do all such things as are incidental or conducive to the carrying on of any trade or business by it.
F51Resolution to alter objects15
1
A company may by special resolution alter its memorandum with respect to the statement of the company's objects.
2
If an application is made under Article 16, an alteration does not have effect except in so far as it is confirmed by the court.
Procedure for objecting to alteration16
1
Where a company's memorandum has been altered by special resolution under Article 15, application may be made to the court for the alteration to be cancelled.
2
Such an application may be made—
a
by the holders of not less in the aggregate than 15 per cent. in nominal value of the company's issued share capital or any class of it or, if the company is not limited by shares, not less than 15 per cent. of the company's members; or
b
by the holders of not less than 15 per cent. of the company's debentures entitling the holders to object to an alteration of its objects;
but an application shall not be made by any person who has consented to or voted in favour of the alteration.
3
The application must be made within 21 days after the date on which the resolution altering the company's objects was passed, and may be made on behalf of the persons entitled to make the application by such one or more of their number as they may appoint in writing for the purpose.
4
The court may on such an application make an order confirming the alteration either wholly or in part and on such terms and conditions as it thinks fit, and may—
a
if it thinks fit, adjourn the proceedings in order that an arrangement may be made to its satisfaction for the purchase of the interests of dissentient members, and
b
give such directions and make such orders as it thinks expedient for facilitating or carrying into effect any such arrangement.
5
The court's order may (if the court thinks fit) provide for the purchase by the company of the shares of any members of the company, and for the reduction accordingly of its capital, and may make such alterations in the company's memorandum and articles as may be required in consequence of that provision.
6
If the court's order requires the company not to make any, or any specified, alteration in its memorandum or articles, the company does not then have power without the leave of the court to make any such alteration in breach of that requirement.
7
An alteration in the memorandum or articles of a company made by virtue of an order under this Article, other than one made by resolution of the company, is of the same effect as if duly made by resolution; and this Order applies accordingly to the memorandum or articles as so altered.
F527A
For the purposes of paragraph (2)(a), any of the company's issued share capital held as treasury shares must be disregarded.
8
The debentures entitling the holders to object to an alteration of a company's objects are any debentures secured by a floating charge which were issued or first issued before 1st April 1961 or form part of the same series as any debentures so issued; and a special resolution altering a company's objects requires the same notice to the holders of any such debentures as to members of the company.
In the absence of provisions regulating the giving of notice to any such debenture holders, the provisions of the company's articles regulating the giving of notice to members apply.
Provisions supplementing Articles 15 and 1617
1
Where a company passes a resolution altering its objects, then—
a
if with respect to the resolution no application is made under Article 16, the company shall within 15 days from the end of the period for making such an application deliver to the registrar a printed copy of its memorandum as altered; and
b
if such an application is made, the company shall—
i
forthwith give notice (in the prescribed form) of that fact to the registrar, and
ii
within 15 days from the date of any order cancelling or confirming the alteration, deliver to the registrar an office copy of the order and, in the case of an order confirming the alteration, a printed copy of the memorandum as altered.
2
The court may by order at any time extend the time for the delivery of documents to the registrar under paragraph (1)(b) for such period as the court may think proper.
C23
If a company makes default in giving notice or delivering any document to the registrar as required by paragraph (1), the company and every officer of it who is in default is liable to a fine and, for continued contravention, to a daily default fine.
4
The validity of an alteration of a company's memorandum with respect to the objects of the company shall not be questioned on the ground that it was not authorised by Article 15, except in proceedings taken for the purpose (whether under Article 16 or otherwise) before the expiration of 21 days after the date of the resolution in that behalf.
5
Where such proceedings are taken otherwise than under Article 16, paragraphs (1) to (3) apply in relation to the proceedings as if they had been taken under that Article and as if an order declaring the alteration invalid were an order cancelling it, and as if an order dismissing the proceedings were an order confirming the alteration.
Articles of association
Regulation of companies by articles of association18
1
There may in the case of a company limited by shares, and there shall in the case of a company limited by guarantee or unlimited, be registered with the memorandum articles of association signed by the subscribers to the memorandum and making regulations for the company.
2
In the case of an unlimited company having a share capital, its articles must state the amount of share capital with which the company proposes to be registered.
3
Articles of association must—
a
be printed,
b
be divided into paragraphs numbered consecutively, and
c
F53subject to paragraph (4), be signed by each subscriber of the memorandum in the presence of at least one witness who must attest the signature.
F534
Where the articles are delivered to the registrar otherwise than in legible form and are authenticated by each subscriber to the memorandum in such manner as is directed by the registrar, the requirements in paragraph (3)(c) for signature in the presence of at least one witness and for attestation of the signature do not apply.
Tables A, C, D and E19
1
Table A is as prescribed by regulations made by the Department; and a company may for its articles adopt the whole or any part of that Table.
2
In the case of a company limited by shares, if articles are not registered or, if articles are registered, in so far as they do not exclude or modify Table A, that Table (so far as applicable, and as in force at the date of the company's registration) constitutes the company's articles in the same manner and to the same extent as if articles in the form of that Table had been duly registered.
3
If in consequence of regulations under this Article Table A is altered, the alteration does not affect a company registered before the alteration takes effect, or revoke as respects that company any portion of the Table.
4
The form of the articles of association of—
a
a company limited by guarantee and not having a share capital,
b
a company limited by guarantee and having a share capital, and
c
an unlimited company having a share capital,
shall be respectively in accordance with Table C, D or E prescribed by regulations made by the Department or as near to that form as circumstances admit.
{prosp. insertion of art. 19A by 1990 NI10} 19AF54
Alteration of articles by special resolution20
1
Subject to the provisions of this Order and to the conditions contained in its memorandum, a company may by special resolution alter its articles.
2
Alterations so made in the articles are (subject to this Order) as valid as if originally contained in them and are subject in like manner to alteration by special resolution.
Registration and its consequences
Documents to be sent to registrar21
1
A company's memorandum and articles (if any) shall be delivered to the registrar.
2
With the memorandum there shall be delivered a statement in the prescribed form containing the names and requisite particulars of—
a
the person who is, or the persons who are, to be the first director or directors of the company; and
F55ba
in the case of a company that is to be a private company, any person who is (or any persons who are) to be the first secretary (or joint secretaries) of the company;
bb
in the case of a company that is to be a public company, the person who is (or the persons who are) to be the first secretary (or joint secretaries) of the company.
and the requisite particulars in each case are those set out in Schedule 1.
3
The statement shall be signed by or on behalf of the subscribers of the memorandum and shall contain a consent signed by each of the persons named in it as a director, as secretary or as one of joint secretaries, to act in the relevant capacity.
4
Where a memorandum is delivered by a person as agent for the subscribers, the statement shall specify that fact and the person's name and address.
5
An appointment by a company's articles delivered with the memorandum of a person as director or secretary of the company is void unless he is named as a director or secretary in the statement.
6
There shall in the statement be specified the intended situation of the company's registered office on incorporation.
Minimum authorised capital (public companies)22
When a memorandum delivered to the registrar under Article 21 states that the association to be registered is to be a public company,F56 the share capital stated in the memorandum to be that with which the company proposes to be registered—
a
must have a nominal value of not less than the authorised minimum (as defined in section 763 of the Companies Act 2006); and
b
to the extent necessary to comply with that requirement, must be denominated in accordance with section 765 of that Act (allotted share capital of public company to be denominated either in sterling or in euros but not partly in one and partly in the other).
Duty of registrar23
1
The registrar shall not register a company's memorandum delivered under Article 21 unless he is satisfied that all the requirements of this Order in respect of registration and of matters precedent and incidental to it have been complied with.
2
Subject to this, the registrar shall retain and register the memorandum and articles (if any) delivered to him under that Article.
3
F57Subject to paragraph (4), a statutory declaration in the prescribed form by—
a
a solicitor engaged in the formation of a company, or
b
a person named as a director or secretary of the company in the statement delivered under Article 21(2),
that those requirements have been complied with shall be delivered to the registrar and the registrar may accept such a declaration as sufficient evidence of compliance.
F574
In place of the statutory declaration referred to in paragraph (3), there may be delivered to the registrar using electronic communications a statement made by a person mentioned in sub-paragraph (a) or (b) of paragraph (3) that the requirements mentioned in paragraph (1) have been complied with; and the registrar may accept such a statement as sufficient evidence of compliance.
5
Any person who makes a false statement under paragraph (4) which he knows to be false or does not believe to be true is liable to imprisonment or a fine, or both.
Effect of registration24
1
On the registration of a company's memorandum, the registrar shall give a certificate that the company is incorporated and, in the case of a limited company, that it is limited.
2
The certificate shall be given under the registrar's hand.
3
From the date of incorporation mentioned in the certificate, the subscribers of the memorandum, together with such other persons as may from time to time become members of the company, shall be a body corporate by the name contained in the memorandum.
4
That body corporate is then capable forthwith of exercising all the functions of an incorporated company, but with such liability on the part of its members to contribute to its assets in the event of its being wound up as is provided by this OrderF58 and the Insolvency Order.
This is subject, in the case of a public company, to F59section 761 of the Companies Act 2006 (public company not to do business without trading certificate).
5
The persons named in the statement under Article 21 as directors, secretary or joint secretaries are, on the company's incorporation, deemed to have been respectively appointed as its first directors, secretary or joint secretaries.
6
Where the registrar registers an association's memorandum which states that the association is to be a public company, the certificate of incorporation shall contain a statement that the company is a public company.
7
A certificate of incorporation given in respect of an association is conclusive evidence—
a
that the requirements of this Order in respect of registration and of matters precedent and incidental to it have been complied with, and that the association is a company authorised to be registered, and is duly registered, under this Order; and
b
if the certificate contains a statement that the company is a public company, that the company is such a company.
Effect of memorandum and articles25
1
Subject to the provisions of this Order, the memorandum and articles, when registered, bind the company and its members to the same extent as if they respectively had been signed and sealed by each member, and contained covenants on the part of each member to observe all the provisions of the memorandum and of the articles.
2
Money payable by a member to the company under the memorandum or articles is a debt due from him to the company.
Memorandum and articles of company limited by guarantee26
1
In the case of a company limited by guarantee and not having a share capital, every provision in the memorandum or articles, or in any resolution of the company purporting to give any person a right to participate in the divisible profits of the company otherwise than as a member, is void.
2
For the purposes of provisions of this Order relating to the memorandum of a company limited by guarantee, and for those of Article 12(4) and this Article, every provision in the memorandum or articles, or in any resolution, of a company so limited purporting to divide the company's undertaking into shares or interests is to be treated as a provision for a share capital, notwithstanding that the nominal amount or number of the shares or interests is not specified by the provision.
Effect of alteration on company's members27
1
A member of a company is not bound by an alteration made in its memorandum or articles after the date on which he became a member, if and so far as the alteration—
a
requires him to take or subscribe for more shares than the number held by him at the date on which the alteration is made; or
b
in any way increases his liability as at that date to contribute to the company's share capital or otherwise to pay money to the company.
2
Paragraph (1) operates notwithstanding anything in the memorandum or articles; but it does not apply in a case where the member agrees in writing, either before or after the alteration is made, to be bound by the alteration.
Conditions in memorandum which could have been in articles28
1
A condition contained in a company's memorandum which could lawfully have been contained in articles of association instead of in the memorandum may be altered by the company by special resolution; but if an application is made to the court for the alteration to be cancelled, the alteration does not have effect except in so far as it is confirmed by the court.
2
This Article—
a
is subject to Article 27, and also to F60section 996 of the Companies Act 2006 (court order protecting minority), and
b
does not apply where the memorandum itself provides for or prohibits the alteration of all or any of the conditions referred to in paragraph (1), and does not authorise any variation or abrogation of the special rights of any class of members.
3
Article 16 (except paragraphs (2)(b) and (8)) and Article 17(1) to (3) apply in relation to any alteration and to any application made under this Article as they apply in relation to alterations and applications under Articles 15 to 17.
Amendments of memorandum or articles to be recorded29
F611
Where an alteration is made in a company's memorandum or articles by any statutory provision, a printed copy of the statutory provision shall, not later than 15 days after that provision comes into operation, be forwarded to the registrar and recorded by him.
2
Where a company is required (by this Article or otherwise) to send to the registrar any document making or evidencing an alteration in the company's memorandum or articles (other than a special resolution under Article 15) the company shall send with it a printed copy of the memorandum or articles as altered.
3
If a company fails to comply with this Article, the company and any officer of it who is in default is liable to a fine and, for continued contravention, to a daily default fine.
Copies of memorandum and articles to be given to members30
1
A company shall, on being so required by any member, send to him a copy of its memorandum and of its articles (if any), and a copy of any statutory provision which alters the memorandum, subject to payment—
a
in the case of a copy of the memorandum and of the articles, of 5 pence or such less sum as the company may determine, and
b
in the case of a copy of a statutory provision, of such sum not exceeding its published price as the company may require.
2
If a company makes default in complying with this Article, the company and every officer of it who is in default is liable for each offence to a fine.
Issued copy of memorandum to embody alterations31
1
Where an alteration is made in a company's memorandum, every copy of the memorandum issued after the date of the alteration shall be in accordance with the alteration.
2
If, where any such alteration has been made, the company at any time after the date of the alteration issues any copies of the memorandum which are not in accordance with the alteration, it is liable to a fine, and so too is every officer of the company who is in default.
A company's membership
Definition of “member”32
1
The subscribers of a company's memorandum are deemed to have agreed to become members of the company, and on its registration shall be entered as such in its register of members.
2
Every other person who agrees to become a member of a company, and whose name is entered in its register of members, is a member of the company.
F62Membership of holding company33
1
Except as mentioned in this Article, a body corporate cannot be a member of a company which is its holding company and any allotment or transfer of shares in a company to its subsidiary is void.
2
The prohibition does not apply where the subsidiary is concerned only as personal representative or trustee unless, in the latter case, the holding company or a subsidiary of it is beneficially interested under the trust.
For the purpose of ascertaining whether the holding company or a subsidiary is so interested, there shall be disregarded—
a
any interest held only by way of security for the purposes of a transaction entered into by the holding company or subsidiary in the ordinary course of a business which includes the lending of money;
b
any such interest as is mentioned in Part I of Schedule 2.
F633
The prohibition does not apply where shares in the holding company are held by the subsidiary in the ordinary course of its business as an intermediary.
For this purpose a person is an intermediary if that person—
a
carries on a bona fide business of dealing in securities;
b
is a member of an EEA exchange (and satisfies any requirements for recognition as a dealer in securities laid down by that exchange) or is otherwise approved or supervised as a dealer in securities under the laws of an EEA State; and
c
does not carry on an excluded business.
3A
The excluded businesses are the following—
a
any business which consists wholly or mainly in the making or managing of investments;
b
any business which consists wholly or mainly in, or is carried on wholly or mainly for the purpose of, providing services to persons who are connected with the person carrying on the business;
c
any business which consists in insurance business;
d
any business which consists in managing or acting as trustee in relation to a pension scheme or which is carried on by the manager or trustee of such a scheme in connection with or for the purposes of the scheme;
e
any business which consists in operating or acting as trustee in relation to a collective investment scheme or is carried on by the operator or trustee of such a scheme in connection with or for the purposes of the scheme.
3B
For the purposes of paragraphs (3) and (3A)—
a
the question whether a person is connected with another shall be determined in accordance with the provisions of section 839 of the Income and Corporation Taxes Act 1988;
b
“collective investment scheme” has the meaning given in section 235 of the Financial Services and Markets Act 2000;
c
“EEA exchange” means a market which appears on the list drawn up by an EEA State pursuant to Article 16 of Council Directive 93/22/EEC on investment services in the securities field;
d
“insurance business” means business which consists of the effecting or carrying out of contracts of insurance;
e
“securities” includes—
i
options,
ii
futures, and
iii
contracts for differences,
and rights or interests in those investments;
f
“trustee” and “the operator” shall, in relation to a collective investment scheme, be construed in accordance with section 237(2) of the Financial Services and Markets Act 2000.
3C
Paragraph (3B) must be read with—
a
section 22 of the Financial Services and Markets Act 2000;
b
any relevant order under that section; and
c
Schedule 2 to that Act.
3D
Where—
a
a subsidiary which is a dealer in securities has purportedly acquired shares in its holding company in contravention of the prohibition in paragraph (1); and
b
a person acting in good faith has agreed, for value and without notice of that contravention, to acquire shares in the holding company from the subsidiary or from someone who has purportedly acquired the shares after their disposal by the subsidiary,
any transfer to that person of the shares mentioned in sub-paragraph (a) shall have the same effect as it would have had if their original acquisition by the subsidiary had not been in contravention of the prohibition.
4
Where a body corporate became a holder of shares in a company—
a
before 1st April 1961, or
b
on or after that date and beforeF63 2nd August 2004, in circumstances in which this Article as it then had effect did not apply,
but at any timeF63 on or after 2nd August 2004 falls within the prohibition in paragraph (1) in respect of those shares, it may continue to be a member of that company; but for so long as that prohibition would apply, apart from this paragraph, it has no right to vote in respect of those shares at meetings of the company or of any class of its members.
5
Where a body corporate becomes a holder of shares in a companyF63 on or after 2nd August 2004. in circumstances in which the prohibition in paragraph (1) does not apply, but subsequently falls within that prohibition in respect of those shares, it may continue to be a member of that company; but for so long as that prohibition would apply, apart from this paragraph, it has no right to vote in respect of those shares at meetings of the company or of any class of its members.
6
Where a body corporate is permitted to continue as a member of a company by virtue of paragraph (4) or (5), an allotment to it of fully paid shares in the company may be validly made by way of capitalisation of reserves of the company; but for so long as the prohibition in paragraph (1) would apply, apart from paragraph (4) or (5), it has no right to vote in respect of those shares at meetings of the company or of any class of its members.
7
The provisions of this Article apply to a nominee acting on behalf of a subsidiary as to the subsidiary itself.
8
In relation to a company other than a company limited by shares, the references in this Article to shares shall be construed as references to the interest of its members as such, whatever the form of that interest.
Minimum membership for carrying on business34 F64
F651
If a companyF66, other than a private company limited by shares or by guarantee, carries on business without having at least two members and does so for more than 6 months, a person who, for the whole or any part of the period that it so carries on business after those 6 months—
a
is a member of the company, and
b
knows that it is carrying on business with only one member,
is liable (jointly and severally with the company) for the payment of the company's debts contracted during the period or, as the case may be, that part of it.
F652
For the purposes of this Article references to a member of a company do not include the company itself where it is such a member only by virtue of its holding shares as treasury shares.
CHAPTER IICOMPANY NAMES
Name as stated in memorandum35
1
The name of a public company must end with the words “public limited company” and those words may not be preceded by the word “limited”.
2
In the case of a company limited by shares or by guarantee (not being a public company), the name must have “limited” as its last word, subject to Article 40 (exempting, in certain circumstances, a company from the requirement to have “limited” as part of the name).
Prohibition on registration of certain names36
1
A company shall not be registered under this Order by a name—
a
which includes, otherwise than at the end of the name, any of the following words or expressions, that is to say, “limited”, “unlimited”F70, “public limited company”, “community interest company” or “community interest public limited company”;
b
which includes otherwise than at the end of the name an abbreviation of any of those words or expressions;
F67bb
which includes, at any place in the name, the expression “investment company with variable capital” or “open‐ended investment company”;
F68bbb
which includes, at any place in the name, the expression “limited liability partnership”;
c
which is the same as a name appearing in the registrar's index of company names;
d
the use of which by the company would in the opinion of the Department constitute a criminal offence; or
e
which in the opinion of the Department is offensive.
2
Except with the approval of the Department, a company shall not be registered under this Order by a name which—
a
in the opinion of the Department would be likely to give the impression that the company is connected in any way with Her Majesty's Government or with any district council; or
b
includes any word or expression for the time being prescribed in regulations under Article 39.
C33
In determining for the purposes of paragraph (1)(c) whether one name is the same as another, there are to be disregarded—
a
the definite article, where it is the first word of the name;
b
the following words and expressions where they appear at the end of the name, that is to say—
“company”, “and company”, “company limited”, “and company limited”, “limited”, “unlimited”F69. . . “public limited company”F71, “community interest company”, “community interest public limited company”,F69F67. . . “investment company with variable capital”;F67 and open‐ended investment company
c
abbreviations of any of those words or expressions where they appear at the end of the name; and
d
type and case of letters, accents, spaces between letters and punctuation marks;
and “and” and “&” are to be taken as the same.
Alternatives of statutory designations37
1
A company which by any provision of this Order is either required or entitled to include in its name, as the last part, any of the words specified in paragraph (4) may, instead of those words, include as the last part of its name the abbreviations there specified as alternatives in relation to those words.
2
A reference in this Order to the name of a company or to the inclusion of any of those words in a company's name includes a reference to the name including (in place of any of the words so specified) the appropriate alternative, or to the inclusion of the appropriate alternative, as the case may be.
3
A provision of this Order requiring a company not to include any of those words in its name also requires it not to include the abbreviated alternative specified in paragraph (4).
4
For the purposes of this Article—
a
the alternative of “limited” is “ltd.”; and
b
the alternative of “public limited company” is “p.l.c.”F72; and
c
the alternative of “community interest company” is “c.i.c.”; and
d
the alternative of “community interest public limited company” is “community interest p.l.c.”.
Change of name38
1
A company may by special resolution change its name (but subject to Article 41 in the case of a company which has received a direction under paragraph (2) of that Article from the Department).
2
Where a company has been registered by a name which—
a
is the same as or, in the opinion of the Department, too like a name appearing at the time of the registration in the registrar's index of company names, or
b
is the same as or, in the opinion of the Department, too like a name which should have appeared in that index at that time,
the Department may within 12 months of that time, in writing, direct the company to change its name within such period as the Department may specify.
Article 36(3)applies in determining under this paragraph whether a name is the same as or too like another.
3
If it appears to the Department that misleading information has been given for the purpose of a company's registration with a particular name, or that undertakings or assurances have been given for that purpose and have not been fulfilled, the Department may within 5 years of the date of the company's registration with that name in writing direct the company to change its name within such period as the Department may specify.
4
Where a direction has been given under paragraph (2) or (3), the Department may by a further direction in writing extend the period within which the company is to change its name, at any time before the end of that period.
5
A company which fails to comply with a direction under this Article, and any officer of it who is in default, is liable to a fine and, for continued contravention, to a daily default fine.
6
Where a company changes its name under this Article, the registrar shall (subject to Article 36) enter the new name on the register in place of the former name, and shall issue a certificate of incorporation altered to meet the circumstances of the case; and the change of name has effect from the date on which the altered certificate is issued.
7
A change of name by a company under this Article does not affect any rights or obligations of the company or render defective any legal proceedings by or against it; and any legal proceedings that might have been continued or commenced against it by its former name may be continued or commenced against it by its new name.
Regulations about names39
F741
The Department may by regulations—
a
prescribe words or expressions for the registration of which as or as part of a company's corporate name the Department's approval is required under Article 36(2)(b), and
b
in relation to any such word or expression, prescribe a government department or other body as the relevant body for the purposes of paragraph (2).
2
Where a company proposes to have as, or as part of, its corporate name any such word or expression in relation to which a relevant body has been prescribed under paragraph (1)(b), a request shall be made (in writing) to the relevant body to indicate whether (and if so why) it has any objections to the proposal; and the person to make the request is—
a
in the case of a company seeking to be registered under this Part, the person making the statutory declarationF73 under Article 23(3) or statement under Article 23(4) (as the case may be),
b
in the case of a company seeking to be registered under Article 629, the persons making the statutory declarationF73 under Article 635(2) or statement under Article 635(2A) (as the case may be), and
c
in any other case, a director or secretary of the company concerned.
3
The person who has made that request to the relevant body shall submit to the registrar a statement that it has been made and a copy of any response received from that body, together with—
a
the requisite statutory declarationF73 or statement, or
b
a copy of the special resolution changing the company's name,
according as the case is the one or the other of those mentioned in paragraph (2).
4
Articles 658 and 659 (public inspection of documents kept by registrar) do not apply to documents sent under paragraph (3) other than documents mentioned in sub-paragraphs (a) and (b) of that paragraph.
5
Regulations under this Article may contain such transitional provisions and savings as the Department thinks appropriate.
6
The regulations shall be laid before the Assembly after being made and shall cease to have effect at the end of the statutory period next after the regulations have been so laid (but without prejudice to anything previously done by virtue of the regulations or to the making of new regulations) unless during that period they are approved by a resolution of the Assembly.
Exemption from requirement of “limited” as part of the name40
1
Certain companies are exempt from requirements of this Order relating to the use of the word “limited” as part of the company name.
2
A private company (including a private company about to be registered) limited by guarantee is exempt from those requirements and so too is a company which on 30th June 1983 was a private company limited by shares with a name which, by virtue of a licence under section 19 of the Act of 1960, did not include the word “limited”; but in either case the company must, to have the exemption, comply with the requirements of paragraph (3).
3
Those requirements are that—
a
the objects to the company are (or, in the case of a company about to be registered, are to be) the promotion of commerce, art, science, education, religion, charity or any profession, and anything incidental or conducive to any of those objects; and
b
the company's memorandum or articles—
i
require its profits (if any) or other income to be applied in promoting its objects,
ii
prohibit the payment of dividends to its members, and
iii
require all the assets which would otherwise be available to its members generally to be transferred on its winding up either to another body with objects similar to its own or to another body the objects of which are the promotion of charity and anything incidental or conducive thereto (whether or not the body is a member of the company).
4
5
The statutory declaration must be in the prescribed form and be made—
a
in the case of a company to be formed, by a solicitor engaged in its formation or by a person named as director or secretary in the statement delivered under Article 21(2);
b
in the case of a company to be registered in pursuance of Article 629, by two or more directors or other principal officers of the company; and
c
in the case of a company proposing to change its name so that it ceases to have the word “limited” as part of its name, by a director or secretary of the company.
F755A
In place of the statutory declaration referred to in paragraph (4), there may be delivered to the registrar using electronic communications a statement made by a person falling within the applicable sub-paragraph of paragraph (5) stating that the company complies with the requirements of paragraph (3); and the registrar may accept such a statement as sufficient evidence of the matters stated in it.
5B
The registrar may refuse to register a company by a name which does not include the word “limited” unless a statutory declaration under paragraph (4) or statement under paragraph (5A) has been delivered to him.
5C
Any person who makes a false statement under paragraph (5A) which he knows to be false or does not believe to be true is liable to imprisonment or a fine, or both.
6
References in this Article to the word “limited” include the appropriate alternative.
7
A company whichF76 under this Article is exempt from requirements relating to the use of the word “limited” and does not include that word as part of its name, is also exempt from the requirements of this Order relating to the publication of its name and the sending of lists of members to the registrar.
Provisions applying to company exempt under Article 4041
1
A company which is exempt under Article 40 and whose name does not include the word “limited” shall not alter its memorandum or articles so that it ceases to comply with the requirements of paragraph (3) of that Article.
2
If it appears to the Department that such a company—
a
has carried on any business other than the promotion of any of the objects mentioned in that paragraph; or
b
has applied any of its profits or other income otherwise than in promoting such objects; or
c
has paid a dividend to any of its members,
the Department may, in writing, direct the company to change its name by resolution of the directors within such period as may be specified in the direction, so that its name ends with the word “limited”.
F77. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F782A
Where such a resolution is passed by the directors, the company must give notice to the registrar of the change.
2B
Where a company changes its name under this Article, the registrar shall (subject to Article 36) enter the new name on the register in place of the former name, and shall issue a certificate of incorporation altered to meet the circumstances of the case; and the change of name has effect from the date on which the altered certificate is issued.
2C
A change of name by a company under this Article does not affect any right or obligations of the company or render defective any legal proceedings by or against it; and any legal proceedings that might have been continued or commenced against it by its former name may be continued or commenced against it by its new name.
3
A company which has received a direction under paragraph (2) shall not thereafter be registered by a name which does not include the word “limited”, without the approval of the Department.
4
References in this Article to the word “limited” include the appropriate alternative.
5
A company which contravenes paragraph (1), and any officer of it who is in default, is liable to a fine and, for continued contravention, to a daily default fine.
6
A company which fails to comply with a direction by the Department under paragraph (2), and any officer of the company who is in default, is liable to a fine and, for continued contravention, to a daily default fine.
Power to require company to abandon misleading name42
1
If in the opinion of the Department the name by which a company is registered gives so misleading an indication of the nature of its activities as to be likely to cause harm to the public, the Department may direct it to change its name.
2
The direction must, if not duly made the subject of an application to the court under paragraph (3), be complied with within a period of 6 weeks from the date of the direction or such longer period as the Department may think fit to allow.
3
The company may, within a period of 3 weeks from the date of the direction, apply to the court to set it aside; and the court may set the direction aside or confirm it and, if it confirms the direction, shall specify a period within which it must be complied with.
4
If a company makes default in complying with a direction under this Article, it is liable to a fine and, for continued contravention, to a daily default fine.
5
Where a company changes its name under this Article, the registrar shall (subject to Article 36) enter the new name on the register in place of the former name, and shall issue a certificate of incorporation altered to meet the circumstances of the case; and the change of name has effect from the date on which the altered certificate is issued.
6
A change of name by a company under this Article does not affect any of its rights or obligations or render defective any legal proceedings by or against it; and any legal proceedings that might have been continued or commenced against it by its former name may be continued or commenced against it by its new name.
Prohibition on trading under misleading name43
1
A person who is not a public company is guilty of an offence if he carries on any trade, profession or business under a name which includes, as its last part, the words “public limited company” or any contraction or imitation of those words.
2
A public company is guilty of an offence if, in circumstances in which the fact that it is a public company is likely to be material to any person, it uses a name which may reasonably be expected to give the impression that it is a private company.
3
A person guilty of an offence under paragraph (1) or (2) and, if that person is a company, any officer of the company who is in default, is liable to a fine and, for continued contravention, to a daily default fine.
Penalty for improper use of “limited”44
If any person trades or carries on business under a name or title of which the word “limited”, or any contraction or imitation of that word, is the last word, that person, unless duly incorporated with limited liability, is liable to a fine and, for continued contravention, to a daily default fine.
F80Penalty for improper use of “community interest company”44A
1
A company which is not a community interest company is guilty of an offence if it carries on any trade, profession or business under a name which includes any of the expressions specified in paragraph (3).
2
A person other than a company is guilty of an offence if it carries on any trade, profession or business under a name which includes any of those expressions (or any contraction of them) as its last part.
3
The expressions are—
a
“community interest company”, and
b
“community interest public limited company”.
4
Paragraphs (1) and (2) do not apply—
a
to a person who was carrying on a trade, profession or business under the name in question at any time during the period beginning with 1st January 2005 and ending with 15th March 2005, or
b
if the name in question was on 15th March 2005 a registered trade mark or Community trade mark (within the meaning of the Trade Marks Act 1994), to a person who was on that date a proprietor or licensee of that trade mark.
5
A person guilty of an offence under paragraph (1) or (2) and, if that person is a company, any officer of the company who is in default, is liable to a fine and, for continued contravention, to a daily default fine.
{prosp. insertion of art. 44A by 2005 NI17}4AF79
CHAPTER IIIA COMPANY'S CAPACITY; FORMALITIES OF CARRYING ON BUSINESS
A company's capacity not limited by its memorandumC445
1
The validity of an act done by a company shall not be called into question on the ground of lack of capacity by reason of anything in the company's memorandum.
2
A member of a company may bring proceedings to restrain the doing of an act which but for paragraph (1) would be beyond the company's capacity; but no such proceedings shall lie in respect of an act to be done in fulfilment of a legal obligation arising from a previous act of the company.
3
It remains the duty of the directors to observe any limitations on their powers flowing from the company's memorandum; and action by the directors which but for paragraph (1) would be beyond the company's capacity may only be ratified by the company by special resolution.
A resolution ratifying such action shall not affect any liability incurred by the directors or any other person; relief from any such liability must be agreed to separately by special resolution.
4
The operation of this Article is restricted by Article 9A of the Charities (Northern Ireland) Order 1987 in relation to companies which are charities; and Article 330A below (invalidity of certain transactions to which directors or their associates are parties) has effect notwithstanding this Article.
Power of directors to bind the companyC545A
1
In favour of a person dealing with a company in good faith, the power of the board of directors to bind the company, or authorise others to do so, shall be deemed to be free of any limitation under the company's constitution.
2
For this purpose—
a
a person “deals with” a company if he is a party to any transaction or other act to which the company is a party;
b
a person shall not be regarded as acting in bad faith by reason only of his knowing that an act is beyond the powers of the directors under the company's constitution; and
c
a person shall be presumed to have acted in good faith unless the contrary is proved.
3
The references above to limitations on the directors' powers under the company's constitution include limitations deriving—
a
from a resolution of the company in general meeting or a meeting of any class of shareholders, or
b
from any agreement between the members of the company or of any class of shareholders.
4
Paragraph (1) does not affect any right of a member of the company to bring proceedings to restrain the doing of an act which is beyond the powers of the directors; but no such proceedings shall lie in respect of an act to be done in fulfilment of a legal obligation arising from a previous act of the company.
5
Nor does that paragraph affect any liability incurred by the directors, or any other person, by reason of the directors' exceeding their powers.
6
The operation of this Article is restricted by Article 9A of the Charities (Northern Ireland) Order 1987 in relation to companies which are charities; and Article 330A below (invalidity of certain transactions to which directors or their associates are parties) has effect notwithstanding this Article.
No duty to enquire as to capacity of company or authority of directors45B
A party to a transaction with a company is not bound to enquire as to whether it is permitted by the company's memorandum or as to any limitation on the powers of the board of directors to bind the company or authorise others to do so.
Form of company contracts46 F81
F82A contract may be made—
a
by a company, by writing under its common seal, or
b
on behalf of a company, by any person acting under its authority, express or implied;
and any formalities required by law in the case of a contract made by an individual also apply, unless a contrary intention appears, to a contract made by or on behalf of a company.
Execution of documents46A F83
1
The following provisions have effect with respect to the execution of documents by a company.
2
F84. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3
A company need not have a common seal, F85. . .
4
F84. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5
F84. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6
F84. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pre-incorporation contracts and deeds46B F86
1
A contract which purports to be made by or on behalf of a company at a time when the company has not been formed has effect, subject to any agreement to the contrary, as one made with the person purporting to act for the company or as agent for it, and he is personally liable on the contract accordingly.
2
Paragraph (1) applies to the making of a deed as it applies to the making of a contract.
Bills of exchange and promissory notes47 F87
A bill of exchange or promissory note is deemed to have been made, accepted or endorsed on behalf of a company if made, accepted or endorsed in the name of, or by or on behalf or on account of, the company by a person acting under its authority.
Execution of deeds abroad48 F88
1
A company may, by writing under its common seal, empower any person, either generally or in respect of any specified matters, as its attorney, to execute deeds on its behalf in any place elsewhere than in the United Kingdom.
F892
A deed executed by such an attorney on behalf of the company has the same effect as if it were executed under the company's common seal.
Power of company to have official seal for use abroad49
1 F90
A companyF91 which has a common seal and whose objects require or comprise the transaction of business in foreign countries may, if authorised by its articles, have for use in any territory, district, or place elsewhere than in the United Kingdom, an official seal, which shall be a facsimile ofF91 its common seal, with the addition on its face of the name of every territory, district or place where it is to be used.
F912
The official seal when duly affixed to a document has the same effect as the company's common seal.
3
A company having an official seal for use in any such territory, district or place may, by writing under its common seal, authorise any person appointed for the purpose in that territory, district or place to affix the official seal to any deed or other document to which the company is party in that territory, district or place.
4
As between the company and a person dealing with such an agent, the agent's authority continues during the period (if any) mentioned in the instrument conferring the authority, or if no period is there mentioned, then until notice of the revocation or determination of the agent's authority has been given to the person dealing with him.
5
The person affixing the official seal shall certify in writing on the deed or other instrument to which the seal is affixed the date on which and the place at which it is affixed.
Official seal for share certificates, etc.50
F92A companyF93 which has a common seal may have, for use for sealing securities issued by the company and for sealing documents creating or evidencing securities so issued, an official seal which is a facsimile ofF93 its common seal with the addition on its face of the word “Securities”.F93 The official seal when duly affixed to a document has the same effect as the company's common seal.
Authentication of documents51
F94. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Events affecting a company's status52
F95. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PART IIIRE-REGISTRATION AS A MEANS OF ALTERING A COMPANY'S STATUS
Private company becoming public
Re-registration of private company as public53
1
Subject to this Article and Articles 54 to 58, a private company (other than a company not having a share capital) may be re-registered as a public company if—
a
a special resolution that it should be so re-registered is passed; and
b
an application for re-registration is delivered to the registrar, together with the necessary documents.
A company cannot be re-registered under this Article if it has previously been re-registered as unlimited.
2
The special resolution must—
a
alter the company's memorandum so that it states that the company is to be a public company; and
b
make such other alterations in the memorandum as are necessary to bring it (in substance and in form) into conformity with the requirements of this Order with respect to the memorandum of a public company (the alterations to include compliance with Article 35(1)F97, or section 33 of the Companies (Audit, Investigations and Community Enterprise) Act 2004, as regards the company's name); and
c
make such alterations in the company's articles as are requisite in the circumstances.
3
The application must be in the prescribed form and be signed by a director or secretary of the company; and the documents to be delivered with it are the following—
a
a printed copy of the memorandum and articles as altered in pursuance of the resolution;
b
a copy of a written statement by the company's auditors that in their opinion the relevant balance sheet shows that at the balance sheet date the amount of the company's net assets (within the meaning given to that expression by F98section 831 of the Companies Act 2006) was not less than the aggregate of its called-up share capital and undistributable reserves;
c
a copy of the relevant balance sheet, together with a copy of an unqualified report (as defined in Article 56) by the company's auditors in relation to that balance sheet;
d
if Article 54 applies, a copy of the valuation report under paragraph (2)(b) of that Article; and
e
F96subject to paragraph (3A), a statutory declaration in the prescribed form by a director or secretary of the company—
i
that the special resolution required by this Article has been passed and that the conditions of Articles 54 and 55 (so far as applicable) have been satisfied, and
ii
that, between the balance sheet date and the application for re-registration, there has been no change in the company's financial position that has resulted in the amount of its net assets becoming less than the aggregate of its called-up share capital and undistributable reserves.
F963A
In place of the statutory declaration referred to in sub-paragraph (e) of paragraph (3), there may be delivered to the registrar using electronic communications a statement made by a director or secretary of the company as to the matters set out in heads (i) and (ii) of that sub-paragraph.
3B
Any person who makes a false statement under paragraph (3A) which he knows to be false or does not believe to be true is liable to imprisonment or a fine, or both.
4
In this Article and Articles 54 and 56, “relevant balance sheet” means a balance sheet prepared as at a date not more than 7 months before the company's application under this Article.
5
A resolution that a company be re-registered as a public company may change the company name by deleting the word “company” or the words “and company”, including any abbreviation of them.
Consideration for shares recently allotted to be valued54
1
This Article applies if shares have been allotted by the company between the relevant balance sheet date and the passing of the special resolution under Article 53, and those shares were allotted as fully or partly paid up as to their nominal value or any premium on them otherwise than in cash.
2
Subject to the following provisions of this Article, the registrar shall not entertain an application by the company under Article 53 unless beforehand—
a
the consideration for the allotment has been valued in accordance with Article 118, and
b
a report with respect to the value of the consideration has been made to the company (in accordance with that Article) during the 6 months immediately preceding the allotment of the shares.
3
Where an amount standing to the credit of any of the company's reserve accounts, or of its profit and loss account, has been applied in paying up (to any extent) any of the shares allotted to members of the company or any premium on those shares, the amount applied does not count as consideration for the allotment, and accordingly paragraph (2) does not apply to it.
4
Paragraph (2) does not apply if the allotment is in connection with an arrangement providing for it to be on terms that the whole or part of the consideration for the shares allotted is to be provided by the transfer to the company or the cancellation of all or some of the shares, or of all or some of the shares of a particular class, in another company (with or without the issue to the company applying under Article 53 of shares, or of shares of any particular class, in that other company).
5
But paragraph (4) does not exclude the application of paragraph (2), unless under the arrangement it is open to all the holders of the shares in the other company in question (or, where the arrangement applies only to shares of a particular class, to all the holders of the other company's shares of that class) to take part in the arrangement.
In determining whether that is the case, shares held by or by a nominee of the company allotting shares in connection with the arrangement, or by or by a nominee of a company which is that company's holding company or subsidiary or a company which is a subsidiary of its holding company, are to be disregarded.
6
Paragraph (2) does not apply to preclude an application under Article 53, if the allotment of the company's shares is in connection with its proposed merger with another company; that is, where one of the companies concerned proposes to acquire all the assets and liabilities of the other in exchange for the issue of shares or other securities in that one to shareholders of the other, with or without any cash payment to those shareholders.
7
In this Article—
a
“arrangement” means any agreement, scheme or arrangement, including an arrangement sanctioned in accordance with F100section 899 of the Companies Act 2006 (company compromise with creditors and members) orF99 Article 96 of the Insolvency Order (liquidator in winding up accepting shares as consideration for sale of a company's property), and
b
“another company” includes any body corporate and any body to which letters patent have been issued under the [1837 c. 73] Chartered Companies Act 1837.
Additional requirements relating to share capital55
1
For a private company to be re-registered under Article 53 as a public company, the following conditions with respect to its share capital must be satisfied at the time the special resolution under that Article is passed.
2
Subject to paragraphs (5) to (7)—
a
the nominal value of the company's allotted share capital must be not less than the authorised minimum, F101(see Chapter 2 of Part 20 of the Companies Act 2006) and
b
each of the company's allotted shares must be paid up at least as to one-quarter of the nominal value of that share and the whole of any premium on it.
3
Subject to paragraph (5), if any shares in the company or any premium payable on them have been fully or partly paid up by an undertaking given by any person that he or another should do work or perform services (whether for the company or any other person), the undertaking must have been performed or otherwise discharged.
4
Subject to paragraph (5), if shares have been allotted as fully or partly paid up as to their nominal value or any premium payable on them otherwise than in cash and the consideration for the allotment consists of or includes an undertaking (other than one to which paragraph (3) applies) to the company, then either—
a
the undertaking must have been performed or otherwise discharged, or
b
there must be a contract between the company and some person pursuant to which the undertaking is to be performed within 5 years from the time the special resolution under Article 53 is passed.
5
For the purpose of determining whether paragraphs (2)(b), (3) and (4) are complied with, certain shares in the company may be disregarded; and these are—
a
subject to paragraph (6), any share which was allotted on or before 31st December 1984, or
b
any share which was allotted in pursuance of an employees' share scheme and by reason of which the company would, but for this paragraph, be precluded under paragraph (2)(b) (but not otherwise) from being re-registered as a public company.
6
A share is not be disregarded under paragraph (5)(a) if the aggregate in nominal value of that share and other shares proposed to be so disregarded is more than one-tenth of the nominal value of the company's allotted share capital; but for this purpose the allotted share capital is treated as not including any shares disregarded under paragraph (5)(b).
7
Any shares disregarded under paragraph (5) are treated as not forming part of the allotted share capital for the purposes of paragraph (2)(a).
Meaning of “unqualified report” in Article 53(3)56
1
The following paragraphs explain the reference in Article 53(3)(c) to an unqualified report of the company's auditors on the relevant balance sheet.
F1022
If the balance sheet was prepared for a financial year of the company, the reference is to an auditors' report stating without material qualification the auditors' opinion that the balance sheet has been properly prepared F103in accordance with the Companies Act 2006.
3
If the balance sheet was not prepared for a financial year of the company, the reference is to an auditors' report stating without material qualification the auditors' opinion that the balance sheet has been properly prepared in accordance with F104the provisions of the Companies Act 2006 which would have applied if it had been so prepared.
For the purposes of an auditors' report under this paragraph F104the provisions of the Companies Act 2006 shall be deemed to apply with such modifications as are necessary by reason of the fact that the balance sheet is not prepared for a financial year of the company.
4
A qualification shall be regarded as material unless the auditors state in their report that the matter giving rise to the qualification is not material for the purpose of determining (by reference to the company's balance sheet) whether at the balance sheet date the amount of the company's net assets was not less than the aggregate of its called up share capital and undistributable reserves.
Certificate of re-registration under Article 5357
1
If the registrar is satisfied, on an application under Article 53, that a company may be re-registered under that Article as a public company, he shall—
a
retain the application and other documents delivered to him under that Article; and
b
issue the company with a certificate of incorporation stating that the company is a public company.
2
The registrar may accept a declaration under Article 53(3)(e)F107 or a statement under Article 53(3A) as sufficient evidence that the special resolution required by that Article has been passed and the other conditions of re-registration have been satisfied.
3
The registrar shall not issue a certificate of incorporation if it appears to him that the court has made an order confirming a reduction of the company's capital which has the effect of bringing the nominal value of the company's allotted share capital below the authorised minimum F108(see Chapter 2 of Part 20 of the Companies Act 2006).
4
Upon the issue to a company of a certificate of incorporation under this Article—
a
the company by virtue of the issue of that certificate becomes a public company; and
b
any alterations in the memorandum and articles of association set out in the resolution take effect accordingly.
5
A certificate of incorporation is conclusive evidence—
a
that the requirements of this Order in respect of re-registration and of matters precedent and incidental thereto have been complied with; and
b
that the company is a public company.
Modification for unlimited company re-registering58
1
In their application to unlimited companies, Articles 53 to 57 are modified as follows.
2
The special resolution required by paragraph (1) of Article 53 must, in addition to the matters mentioned in paragraph (2) of that Article—
a
state that the liability of the members is to be limited by shares, and what the company's share capital is to be; and
b
make such alterations in the company's memorandum as are necessary to bring it in substance and in form into conformity with the requirements of this Order with respect to the memorandum of a company limited by shares.
3
The certificate of incorporation issued under paragraph (1) of Article 57 shall, in addition to containing the statement required by sub-paragraph (b) of that paragraph, state that the company has been incorporated as a company limited by shares; and—
a
the company by virtue of the issue of the certificate becomes a public company so limited; and
b
the certificate is conclusive evidence of the fact that it is such a company.
Limited company becoming unlimited
Re-registration of limited company as unlimited59
1
Subject as follows, a company which is registered as limited may be re-registered as unlimited in pursuance of an application in that behalf complying with the requirements of this Article.
2
A company is excluded from re-registering under this Article if it is limited by virtue or re-registration under Article 119 of the Order of 1978 or Article 61 of this Order.
3
A public company cannot be re-registered under this Article; nor can a company which has previously been re-registered as unlimited.
4
An application under this Article must be in the prescribed form and be signed by a director or the secretary of the company, and be lodged with the registrar, together with the documents specified in paragraph (8).
5
The application must set out such alterations in the company's memorandum as—
a
if it is to have a share capital, are requisite to bring it (in substance and in form) into conformity with the requirements of this Order with respect to the memorandum of a company to be formed as an unlimited company having a share capital; or
b
if it is not to have a share capital, are requisite in the circumstances.
6
If articles of association have been registered, the application must set out such alterations in them as—
a
if the company is to have a share capital, are requisite to bring its articles (in substance and in form) into conformity with the requirements of this Order with respect to the articles of a company to be formed as an unlimited company having a share capital; or
b
if the company is not to have a share capital, are requisite in the circumstances.
7
If articles of association have not been registered, the application must have annexed to it, and request the registration of, printed articles; and these must, if the company is to have a share capital, comply with the requirements mentioned in paragraph (6)(a) and, if not, be articles appropriate to the circumstances.
8
The documents to be lodged with the registrar are—
a
the prescribed form of assent to the company's being registered as unlimited, subscribed by or on behalf of all the members of the company;
b
F109subject to paragraph (8A), a statutory declaration made by the directors of the company—
i
that the persons by whom or on whose behalf the form of assent is subscribed constitute the whole membership of the company, and
ii
that if any of the members have not subscribed that form themselves, that the directors have taken all reasonable steps to satisfy themselves that each person who subscribed it on behalf of a member was lawfully empowered to do so;
c
a printed copy of the memorandum incorporating the alterations in it set out in the application; and
d
if articles of association have been registered, a printed copy of them incorporating the alterations set out in the application.
F1098A
In place of the lodging of a statutory declaration under sub-paragraph (b) of paragraph (8), there may be delivered to the registrar using electronic communications a statement made by the directors of the company as to the matters set out in heads (i) and (ii) of that sub-paragraph.
8B
Any person who makes a false statement under paragraph (8A) which he knows to be false or does not believe to be true is liable to imprisonment or a fine, or both.
9
For the purposes of this Article—
a
subscription to a form of assent by the personal representative of a deceased member of a company is deemed a subscription by him; and
b
the assignees or trustee in bankruptcy of a member of a company is, to the exclusion of that member, deemed a member of the company.
Certificate of re-registration under Article 5960
1
The registrar shall retain the application and other documents lodged with him under Article 59 and shall—
a
if articles of association are annexed to the application, register them; and
b
issue to the company a certificate of incorporation appropriate to the status to be assumed by it by virtue of that Article.
2
On the issue of the certificate—
a
the status of the company, by virtue of the issue, is changed from limited to unlimited; and
b
the alterations in the memorandum set out in the application and (if articles of association have been previously registered) any alterations to the articles so set out take effect as if duly made by resolution of the company; and
c
the provision of this Order apply accordingly to the memorandum and articles as altered by virtue of Article 59.
3
The certificate is conclusive evidence that the requirements of Article 59 in respect of re-registration and of matters precedent and incidental to it have been complied with, and that the company was authorised to be re-registered under this Order in pursuance of that Article and was duly so re-registered.
Unlimited company becoming limited
Re-registration of unlimited company as limited61
1
Subject as follows, a company which is registered as unlimited may be re-registered as limited if a special resolution that it should be so re-registered is passed, and the requirements of this Article are complied with in respect of the resolution and otherwise.
2
A company cannot under this Article be re-registered as a public company; and a company is excluded from re-registering under it if it is unlimited by virtue of re-registration under Article 118 of the Order of 1978 or Article 59 or this Order.
3
The special resolution must state whether the company is to be limited by shares or by guarantee and—
a
if it is to be limited by shares, must state what the share capital is to be and provide for the making of such alterations in the memorandum as are necessary to bring it (in substance and in form) into conformity with the requirements of this Order with respect to the memorandum of a company so limited, and such alterations in the articles of association as are requisite in the circumstances;
b
if it is to be limited by guarantee, must provide for the making of such alterations in its memorandum and articles as are necessary to bring them (in substance and in form) into conformity with the requirements of this Order with respect to the memorandum and articles of a company so limited.
4
F110. . . an application for the company to be re-registered as limited, framed in the prescribed form and signed by a director or by the secretary of the company, must be lodged with the registrar, together with the necessary documents, not earlier than the day on which the copy of the resolution forwarded F111under section 30 of the Companies Act 2006 is received by him.
5
The documents to be lodged with the registrar are—
a
a printed copy of the memorandum as altered in pursuance of the resolution; and
b
a printed copy of the articles as so altered.
6
This Article does not apply in relation to the re-registration of an unlimited company as a public company under Article 53.
Certificate of re-registration under Article 6162
1
The registrar shall retain the application and other documents lodged with him under Article 61, and shall issue to the company a certificate of incorporation appropriate to the status to be assumed by the company by virtue of that Article.
2
On the issue of the certificate—
a
the status of the company is, by virtue of the issue, changed from unlimited to limited; and
b
the alterations in the memorandum specified in the resolution and the alterations in, and additions to, the articles so specified take effect.
3
The certificate is conclusive evidence that the requirements of Article 61 in respect of re-registration and of matters precedent and incidental to it have been complied with, and that the company was authorised to be re-registered in pursuance of that Article and was duly so re-registered.
Public company becoming private
Re-registration of public company as private63
1
A public company may be re-registered as a private company if—
a
a special resolution complying with paragraph (2) that it should be so re-registered is passed and has not been cancelled by the court under Article 64;
b
an application for the purpose in the prescribed form and signed by a director or the secretary of the company is delivered to the registrar, together with a printed copy of the memorandum and articles of the company as altered by the resolution; and
c
the period during which an application for the cancellation of the resolution under Article 64 may be made has expired without any such application having been made; or
d
where such an application has been made, the application has been withdrawn or an order has been made under Article 64(5) confirming the resolution and a copy of that order has been delivered to the registrar.
2
The special resolution must alter the company's memorandum so that it no longer states that the company is to be a public company and must make such other alterations in the company's memorandum and articles as are requisite in the circumstances.
3
A company cannot under this Article be re-registered otherwise than as a company limited by shares or by guarantee.
Litigation objection to resolution under Article 6364
1
Where a special resolution by a public company to be re-registered under Article 63 as a private company has been passed, an application may be made to the court for the cancellation of that resolution.
2
The application may be made—
a
by the holders of not less in the aggregate than 5 per cent. in nominal value of the company's issued share capital or any class thereof;
b
if the company is not limited by shares, by not less than 5 per cent. of its members; or
c
by not less than 50 of its members;
but not by a person who has consented to or voted in favour of the resolution.
F1122A
For the purposes of paragraph (2)(a), any of the company's issued share capital held as treasury shares must be disregarded.
3
The application must be made within 28 days after the passing of the resolution and may be made on behalf of the persons entitled to make the application by such one or more of their number as they may appoint in writing for the purpose.
4
If such an application is made, the company shall forthwith give notice in the prescribed form of that fact to the registrar.
5
On the hearing of the application, the court shall make an order either cancelling or confirming the resolution and—
a
may make that order on such terms and conditions as it thinks fit, and may (if it thinks fit) adjourn the proceedings in order that an arrangement may be made to the satisfaction of the court for the purchase of the interests of dissentient members; and
b
may give such directions and make such orders as it thinks expedient for facilitating or carrying into effect any such arrangement.
6
The court's order may, if the court thinks fit, provide for the purchase by the company of the shares of any of its members and for the reduction accordingly of the company's capital, and may make such alterations in the company's memorandum and articles as may be required in consequence of that provision.
7
The company shall, within 15 days from the making of the court's order, or within such longer period as the court may at any time by order direct, deliver to the registrar an office copy of the order.
8
If the court's order requires the company not to make any, or any specified, alteration in its memorandum or articles, the company has not then power without the leave of the court to make any such alteration in breach of that requirement.
9
An alteration in the memorandum or articles made by virtue of an order under this Article, if not made by resolution of the company, is of the same effect as if duly made by resolution; and this Order applies accordingly to the memorandum or articles as so altered.
10
A company which fails to comply with paragraph (4) or paragraph (7), and any officer of it who is in default, is liable to a fine and, for continued contravention, to a daily default fine.
Certificate of re-registration under Article 6365
1
If the registrar is satisfied that a company may be re-registered under Article 63, he shall—
a
retain the application and other documents delivered to him under that Article; and
b
issue the company with a certificate of incorporation appropriate to a private company.
2
On the issue of the certificate—
a
the company by virtue of the issue becomes a private company; and
b
the alterations in the memorandum and articles set out in the resolution under Article 63 take effect accordingly.
3
The certificate is conclusive evidence—
a
that the requirements of Article 63 in respect of re-registration and of matters precedent and incidental to it have been complied with; and
b
that the company is a private company.
F113PART IVCAPITAL ISSUES
Pt. IV (arts. 66-89) repealed by Financial Services Act 1986 (c. 60), ss. 211(1), 212(3), Sch. 17 Pt. II (the repeal coming into force as mentioned in S.I. 1986/2246, art. 5, Sch. 4, S.I. 1988/740, arts. 2-7, Sch. (as amended by S.I 1988/1960, arts. 2-4 and by S.I. 1988/2285, arts. 2-6) and S.I. 1995/1538, art. 2 and otherwise prosp.)
CHAPTER IISSUES BY COMPANIES REGISTERED, OR TO BE REGISTERED, IN NORTHERN IRELAND
The prospectus
F114Matters to be stated, and reports to be set out, in prospectus66
1
Every prospectus issued by or on behalf of a company, or by or on behalf of any person who is or has been engaged or interested in the formation of the company, must comply—
a
with Part I of Schedule 3, as respects the matters to be stated in the prospectus, and
b
with Part II of that Schedule, as respects the reports to be set out.
2
It is unlawful to issue any form of application for shares in or debentures of a company unless the form is issued with a prospectus which complies with the requirements of this Article.
3
Paragraph (2) does not apply if it is shown that the form of application was issued either—
a
in connection with a bona fide invitation to a person to enter into an underwriting agreement with respect to the shares or debentures, or
b
in relation to shares or debentures which were not offered to the public.
4
If a person acts in contravention of paragraph (2), he is liable to a fine.
5
This Article does not apply—
a
to the issue to existing members or debenture holders of a company of a prospectus or form of application relating to shares in or debentures of the company, whether an applicant for shares or debentures will or will not have the right to renounce in favour of other persons, or
b
to the issue of a prospectus or form of application relating to shares or debentures which are or are to be in all respects uniform with shares or debentures previously issued and for the time being listed on a prescribed stock exchange;
but subject to this, it applies to a prospectus or a form of application whether issued on or with reference to the formation of a company or subsequently.
F115Attempted evasion of Article 66 to be void67
A condition requiring or binding an applicant for shares in or debentures of a company to waive compliance with any requirement of Article 66, or purporting to affect him with notice of any contract, document or matter not specifically referred to in the prospectus, is void.
Document offering shares, etc. for sale deemed a prospectus68
F116. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Arts. 69, 70 rep. by SI 2001/3649
F117Prospectus containing statement by expert71
1
A prospectus inviting persons to subscribe for a company's shares or debentures and including a statement purporting to be made by an expert shall not be issued unless—
a
he (the expert) has given and has not, before delivery of a copy of the prospectus for registration, withdrawn his written consent to its issue with the statement included in the form and context in which it is in fact included; and
b
a statement that he has given and not withdrawn that consent appears in the prospectus.
2
If a prospectus is issued in contravention of this Article the company and every person who is knowingly a party to the issue of the prospectus is liable to a fine.
F118Meaning of “expert”72
In this Part, “expert” includes engineer, valuer, accountant and any other person whose profession gives authority to a statement made by him.
F119Prospectus to be dated73
A prospectus issued by or on behalf of a company, or in relation to an intended company, shall be dated; and that date shall, unless the contrary is proved, be taken as its date of publication.
Registration of prospectus
F120Registration requirement applicable in all cases74
1
No prospectus shall be issued by or on behalf of a company, or in relation to an intended company, unless on or before the date of its publication there has been delivered to the registrar for registration a copy of the prospectus—
a
signed by every person who is named in it as a director or proposed director of the company, or by his agent authorised in writing, and
b
having endorsed on or attached to it any consent to its issue required by Article 71 from any person as an expert.
2
Where the prospectus is such a document as is referred to in Article 68, the signatures required by paragraph (1) include those of every person making the offer, or his agent authorised in writing.
Where the offer is made by a company or a firm, it is sufficient for the purposes of this paragraph if the document is signed on its behalf by 2 directors or (as the case may be) not less than half of the partners; and a director or partner may sign by his agent authorised in writing.
3
Every prospectus shall on its face—
a
state that a copy has been delivered for registration as required by this Article, and
b
specify, or refer to statements in the prospectus specifying, any documents required by this Article or Article 75 to be endorsed on or attached to the copy delivered.
4
The registrar shall not register a prospectus unless it is dated and the copy of it signed as required by this Article and unless it has endorsed on or attached to it the documents (if any) specified in paragraph (3)(b).
5
If a prospectus is issued without a copy of it being delivered to the registrar as required by this Article, or without the copy so delivered having the required documents endorsed on or attached to it, the company and every person who is knowingly a party to the issue of the prospectus is liable to a fine and, for continued contravention, to a daily default fine.
F121Additional requirements in case of prospectus issued generally75
1
In the case of a prospectus issued generally the following provisions apply in addition to those of Article 74.
2
The copy of the prospectus delivered to the registrar must also have endorsed on or attached to it a copy of any contract required by paragraph 11 of Schedule 3 to be stated in the prospectus or, in the case of a contract not reduced into writing, a memorandum giving full particulars of it.
3
In the case of a contract wholly or partly in a foreign language—
a
the copy required by paragraph (2) to be endorsed on or attached to the prospectus must be a copy of a translation of the contract into English or (as the case may be) a copy embodying a translation into English of the parts in a foreign language, and
b
the translation must be certified in the prescribed manner to be a correct translation.
4
If the person making any report required by Part II of Schedule 3 have made in the report, or have (without giving reasons) indicated in it, any such adjustments as are mentioned in paragraph 21 of that Schedule (profits, losses, assets, liabilities), the copy of the prospectus delivered to the registrar must have endorsed on or attached to it a written statement signed by those persons setting out the adjustments and giving the reasons for them.
Liabilities and offences in connection with prospectus
F122Directors, etc. exempt from liability in certain cases76
1
In the event of contravention of Article 66, a director or other person responsible for the prospectus does not incur any liability by reason of that contravention if—
a
as regards any matter not disclosed, he proves that he was not cognisant of it, or
b
he proves that the contravention arose from an honest mistake of fact on his part, or
c
the contravention was in respect of matters which, in the opinion of the court dealing with the case, were immaterial or was otherwise such as ought (in the court's opinion, having regard to all the circumstances of the case) reasonably to be excused.
2
In the event of failure to include in a prospectus a statement with respect to the matters specified in paragraph 13 of Schedule 3 (disclosure of directors' interests), no director or other person incurs any liability in respect of the failure unless it is proved that he had knowledge of the matters not disclosed.
3
Nothing in Article 66 or 67 or this Article limits or diminishes any liability which a person may incur under the general law or this Order apart from those provisions.
F123Compensation for subscribers misled by statement in prospectus77
1
Where a prospectus invites persons to subscribe for a company's shares or debentures, compensation is payable to all those who subscribe for any shares or debentures on the faith of the prospectus for the loss or damage which they may have sustained by reason of any untrue statement included in it.
2
The persons liable to pay the compensation are—
a
every person who is a director of the company at the time of the issue of the prospectus,
b
every person who authorised himself to be named, and is named, in the prospectus as a director or as having agreed to become a director (either immediately or after an interval of time),
c
every person being a promoter of the company, and
d
every person who has authorised the issue of the prospectus.
3
Paragraphs (1) and (2) have effect subject to Articles 78 and 79; and here and in those Articles “promoter” means a promoter who was party to the preparation of the prospectus, or of the portion of it containing the untrue statement, but does not include any person by reason of his acting in a professional capacity for persons engaged in procuring the formation of the company.
F124Exemption from Article 77 for those acting with propriety78
1
A person is not liable under Article 77 if he proves—
a
that, having consented to become a director of the company, he withdrew his consent before the issue of the prospectus, and that it was issued without his authority or consent, or
b
that the prospectus was issued without his knowledge or consent, and that on becoming aware of its issue he forthwith gave reasonable public notice that it was issued without his knowledge or consent, or
c
that after issue of the prospectus and before allotment under it he, on becoming aware of any untrue statement in it, withdrew his consent to its issue and gave reasonable public notice of the withdrawal and of the reason for it.
2
A person is not liable under that Article if he proves that—
a
as regards every untrue statement nor purporting to be made on the authority of an expert or of a public official document or statement, he had reasonable ground to believe, and did up to the time of the allotment of the shares or debentures (as the case may be) believe, that the statement was true; and
b
as regards every untrue statement purporting to be a statement by an expert or contained in what purports to be a copy of or extract from a report or valuation of an expert, it fairly represented the statement, or was a correct and fair copy of or extract from the report or valuation, and he had reasonable ground to believe and did up to the time of issue of the prospectus believe that the person making the statement was competent to make it and that person had given the consent required by Article 71 to the issue of the prospectus and had not withdrawn that consent before delivery of a copy of the prospectus for registration or, to the defendant's knowledge, before allotment under it; and
c
as regards every untrue statement purporting to be made by an official person or contained in what purports to be a copy of or extract from a public official document, it was a correct and fair representation of the statement or copy of or extract from the document.
3
Paragraphs (1) and (2) do not apply in the case of a person liable, by reason of his having given a consent required of him by Article 71, as a person who has authorised the issue of the prospectus in respect of an untrue statement purporting to be made by him as an expert.
4
Where under Article 71 the consent of a person is required to the issue of a prospectus and he has given that consent, he is not by reason of his having given it liable under Article 77 as a person who has authorised the issue of the prospectus except in respect of an untrue statement purporting to be made by him as an expert.
5
A person who, apart from this paragraph, would under Article 77 be liable, by reason of his having given a consent required of him by Article 71, as a person who has authorised the issue of a prospectus in respect of an untrue statement purporting to be made by him as an expert is not so liable if he proves—
a
that, having given his consent under Article 71 to the issue of the prospectus, he withdrew it in writing before the delivery of a copy of the prospectus for registration; or
b
that, after delivery of a copy of the prospectus for registration and before allotment under it, he, on becoming aware of the untrue statement, withdrew his consent in writing and gave reasonable public notice of the withdrawal and of the reason for it; or
c
that he was competent to make the statement and that he had reasonable ground to believe, and did up to the time of the allotment of the shares or debentures (as the case may be) believe, that the statement was true.
F125Indemnity for innocent director or expert79
1
This Article applies where—
a
the prospectus contains the name of a person as a director of the company, or as having agreed to become a director of it, and he has not consented to become a director, or has withdrawn his consent before the issue of the prospectus, and has not authorised or consented to its issue, or
b
the consent of a person is required under Article 71 to the issue of the prospectus and he either has not given that consent or has withdrawn it before the issue of the prospectus.
2
The directors of the company (except any without whose knowledge or consent the prospectus was issued) and any other person who authorised its issue are liable to indemnify the person named, or whose consent was required under Article 71 (as the case may be), against all damages, costs and expenses to which he may be liable by reason of his name having been inserted in the prospectus or of the inclusion in it of a statement purporting to be made by him as an expert (as the case may be), or in defending himself against any action or legal proceeding brought against him in respect of it.
3
A person is not deemed for the purposes of this Article to have authorised the issue of a prospectus by reason only of his having given the consent required by Article 71 to the inclusion of a statement purporting to be made by him as an expert.
F126Criminal liability for untrue statements80
1
If a prospectus is issued with an untrue statement included in it, any person who authorised the issue of the prospectus is guilty of an offence and liable to imprisonment or a fine, or both, unless he proves either—
a
that the statement was immaterial, or
b
that he had reasonable ground to believe and did, up to the time of the issue of the prospectus, believe that the statement was true.
2
A person is not deemed for the purpose of this Article to have authorised the issue of a prospectus by reason only of his having given the consent required by Article 71 to the inclusion in it of a statement purporting to be made by him as an expert.
Supplementary
F127Interpretation for Articles 66 to 8081
For the purposes of Articles 66 to 80—
a
a statement included in a prospectus is deemed to be untrue if it is misleading in the form and context in which it is included, and
b
a statement is deemed to be included in a prospectus if it is contained in it, or in any report or memorandum appearing on its face, or by reference incorporated in, or issued with, the prospectus.
CHAPTER IIISSUES BY COMPANIES INCORPORATED, OR TO BE INCORPORATED, OUTSIDE THE UNITED KINGDOM
F128Prospectus of non-United Kingdom company82
1
It is unlawful for a person to issue, circulate or distribute in Northern Ireland any prospectus offering for subscription shares in or debentures of a company incorporated or to be incorporated outside the United Kingdom (whether the company has or has not established, or when formed will or will not establish, a place of business in the United Kingdom) unless the prospectus complies with the requirements of paragraphs (2) and (3).
2
The prospectus must be dated and contain particulars with respect to the following matters—
a
the instrument constituting or defining the constitution of the company;
b
the enactments, or provisions having the force of an enactment, by or under which the incorporation of the company was effected;
c
an address in the United Kingdom where that instrument, and those enactments or provisions, or copies of them (and, if they are in a foreign language, a translation of them certified in the prescribed manner), can be inspected;
d
the date on which, and the country in which, the company was incorporated; and
e
whether the company has established a place of business in the United Kingdom and, if so, the address of its principal office in the United Kingdom.
3
Subject to the following provisions, the prospectus must comply—
a
with Part I of Schedule 3, as respects the matters to be stated in the prospectus, and
b
with Part II of that Schedule, as respects the reports to be set out.
4
Sub-paragraphs (a) to (c) of paragraph (2) do not apply in the case of a prospectus issued more than 2 years after the company is entitled to commence business.
5
It is unlawful for a person to issue to any person in Northern Ireland a form of application for shares in or debentures of such a company or intended company as is mentioned in paragraph (1) unless the form is issued with a prospectus which complies with this Chapter and the issue of which in Northern Ireland does not contravene Article 84 or 85.
This paragraph does not apply if it is shown that the form of application was issued in connection with a bona fide invitation to a person to enter into an underwriting agreement with respect to the shares or debentures.
6
This Article—
a
does not apply to the issue to a company's existing members or debenture holders of a prospectus or form of application relating to shares in or debentures of the company, whether an applicant for shares or debentures will or will not have the right to renounce in favour of other persons; and
b
except in so far as it requires a prospectus to be dated, does not apply to the issue of a prospectus relating to shares or debentures which are or are to be in all respects uniform with shares or debentures previously issued and for the time being listed on a prescribed stock exchange;
but subject to this, it applies to a prospectus or form of application whether issued on or with reference to the formation of a company or subsequently.
F129Attempted evasion of Article 82 to be void83
A condition requiring or binding an applicant for shares or debentures to waive compliance with any requirement imposed—
a
by paragraph (2) of Article 82, as regards the particulars to be contained in the prospectus, or
b
by paragraph (3) of that Article, as regards compliance with Schedule 3,
or purporting to affect an applicant with notice of any contract, document or matter not specifically referred to in the prospectus, is void.
F130Prospectus containing statement by expert84
1
This Article applies in the case of a prospectus offering for subscription shares in or debentures of a company incorporated or to be incorporated outside the United Kingdom (whether it has or has not established, or when formed will or will not establish, a place of business in the United Kingdom), if the prospectus includes a statement purporting to be made by an expert.
2
It is unlawful for any person to issue, circulate or distribute in Northern Ireland such a prospectus if—
a
the expert has not given, or has before the delivery of the prospectus for registration withdrawn, his written consent to the issue of the prospectus with the statement included in the form and context in which it is included; or
b
there does not appear in the prospectus a statement that he has given and has not withdrawn his consent as mentioned in sub-paragraph (a).
3
For the purposes of this Article, a statement is deemed to be included in a prospectus if it is contained in it, or in any report or memorandum appearing on its face, or by reference incorporated in, or issued with, the prospectus.
F131Restrictions on allotment to be secured in prospectus85
1
It is unlawful for a person to issue, circulate or distribute in Northern Ireland a prospectus offering for subscription shares in or debentures of a company incorporated or to be incorporated outside the United Kingdom (whether the company has or has not established, or when formed will or will not establish, a place of business in the United Kingdom), unless the prospectus complies with the following condition.
2
The prospectus must have the effect, where an application is made in pursuance of it, of rendering all persons concerned bound by all the provisions (other than penal provisions) of Articles 92, 96 and 97 (restrictions on allotment), so far as applicable.
F132Stock exchange certificate exempting from compliance with Schedule 386
1
This Article applies where—
a
it is proposed to offer to the public by a prospectus issued generally any shares in or debentures of a company incorporated or to be incorporated outside the United Kingdom (whether the company has or has not established, or when formed will or will not establish, a place of business in the United Kingdom), and
b
application is made to a prescribed stock exchange for permission of those shares or debentures to be listed on that stock exchange.
2
There may on the applicant's request be given by or on behalf of that stock exchange a certificate that, having regard to the proposals (as stated in the request) as to the size and other circumstances of the issue of shares or debentures and as to any limitation on the number and class of person to whom the offer is to be made, compliance with Schedule 3 would be unduly burdensome.
3
If a certificate is given under paragraph (2), and if the proposals mentioned in that paragraph are adhered to and the particulars and information required to be published in connection with the application for permission to the stock exchange are so published, then—
a
a prospectus giving the particulars and information in the form in which they are so required to be published is deemed to comply with Schedule 3, and
b
except as respects the requirement for the prospectus to be dated, Article 82 does not apply to any issue, after the permission applied for is given, of a prospectus or form of application relating to the shares or debentures.
F133Registration of prospectus before issue87
1
It is unlawful for a person to issue, circulate or distribute in Northern Ireland a prospectus offering for subscription shares in or debentures of a company incorporated or to be incorporated outside the United Kingdom (whether the company has or has not established, or when formed will or will not establish, a place of business in the United Kingdom), unless before the issue, circulation or distribution of the prospectus in Northern Ireland the requirements of this Article have been complied with.
2
A copy of the prospectus, certified by the chairman and two other directors of the company as having been approved by resolution of the managing body, must have been delivered for registration to the registrar or the registrar of companies as defined in the [1985 c. 6] Companies Act 1985.
3
The prospectus must state on the face of it that a copy has been so delivered and the following must be endorsed on or attached to that copy of the prospectus—
a
any consent to the issue of the prospectus which is required by Article 84;
b
a copy of any contract required by paragraph 11 of Schedule 3 to be stated in the prospectus or, in the case of a contract not reduced into writing, a memorandum giving full particulars of it; and
c
where the persons making any report required by Part II of Schedule 3 have made in it or have, without giving the reasons, indicated in it any such adjustments as are mentioned in paragraph 21 of that Schedule, a written statement signed by those persons setting out the adjustments and giving the reasons for them.
4
If in the case of a prospectus deemed by virtue of a certificate under Article 86 to comply with Schedule 3, a contract or a copy of it, or a memorandum of a contract, is required to be available for inspection in connection with the application under that Article to the stock exchange, a copy or (as the case may be) a memorandum of the contract must be endorsed on or attached to the copy of the prospectus delivered to the registrar for registration.
5
References in paragraphs (3)(b) and (4) to the copy of a contract are, in the case of a contract wholly or partly in a foreign language, to a copy of a translation of the contract into English, or a copy embodying a translation into English of the parts in foreign language (as the case may be); and—
a
the translation must in either case be certified in the prescribed manner to be a correct translation, and
b
the reference in paragraph (4) to a copy of a contract required to be available for inspection includes a copy of a translation of it or a copy embodying a translation of parts of it.
F134Consequences (criminal and civil) of contravention of Articles 82 to 8788
1
A person who is knowingly responsible for the issue, circulation or distribution of a prospectus, or for the issue of a form of application for shares or debentures, in contravention of any of the provisions of Articles 82 to 87 is liable to a fine.
2
Articles 77, 78 and 79 extend to every prospectus offering for subscription shares in or debentures of a company incorporated or to be incorporated outside the United kingdom (whether the company has or has not established, or when formed will or will not establish, a place of business in the United Kingdom), substituting for any reference to Article 71 a reference to Article 84.
3
In the event of contravention of any of the requirements of Article 82(2) as regards the particulars to be contained in the prospectus, or Article 82(3) as regards compliance with Schedule 3, a director or other person responsible for the prospectus incurs no liability by reason of the contravention if—
a
as regards any matter not disclosed, he proves that he was not cognisant of it, or
b
he proves that the contravention arose from an honest mistake of fact on his part, or
c
the contravention was in respect of matters which, in the opinion of the court dealing with the case, were immaterial or was otherwise such as ought, in the court's opinion, having regard to all the circumstances of the case, reasonably to be excused.
4
In the event of failure to include in a prospectus to which this Chapter applies a statement with respect to the matters contained in paragraph 13 of Schedule 3, no director or other person incurs any liability in respect of the failure unless it is proved that he had knowledge of the matters not disclosed.
5
Nothing in Article 82 or 83 or this Article limits or diminishes any liability which a person may incur under the general law or this Order, apart from those provisions.
F135Supplementary89
1
Where a document by which the shares in or debentures of a company incorporated outside the United Kingdom are offered for sale to the public would, if the company had been a company incorporated under this Order, have been deemed by virtue of Article 68 to be a prospectus issued by the company, that document is deemed, for the purposes of this Chapter, a prospectus so issued.
2
An offer of shares or debentures for subscription or sale to a person whose ordinary business it is to buy or sell shares or debentures (whether as principal or agent) is not deemed an offer to the public for those purposes.
3
In this Chapter “shares” and “debentures” have the same meaning as when those expressions are used, elsewhere in this Order, in relation to a company incorporated under this Order.
PART VALLOTMENT OF SHARES AND DEBENTURES
General provisions as to allotment
Authority of company required for certain allotments90
1
The directors of a company shall not exercise any power of the company to allot relevant securities unless they are, in accordance with this ArticleF136 or Article 90A, authorised to do so by—
a
the company in general meeting; or
b
the company's articles.
2
In this Article “relevant securities” means—
a
shares in the company other than shares shown in the memorandum to have been taken by the subscribers to it or shares allotted in pursuance of an employees' share scheme, and
b
any right to subscribe for, or to convert any security into, shares in the company (other than shares so allotted);
and a reference to the allotment of relevant securities includes the grant of such a right but (subject to paragraph (6)) not the allotment of shares pursuant to such a right.
3
Authority under this Article may be given for a particular exercise of the power or for its exercise generally, and may be unconditional or subject to conditions.
4
The authority must state the maximum amount of relevant securities that may be allotted under it and the date on which it will expire, which must be not more than 5 years from whichever is relevant of the following dates—
a
in the case of an authority contained in the company's articles at the time of its original incorporation, the date of that incorporation; and
b
in any other case, the date on which the resolution is passed by virtue of which the authority is given;
but such an authority (including an authority contained in the company's articles) may be previously revoked or varied by the company in general meeting.
5
The authority may be renewed or further renewed by the company in general meeting for a further period not exceeding 5 years; but the resolution must state (or restate) the amount of relevant securities which may be allotted under the authority or, as the case may be, the amount remaining to be allotted under it, and must specify the date on which the renewed authority will expire.
6
In relation to an authority under this Article for the grant of such rights as are mentioned in paragraph (2)(b), the reference in paragraph (4) (as also the corresponding reference in paragraph (5)) to the maximum amount of relevant securities that may be allotted under the authority is to the maximum amount of shares which may be allotted pursuant to the rights.
7
The directors may allot relevant securities, notwithstanding that any authority under this Article has expired, if they are allotted in pursuance of an offer or agreement made by the company before the authority expired and the authority allowed it to make an offer or agreement which would or might require relevant securities to be allotted after the authority expired.
8
A resolution of a company to give, vary, revoke or renew such an authority may, notwithstanding that it alters the company's articles, be an ordinary resolution; F137but in any case Chapter 3 of Part 3 of the Companies Act 2006 (resolutions affecting a company's constitution) applies to it.
9
A director who knowingly and wilfully contravenes, or permits or authorises a contravention of, this Article is liable to a fine.
10
Nothing in this Article affects the validity of any allotment.
11
This Article does not apply to any allotment of relevant securities by a company, other than a public company registered as such on its original incorporation, if it is made in pursuance of an offer or agreement made before the earlier of the following two dates—
a
the date of the holding of the first general meeting of the company after its registration or re-registration as a public company, and
b
1st January 1985;
but any resolution to give, vary or revoke an authority for the purposes of Article 16 of the Order of 1981 or this Article has effect for those purposes if passed at any time on or after 10th June 1981.
F138Election by private company as to duration of authority90A
1
A private company may elect (by elective resolution in accordance with Article 387A) that the provisions of this Article shall apply, instead of the provisions of Article 90(4) and (5), in relation to the giving or renewal, after the election, of an authority under that Article.
2
The authority must state the maximum amount of relevant securities that may be allotted under it and may be given—
a
for an indefinite period, or
b
for a fixed period, in which case it must state the date on which it will expire.
3
In either case an authority (including an authority contained in the articles) may be revoked or varied by the company in general meeting.
4
An authority given for a fixed period may be renewed or further renewed by the company in general meeting.
5
A resolution renewing an authority—
a
must state, or re-state, the amount of relevant securities which may be allotted under the authority or, as the case may be, the amount remaining to be allotted under it, and
b
must state whether the authority is renewed for an indefinite period or for a fixed period, in which case it must state the date on which the renewed authority will expire.
6
The references in this Article to the maximum amount of relevant securities that may be allotted shall be construed in accordance with Article 90(6).
7
If an election under this Article ceases to have effect, an authority then in force which was given for an indefinite period or for a fixed period of more than five years—
a
if given five years or more before the election ceases to have effect, shall expire forthwith, and
b
otherwise, shall have effect as if it had been given for a fixed period of five years.
Restriction on public offers by private company91
F139. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F140Application for, and allotment of, shares and debentures92
1
No allotment shall be made of a company's shares or debentures in pursuance of a prospectus issued generally, and no proceedings shall be taken on applications made in pursuance of a prospectus so issued, until the beginning of the third day after that on which the prospectus is first so issued or such later time (if any) as may be specified in the prospectus.
2
The beginning of that third day, or that later time, is “the time of the opening of the subscription lists”.
3
In paragraph (1), the reference to the day on which the prospectus is first issued generally is to the day when it is first so issued as a newspaper advertisement; and if it is not so issued as a newspaper advertisement before the third day after that on which it is first so issued in any other manner, the reference is to the day on which it is first so issued in any manner.
4
In reckoning for this purpose the third day after another day—
a
any intervening day which is a Saturday or Sunday, or which is a bank holiday, is to be disregarded; and
b
if the third day (as so reckoned) is itself a Saturday or Sunday, or a bank holiday, there is to be substituted the first day after that which is none of them.
5
The validity of an allotment is not affected by any contravention of paragraphs (1) to (4); but in the event of contravention, the company and every officer of it who is in default is liable to a fine.
6
As applying to a prospectus offering shares or debentures for sale, paragraphs (1) to (5) are modified as follows—
a
for references to allotment, substitute references to sale; and
b
for the reference to the company and every officer of it who is in default, substitute a reference to any person by or through whom the offer is made and who knowingly and wilfully authorises or permits the contravention.
7
An application for shares in or debentures of a company which is made in pursuance of a prospectus issued generally is not revocable until after the expiration of the third day after the time of the opening of the subscription lists, or the giving before the expiration of that day of the appropriate public notice; and that notice is one given by some person responsible under Articles 77 to 79 for the prospectus and having the effect under those Articles of excluding or limiting the responsibility of the giver.
F141No allotment unless minimum subscription received93
1
No allotment shall be made of any share capital of a company offered to the public for subscription unless—
a
there has been subscribed the amount stated in the prospectus as the minimum amount which, in the opinion of the directors, must be raised by the issue of share capital in order to provide for the matters specified in paragraph 2 of Schedule 3 (preliminary expenses, purchase of property, working capital, etc); and
b
the sum payable on application for the amount so stated has been paid to and received by the company.
2
For the purposes of paragraph (1)(b), a sum is deemed paid to the company, and received by it, if a cheque for that sum has been received in good faith by the company and the directors have no reason for suspecting that the cheque will not be paid.
3
The amount so stated in the prospectus is to be reckoned exclusively of any amount payable otherwise than in cash and is known as “the minimum subscription”.
4
If the above conditions have not been complied with on the expiration of 40 days after the first issue of the prospectus, all money received from applicants for shares shall be forthwith repaid to them without interest.
5
If any of the money is not repaid within 48 days after the issue of the prospectus, the directors of the company are jointly and severally liable to repay it with interest at the rate of 5 per cent. per annum from the expiration of the 48th day; except that a director is not so liable if he proves that the default in the repayment of the money was not due to any misconduct or negligence on his part.
6
Any condition requiring or binding an applicant for shares to waive compliance with any requirement of this Article is void.
7
This Article does not apply to an allotment of shares subsequent to the first allotment of shares offered to the public for subscription.
Allotment where issue not fully subscribed94
1
No allotment shall be made of any share capital of a public company offered for subscription unless—
a
that capital is subscribed for in full; or
b
the offer states that, even if the capital is not subscribed for in full, the amount of that capital subscribed for may be allotted in any event or in the event of the conditions specified in the offer being satisfied;
and, where conditions are so specified, no allotment of the capital shall be made by virtue of sub-paragraph (b) unless those conditions are satisfied.
F142This is without prejudice to Article 93.
2
If shares are prohibited from being allotted by paragraph (1) and 40 days have elapsed after the first issue of the prospectus, all money received from applicants for shares shall be forthwith repaid to them without interest.
3
If any of the money is not repaid within 48 days after the issue of the prospectus, the directors of the company are jointly and severally liable to repay it with interest at the rate of 5 per cent. per annum from the expiration of the 48th day; except that a director is not so liable if he proves that the default in repayment was not due to any misconduct or negligence on his part.
4
This Article applies in the case of shares offered as wholly or partly payable otherwise than in cash as it applies in the case of shares offered for subscription (the word “subscribed” in paragraph (1) being construed accordingly).
5
In paragraphs (2) and (3) as they apply to the case of shares offered as wholly or partly payable otherwise than in cash, references to the repayment of money received from applicants for shares include—
a
the return of any other consideration so received (including, if the case so requires, the release of the applicant from any undertaking), or
b
if it is not reasonably practicable to return the consideration, the payment of money equal to its value at the time it was so received,
and references to interest apply accordingly.
6
Any condition requiring or binding an applicant for shares to waive compliance with any requirement of this Article is void.
Effect of irregular allotment95
1
An allotment made by a company to an applicant in contravention of ArticleF143 93 or 94 is voidable at the instance of the applicant within one month after the date of the allotment, and not later, and is so voidable notwithstanding that the company is in the course of being wound up.
2
If a director of a company knowingly contravenes, or permits or authorises the contravention of, any provision of either of those Articles with respect to allotment, he is liable to compensate the company and the allottee respectively for any loss, damages or costs which the company or the allottee may have sustained or incurred by the contravention.
3
But proceedings to recover any such loss, damages or costs shall not be commenced after the expiration of 2 years from the date of the allotment.
F144Allotment of shares, etc. to be listed on a stock exchange96
1
This Article applies where a prospectus, whether issued generally or not, states that application has been or will be made for permission for the shares or debentures offered by it to be listed on any stock exchange.
2
An allotment made on an application in pursuance of the prospectus is, whenever made, void if the permission has not been applied for before the third day after the first issue of the prospectus or, if the permission has been refused, before the expiration of 3 weeks from the date of the closing of the subscription lists or such longer period (not exceeding 6 weeks) as may, within those 3 weeks, be notified to the applicant for permission by or on behalf of the stock exchange.
3
In reckoning for this purpose the third day after another day—
a
any intervening day which is a Saturday or Sunday, or which is a bank holiday, is to be disregarded; and
b
if the third day (as so reckoned) is itself a Saturday or Sunday or a bank holiday, there is to be substituted the first day after that which is none of them.
4
Where permission has not been applied for as mentioned in paragraph (2), or has been refused as so mentioned, the company shall forthwith repay (without interest) all money received from applicants in pursuance of the prospectus.
5
If any of the money is not repaid within 8 days after the company becomes liable to repay it, the directors of the company are jointly and severally liable to repay the money with interest at the rate of 5 per cent. per annum from the expiration of the 8th day, except that a director is not liable if he proves that the default in the repayment of the money was not due to any misconduct or negligence on his part.
6
All money received from applicants in pursuance of the prospectus shall be kept in a separate bank account so long as the company may become liable to repay it under paragraph (4); and if default is made in complying with this paragraph, the company and every officer of it who is in default is liable to a fine.
7
Any condition requiring or binding an applicant for shares or debentures to waive compliance with any requirement of this Article is void.
8
For the purposes of this Article, permission is not deemed to be refused if it is intimated that the application for it, though not at present granted, will be given further consideration.
9
This Article has effect in relation to shares or debentures agreed to be taken by a person underwriting an offer of them by a prospectus as if he had applied for them in pursuance of the prospectus.
F145Operation of Article 96 where prospectus offers shares for sale97
1
This Article has effect as regards the operation of Article 96 in relation to a prospectus offering shares for sale.
2
Paragraphs (1) and (2) of that Article apply, but with the substitution for the reference in paragraph (2) to allotment of a reference to sale.
3
Paragraphs (4) and (5) of that Article do not apply; but—
a
if the permission referred to in paragraph (2) of that Article has not been applied for as there mentioned, or has been refused as there mentioned, the offeror of the shares shall forthwith repay (without interest) all money received from applicants in pursuance of the prospectus, and
b
if any such money has not been repaid within 8 days after the offeror becomes liable to repay it, he becomes liable to pay interest on the money due, at the rate of 5 per cent. per annum from the end of the 8th day.
4
Paragraphs (6) to (9) of that Article apply, except that in paragraph (6)—
a
for the first reference to the company there is substituted a reference to the offeror, and
b
for the reference to the company and every officer of the company who is in default there is substituted a reference to any person by or through whom the offer is made and who knowingly and wilfully authorises or permits the default.
Return as to allotments, etc.98
1
This Article applies to a company limited by shares and to a company limited by guarantee and having a share capital.
2
When such a company makes an allotment of its shares, the company shall within one month thereafter deliver to the registrar for registration—
a
a return of the allotments (in the prescribed form) stating the number and nominal amount of the shares comprised in the allotment, the names and addresses of the allottees, and the amount (if any) paid or due and payable on each share, whether on account of the nominal value of the share or by way of premium; and
b
in the case of shares allotted as fully or partly paid up otherwise than in cash—
i
a contract in writing constituting the title of the allotee to the allotment together with any contract of sale, or for services or other consideration in respect of which that allotment was made (such contracts being duly stamped), and
ii
a return stating the number and nominal amount of shares so allotted, the extent to which they are to be treated as paid up, and the consideration for which they have been allotted.
3
Where such a contract as mentioned in paragraph (2) is not reduced to writing, the company shall within one month after the allotment deliver to the registrar for registration the prescribed particulars of the contractF146. . . .
Para.(4) rep. by SI 2005/1634
5
If default is made in complying with this Article, every officer of the company who is in default is liable to a fine and, for continued contravention, to a daily default fine, but subject as follows.
6
In the case of default in delivering to the registrar within one month after the allotment any document required by this Article to be delivered, the company, or any officer liable for the default, may apply to the court for relief; and the court, if satisfied that the omission to deliver the document was accidental or due to inadvertence or that it is just and equitable to grant relief, may make an order extending the time for the delivery of the document for such period as the court thinks proper.
Pre-emption rights
Offers to shareholders to be on pre-emptive basis99
1
Subject to the provisions of this Article and Articles 100 to 106, a company proposing to allot equity securities (as defined in Article 104)—
a
shall not allot any of them on any terms to a person unless it has made an offer to each person who holds relevant shares or relevant employee shares to allot to him on the same or more favourable terms a proportion of those securities which is as nearly as practicable equal to the proportion in nominal value held by him of the aggregate of relevant shares and relevant employee shares, and
b
shall not allot any of those securities to a person unless the period during which any such offer may be accepted has expired or the company has received notice of the acceptance or refusal of every offer so made.
2
Paragraph (3) applies to any provision of a company's memorandum or articles which requires the company, when proposing to allot equity securities consisting of relevant shares of any particular class, not to allot those securities on any terms unless it has complied with the condition that it makes such an offer as is described in paragraph (1) to each person who holds relevant shares or relevant employee shares of that class.
3
If in accordance with a provision to which this paragraph applies—
a
a company makes an offer to allot securities to such a holder, and
b
he or anyone in whose favour he has renounced his right to their allotment accepts the offer,
paragraph (1) does not apply to the allotment of those securities, and the company may allot them accordingly; but this is without prejudice to the application of paragraph (1) in any other case.
4
Paragraph (1) does not apply to a particular allotment of equity securities if these are, or are to be, wholly or partly paid up otherwise than in cash; and securities which a company has offered to allot to a holder of relevant shares or relevant employee shares may be allotted to him, or anyone in whose favour he has renounced his right to their allotment, without contravening paragraph (1)(b).
5
Paragraph (1) does not apply to the allotment of securities which would, apart from a renunciation or assignment of the right to their allotment, be held under an employees' share scheme.
F1476
Where a company holds relevant shares as treasury shares—
a
for the purposes of paragraphs (1) and (2), the company is not a “person who holds relevant shares”; and
b
for the purposes of paragraph (1), the shares held as treasury shares do not form part of “the aggregate of relevant shares and relevant employee shares”.
Communication of pre-emption offers to shareholders100
1
This Article has effect as to the manner in which offers required by Article 99(1), or by a provision to which Article 99(3) applies, are to be made to holders of a company's shares.
2
Subject to paragraphs (3) to (7), an offer shall be in writing and shall be made to a holder of shares either personally or by sending it by post (that is to say, prepaying and posting a letter containing the offer) to him or to his registered address or, if he has no registered address in the United Kingdom, to the address in the United Kingdom supplied by him to the company for the giving of notice to him.
If sent by post, the offer is deemed to be made at the time at which the letter would be delivered in the ordinary course of post.
3
Where shares are held by 2 or more persons jointly, the offer may be made to the joint holder first named in the register of members in respect of the shares.
4
In the case of a holder's death or bankruptcy, the offer may be made—
a
by sending it by post in a prepaid letter addressed to the persons claiming to be entitled to the shares in consequence of the death or bankruptcy by name, or by the title of representatives of the deceased, or assignee in bankruptcy, or by any like description, at the address in the United Kingdom supplied for the purpose by those so claiming, or
b
until such an address has been so supplied, by giving the notice in any manner in which it might have been given if the death or bankruptcy had not occurred.
5
If the holder—
a
has no registered address in the United Kingdom and has not given to the company an address in the United Kingdom for the service of notices on him, or
b
is the holder of a share warrant,
the offer may be made by causing it, or a notice specifying where a copy of it can be obtained or inspected, to be published in the Belfast Gazette.
6
The offer must state a period of not less than 21 days during which it may be accepted; and the offer shall not be withdrawn before the end of that period.
7
This Article does not invalidate a provision to which Article 99(3) applies by reason that that provision requires or authorises an offer under it to be made in contravention of any of paragraphs (1) to (6); but, to the extent that the provision requires or authorises such an offer to be so made, it is of no effect.
Exclusion of Articles 99 and 100 by private company101
1
Article 99(1), 100(1) to (5) or 100(6) may, as applying to allotments by a private company of equity securities or to such allotments of a particular description, be excluded by a provision contained in the memorandum or articles of that company.
2
A requirement or authority contained in the memorandum or articles of a private company, if it is inconsistent with any of those Articles, has effect as a provision excluding that Article; but a provision to which Article 99(3) applies is not to be treated as inconsistent with Article 99(1).
Consequences of contravening Articles 99 and 100102
1
If there is a contravention of Article 99(1), or of Article 100(1) to (5) or of Article 100(6), or of a provision to which Article 99(3) applies, the company, and every officer of it who knowingly authorised or permitted the contravention, are jointly and severally liable to compensate any person to whom an offer should have been made under the Article or provision contravened for any loss, damage, costs or expenses which the person has sustained or incurred by reason of the contravention.
2
However, no proceedings to recover any such loss, damage, costs or expenses shall be commenced after the expiration of 2 years from the delivery to the registrar of the return of allotments in question or, where equity securities other than shares are granted, from the date of the grant.
Saving for other restrictions as to offers103
1
Articles 99 to 102 are without prejudice to any statutory provision by virtue of which a company is prohibited (whether generally or in specified circumstances) from offering or allotting equity securities to any person.
2
Where a company cannot by virtue of such a statutory provision offer or allot equity securities to a holder of relevant shares or relevant employee shares, those Articles have effect as if the shares held by that holder were not relevant shares or relevant employee shares.
Interpretation for Articles 99 to 106104
1
The following paragraphs apply for the interpretation of Articles 99 to 106.
2
“Equity security”, in relation to a company, means a relevant share in the company (other than a share shown in the memorandum to have been taken by a subscriber to the memorandum or a bonus share), or a right to subscribe for, or to convert securities into, relevant shares in the company.
3
A reference to the allotment of equity securities or of equity securities consisting of relevant shares of a particular class includes the grant of a right to subscribe for, or to convert any securities into, relevant shares in the company or (as the case may be) relevant shares of a particular class; but such a reference does not include the allotment of relevant shares pursuant to such a right.
F1483A
A reference to the allotment of equity securities or of equity securities consisting of relevant shares of a particular class also includes the sale of any relevant shares in the company or (as the case may be) relevant shares of a particular class if, immediately before the sale, the shares were held by the company as treasury shares.
4
“Relevant employee shares”, in relation to a company, means shares of the company which would be relevant shares in it but for the fact that they are held by a person who acquired them in pursuance of an employees' share scheme.
5
“Relevant shares”, in relation to a company, means shares in the company other than—
a
shares which as respects dividends and capital carry a right to participate only up to a specified amount in a distribution, and
b
shares which are held by a person who acquired them in pursuance of an employees' share scheme or, in the case of shares which have not been allotted, are to be allotted in pursuance of such a schemeF148 or, in the case of shares held by the company as treasury shares, are to be transferred in pursuance of such a scheme.
6
A reference to a class of shares is to shares to which the same rights are attached as to voting and as to participation, both as respects dividends and as respects capital, in a distribution.
7
In relation to an offer to allot securities required by Article 99(1) or by any provision to which Article 99(3) applies, a reference in Articles 99 to 103 and this Article (however expressed) to the holder of shares of any description is to whoever was at the close of business on a date, to be specified in the offer and to fall in the period of 28 days immediately before the date of the offer, the holder of shares of that description.
Disapplication of pre-emption rights105
1
Where the directors of a company are generally authorised for the purposes of Article 90, they may be given power by the articles of association, or by a special resolution of the company, to allot equity securities pursuant to that authority as if—
a
Article 99(1) did not apply to the allotment, or
b
that Article applied to the allotment with such modifications as the directors may determine;
and where the directors make an allotment under this paragraph, Articles 99 to 104 have effect accordingly.
2
Where the directors of a company are authorised for the purposes of Article 90 (whether generally or otherwise), the company may by special resolution resolve either—
a
that Article 99(1) shall not apply to a specified allotment of equity securities to be made pursuant to that authority, or
b
that that Article shall apply to the allotment with such modifications as may be specified in the resolution;
and where such a resolution is passed, Articles 99 to 104 have effect accordingly.
F1492A
Paragraphs (1) and (2) apply in relation to a sale of shares which is an allotment of equity securities by virtue of Article 104(3A) as if—
a
in paragraph (1) for “Where the directors of a company are generally authorised for the purposes of Article 90, they” there were substituted “
The directors of a company
”
and the words “pursuant to that authority” were omitted, and
b
in paragraph (2), the words from “Where” to “otherwise), the” there were substituted “
The
”
and, in sub-paragraph (a), the words “to be made pursuant to that authority” were omitted.
3
The powers conferred by paragraph (1) or a special resolution under paragraph (2) ceases to have effect when the authority to which it relates is revoked or would (if not renewed) expire; but if the authority is renewed, the power or (as the case may be) the resolution may also be renewed, for a period not longer than that for which the authority is renewed, by a special resolution of the company.
4
Notwithstanding that any such power or resolution has expired, the directors may allot equity securities in pursuance of an offer or agreement previously made by the company, if the power or resolution enabled the company to make an offer or agreement which would or might require equity securities to be allotted after it expired.
5
A special resolution under paragraph (2), or a special resolution to renew such a resolution, shall not be proposed unless it is recommended by the directors and there has been circulated, with the notice of the meeting at which the resolution is proposed, to the members entitled to have that notice a written statement by the directors setting out—
a
their reasons for making the recommendation,
b
the amount to be paid to the company in respect of the equity securities to be allotted, and
c
the directors' justification of that amount.
6
A person who knowingly or recklessly authorises or permits the inclusion in a statement circulated under paragraph (5) of any matter which is misleading, false or deceptive in a material particular is liable to imprisonment or a fine, or both.
Saving for company's pre-emption procedure operative before 1985106
1
Where a company which is re-registered or registered as a public company is or, but for the provisions of the Order of 1981 and the statutory provisions replacing it, would be subject at the time or re-registration or (as the case may be) registration to a pre-1985 pre-emption requirement, Articles 99 to 105 do not apply to an allotment of the equity securities which are subject to that requirement.
2
A “pre-1985 pre-emption requirement” is a requirement imposed (whether by the company's memorandum or articles, or otherwise) before the relevant date by virtue of which the company must, when making an allotment of equity securities, make an offer to allot those securities or some of them in a manner which (otherwise than because involving a contravention of Article 100(1) to (5) or 100(6)) is inconsistent with Articles 99 to 104; and “the relevant date” is—
a
except in a case falling within sub-paragraph (b), 1st January 1985, and
b
in the case of a company which was re-registered or registered as a public company on an application made before that date, the date on which the application was made.
3
A requirement which—
a
is imposed on a private company (having been so imposed before the relevant date) otherwise than by the company's memorandum or articles, and
b
if contained in the company's memorandum or articles, would have effect under Article 101 to the exclusion of any provisions of Articles 99 to 104,
has effect, so long as the company remains a private company as if it were contained in its memorandum or articles.
4
If on the relevant date a company, other than a public company registered as such on its original incorporation, was subject to such a requirement as is mentioned in Article 99(2) imposed otherwise than by its memorandum or articles, the requirement is to be treated for the purposes of Articles 99 to 104 as if it were contained in the company's memorandum or articles.
Commissions and discounts
Power of company to pay commissions107
1
It is lawful for a company to pay a commission to any person in consideration of his subscribing or agreeing to subscribe (whether absolutely or conditionally) for any shares in the company, or procuring or agreeing to procure subscriptions (whether absolute or conditional) for any shares in the company, if the following conditionsF150 are satisfied.
2
The payment of the commission must be authorised by the company's articles; and—
a
F151b
the amount or rate per cent. of commission paid or agreed to be paid, and the number of shares which persons have agreed for a commission to subscribe absolutely, must be disclosed in the manner required by paragraph (3).
F1513
Those matters must, in the case of shares offered to the public for subscription, be disclosed in the prospectus; and in the case of shares not so offered—
a
they must be disclosed in a statement in the prescribed form signed by every director of the company or by his agent authorised in writing, and delivered (before payment of the commission) to the registrar for registration; and
b
where a circular or notice (not being a prospectus) inviting subscription for the shares is issued, they must also be disclosed in that circular or notice.
F1514
If default is made in complying with paragraph (3)(a) as regards delivery to the registrar of the statement in prescribed form, the company and every officer of it who is in default is liable to a fine.
Apart from Article 107, commissions and discounts barred108
1
Except as permitted by Article 107, no company shall apply any of its shares or capital money either directly or indirectly in payment of any commission, discount or allowance to any person in consderation of his subscribing or agreeing to subscribe (whether absolutely or conditionally) for any shares in the company, or procuring or agreeing to procure subscriptions (whether absolute or conditional) for any shares in the company.
2
This applies whether the shares or money be so applied by being added to the purchase money of any property acquired by the company or to the contract price of any work to be executed for the company, or the money be paid out of the nominal purchase money or contract price, or otherwise.
3
Nothing in Article 107 or this Article affects the power of a company to pay such brokerage as has heretofore been lawful.
4
A vendor to, or promoter of, or other person who receives payment in money or shares from, a company has and is deemed always to have had power to apply any part of the money or shares so received in payment of any commission, the payment of which, if made directly by the company, would have been lawful under Article 107 and this Article.
Valuation provisions
Valuation and report (Articles 54 and 113)118
1
The valuation and report required by Article 113 (or, where applicable, Article 54) shall be made by an independent person, that is to say a person qualified at the time of the report to be appointed, or continue to be, an auditor of the company.
2
However, where it appears to the independent person (from here on referred to as “the valuer”) to be reasonable for the valuation of the consideration, or part of it, to be made (or for him to accept such a valuation) by another person who—
a
appears to him to have the requisite knowledge and experience to value the consideration or that part of it; and
b
is not an officer or servant of the company or any other body corporate which is that company's subsidiary or holding company or a subsidiary of that company's holding company or a partner or employee of such an officer or servant,
he may arrange for or accept such a valuation, together with a report which will enable him to make his own report under this Article and provide the note required by paragraph (6).
3
The reference in paragraph (2)(b) to an officer or servant does not include an auditor.
4
The valuer's report shall state—
a
the nominal value of the shares to be wholly or partly paid for by the consideration in question;
b
the amount of any premium payable on the shares;
c
the description of the consideration and, as respects so much of the consideration as he himself has valued, a description of that part of the consideration, the method used to value it and the date of the valuation;
d
the extent to which the nominal value of the shares and any premium are to be treated as paid up—
i
by the consideration;
ii
in cash.
5
Where the consideration or part of it is valued by a person other than the valuer himself, the latter's report shall state that fact and shall also—
a
state the former's name and what knowledge and experience he has to carry out the valuation; and
b
describe so much of the consideration as was valued by the other person, and the method used to value it, and specify the date of the valuation.
6
The valuer's report shall contain or be accompanied by a note by him—
a
in the case of a valuation made by a person other than himself, that it appeared to himself reasonable to arrange for it to be so made or to accept a valuation so made;
b
whoever made the valuation, that the method of valuation was reasonable in all the circumstances;
c
that it appears to the valuer that there has been no material change in the value of the consideration in question since the valuation; and
d
that on the basis of the valuation the value of the consideration, together with any cash by which the nominal value of the shares or any premium payable on them is to be paid up, is not less than so much of the aggregate of the nominal value and the whole of any such premium as is treated as paid up by the consideration and any such cash.
7
Where the consideration to be valued is accepted partly in payment up of the nominal value of the shares and any premium and partly for some other consideration given by the company, Article 113 (and, where applicable, Article 54) and the foregoing provisions of this Article apply as if references to the consideration accepted by the company included the proportion of that consideration which is properly attributable to the payment up of that value and any premium; and—
a
the valuer shall carry out, or arrange for, such other valuations as will enable him to determine that proportion; and
b
his report shall state what valuations have been made under this paragraph and also the reason for, and method and date of, any such valuation and any other matters which may be relevant to that determination.
Valuation and report (Article 114)119
1
Article 118(1) to (3) and (5) applies also as respects the valuation and report for the purposes of Article 114.
2
The valuer's report for those purposes shall—
a
state the consideration to be received by the company, describing the asset in question (specifying the amount to be received in cash) and the consideration to be given by the company (specifying the amount to be given in cash);
b
state the method and date of valuation;
c
contain or be accompanied by a note as to the matters mentioned in Article 118(6)(a) to (c); and
d
contain or be accompanied by a note that on the basis of the valuation the value of the consideration to be received by the company is not less than the value of the consideration to be given by it.
3
A reference in Article 114 or this Article to consideration given for the transfer of an asset includes consideration given partly for its transfer; but—
a
the value of any consideration partly so given is to be taken as the proportion of the consideration properly attributable to its transfer;
b
the valuer shall carry out or arrange for such valuations of anything else as will enable him to determine that proportion; and
c
his report for the purposes of Article 114 shall state what valuation has been made under this paragraph and also the reason for, and method and date of, any such valuation and any other matters which may be relevant to that determination.
Entitlement of valuer to full disclosure120
1
A person carrying out a valuation or making a report under Article 113 or 114, with respect to any consideration proposed to be accepted or given by a company, is entitled to require from the officers of the company such information and explanation as he thinks necessary to enable him to carry out the valuation or make the report and provide a note under Article 118(6) or (as the case may be) Article 119(2)(c).
2
A person who knowingly or recklessly makes a statement which—
a
is misleading, false or deceptive in a material particular, and
b
is a statement to which this paragraph applies,
is guilty of an offence and liable to imprisonment or a fine, or both.
3
Paragraph (2) applies to any statement made (whether orally or in writing) to a person carrying out a valuation or making a report under Article 118 or 119, being a statement which conveys or purports to convey any information or explanation which that person requires, or is entitled to require, under paragraph (1).
Matters to be communicated to registrar121
1
A company to which a report is made under Article 118 as to the value of any consideration for which, or partly for which, it proposes to allot shares shall deliver a copy of the report to the registrar for registration at the same time that it files the return of the allotments of those shares under Article 98.
2
A company which has passed a resolution under Article 114 with respect to the transfer of an asset shall, within 15 days of so doing, deliver to the registrar a copy of the resolution together with the valuer's report required by that Article.
3
If default is made in complying with paragraph (1), every officer of the company who is in default is liable to a fine and, for continued contravention, to a daily default fine; but this is subject to the same exception as is made by Article 98(6) (relief on application to the court) in the case of default in complying with that Article.
4
If a company fails to comply with paragraph (2), it and every officer of it who is in default is liable to a fine and, for continued contravention, to a daily default fine.
Other matters arising out of allotment, etc.
F156Right to damages, etc. not affected121A
A person is not debarred from obtaining damages or other compensation from a company by reason only of his holding or having held shares in the company or any right to apply or subscribe for shares or to be included in the company's register in respect of shares.
Liability of subsequent holders of shares allotted122
1
If a person becomes a holder of shares in respect of which—
a
there has been a contravention of Article 109, 110, 111 or 113; and
b
by virtue of that contravention, another is liable to pay any amount under the Article contravened,
that person is also liable to pay that amount (jointly and severally with any other person so liable), unless he is exempted from liability by paragraph (3).
2
If a company enters into an agreement in contravention of Article 114 and—
a
the agreement is or includes an agreement for the allotment of shares in the company; and
b
a person becomes a holder of shares allotted under the agreement; and
c
by virtue of the agreement and allotment under it, another person is liable to pay any amount under Article 115,
the person who becomes the holder of the shares is also liable to pay that amount (jointly and severally with any other person so liable), unless he is exempted from liability by paragraph (3); and this applies whether or not the agreement also contravenes Article 113.
3
A person otherwise liable under paragraph (1) or (2) is exempted from that liability if either—
a
he is a purchaser for value and, at the time of the purchase, he did not have actual notice of the contravention concerned; or
b
he derived title to the shares (directly or indirectly) from a person who became a holder of them after the contravention and was not liable under paragraph (1) or (as the case may be) paragraph (2).
4
References in this Article to a holder, in relation to shares in a company, include any person who has an unconditional right to be included in the company's register of members in respect of those shares or to have an instrument of transfer of the shares executed in his favour.
5
As paragraphs (1) and (3) apply in relation to the contraventions there mentioned, they also apply—
a
to a contravention of Article 112; and
b
to a failure to carry out a term of contract as mentioned in paragraphs (5) and (6) of that Article.
Relief in respect of certain liabilities under Articles 109ff.123
1
Where a person is liable to a company under—
a
Article 109, 112, 113 or 115;
b
Article 122(1) by reference to a contravention of Article 109 or 113; or
c
Article 122(2) or (5),
in relation to payment in respect of any shares in the company, or is liable by virtue of an undertaking given to it in, or in connection with, payment for any such shares, the person so liable may make an application to the court to be exempted in whole or in part from the liability.
2
If the liability mentioned in paragraph (1) arises in relation to payment in respect of any shares, the court may, on an application under that paragraph, exempt the applicant from the liability only—
a
if and to the extent that it appears to the court just and equitable to do so having regard to the matters mentioned in paragraph (3);
b
if and to the extent that it appears to the court just and equitable to do so in respect of any interest which he is liable to pay to the company under any of the relevant Articles.
3
The matters to be taken into account by the court under paragraph (2)(a) are—
a
whether the applicant has paid, or is liable to pay, any amount in respect of any other liability arising in relation to those shares under any of the relevant Articles, or of any liability arising by virtue of any undertaking given in or in connection with a payment for those shares;
b
whether any person other than the applicant has paid or is likely to pay (whether in pursuance of an order of the court or otherwise) any such amount; and
c
whether the applicant or any other person has performed in whole or in part, or is likely so to perform, any such undertaking, or has done or is likely to do any other thing in payment or part payment for the shares.
4
Where the liability arises by virtue of an undertaking given to the company in, or in connection with, payment for shares in it, the court may, on an application under paragraph (1), exempt the applicant from the liability only if and to the extent that it appears to the court just and equitable to do so having regard to—
a
whether the applicant has paid or is liable to pay any amount in respect of liability arising in relation to the shares under any of the provisions mentioned in that paragraph; and
b
whether any person other than the applicant has paid or is likely to pay (whether in pursuance of an order of the court or otherwise) any such amount.
5
In determining whether it should exempt the applicant in whole or in part from any liability, the court shall have regard to the following overriding principles, namely—
a
that a company which has allotted shares should receive money or money's worth at least equal in value to the aggregate of the nominal value of those shares and the whole of any premium or, if the case so requires, so much of that aggregate as is treated as paid up; and
b
subject to this, that where such a company would, if the court did not grant the exemption, have more than one remedy against a particular person, it should be for the company to decide which remedy it should remain entitled to pursue.
6
If a person brings proceedings against another ( “the contributor”) for a contribution in respect of liability to a company arising under any of Articles 109 to 115 or 122 and it appears to the court that the contributor is liable to make such a contribution, the court may exercise the powers of paragraph (7).
7
The court may, if and to the extent that it appears to it, having regard to the respective culpability (in respect of the liability to the company) of the contributor and the person bringing the proceedings, that it is just and equitable to do so—
a
exempt the contributor in whole or in part from his liability to make such a contribution; or
b
order the contributor to make a larger contribution than, but for this paragraph, he would be liable to make.
8
Where a person is liable to a company under paragraph (2) of Article 115, the court may, on application, exempt him in whole or in part from that liability if and to the extent that it appears to the court just and equitable to do so having regard to any benefit accruing to the company by virtue of anything done by him towards the carrying out of the agreement mentioned in that paragraph.
Penalty for contravention124
If a company contravenes any of the provisions of Articles 109 to 114 and 116 the company and any officer of it who is in default is liable to a fine.
Undertakings to do work, etc.125
1
Subject to Article 123, an undertaking given by any person, in or in connection with payment for shares in a company, to do work or perform services or to do any other thing, if it is enforceable by the company apart from this Order, is so enforceable notwithstanding that there has been a contravention in relation to it of Article 109, 112 or 113.
2
Where such an undertaking is given in contravention of Article 114 in respect of the allotment of shares, it is so enforceable notwithstanding the contravention.
Application of Articles 109ff. to special cases126
Except as provided by Article 11 of the Consequential Provisions Order (transitional cases dealt with by Article 33 of the Order of 1981), Articles 109, 111 to 113, 116, 118F157, 120, 121 and 122 to 125 apply—
a
to a company which has passed and not revoked a resolution to be re-registered under Article 53 as a public company, and
b
to a joint stock company which has passed, and not revoked, a resolution that the company be a public company,
as those Articles apply to a public company.
PART VISHARE CAPITAL, ITS INCREASE, MAINTENANCE AND REDUCTION
CHAPTER IGENERAL PROVISIONS ABOUT SHARE CAPITAL
Public company share capital requirements127
F158. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The authorised minimum128
F159. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provision for different amounts to be paid on shares129
A company, if so authorised by its articles, may do any one or more of the following things—
a
make arrangements on the issue of shares for a difference between the shareholders in the amounts and times of payment of calls on their shares;
b
accept from any member the whole or a part of the amount remaining unpaid on any shares held by him, although no part of that amount has been called up;
c
pay dividend in proportion to the amount paid up on each share where a larger amount is paid up on some shares than on others.
Reserve liability of limited company130
A limited company may by special resolution determine that any portion of its share capital which has not been already called up shall not be capable of being called up except in the event and for the purposes of the company being wound up; and that portion of its share capital is then not capable of being called up except in that event and for those purposes.
Alteration of share capital (limited companies)131
1
A company limited by shares or a company limited by guarantee and having a share capital, if so authorised by its articles, may alter the conditions of its memorandum in any of the following ways.
2
The company may—
a
increase its share capital by new shares of such amount as it thinks expedient;
b
consolidate and divide all or any of its share capital into shares of larger amount than its existing shares;
c
convert all or any of its paid-up shares into stock, and re-convert that stock into paid-up shares of any denomination;
d
sub-divide its shares, or any of them, into shares of smaller amount than is fixed by the memorandum (but subject to paragraph (3));
e
cancel shares which, at the date of the passing of the resolution to cancel them, have not been taken or agreed to be taken by any person, and diminish the amount of the company's share capital by the amount of the shares so cancelled.
3
In any sub-division under paragraph (2)(d) the proportion between the amount paid and the amount, if any, unpaid on each reduced share must be the same as it was in the case of the share from which the reduced share is derived.
4
The powers conferred by this Article must be exercised by the company in general meeting.
5
A cancellation of shares under this Article does not for the purposes of this Order constitute a reduction of share capital.
Notice to registrar of alteration132
1
If a company having a share capital has—
a
consolidated and divided its share capital into shares of larger amount than its existing shares; or
b
converted any shares into stock; or
c
re-converted stock into shares; or
d
sub-divided its shares or any of them; or
e
redeemed any redeemable shares; or
f
cancelled any shares (otherwise than in connection with a reduction of share capital under Article 145);
it shall within one month after so doing give notice in the prescribed form to the registrar, specifying (as the case may be) the shares consolidated, divided, converted, sub-divided, redeemed or cancelled, or the stock re-converted.
2
If default is made in complying with this Article, the company and every officer of it who is in default is liable to a fine and, for continued contravention, to a daily default fine.
Notice to registrar of increased share capital133
1
If a company having a share capital (whether or not its shares have been converted into stock) increases its share capital beyond the registered capital, it shall, within 15 days after the passing of the resolution authorising the increase, give to the registrar notice in the prescribed form of the increase, and the registrar shall record the increase.
2
The notice must include such particulars as may be prescribed with respect to the classes of shares affected and the conditions subject to which the new shares have been or are to be issued.
3
There shall be forwarded to the registrar together with the notice a printed copy of the resolution authorising the increase, or a copy of the resolution in some other form approved by the registrar.
4
If default is made in complying with this Article, the company and every officer of it who is in default is liable to a fine and, for continued contravention, to a daily default fine.
Reserve capital of unlimited company134
An unlimited company having a share capital may by its resolution for re-registration as a public company under Article 53, or as a limited company under Article 61—
a
increase the nominal amount of its share capital by increasing the nominal amount of each of its shares (but subject to the condition that no part of the increased capital is to be capable of being called up except in the event and for the purpose of the company being wound up), and
b
alternatively or in addition, provide that a specified portion of its uncalled share capital is not to be capable of being called up except in that event and for that purpose.
CHAPTER IICLASS RIGHTS
Variation of class rights135
F1611
This Article is concerned with the variation of the rights attached to any class of shares in a company whose share capital is divided into shares of different classes.
2
Where the rights are attached to a class of shares otherwise than by the company's memorandum, and the company's articles do not contain provision with respect to the variation of the rights, those rights may be varied if, but only if—
a
the holders of three-quarters in nominal value of the issued shares of that classF160 (excluding any shares of that class held as treasury shares) consent in writing to the variation; or
b
F162a special resolution passed at a separate general meeting of the holders of that class sanctions the variation;
and any requirement (howsoever imposed) in relation to the variation of those rights is complied with to the extent that it is not comprised in sub-paragraphs (a) and (b).
3
Where—
a
the rights are attached to a class of shares by the memorandum or otherwise;
b
the memorandum or articles contain provision for the variation of those rights; and
c
the variation of those rights is connected with the giving, variation, revocation or renewal of an authority for allotment under Article 90 or with a reduction of the company's share capital under Article 145;
those rights shall not be varied unless—
i
the condition mentioned in paragraph (2)(a) or (b) is satisfied; and
ii
any requirement of the memorandum or articles in relation to the variation of rights of that class is complied with to the extent that it is not comprised in that condition.
4
If the rights are attached to a class of shares in the company by the memorandum or otherwise and—
a
where they are so attached by the memorandum, its articles contain provision with respect to their variation which had been included in the articles at the time of the company's original incorporation; or
b
where they are so attached otherwise, its articles contain such provision (whenever first so included),
and in either case the variation is not connected as mentioned in paragraph (3)(c), those rights may only be varied in accordance with that provision of the company's articles.
5
If the rights are attached to a class of shares by the memorandum, and the memorandum and articles do not contain provision with respect to the variation of those rights, those rights may be varied if all the members of the companyF160 (excluding any member holding shares as treasury shares) agree to the variation.
6
The provisions of Article 377 (length of notice for calling company meetings), Article 378 (general provisions as to meetings and votes), and Articles 384 and 385 (circulation of members' resolutions) and the provisions of the company's articles relating to general meetings shall, so far as applicable, apply in relation to any meeting of shareholders required by this Article or otherwise to take place in connection with the variation of the rights attached to a class of shares, and shall so apply with the necessary modifications and subject to the following provisions, namely—
a
the necessary quorum at any such meeting other than an adjourned meeting shall be 2 persons holding or representing by proxy at least one-third in nominal value of the issued shares of the class in questionF160 (excluding any shares of that class held as treasury shares) and at an adjourned meeting one person holding shares of the class in question or his proxy;
b
any holder of shares of the class in question present in person or by proxy may demand a poll.
7
Any alteration of a provision contained in a company's articles for the variation of the rights attached to a class of shares, or the insertion of any such provision into its articles, is itself to be treated as a variation of those rights.
8
In this Article and (except where the context otherwise requires) in any provision for the variation of the rights attached to a class of shares contained in a company's memorandum or articles, references to the variation of those rights are to be read as including references to their abrogation.
Saving for court's powers under other provisions136
Nothing in Article 135(2) to (5) derogates from the powers of the court under the following Articles, namely—
Articles 15 to 17 (company resolution to alter objects),
Article 64 (litigated objection to public company becoming private by re-registration),
F164section 899 of the Companies Act 2006 (court sanction for compromise or arrangement with creditors or members),
F165section 900 of that Act (powers of court to facilitate reconstruction or amalgamation),
F163Part 30 of the Companies Act 2006 (protection of members against unfair prejudice).
Shareholders' right to object to variation137
1
This Article applies if, in the case of a company whose share capital is divided into different classes of shares—
a
provision is made by its memorandum or articles for authorising the variation of the rights attached to any class of shares in the company, subject to—
i
the consent of any specified proportion of the holders of the issued shares of that class, or
ii
the sanction of a resolution passed at a separate meeting of the holders of those shares,
and in pursuance of that provision the rights attached to any such class of shares are at any time varied; or
b
the rights attached to any class of shares in the company are varied under Article 135(2).
2
The holders of not less in the aggregate than 15 per cent. of the issued shares of the class in question (being persons who did not consent to or vote in favour of the resolution for the variation), may apply to the court to have the variation cancelled; and if such an application is made, the variation has no effect unless and until it is confirmed by the court.
F1662A
For the purposes of paragraph (2), any of the company's issued share capital held as treasury shares must be disregarded.
3
Application to the court must be made within 21 days after the date on which the consent was given or the resolution was passed (as the case may be), and may be made on behalf of the shareholders entitled to make the application by such one or more of their number as they may appoint in writing for the purpose.
4
The court, after hearing the applicant and any other persons who apply to the court to be heard and appear to the court to be interested in the application, may, if satisfied having regard to all the circumstances of the case, that the variation would unfairly prejudice the shareholders of the class represented by the applicant, disallow the variation and shall, if not so satisfied, confirm it.
The decision of the court on any such application is final.
5
The company shall within 15 days after the making of an order by the court on such an application forward an office copy of the order to the registrar; and, if default is made in complying with this provision, the company and every officer of it who is in default is liable to a fine and, for continued contravention, to a daily default fine.
6
“Variation”, in this Article, includes abrogation.
Registration of particulars of special rights138
1
If a company allots shares with rights which are not stated in its memorandum or articles, or in any resolution or agreement which is required by F167section 30 of the Companies Act 2006 to be sent to the registrar, the company shall deliver to the registrar within one month from allotting the shares a statement in the prescribed form containing particulars of those rights.
2
This does not apply if the shares are in all respects uniform with shares previously allotted; and shares are not for this purpose to be treated as different from shares previously allotted by reason only that the former do not carry the same rights to dividends as the latter during the 12 months immediately following the former's allotment.
3
Where the rights attached to any shares of a company are varied otherwise than by an amendment of the company's memorandum or articles or by a resolution or agreement subject to Article 388, the company shall within one month from the date on which the variation is made deliver to the registrar a statement in the prescribed form containing particulars of the variation.
4
Where a company (otherwise than by any such amendment, resolution or agreement as is mentioned in paragraph (3)) assigns a name or other designation, or a new name or other designation, to any class of its shares, it shall within one month from doing so deliver to the registrar a notice in the prescribed form giving particulars of the name or designation so assigned.
5
If a company fails to comply with this Article, the company and every officer of it who is in default is liable to a fine and, for continued contravention, to a daily default fine.
Registration of newly created class rights139
1
If a company not having a share capital creates a class of members with rights which are not stated in its memorandum or articles or in a resolution or agreement to which F168section 30 of the Companies Act 2006 applies, the company shall deliver to the registrar within one month from the date on which the new class is created a statement in the prescribed form containing particulars of the rights attached to that class.
2
If the rights of any class of members of the company are varied otherwise than by an amendment of the memorandum or articles or by a resolution or agreement subject to Article 388, the company shall within one month from the date on which the variation is made deliver to the registrar a statement in the prescribed form containing particulars of the variation.
3
If a company (otherwise than by such an amendment, resolution or agreement as is mentioned in paragraph (2)) assigns a name or other designation, or a new name or other designation, to any class of its members, it shall within one month from doing so deliver to the registrar a notice in the prescribed form giving particulars of the name or designation so assigned.
4
If a company fails to comply with this Article, the company and every officer of it who is in default is liable to a fine and, for continued contravention, to a daily default fine.
CHAPTER IIISHARE PREMIUMS
Appication of share premiums140
1
If a company issues shares at a premium, whether for cash or otherwise, a sum equal to the aggregate amount or value of the premiums on those shares shall be transferred to an account called “the share premium account”.
2
The share premium account may be applied by the company in paying up unissued shares to be allotted to members as fully paid bonus shares, or in writing off—
a
the company's preliminary expenses; or
b
the expenses of, or the commission paid or discount allowed on, any issue of shares or debentures of the company,
or in providing for the premium payable on redemption or debentures of the company.
3
Subject to this, the provisions of this Order relating to the reduction of a company's share capital apply as if the share premium account were part of its paid-up share capital.
4
Articles 141 and 142 give relief from the requirements of this Article, and in those Articles references to the issuing company are to the company issuing shares as mentioned in paragraph (1).
Merger relief141
1
With the exception made by Article 142(8) (group reconstruction) this Article applies where the issuing company has secured at least a 90 per cent. equity holding in another company in pursuance of an arrangement providing for the allotment of equity shares in the issuing company on terms that the consideration for the shares allotted is to be provided—
a
by the issue or transfer to the issuing company of equity shares in the other company, or
b
by the cancellation of any such shares not held by the issuing company.
2
If the equity shares in the issuing company allotted in pursuance of the arrangement in consideration for the acquisition or cancellation of equity shares in the other company are issued at a premium, Article 140 does not apply to the premiums on those shares.
3
Where the arrangement also provides for the allotment of any shares in the issuing company on terms that the consideration for those shares is to be provided by the issue or transfer to the issuing company of non-equity shares in the other company or by the cancellation of any such shares in that company not held by the issuing company, relief under paragraph (2) extends to any shares in the issuing company allotted on those terms in pursuance of the arrangement.
4
Subject to paragraph (5), the issuing company is to be regarded for the purposes of this Article as having secured at least a 90 per cent. equity holding in another company in pursuance of such an arrangement as is mentioned in paragraph (1) if in consequence of an acquisition or cancellation of equity shares in that company (in pursuance of that arrangement) it holds equity shares in that company (whether all or any of those shares were acquired in pursuance of that arrangement or not) of an aggregate nominal value equal to 90 per cent. or more of the nominal value of that company's equity share capitalF169 (excluding any shares in that company held as treasury shares).
5
Where the equity share capital of the other company is divided into different classes of shares, this Article does not apply unless the requirements of paragraph (1) are satisfied in relation to each of those classes of shares taken separately.
6
Shares held by a company which is the issuing company's holding company or subsidiary, or a subsidiary of the issuing company's holding company, or by its or their nominees, are to be regarded for the purposes of this Article as held by the issuing company.
7
In relation to a company and its shares and capital, the following definitions apply for the purposes of this Article—
a
“equity shares” means shares comprised in the company's equity share capital;
b
“non-equity shares” means shares (of any class) not so comprised;
and “arrangement” means any agreement, scheme or arrangement (including an arrangement sanctioned under F171section 899 of the Companies Act 2006 (court sanction for compromise or arrangement with creditors or members) orF170 Article 96 of the Insolvency Order (liquidator accepting shares, etc. as consideration for sale of company property)).
8
The relief allowed by this Article does not apply if the issue of shares took place before 4th February 1981.
Relief in respect of group reconstructions142
1
This Article applies where the issuing company—
a
is a wholly-owned subsidiary of another company ( “the holding company”), and
b
allots shares to the holding company or to another wholly-owned subsidiary of the holding company in consideration for the transfer to the issuing company of assets other than cash, being assets of any company ( “the transferor company”) which is a member of the group of companies which comprises the holding company and all its wholly-owned subsidiaries.
2
Where the shares in the issuing company allotted in consideration for the transfer are issued at a premium, the issuing company is not required by Article 140 to transfer any account in excess of the minimum premium value to the share premium account.
3
In paragraph (2), “the minimum premium value” means the amount (if any) by which the base value of the consideration for the shares allotted exceeds the aggregate nominal value of those shares.
4
For the purposes of paragraph (3), the base value of the consideration for the shares allotted is the amount by which the base value of the assets transferred exceeds the base value of any liabilities of the transferor company assumed by the issuing company as part of the consideration for the assets transferred.
5
For the purposes of paragraph (4)—
a
the base value of the assets transferred is to be taken as—
i
the cost of those assets to the transferor company, or
ii
the amount at which those assets are stated in the transferor company's accounting records immediately before the transfer,
whichever is the less; and
b
the base value of the liabilities assumed is to be taken as the amount at which they are stated in the transferor company's accounting records immediately before the transfer.
6
The relief allowed by this Article does not apply (subject to paragraph (7)) if the issue of shares took place before the date of the coming into operation of this Article.
7
To the extent that the relief allowed by this Article would have been allowed by Article 39 of the Order of 1982 as originally enacted (the text of which Article is set out in Schedule 24), the relief applies where the issue of shares took place before the date of the coming into operation of this Article, but not if it took place before 4th February 1981.
8
Article 141 does not apply in a case falling within this Article.
Provisions supplementing Articles 141 and 142143
1
An amount corresponding to one representing the premiums or part of the premiums on shares issued by a company which by virtue of Article 141 or 142 of this Order or Article 14 of the Consequential Provisions Order is not included in the company's share premium account may also be disregarded in determining the amount at which any shares or other consideration provided for the shares issued is to be included in the company's balance sheet.
2
References in this Chapter (however expressed) to—
a
the acquisition by a company of shares in another company; and
b
the issue or allotment of shares to, or the transfer of shares to or by, a company,
include (respectively) the acquisition of any of those shares by, and the issue or allotment or (as the case may be) the transfer of any of those shares to or by, nominees of that company; and the references in Article 142 to the company transferring the shares is to be construed accordingly.
3
References in this Chapter to the transfer of shares in a company include the transfer of a right to be included in the company's register of members in respect of those shares.
4
In Articles 141, 142 and this Article “company”, except in references to the issuing company, includes any body corporate.
Provision for extending or restricting relief from Article 140144
1
The Department may by regulations make such provision as appears to it to be appropriate—
a
for relieving companies from the requirements of Article 140 in relation to premiums other than cash premiums, or
b
for restricting or otherwise modifying any relief from those requirements provided by this Chapter.
2
No such regulations shall be made unless a draft of the regulations has been laid before, and approved by a resolution of, the Assembly.
CHAPTER IVREDUCTION OF SHARE CAPITAL
Special resolution for reduction of share capital145
1
Subject to confirmation by the court, a company limited by shares or a company limited by guarantee and having a share capital may, if so authorised by its articles, by special resolution reduce its share capital in any way.
2
In particular, and without prejudice to paragraph (1), the company may—
a
extinguish or reduce the liability on any of its shares in respect of share capital not paid up; or
b
either with or without extinguishing or reducing liability on any of its shares, cancel any paid-up share capital which is lost or unrepresented by available assets; or
c
either with or without extinguishing or reducing liability on any of its shares, pay off any paid-up share capital which is in excess of the company's wants;
and the company may, if and so far as is necessary, alter its memorandum by reducing the amount of its share capital and of its shares accordingly.
3
A special resolution under this Article is in this Order referred to as “a resolution for reducing share capital”.
Application to court for order of confirmation146
1
Where a company has passed a resolution for reducing share capital, it may apply to the court for an order confirming the reduction.
2
If the proposed reduction of share capital involves either—
a
diminution of liability in respect of unpaid share capital; or
b
the payment to a shareholder of any paid-up share capital,
and in any other case if the court so directs, paragraphs (3) to (5) shall have effect, but subject throughout to paragraph (6).
3
Every creditor of the company who F172—
a
at the date fixed by the court is entitled to any debt or claim which, if that date were the commencement of the winding up of the company, would be admissible in proof against the company, F173and
b
can show that there is a real likelihood that the reduction would result in the company being unable to discharge his debt or claim when it fell due,
is entitled to object to the reduction of capital.
4
The court shall settle a list of creditors entitled to object, and for that purpose—
a
shall ascertain, as far as possible without requiring an application from any creditor, the names of those creditors and the nature and amount of their debts or claims; and
b
may publish notices fixing a day or days within which creditors not entered on the list are to claim to be so entered or are to be excluded from the right of objecting to the reduction of capital.
5
If a creditor entered on the list whose debt or claim is not discharged or has not determined does not consent to the reduction, the court may, if it thinks fit, dispense with the consent of that creditor, on the company securing payment of his debt or claim by appropriating (as the court may direct) the following amount—
a
if the company admits the full amount of the debt or claim or, though not admitting it, is willing to provide for it, then the full amount of the debt or claim;
b
if the company does not admit, and is not willing to provide for, the full amount of the debt or claim, or if the amount is contingent or not ascertained, then an amount fixed by the court after the like enquiry and adjudication as if the company were being wound up by the court.
6
If a proposed reduction of share capital involves either the diminution of any liability in respect of unpaid share capital or the payment to any shareholder of any paid-up share capital, the court may, if having regard to any special circumstances of the case it thinks proper to do so, direct that paragraphs (3) to (5) shall not apply as regards any class or any classes or creditors.
Court order confirming reduction147
1
The court, if satisfied with respect to every creditor of the company who under Article 146 is entitled to object to the reduction of capital that either—
a
his consent to the reduction has been obtained; or
b
his debt or claim has been discharged or has determined, or has been secured,
may make an order confirming the reduction on such terms and conditions as it thinks fit.
2
Where the court so orders, it may also—
a
if for any special reason it thinks proper to do so, make an order directing that the company shall, during such period (commencing on or at any time after the date of the order) as is specified in the order, add to its name as its last words the words “and reduced”; and
b
make an order requiring the company to publish (as the court directs) the reasons for reduction of capital or such other information in regard to it as the court thinks expedient with a view to giving proper information to the public and (if the court thinks fit) the causes which led to the reduction.
3
Where a company is ordered to add to its name the words “and reduced”, those words are, until the expiration of the period specified in the order, deemed to be part of the company's name.
Registration of order and minute of reduction148
1
The registrar, on production to him of an order of the court confirming the reduction of a company's share capital, and the delivery to him of an office copy of the order and of a minute (approved by the court) showing, with respect to the company's share capital as altered by the order—
a
the amount of the share capital;
b
the number of shares into which it is to be divided, and the amount of each share; and
c
the amount (if any) at the date of the registration deemed to be paid up on each share,
shall register the order and minute (but subject to Article 149).
2
On the registration of the order and minute, and not before, the resolution for reducing share capital as confirmed by the order so registered takes effect.
3
Notice of the registration shall be published in such manner as the court may direct.
4
The registrar shall certify under his hand the registration of the order and minute; and the certificate is conclusive evidence that all the requirements of this Order with respect to the reduction of share capital have been complied with, and that the company's share capital is as stated in the minute.
5
The minute when registered is deemed to be substituted for the corresponding part of the company's memorandum, and is valid and alterable as if it had been originally contained therein.
6
The substitution of such a minute for part of the company's memorandum is deemed an alteration of the memorandum for the purposes of Article 31.
Public company reducing capital below authorised minimum149
1
This Article applies where the court makes an order confirming a reduction of a public company's capital which has the effect of bringing the nominal value of its allotted share capital below the authorised minimum.
2
The registrar shall not register the order under Article 148 unless the court otherwise directs, or the company is first re-registered as a private company.
3
The court may authorise the company to be so re-registered without its having passed the special resolution required by Article 63; and where that authority is given, the court shall specify in the order the alterations in the company's memorandum and articles to be made in connection with that re-registration.
4
The company may then be re-registered as a private company, if an application in the prescribed form and signed by a director or secretary of the company is delivered to the registrar, together with a printed copy of the memorandum and articles as altered by the court's order.
5
On receipt of such an application, the registrar shall retain it and the other documents delivered with it and issue the company with a certificate of incorporation appropriate to a company that is not a public company; and—
a
the company by virtue of the issue of the certificate becomes a private company, and the alterations in the memorandum and articles set out in the court's order take effect; and
b
the certificate is conclusive evidence that the requirements of this Article in respect of re-registration and of matters precedent and incidental thereto have been complied with, and that the company is a private company.
Liability of members on reduced shares150
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 the amount of the share as fixed by the minute and 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
But paragraphs (3) and (4) apply if—
a
a creditor, entitled in respect of a debt or claim to object to the reduction of share capital, by reason of his ignorance of the proceedings for reduction of share capital, or of their nature and effect with respect to his claim, is not entered on the list of creditors; and
b
after the reduction of capital, the company is unable (within the meaning ofF174 Article 103 of the Insolvency Order) to pay the amount of his debt or claim.
3
Every person who was a member of the company at the date of the registration of the order for reduction and minute is then liable to contribute for the payment of the debt or claim in question 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.
4
If the company is wound up, the court, on the application of the creditor in question and proof of ignorance referred to in paragraph (2)(a), may (if it thinks fit) settle accordingly a list of persons so liable to contribute, and make and enforce calls and orders on the contributories settled on the list, as if they were ordinary contributories in a winding up.
5
Nothing in this Article affects the rights of the contributories among themselves.
Penalty for concealing name of creditor, etc.151
If an officer of the company—
a
wilfully conceals the name of a creditor entitled to object to the reduction of capital;
b
wilfully misrepresents the nature or amount of the debt of claim of any creditor; or
c
aids, abets or is privy to any such concealment or misrepresentation,
he is guilty of an offence and liable to a fine.
CHAPTER VMAINTENANCE OF CAPITAL
Duty of directors on serious loss of capital152
1
Where the net assets of a public company are half or less of its called-up share capital, the directors shall, not later than 28 days from the earliest day on which that fact is known to a director of the company, duly convene an extraordinary general meeting of the company for a date not later than 56 days from that day for the purpose of considering whether any, and if so what, steps should be taken to deal with the situation.
2
In paragraph (1), “net assets” means the aggregate of the company's assets less the aggregate of its liabilities ( “liabilities” to include any provision for liabilities or charges within paragraph 88 of Schedule 4).
3
If there is a failure to convene an extraordinary general meeting as required by paragraph (1), each of the directors of the company who—
a
knowingly and wilfully authorises or permits the failure, or
b
after the expiry of the period during which that meeting should have been convened, knowingly and wilfully authorises or permits the failure to continue,
is liable to a fine.
4
Nothing in this Article authorises the consideration, at a meeting convened in pursuance of paragraph (1), of any matter which could not have been considered at that meeting apart from this Article.
General rule against company acquiring own shares153
1
Subject to the following provisions, a company limited by shares or limited by guarantee and having a share capital shall not acquire its own shares, whether by purchase, subscription or otherwise.
2
If a company purports to act in contravention of this Article, the company is liable to a fine, and every officer of the company who is in default is liable to imprisonment or a fine, or both; andF175, subject to paragraph (2A), the purported acquisition is void.
F1752A
Where a company purchases qualifying shares out of distributable profits under Article 172, any contravention by the company of any provision of Article 172B(1) or (2) shall not render the acquisition void under paragraph (2).
3
A company limited by shares may acquire any of its own fully paid shares otherwise than for valuable consideration; and paragraph (1) does not apply in relation to—
a
the redemption or purchase of shares in accordance with Chapter VII,
b
the acquisition of shares in a reduction of capital duly made,
c
the purchase of shares in pursuance of an order of the court under Article 16 (alteration of objects), Article 64 (litigated objection to resolution for company to be re-registered as private) or F176section 996 of the Companies Act 2006 (relief to members unfairly prejudiced), or
d
the forfeiture of shares, or the acceptance of shares surrendered in lieu, in pursuance of the company's articles, for failure to pay any sum payable in respect of the shares.
Acquisition of shares by company's nominee154
1
Subject to Article 155, where shares are issued to a nominee of a company mentioned in Article 153(1), or are acquired by a nominee of such a company from a third person as partly paid up, then, for all purposes—
a
the shares are to be treated as held by the nominee on his own account; and
b
the company is to be regarded as having no beneficial interest in them.
2
Subject to that Article, if a person is called on to pay any amount for the purpose of paying up, or paying any premium on, any shares in such a company which were issued to him, or which he otherwise acquired, as the company's nominee and he fails to pay that amount within 21 days from being called on to do so, then—
a
if the shares were issued to him as subscriber to the memorandum by virtue of an undertaking of his in the memorandum, the other subscribers to the memorandum, or
b
if the shares were otherwise issued to or acquired by him, the directors of the company at the time of the issue or acquisition,
are jointly and severally liable with him to pay that amount.
3
If in proceedings for the recovery of any such amount from any such subscriber or director under this Article it appears to the court—
a
that he is or may be liable to pay that amount, but
b
that he has acted honestly and reasonably and, having regard to all the circumstances of the case, he ought fairly to be excused from liability,
the court may relieve him, either wholly or partly, from his liability on such terms as the court thinks fit.
4
Where any such subscriber or director has reason to apprehend that a claim will or might be made for the recovery of any such amount from him, he may apply to the court for relief; and the court has the same power to relieve him as it would have had in proceedings for the recovery of that amount.
Exceptions from Article 154155
1
Article 154(1) does not apply to shares acquired otherwise than by subscription by a nominee of a public company, where a 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 the shares.
2
Article 154(1) and (2) does not apply—
a
to shares acquired by a nominee of a company when the company has no beneficial interest in those shares, or
b
to shares issued in consequence of an application made before 1st July 1983, or transferred in pursuance of an agreement to acquire them made before that date.
3
Schedule 2 has effect for the interpretation of references in this Article to a company having, or not having, a beneficial interest in shares.
Treatment of shares held by or for public company156
1
Except as provided by Article 158, the following applies to a public company—
a
where shares in the company are forfeited, or surrendered to the company in lieu, in pursuance of its articles, for failure to pay any sum payable in respect of the shares;
F177aa
where shares in the company are surrendered to the company in pursuance of section 102C(1)(b) of the Building Societies Act 1986;
b
where shares in the company are acquired by it (otherwise than by any of the methods mentioned in Article 153 (3)(a) to (d)) and the company has a beneficial interest in the 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 the shares; or
d
where a 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 the shares.
Schedule 2 has effect for the interpretation of references in this paragraph to the company having a beneficial interest in shares.
2
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 within paragraph (1)(b), (c) or (d), their acquisition—
a
cancel them and diminish the amount of the share capital by the nominal value of the shares cancelled; 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 a private company, stating the effect of the cancellation.
3
For this purpose “the relevant period” is—
a
3 years in the case of shares forfeited or surrendered to the company in lieu of forfeiture, or acquired as mentioned in paragraph (1)(b) or (c);
b
one year in the case of shares acquired as mentioned in paragraph (1)(d).
4
The company and, in a case within paragraph (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 is void.
Matters arising out of compliance with Article 156(2)157
1
The directors may take such steps as are requisite to enable the company to carry out its obligations under Article 156(2) without complying with Articles 145 and 146 (resolution to reduce share capital; application to court for approval).
2
The steps taken may include the passing of a resolution to alter the company's memorandum so that it no longer states that the company is to be a public company; and the resolution may make such other alterations in the memorandum as are requisite in the circumstances.
F178Chapter 3 of Part 3 of the Companies Act 2006 (resolutions affecting a company's constitution) applies to such a resolution.
3
The application for re-registration required by Article 156(2)(b) must be in the prescribed form and be 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.
4
If the registrar is satisfied that the company may be re-registered under Article 156, he shall retain the application and other documents delivered with it and issue the company with a certificate of incorporation appropriate to a company that is not a public company; and—
a
the company by virtue of the issue of the certificate becomes a private company, and the alterations in the memorandum and articles set out in the resolution take effect accordingly, and
b
the certificate is conclusive evidence that the requirements of Articles 156 to 158 in respect of re-registration and of matters precedent and incidental to it have been complied with, and that the company is a private company.
Further provisions supplementing Articles 156 and 157158
1
Where, after shares in a private company—
a
are forfeited in pursuance of the company's articles or are surrendered to the company in lieu of forfeiture, or
b
are acquired by the company (otherwise than by such surrender or forfeiture, and otherwise than by any of the methods mentioned in Article 153(3)), the company having a beneficial interest in the shares, or
c
are acquired by the nominee of a company in the circumstances mentioned in Article 156(1)(c), or
d
are acquired by any person in the circumstances mentioned in Article 156(1)(d),
the company is re-registered as a public company, Articles 156 and 157, and also Article 159, apply to the company as if it had been a public company at the time of the forfeiture, surrender or acquisition, but with the modification required by paragraph (2).
2
That modification is to treat any reference to the relevant period from the forfeiture, surrender or acquisition as referring to the relevant period from the re-registration of the company as a public company.
3
Schedule 2 has effect for the interpretation of the reference in paragraph (1)(b) to the company having a beneficial interest in shares.
4
Where a public company or a nominee of a public 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 them shall be transferred out of profits available for dividend to a reserve fund and shall not then be available for distribution.
Sanctions for non-compliance159
1
If a public company required by paragraph (2) of Article 156 to apply to be re-registered as a private company fails to do so before the end of the relevant period referred to in that paragraph, F179Chapter 1 of Part 20 of the Companies Act 2006 (restriction on public offers) applies to it as if it were a private company such as is mentioned in that Article; but, subject to this, the company continues to be treated for the purposes of this Order as a public company until it is so re-registered.
2
If a company when required to do so by paragraph (2) of Article 156 (including that paragraph as applied by Article 158(1)) fails to cancel any shares in accordance with sub-paragraph (a) of that paragraph or to make an application for re-registration in accordance with sub-paragraph (b) of that paragraph, the company and every officer of it who is in default is liable to a fine and, for continued contravention, to a daily default fine.
Charges of public companies on own shares160
1
A lien or other charge of a public company on its own shares (whether taken expressly or otherwise), except a charge permitted by any of the following paragraphs, is void.
This is subject to Article 8 of the Consequential Provisions Order (saving for charges of old public companies on their own shares).
2
In the case of any description of company, a charge on its own shares is permitted if the shares are not fully paid and the charge is for any amount payable in respect of the shares.
3
In the case of a company whose ordinary business—
a
includes the lending of money, or
b
consists of the provision of credit or the bailment of goods under a hire purchase agreement, or both,
a charge of the company on its own shares is permitted (whether the shares are fully paid or not) if it arises in connection with a transaction entered into by the company in the ordinary course of its business.
4
In the case of a company which is re-registered or is registered under Article 629 as a public company, a charge on its own shares is permitted if the charge was in existence immediately before the company's application for re-registration or (as the case may be) registration.
This paragraph does not apply in the case of such a company as is referred to in Article 8(3) of the Consequential Provisions Order (old public company remaining such after 31st December 1984 not having applied to be re-registered as a public company).
CHAPTER VIFINANCIAL ASSISTANCE BY A COMPANY FOR ACQUISITION OF ITS OWN SHARES
Provisions applying to both public and private companies
Financial assistance generally prohibited161
F1801
Subject to the following provisions of this Chapter, where a person is acquiring or is proposing to acquire shares in a company, it is not lawful for the company or any of its subsidiaries to give financial assistance directly or indirectly for the purpose of that acquisition before or at the same time as the acquisition takes place.
2
Subject to those provisions, where a person has acquired shares in a company and any liability has been incurred (by that or any other person) for the purpose of that acquisition, it is not lawful for the company or any of its subsidiaries to give financial assistance directly or indirectly for the purpose of reducing or discharging the liability so incurred.
3
If a company acts in contravention of this Article, it is liable to a fine, and every officer of it who is in default is liable to imprisonment or a fine, or both.
Interpretation for this Chapter162
F1821
In this Chapter—
a
“financial assistance” means—
i
financial assistance given by way of gift;
ii
financial assistance given by way of guarantee, security or indemnity, other than an indemnity in respect of the indemnifier's own neglect or default, or by way of release or waiver;
iii
financial assistance given by way of a loan or any other agreement under which any of the obligations of the person giving the assistance are to be fulfilled at a time when in accordance with the agreement any obligation of another party to the agreement remains unfulfilled, or by way of the novation of, or the assignment of rights arising under a loan or such other agreement; or
iv
any other financial assistance given by a company the net assets of which are thereby reduced to a material extent or which has no net assets;
b
“distributable profits”, in relation to the giving of any financial assistance—
i
means those profits out of which the company could lawfully make a distribution equal in value to that assistance, and
ii
includes, in a case where the financial assistance is or includes a non-cash asset, any profit which, if the company were to make a distribution of that asset, would under F183section 846 of the Companies Act 2006 (distributions in kind) be available for that purpose, and
c
“distribution” has the meaning given by F184section 829 of the Companies Act 2006.
2
In paragraph (1)(a)(iv) “net assets” means the aggregate of the company's assets, less the aggregate of its liabilities ( “liabilities” to include anyF181 provision for liabilities within paragraph 88 of Schedule 4F181 that is made in Companies Order individual accounts and any provision that is made in IAS individual accounts ).
3
In this Chapter—
a
a reference to a person incurring a liability includes his changing his financial position by making an agreement or arrangement (whether enforceable or unenforceable, and whether made on his own account or with any other person) or by any other means, and
b
a reference to a company giving financial assistance for the purpose of reducing or discharging a liability incurred by a person for the purpose of the acquisition of shares includes its giving such assistance for the purpose of wholly or partly restoring his financial position to what it was before the acquisition took place.
Transactions not prohibited by Article 161163
F1881
Article 161(1) does not prohibit a company from giving financial assistance for the purpose of an acquisition of shares in it or its holding company if—
a
the company's principal purpose in giving that assistance is not to give it for the purpose of any such acquisition, or the giving of the assistance for that purpose is but an incidental part of some larger purpose of the company, and
b
the assistance is given in good faith in the interests of the company.
2
Article 161 (2) does not prohibit a company from giving financial assistance if—
a
the company's principal purpose in giving the assistance is not to reduce or discharge any liability incurred by a person for the purpose of the acquisition of shares in the company or its holding company, or the reduction or discharge of any such liability is but an incidental part of some larger purpose of the company, and
b
the assistance is given in good faith in the interests of the company.
3
Article 161 does not prohibit—
a
a distribution of a company's assets by way of dividend lawfully made or a distribution made in the course of the company's winding up,
b
the allotment of bonus shares,
c
a reduction of capital confirmed by order of the court under Article 147,
d
a redemption or purchase of shares made in accordance with Chapter VII,
e
anything done in pursuance of an order of the court under F189section 899 of the Companies Act 2006 (compromises and arrangements with creditors and members),
f
anything done under an arrangement made in pursuance ofF185 Article 96 of the Insolvency Order (acceptance of shares by liquidator in winding up as consideration for sale of property), or
g
anything done under an arrangement made between a company and its creditors which is binding on the creditors by virtue ofF185 Part II of the Insolvency Order (winding up imminent or in progress).
4
Article 161 does not prohibit—
a
where the lending of money is part of the ordinary business of the company, the lending of money by the company in the ordinary course of its business,
F186b
the provision by a company, in good faith in the interests of the company, of financial assistance for the purposes of an employees' share scheme,
F187bb
without prejudice to sub-paragraph (b), the provision of financial assistance by a company or any of its subsidiaries for the purposes of or in connection with anything done by the company (orF186 a company in the same group) for the purpose of enabling or facilitating transactions in shares in the first-mentioned company between, and involving the acquisition of beneficial ownership of those shares by, any of the following persons—
i
the bona fida employees or former employees of that company or of another company in the same group; or
ii
the wives, husbands, widows, widowers, children, step-children or adopted children under the age of eighteen of such employees or former employees.
c
the making by a company of loans to persons (other than directors) employed in good faith by the company with a view to enabling those persons to acquire fully paid shares in the company or its holding company to be held by them by way of beneficial ownership.
F1865
For the purposes of paragraph (4)(bb) a company is in the same group as another company if it is a holding company or subsidiary of that company, or a subsidiary of a holding company of that company.
Special restriction for public companies164
1
In the case of a public company, Article 163(4) authorises the giving of financial assistance only if the company has net assets which are not thereby reduced or, to the extent that those assets are thereby reduced, if the assistance is provided out of distributable profits.
2
For this purpose the following definitions apply—
a
“net assets” means the amount by which the aggregate of the company's assets exceeds the aggregate of its liabilities (taking the amount of both assets and liabilities to be as stated in the company's accounting records immediately before the financial assistance is given);
b
“liabilities” includes any amount retained as reasonably necessary for the purpose of providing for any liabilityF190 the nature of which is clearly defined and which is either likely to be incurred, or certain to be incurred, but uncertain as to amount or as to the date on which it will arise.
Private companies
Relaxation of Article 161 for private companies165
F1911
Article 161 does not prohibit a private company from giving financial assistance in a case where the acquisition of shares in question is or was an acquisition of shares in the company or, if it is a subsidiary of another private company, in that other company if the following provisions of this Article, and Articles 166 to 168, are complied with as respects the giving of that assistance.
2
The financial assistance may only be given if the company has net assets which are not thereby reduced or, to the extent that they are reduced, if the assistance is provided out of distributable profits.
Article 164(2) applies for the interpretation of this paragraph.
3
This Article does not permit financial assistance to be given by a subsidiary in a case where the acquisition of shares in question is or was an acquisition of shares in its holding company, if it is also a subsidiary of a public company which is itself a subsidiary of that holding company.
4
Unless the company proposing to give the financial assistance is a wholly-owned subsidiary, the giving of assistance under this Article must be approved by special resolution of the company in general meeting.
5
Where the financial assistance is to be given by the company in a case where the acquisition of shares in question is or was an acquisition of shares in its holding company, that holding company and any other company which is both the company's holding company and a subsidiary of that other holding company (except, in any case, a company which is a wholly-owned subsidiary) shall also approve by special resolution in general meeting the giving of the financial assistance.
6
The directors of the company proposing to give the financial assistance and, where the shares acquired or to be acquired are shares in its holding company, the directors of that company and of any other company which is both the company's holding company and a subsidiary of that other holding company shall before the financial assistance is given make a statutory declaration in the prescribed form complying with Article 166.
Statutory declaration under Article 165166
F1941
A statutory declaration made by a company's directors under Article 165(6) shall contain such particulars of the financial assistance to be given, and of the business of the company of which they are directors, as may be prescribed, and shall identify the person to whom the assistance is to be given.
2
The declaration shall state that the directors have formed the opinion, as regards the company's initial situation immediately following the date on which the assistance is proposed to be given, that there will be no ground on which it could then be found to be unable to pay its debts; and either—
a
if it is intended to commence the winding up of the company within 12 months of that date, the company will be able to pay its debts in full within 12 months of the commencement of the winding up, or
b
in any other case, that the company will be able to pay its debts as they fall due during the year immediately following that date.
3
In forming their opinion for the purposes of paragraph (2), the directors shall take into account the same liabilities (including contingent and prospective liabilities) as would be relevant underF192 Article 102 of the Insolvency Order (winding up by the court) to the question whether the company is unable to pay its debts.
4
The directors' statutory declaration shall have annexed to it a report addressed to them by their company's auditors stating that—
a
they have enquired into the state of affairs of the company, and
b
they are not aware of anything to indicate that the opinion expressed by the directors in the declaration as to any of the matters mentioned in paragraph (2) is unreasonable in all the circumstances.
5
The statutory declaration and auditors' report shall be delivered to the registrar—
a
together with a copy of any special resolution passed by the company under Article 165 and delivered to the registrar in compliance with F193section 30 of the Companies Act 2006, or
b
where no such resolution is required to be passed, within 15 days after the making of the declaration.
6
If a company fails to comply with paragraph (5), the company and every officer of it who is in default is liable to a fine and, for continued contravention, to a daily default fine.
7
A director of a company who makes a statutory declaration under Article 165 without having reasonable grounds for the opinion expressed in it is liable to imprisonment or a fine, or both.
Special resolution under Article 165167
F1951
A special resolution required by Article 165 to be passed by a company approving the giving of financial assistance must be passed on the date on which the directors of that company make the statutory declaration required by that Article in connection with the giving of that assistance, or within the week immediately following that date.
2
Where such a resolution has been passed, an application may be made to the court for the cancellation of the resolution—
a
by the holders of not less in the aggregate than 10 per cent. in nominal value of the company's issued share capital or any class of it, or
b
if the company is not limited by shares, by not less than 10 per cent. of the company's members;
but the application shall not be made by a person who has consented to or voted in favour of the resolution.
3
Article 64(3) to (10) (litigation to cancel resolution under Article 63) applies to applications under this Article as to applications under Article 64.
4
A special resolution passed by a company is not effective for the purposes of Article 165—
a
unless the declaration made under paragraph (6) of that Article by the directors of the company, together with the auditors' report annexed to it, is available for inspection by members of the company at the meeting at which the resolution is passed,
b
if it is cancelled by the court on an application under this Article.
Time for giving financial assistance under Article 165168
F1961
This Article applies as to the time before and after which financial assistance may not be given by a company in pursuance of Article 165.
2
Where a special resolution is required by that Article to be passed approving the giving of the assistance, the assistance shall not be given before the expiry of the period of 4 weeks beginning with—
a
the date on which the special resolution is passed, or
b
where more than one such resolution is passed, the date on which the last of them is passed,
unless, as respects that resolution (or, if more than one, each of them) every member of the company which passed the resolution who is entitled to vote at general meetings of the company voted in favour of the resolution.
3
If application for the cancellation of any such resolution is made under Article 167, the financial assistance shall not be given before the final determination of the application unless the court otherwise orders.
4
The assistance shall not be given after the expiry of the period of 8 weeks beginning with—
a
the date on which the directors of the company proposing to give the assistance made their statutory declaration under Article 165, or
b
where that company is a subsidiary and both its directors and the directors of any of its holding companies made such a declaration, the date on which the earliest of the declarations is made,
unless the court, on an application under Article 167, otherwise orders.
CHAPTER VIIREDEEMABLE SHARES; PURCHASE BY A COMPANY OF ITS OWN SHARES
Redemption and purchase generally
Power to issue redeemable shares169 F197
1
Subject to the provisions of this Chapter, a company limited by shares or limited by guarantee and having a share capital may, if authorised to do so by its articles, issue shares which are to be redeemed or are liable to be redeemed at the option of the company or the shareholder.
2
No redeemable shares may be issued at a time when there are no issued shares of the company which are not redeemable.
3
Redeemable shares may not be redeemed unless they are fully paid; and the terms of redemption must provide for payment on redemption.
{prosp. insertion of art. 169A by 1990 NI10} 169AF198
Financing, etc. of redemption170 F199
1
Subject to paragraph (2) and to Articles 181 (private companies redeeming or purchasing own shares out of capital) and 188(4) (terms of redemption or purchase enforceable in a winding up)—
a
redeemable shares may only be redeemed out of distributable profits of the company or out of the proceeds of a fresh issue of shares made for the purposes of the redemption; and
b
any premium payable on redemption must be paid out of distributable profits of the company.
2
If the redeemable shares were issued at a premium, any premium payable on their redemption may be paid out of the proceeds of a fresh issue of shares made for the purposes of the redemption, up to an amount equal to—
a
the aggregate of the premiums received by the company on the issue of the shares redeemed, or
b
the current amount of the company's share premium account (including any sum transferred to that account in respect of premiums on the new shares),
whichever is the less; and in that case the amount of the company's share premium account shall be reduced by a sum corresponding (or by sums in the aggregate corresponding) to the amount of any payment made by virtue of this paragraph out of the proceeds of the issue of the new shares.
F2003
Subject to the following provisions of this Chapter, redemption of shares may be effected on such terms and in such manner as may be provided by the company's articles.
4
SharesF201 redeemed under this Article shall be treated as cancelled on redemption, and the amount of the company's issued share capital shall be diminished by the nominal value of those shares accordingly; but the redemption of shares by a company is not to be taken as reducing the amount of the company's authorised share capital.
5
Without prejudice to paragraph (4), where a company is about to redeem shares, it has power to issue shares up to the nominal value of the shares to be redeemed as if those shares had never been issued.
Art. 171 rep. by 1988 c. 39
Power of company to purchase own shares172 F202
1
Subject to the following provisions of this Chapter, a company limited by shares or limited by guarantee and having a share capital may, if authorised to do so by its articles, purchase its own shares (including any redeemable shares).
F2032
Articles 169 and 170 apply to the purchase by a company under this Article of its own shares as they apply to the redemption of redeemable shares.
This is subject to paragraphs (2A) and (2B).
2A
The terms and manner of a purchase under this Article need not be determined by the Articles as required by Article 170(3).
2B
Where a company makes a purchase of qualifying shares out of distributable profits under this Article, Article 172A applies to the shares purchased and accordingly Article 170(4) does not apply to those shares.
3
A company may not under this Article purchase its own shares if as a result of the purchase there would no longer be any member of the company holding shares other than redeemable sharesF203 or shares held as treasury shares.
F2034
For the purposes of this Chapter “qualifying shares” are shares which—
a
are included in the official list in accordance with the provisions of Part 6 of the Financial Services and Markets Act 2000,
b
are traded on the market known as the Alternative Investment Market established under the rules of London Stock Exchange plc,
c
are officially listed in an EEA State, or
d
are traded on a market established in an EEA State which is a regulated market for the purposes of Article 16 of Council Directive 93/22/EEC on investment services in the securities field,
and in sub-paragraph (a) “the official list” has the meaning given in section 103(1) of the Financial Services and Markets Act 2000.
Treasury shares172A
1
Where qualifying shares are purchased by a company out of distributable profits in accordance with Article 172, the company may—
a
hold the shares (or any of them), or
b
deal with any of them, at any time, in accordance with Article 172D.
2
Where shares are held under paragraph (1)(a) then, for the purposes of Article 360, the company must be entered in the register as the member holding those shares.
3
In this Order, references to a company holding shares as treasury shares are references to the company holding shares which—
a
were (or are treated as having been) purchased by it in circumstances in which this Article applies, and
b
have been held by the company continuously since they were so purchased.
Treasury shares: maximum holdings172B
1
Where a company has shares of only one class, the aggregate nominal value of shares held as treasury shares must not at any time exceed 10 per cent of the nominal value of the issued share capital of the company at that time.
2
Where the share capital of a company is divided into shares of different classes, the aggregate nominal value of the shares of any class held as treasury shares must not at any time exceed 10 per cent of the nominal value of the issued share capital of the shares in that class at that time.
3
Where paragraph (1) or (2) is contravened by a company, the company must dispose of or cancel the excess shares, in accordance with Article 172D, before the end of the period of 12 months beginning with the day on which that contravention occurs.
For this purpose “the excess shares” means such number of the shares, held by the company as treasury shares at the time in question, as resulted in the limit being exceeded.
Treasury shares: voting and other rights172C
1
This Article applies to shares which are held by a company as treasury shares ( “the treasury shares”).
2
The company must not exercise any right in respect of the treasury shares and any purported exercise of such a right is void.
3
The rights to which paragraph (2) applies include any right to attend or vote at meetings (including F204meetings summoned under section 896 of the Companies Act 2006).
4
No dividend may be paid, and no other distribution (whether in cash or otherwise) of the company's assets (including any distribution of assets to members on a winding up) may be made, to the company in respect of the treasury shares.
5
Nothing in this Article is to be taken as preventing—
a
an allotment of shares as fully paid bonus shares in respect of the treasury shares, or
b
the payment of any amount payable on the redemption of the treasury shares (if they are redeemable shares).
6
Any shares allotted as fully paid bonus shares in respect of the treasury shares shall be treated for the purposes of this Order as if they were purchased by the company at the time they were allotted, in circumstances in which Article 172A(1) applied.
Treasury shares: disposal and cancellation172D
1
Where shares are held as treasury shares, a company may at any time—
a
sell the shares (or any of them) for cash,
b
transfer the shares (or any of them) for the purposes of or pursuant to an employees' share scheme, or
c
cancel the shares (or any of them).
2
For the purposes of paragraph (1)(a), “cash”, in relation to a sale of shares by a company, means—
a
cash (including foreign currency) received by the company, or
b
a cheque received by the company in good faith which the directors have no reason for suspecting will not be paid, or
c
a release of a liability of the company for a liquidated sum, or
d
an undertaking to pay cash to the company on or before a date not more than 90 days after the date on which the company agrees to sell the shares.
3
But if the company receives a notice under F205section 979 of the Companies Act 2006 (right of offeror to buy out minority shareholders)[7] that a person desires to acquire any of the shares, the company must not, under paragraph (1), sell or transfer the shares to which the notice relates except to that person.
4
If under paragraph (1) the company cancels shares held as treasury shares, the company must diminish the amount of the issued share capital by the nominal value of the shares cancelled; but the cancellation is not to be taken as reducing the amount of the company's authorised share capital.
5
The directors may take such steps as are requisite to enable the company to cancel its shares under paragraph (1) without complying with Articles 145 and 146 (special resolution for reduction of share capital; application to court for order of confirmation).
Treasury shares: mandatory cancellation172E
1
If shares held as treasury shares cease to be qualifying shares, the company must forthwith cancel the shares in accordance with Article 172D.
2
For the purposes of paragraph (1), shares are not to be regarded as ceasing to be qualifying shares by virtue only of—
a
the suspension of their listing in accordance with the applicable rules in the EEA State in which the shares are officially listed, or
b
the suspension of their trading in accordance with—
i
in the case of shares traded on the market known as the Alternative Investment Market, the rules of London Stock Exchange plc, and
ii
in any other case, the rules of the regulated market on which they are traded.
3
For the purposes of this Article “regulated market” means a market which is a regulated market for the purposes of Article 16 of Council Directive 93/22/EEC on investment services in the securities field.
Treasury shares: proceeds of sale172F
1
Where shares held as treasury shares are sold, the proceeds of sale shall be dealt with in accordance with this Article.
2
Where the proceeds of sale are equal to or less than the purchase price paid by the company for the shares, the proceeds shall be treated for the purposes of F206Part 23 of the Companies Act 2006 as a realised profit of the company.
3
Where the proceeds of sale exceed the purchase price paid by the company for the shares—
a
that part of the proceeds of sale that is equal to the purchase price paid shall be treated for the purposes of Part IX as a realised profit of the company, and
b
a sum equal to the excess shall be transferred to the company's share premium account.
4
The purchase price paid by the company for the shares shall be determined by the application of a weighted average price method.
5
Where the shares were allotted to the company as fully paid bonus shares, the purchase price paid for them shall, for the purposes of paragraph (4), be treated as being nil.
Treasury shares: penalty for contravention172G
If a company contravenes any provision of Articles 172A to 172F every officer of it who is in default is liable to a fine.
Definitions of “off-market” and “market” purchase173 F207
1
A purchase by a company of its own shares is “off-market” if the shares either—
a
are purchased otherwise than onF208 a recognised investment exchange, or
2
For this purpose, a company's shares are subject to a marketing arrangement onF208 a recognised investment exchange if either—
b
the company has been afforded facilities for dealings in those shares to take place onF208 that investment exchange without prior permission for individual transactions from the authority governingF208 that investment exchange and without limit as to the time during which those facilities are to be available.
3
A purchase by a company of its own shares is a “market” purchase if it is a purchase made onF208 a recognised investment exchange, other than a purchase which is an off-market purchase by virtue of paragraph (1)(b).
F2094
“Recognised investment exchange” means a recognised investment exchange other than an overseas investment exchange.
5
Expressions used in the definition contained in paragraph (4) have the same meaning as in Part 18 of the Financial Services and Markets Act 2000.
Authority for off-market purchase174 F210
1
A company may only make an off-market purchase of its own shares in pursuance of a contract approved in advance in accordance with this Article or Article 175.
2
The terms of the proposed contract must be authorised by a special resolution of the company before the contract is entered into; and the following paragraphs apply with respect to that authority and to resolutions conferring it.
3
Subject to paragraph (4), the authority may be varied, revoked or from time to time renewed by special resolution of the company.
4
In the case of a public company the authority conferred by the resolution must specify a date on which the authority is to expire; and in a resolution conferring or renewing authority that date must not be later than 18 months after that on which the resolution is passed.
5
A special resolution to confer, vary, revoke or renew authority is not effective if any member of the company holding shares to which the resolution relates exercises the voting rights carried by any of those shares in voting on the resolution and the resolution would not have been passed if he had not done so.
For this purpose—
- a
a member who holds shares to which the resolution relates is regarded as exercising the voting rights carried by those shares not only if he votes in respect of them on a poll on the question whether the resolution shall be passed, but also if he votes on the resolution otherwise than on a poll;
- b
notwithstanding anything in the company's articles, any member of the company may demand a poll on that question; and
- c
a vote and a demand for a poll by a person as proxy for a member are the same respectively as a vote and a demand by the member.
6
Such a resolution is not effective for the purposes of this Article unless (if the proposed contract is in writing) a copy of the contract or (if not) a written memorandum of its terms is available for inspection by members of the company both—
a
at the company's registered office for not less than 15 days ending with the date of the meeting at which the resolution is passed, and
b
at the meeting itself.
A memorandum of contract terms so made available must include the names of any members holding shares to which the contract relates; and a copy of the contract so made available must have annexed to it a written memorandum specifying any such names which do not appear in the contract itself.
7
A company may agree to a variation of an existing contract so approved, but only if the variation is authorised by a special resolution of the company before it is agreed to; and paragraphs (3) to (6) apply to the authority for a proposed variation as they apply to the authority for a proposed contract, save that a copy of the original contract or (as the case may require) a memorandum of its terms, together with any variations previously made, must also be available for inspection in accordance with paragraph (6).
Authority for contingent purchase contract175 F211
1
A contingent purchase contract is a contract entered into by a company and relating to any of its shares—
a
which does not amount to a contract to purchase those shares, but
b
under which the company may (subject to any conditions) become entitled or obliged to purchase those shares.
2
A company may only make a purchase of its own shares in pursuance of a contingent purchase contract if the contract is approved in advance by a special resolution of the company before the contract is entered into; and paragraphs (3) to (7) of Article 174 apply to the contract and its terms.
Authority for market purchase176 F212
1
A company shall not make a market purchase of its own shares unless the purchase has first been authorised by the company in general meeting.
2
That authority—
a
may be general for that purpose, or limited to the purchase of shares of any particular class or description, and
b
may be unconditional or subject to conditions.
3
The authority must—
a
specify the maximum number of shares authorised to be acquired,
b
determine both the maximum and the minimum prices which may be paid for the shares, and
c
specify a date on which it is to expire.
4
The authority may be varied, revoked or from time to time renewed by the company in general meeting, but this is subject to paragraph (3); and in a resolution to confer or renew authority, the date on which the authority is to expire must not be later than 18 months after that on which the resolution is passed.
5
A company may under this Article make a purchase of its own shares after the expiry of the time limit imposed to comply with paragraph (3)(c), if the contract of purchase was concluded before the authority expired and the terms of the authority permitted the company to make a contract of purchase which would or might be executed wholly or partly after its expiration.
6
A resolution to confer or vary authority under this Article may determine either or both the maximum and minimum prices for purchase by—
a
specifying a particular sum, or
b
providing a basis or formula for calculating the amount of the price in question without reference to any person's discretion or opinion.
F2137
Chapter 3 of Part 3 of the Companies Act 2006 (resolutions affecting a company's constitution) applies to a resolution of a company conferring, varying, revoking or renewing authority under this Article.
Assignment or release of company's right to purchase own shares177 F214
1
The rights of a company under a contract approved under Article 174 or 175, or under a contract for a purchase authorised under Article 176, are not capable of being assigned.
2
An agreement by a company to release its rights under a contract approved under Article 174 or 175 is void unless the terms of the release agreement are approved in advance by a special resolution of the company before the agreement is entered into; and paragraphs (3) to (7) of Article 174 apply to approval for a proposed release agreement as to authority for a proposed variation of an existing contract.
Payments apart from purchase price to be made out of distributable profits178 F215
1
A payment made by a company in consideration of—
a
acquiring any right with respect to the purchase of its own shares in pursuance of a contract approved under Article 175, or
b
the variation of a contract approved under Article 174 or 175, or
c
the release of any of the company's obligations with respect to the purchase of any of its own shares under a contract approved under Article 174 or 175 or under a contract for a purchase authorised under Article 176,
must be made out of the company's distributable profits.
2
If the requirements of paragraph (1) are not satisfied in relation to a contract—
a
in a case within paragraph (1)(a), no purchase by the company of its own shares in pursuance of that contract is lawful under this Chapter,
b
in a case within paragraph (1)(b), no such purchase following the variation is lawful under this Chapter, and
c
in a case within paragraph (1)(c), the purported release is void.
Disclosure by company of purchase of own shares179 F216
1
Within the period of 28 days beginning with the date on which any shares purchased by a company under this Chapter are delivered to it, the company shall deliver to the registrar for registration a return in the prescribed form stating with respect to shares of each class purchased the number and nominal value of those shares and the date on which they were delivered to the company.
F2171A
But in the case of a company which has purchased its own shares in circumstances in which Article 172A applies, the requirement to deliver a return under paragraph (1) shall apply only where some or all of the shares have been cancelled forthwith after the date of their delivery in accordance with Article 172D(1) and in those circumstances the particulars required by that paragraph to be stated with respect to the shares purchased shall apply only to such of the shares as have been so cancelled.
1B
Where a company has purchased its own shares in circumstances in which Article 172A applies, the company shall within the period of 28 days beginning with the date on which such shares are delivered to it (except where all of the shares have been cancelled forthwith after the date of their delivery in the circumstances referred to in paragraph (1A)) deliver to the registrar for registration a return in the prescribed form stating with respect to shares of each class purchased (other than any shares which have been cancelled in the circumstances referred to in paragraph (1A)) the number and nominal value of each of those shares which are held as treasury shares and the date on which they were delivered to the company.
2
In the case of a public company,F217 any return under paragraph (1) or (1B) shall also state—
a
the aggregate amount paid by the company for the shares; and
b
the maximum and minimum prices paid in respect of shares of each class purchased.
3
Particulars of shares delivered to the company on different dates and under different contracts may be included in a single returnF217 under either paragraph (1) or (1B) to the registrar; and in such a case the amount required to be stated under paragraph (2)(a) is the aggregate amount paid by the company for all the shares to which the return relates.
4
Where a company enters into a contract approved under Article 174 or 175, or a contract for a purchase authorised under Article 176, the company shall keep at its registered office—
a
if the contract is in writing, a copy of it; and
b
if not, a memorandum of its terms,
from the conclusion of the contract until the end of the period of 10 years beginning with the date on which the purchase of all the shares in pursuance of the contract is completed or (as the case may be) the date on which the contract otherwise determines.
5
Every copy and memorandum so required to be kept shallF218. . . be open to inspection without charge—
a
by any member of the company, and
b
if it is a public company, by any other person.
6
If default is made in delivering to the registrar any return required by this Article, every officer of the company who is in default is liable to a fine and, for continued contravention, to a daily default fine.
7
If default is made in complying with paragraph (4), or if an inspection required under paragraph (5) is refused, the company and every officer of it who is in default is liable to a fine and, for continued contravention, to a daily default fine.
8
In the case of a refusal of an inspection required under paragraph (5) of a copy or memorandum, the court may by order compel an immediate inspection of it.
9
The obligation of a company under paragraph (4) to keep a copy of any contract or (as the case may be) a memorandum of its terms applies to any variation of the contract so long as it applies to the contract.
F219Disclosure by company of cancellation or disposal of treasury shares179A
1
Paragraph (2) applies in relation to any shares held by a company as treasury shares if—
a
the company is or was required to make a return under Article 179(1B) in relation to the shares, and
b
the shares have—
i
been cancelled in accordance with Article 172D(1), or
ii
been sold or transferred for the purposes of or pursuant to an employees' share scheme under Article 172D(1).
2
Within the period of 28 days beginning with the date on which such shares are cancelled or disposed of, the company shall deliver to the registrar for registration a return in the prescribed form stating with respect to shares of each class cancelled or disposed of—
a
the number and nominal value of those shares, and
b
the date on which they were cancelled or disposed of.
3
Particulars of shares cancelled or disposed of on different dates may be included in a single return to the registrar.
4
If default is made in delivering to the registrar any return required by this Article, every officer of the company who is in default is liable to a fine and, for continued contravention, to a daily default fine.
The capital redemption reserve180 F220
1
Where under this Chapter shares of a company are redeemed or purchased wholly out of the company's profits, the amount by which the company's issued share capital is diminished in accordance with Article 170(4) on cancellation of the shares redeemed or purchasedF221, or in accordance with Article 172D(4) on cancellation of shares held as treasury shares, shall be transferred to a reserve, called “the capital redemption reserve”.
2
If the shares are redeemed or purchased wholly or partly out of the proceeds of a fresh issue and the aggregate amount of those proceeds is less than the aggregate nominal value of the shares redeemed or purchased, the amount of the difference shall be transferred to the capital redemption reserve.
3
But paragraph (2) does not apply if the proceeds of the fresh issue are applied by the company in making a redemption or purchase of its own shares in addition to a payment out of capital under Article 181.
4
The provisions of this Order relating to the reduction of a company's share capital apply as if the capital redemption reserve were paid-up share capital of the company, except that the reserve may be applied by the company in paying up its unissued shares to be allotted to members of the company as fully paid bonus shares.
Supplementary
Effect of company's failure to redeem or purchase188 F236
1
This Article has effect where a company has, on or after 1st July 1983—
a
issued shares on terms that they are or are liable to be redeemed, or
b
agreed to purchase any of its own shares.
2
The company is not liable in damages in respect of any failure on its part to redeem or purchase any of the shares.
3
Paragraph (2) is without prejudice to any right of the holder of the shares other than his right to sue the company for damages in respect of its failure; but the court shall not grant an order for specific performance of the terms of redemption or purchase if the company shows that it is unable to meet the costs of redeeming or purchasing the shares in question out of distributable profits.
4
If the company is would up and at the commencement of the winding up any of the shares have not been redeemed or purchased, the terms of redemption or purchase may be enforced against the company; and when shares are redeemed or purchased under this paragraph they are treated as cancelled.
5
However, paragraph (4) does not apply if—
a
the terms provided for the redemption or purchase to take place at a date later than that of the commencement of the winding up, or
b
during the period beginning with the date on which the redemption or purchase was to have taken place and ending with the commencement of the winding up the company could not at any time have lawfully made a distribution equal to value to the price at which the shares were to have been redeemed or purchased.
6
There shall be paid in priority to any amount which the company is liable under paragraph (4) to pay in respect of any shares—
a
all other debts and liabilities of the company (other than any due to members in their character as such),
b
if other shares carry rights (whether as to capital or as to income) which are preferred to the rights as to capital attaching to the first-mentioned shares, any amount due in satisfaction of those preferred rights;
but, subject to that, any such amount shall be paid in priority to any amounts due to members in satisfaction of their rights (whether as to capital or income) as members.
Para. (7) rep. by 1989 NI 19
Power of Department to modify this Chapter189 F237
1
The Department may by regulations modify the provisions of this Chapter with respect to any of the following matters—
a
the authority required for a purchase by a company of its own shares,
b
the authority required for the release by a company of its rights under a contract for the purchase of its own shares or a contract under which the company may (subject to any conditions) become entitled or obliged to purchase its own shares,
c
the information to be included in a return delivered by a company to the registrar in accordance with Article 179(1),
d
the matters to be dealt with in the statutory declaration of the directors under Article 183 with a view to indicating their opinion of their company's ability to make a proposed payment out of capital with due regard to its financial situation and prospects, and
e
the contents of the auditors' report required by that Article to be annexed to that declaration.
2
The Department may also by regulations make such provision (including modification of the provisions of this Chapter) as appears to it to be appropriate—
a
for wholly or partly relieving companies from the requirement of Article 181(3)(a) that any available profits must be taken into account in determining the amount of the permissible capital payment for shares under that Article, or
b
for permitting a company's share premium account to be applied, to any extent appearing to the Department to be appropriate, in providing for the premiums payable on the redemption or purchase by the company of any of its own shares.
3
Regulations under this Article may make such further modification of any provisions of this Chapter as appears to the Department to be reasonably necessary in consequence of any provision made under such regulations by virtue of paragraph (1) or (2).
4
No regulations shall be made under this Article unless a draft of the regulations has been laid before, and approved by a resolution of, the Assembly.
Transitional cases arising under this Chapter; and savings190 F238
1
Any preference shares issued by a company before 1st July 1983 which could but for the repeal by the Order of 1982 of section 58 of the Act of 1960 (power to issue redeemable preference shares) have been redeemed under that section are subject to redemption in accordance with the provisions of this Chapter.
2
In a case to which Articles 169 and 170 apply by virtue of this Article, any premium payable on redemption may, notwithstanding the repeal by the Order of 1982 of any provision of the Act of 1960, be paid out of the share premium account instead of out of profits, or partly out of that account and partly out of profits (but subject to the provisions of this Chapter so far as payment is out of profits).
3
Any capital redemption reserve fund established before 1st July 1983 by a company for the purposes of section 58 of the Act of 1960 is to be known as the company's capital redemption reserve and to be treated as if it had been established for the purposes of Article 180; and accordingly, a reference in any statutory provision or in the articles of any company, or in any other instrument, to a company's capital redemption reserve fund is to be construed as a reference to the company's capital redemption reserve.
Interpretation for Chapter VII191 F239
In this Chapter—
a
“distributable profits”, in relation to the making of any payment by a company, means those profits out of which it could lawfully make a distribution (within the meaning given by F240section 829 of the Companies Act 2006), equal in value to the payment, and
b
“permissible capital payment” means the payment permitted by Article 181;
and references to payment out of capital are to be construed in accordance with Article 181.
CHAPTER VIIIMISCELLANEOUS PROVISIONS ABOUT SHARES AND DEBENTURES
Debentures
Register of debenture holders199 F249
F250. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Right to inspect register200
F251. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Liability of trustees of debentures201 F252
F253. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Perpetual debentures202 F254
F255. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Power to re-issue redeemed debentures203
F256. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Contract to subscribe for debentures204 F257
F258. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payment of debts out of assets subject to floating charge205
F259. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PART VIIDISCLOSURE OF INTERESTS IN SHARES
Individual and group acquisitions
Obligation of disclosure; the cases in which it may arise and “the relevant time”206
F260. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interests to be disclosed207
F261. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
“Percentage level” in relation to notifiable interests208
F262. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Art. 209 rep. by 1990 NI 10
Particulars to be contained in notification210
F263. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Notification of family and corporate interests211
F264. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Agreement to acquire interests in a particular company212
F265. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Obligation of disclosure arising under Article 212213
F266. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Obligation of persons acting together to keep each other informed214
F267. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interests in shares by attribution215
F268. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interests in shares which are to be notified216
F269. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interests to be disregarded217
F270. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other provisions about notification under this Part218
F271. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Power to make further provision by regulations218A
F272. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Supplementary
Interpretation of Part VII228
F282. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F283F284F285F286Part VIIIAccounts and Audit
mod. SR 1994/133
Pt. VIII substituted by S.I. 1990/593 (N.I. 5), Pt. II
Pt. VIII modified by S.R. 2004/307 (as amended (1.10.2006) by Limited Liability Partnerships (Amendment) Regulations (Northern Ireland) 2006 (S.R. 2006/377), reg. 2, Sch. 1)
Pt. VIII modified by {S.R. 2004/496}
Chapter 1Provisions Applying to Companies Generally
Accounting records
Duty to keep accounting records229
F287. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Where and for how long records to be kept230
F288. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
A company's financial and accounting reference periods
A company's financial year231
F289. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounting reference periods and accounting reference date232
F290. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Alteration of accounting reference date233
Annual accounts
Duty to prepare individual accounts234
F293. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Companies Order individual accounts234A
F294. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
IAS individual accounts234B
F295. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Duty to prepare group accounts235
F296. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Companies Order group accounts235A
F297. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
IAS group accounts235B
F298. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consistency of accounts235C
F299. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exemption for parent companies included in accounts of larger group236
F300. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exemption for parent companies included in non‐EEA group accounts236A
F301. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Subsidiary undertakings included in the consolidation237
F302. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Treatment of individual profit and loss account where group accounts prepared238
F303. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Disclosure required in notes to accounts: related undertakings239
F304. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Disclosure required in notes to annual accounts: particulars of staff239A
F305. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Disclosure required in notes to accounts: emoluments and other benefits of directors and others240 F306
F307. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Approval and signing of accounts
Approval and signing of accounts241 F308
F309. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
DIRECTORS' REPORT
Duty to prepare directors' report242
F310. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Directors' report: general requirements242ZZA
F311. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Directors' report: business review242ZZB
F312. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F313. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Approval and signing of directors' report242A
F314. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F317. . .
Heading before art. 242AA omitted (31.3.2006) by virtue of Companies (1986 Order) (Operating and Financial Review) (Repeal) Regulations (Northern Ireland) 2006 (S.R. 2006/94), reg. 2(2), Sch. para. 2
Duty to prepare operating and financial review242AA
F315. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Approval and signing of operating and financial review242AB
F316. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Quoted companies: directors' remuneration report
Duty to prepare directors' remuneration report242B
F318. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Approval and signing of directors' remuneration report242C
F319. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F320Auditors' report
Auditors' report243
F321. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Signature of auditors' report244
F322. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Duties of auditors245
F323. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F324Publication of accounts and reports
Persons entitled to receive copies of accounts and reports246
F325. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Time allowed for sending out copies of accounts and reports246A
F328. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Right to demand copies of accounts and reports247
F326. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Requirements in connection with publication of accounts248
F327. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F329Laying and delivering of accounts and reports
shell centre redevAccounts and reports to be laid before company in general meeting249
F330. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Members' approval of directors' remuneration report249A
F331. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts and reports to be delivered to the registrar250
F332. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Civil penalty for failure to deliver accounts250A
F333. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Delivery and publication of accounts in ECUs250B
F334. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Art. 251 rep. by SR 2004/496
Period allowed for laying and delivering accounts and reports252
F335. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F336Revision of defective accounts and reports
Voluntary revision of annual accounts or directors' report253
F337. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Department's notice in respect of annual accounts253A
F338. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Application to court in respect of defective accounts253B
F339. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other persons authorised to apply to court253C
F340. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Disclosure of information held by Inland Revenue to persons authorised to apply to court253D
F341. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restrictions on use and further disclosure of information disclosed under Article 253D253E
F342. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .253F
F343. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F344CHAPTER IIF344Exemptions, exceptions and special provisions
F345Small and medium‐sized companies and groups
Special provisions for small companies254
F346. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Special provisions for medium‐sized companies254A
F347. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Qualification of company as small or medium‐sized255
F348. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cases in which special provisions do not apply255A
F349. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Special auditors' report255B
F350. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exemption for small and medium‐sized groups256
F351. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Group accounts prepared by small company256A
F352. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Qualification of group as small or medium‐sized257
F353. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F354Exemptions from audit for certain categories of small company
SR 1995/128
Exemptions from audit257A
F355. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dormant Companies257AA
F356. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cases where exemptions not available257B
F357. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The report required for the purposes of Article 257A(2)257C
F358. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The reporting accountant257D
F359. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of exemptions257E
F360. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Art. 258 rep. by SR 2001/153
F361Listed public companies
Summary financial statement259
F362. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Private companies
Election to dispense with laying of accounts and reports before general meeting260
F363. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Right of shareholder to require laying of accounts261
F364. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unlimited companies
Exemption from requirement to deliver accounts and reports262
F365. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F366Banking and insurance companies and groups
SR 1992/258
Special provisions for banking and insurance companies263
F367. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Special provisions for banking and insurance groups263A
F368. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Modification of disclosure requirements in relation to banking company or group263B
F369. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Art. 263C rep. by SR 1994/428
Power to apply provisions to banking partnerships263D
F370. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F371CHAPTER IIISUPPLEMENTARY PROVISIONS
F372Accounting standards
Accounting standards264
F373. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Power to alter accounting requirements
Power of Department to alter accounting requirements265
F374. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Parent and subsidiary undertakings
Parent and subsidiary undertakings266
F375. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F376Other interpretation provisions
Meaning of “undertaking” and related expressions267
F377. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Participating interests268
F378. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Notes to the accounts269
F379. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Minor definitions270
F380. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Index of defined expressions270A
F381. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PART IXDISTRIBUTION OF PROFITS AND ASSETS
Limits of company's power of distribution
Certain distributions prohibited271
F382. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restriction on distribution of assets272
F383. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other distributors by investment companies273
F384. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Meaning of “investment company”274
F385. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Extension of Articles 273 and 274 to other companies275
F386. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Realised profits of insurance company with long term business276
F387. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Treatment of development costs277
F388. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Relevant accounts
Distribution to be justified by reference to company's accounts278
F389. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Requirements for last annual accounts279
F390. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Requirements for interim accounts280
F391. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Requirements for initial accounts281
F392. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Method of apply Article 278 so successive distributions282
F393. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Treatment of assets in the relevant accounts283
F394. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Distributors in kind284
F395. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Supplementary
Consequences of unlawful distribution285
F396. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Saving for provision in a company's articles operative before the Order of 1981286
F397. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Distributions by banking or insurance companies287
F398. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interpretation for Part IX288
F399. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Saving for other restraints on distribution289
F400. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PART XA COMPANY'S MANAGEMENT; DIRECTORS AND SECRETARIES; THEIR QUALIFICATIONS, DUTIES AND RESPONSIBILITIES
Officers and registered office
Directors290
F401. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Secretary291
F402. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Acts done by person in dual capacity292
F403. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Validity of acts of directors293
F404. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Qualifications of company secretaries294
F405. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F406Registered office295 F407
1
A company shall at all times have a registered office to which all communications and notices may be addressed.
2
On incorporation the situation of the company's registered office is that specified in the statement sent to the registrar under Article 21.
3
The company may change the situation of its registered office from time to time by giving notice in the prescribed form to the registrar.
4
The change takes effect upon the notice being registered by the registrar, but until the end of the period of 14 days beginning with the date on which it is registered a person may validly serve any document on the company at its previous registered office.
5
For the purposes of any duty of a company—
a
to keep at its registered office, or make available for public inspection there, any register, index or other document, or
b
to mention the address of its registered office in any document,
a company which has given notice to the registrar of a change in the situation of its registered office may act on the change as from such date, not more than 14 days after the notice is given, as it may determine.
6
Where a company unavoidably ceases to perform at its registered office any such duty as is mentioned in paragraph (5)(a) in circumstances in which it was not practicable to give prior notice to the registrar of a change in the situation of its registered office, but—
a
resumes performance of that duty at other premises as soon as practicable, and
b
gives notice accordingly to the registrar of a change in the situation of its registered office within 14 days of doing so,
it shall not be treated as having failed to comply with that duty.
7
In proceedings for an offence of failing to comply with any such duty as is mentioned in paragraph (5), it is for the person charged to show that by reason of the matters referred to in that paragraph or paragraph (6) no offence was committed.
Register of directors and secretaries296 F408
F4091
Every company shall keep, at the same office as its register of members is kept, a register of its directors and secretaries; and the register shall, with respect to the particulars to be contained in it of those persons, comply with Articles 297 and 298.
2
The company shall, within the period of 14 days from the occurrence of—
a
any change among its directors or in its secretary, or
b
any change in particulars contained in the register,
send to the registrar a notification in the prescribed form of the change and of the date on which it occurred; and a notification of a person having become a director or secretary, or one of joint secretaries, of the company shall contain a consent, signed by that person, to act in the relevant capacity.
3
4
If an inspection required under this Article is refused, or if default is made in complying with paragraph (1) or (2), the company and every officer of it who is in default is liable to a fine and, for continued contravention, to a daily default fine.
5
In the case of a refusal of inspection of the register, the court may by order compel an immediate inspection of it.
6
For the purposes of this Article and Article 297, a shadow director of a company is deemed a director and officer of it.
Particulars of directors to be registered under Article 296297
1
Subject to the provisions of this Article, the register kept by a company under Article 296 shall contain the following particulars with respect to each director—
F4112
In paragraph (1)(a)—
a
“name” means a person's Christian name (or other forename) and surname, except that in the case of a peer, or an individual usually known by a title, the title may be stated instead of his Christian name (or other forename) and surname, or in addition to either or both or them; and
b
the reference to a former name does not include—
i
in the case of a peer, or an individual normally known by a British title, the name by which he was known previous to the adoption of or succession to the title, or
ii
in the case of any person, a former name which was changed or disused before he attained the age of 18 years or which has been changed or disused for 20 years or more, or
iii
in the case of a married woman, the name by which she was known previous to the marriage.
3
It is not necessary for the register to contain on any day particulars of a directorship—
a
which has not been held by a director at any time during the 5 years preceding that day,
b
which is held by a director in a company which—
i
is dormant or grouped with the company keeping the register, and
ii
if he also held that directorship for any period during those 5 years, was for the whole of that period either dormant or so grouped,
c
which was held by a director for any period during those 5 years in a company which for the whole of that period was either dormant or grouped with the company keeping the register.
4
For the purposes of paragraph (3), “company” includes any body incorporated in Northern Ireland; and—
a
F412section 481 of the Companies Act 2006 applies as regards whether and when a company is or has been dormant, and
b
a company is to be regarded as being or having been grouped with another at any time if at that time it is or was a company of which the other is or was a wholly-owned subsidiary, or if it is or was a wholly-owned subsidiary of the other or of another company of which that other is or was a wholly-owned subsidiary.
Particulars of secretaries to be registered under Article 296298
1
The register to be kept by a company under Article 296 shall contain the following particulars with respect to the secretary F414(if any) or, where there are joint secretaries, with respect to each of them—
a
b
in the case of a body corporate or a Scottish firm, its corporate or firm name and registered or principal office.
2
Where all the partners in a firm are joint secretaries, the name and principal office of the firm may be stated instead of the particulars mentioned in paragraph (1).
F4133
Article 297(2)(a) and (b) apply for the purposes of the obligation under paragraph (1)(a) of this Article to state the name or former name of an individual.
Provisions governing appointment of directors
Share qualifications of directors299
1
It is the duty of every director who is by the company's articles required to hold a specified share qualification, and who is not already qualified, to obtain his qualification within 2 months after his appointment, or such shorter time as may be fixed by the articles.
2
For the purpose of any provision of the company's articles requiring a director to hold any specified share qualification, the bearer of a share warrant is not deemed the holder of the shares specified in the warrant.
3
The office of director of a company is vacated if the director does not within 2 months from the date of his appointment (or within such shorter time as may be fixed by its articles) obtain his qualification, or if after the expiration of that period or shorter time he ceases at any time to hold his qualification.
4
A person vacating office under this Article is incapable of being reappointed a director of the company until he has obtained his qualification.
5
If after the expiration of that period or shorter time any unqualified person acts as a director of the company, he is liable to a fine and, for continued contravention, to a daily default fine.
Appointment of directors to be voted on individually300
F415. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Age limit for directors301
F416. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Duty of director to disclose his age302
F417. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Arts. 303‐310 rep. by 1989 NI 18
Removal of directors
Resolution to remove director311
F418. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Director's right to protest removal312
F419. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other provisions about directors and officers
Directors' names on company correspondence, etc.313
F420. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Limited company may have directors with unlimited liability314
1
In the case of a limited company, the liability of the directors or of the managing director may, if so provided by the memorandum, be unlimited.
2
In the case of a limited company in which the liability of a director is unlimited, the directors of the company and the member who proposes any person for election or appointment to the office of director, shall add to that proposal a statement that the liability of the person holding that office will be unlimited.
3
Before the person accepts the office or acts in it, notice in writing that his liability will be unlimited shall be given to him by the following or one of the following persons, namely—
a
the promoters of the company,
b
the directors of the company,
c
the company secretary.
4
If a director or proposer makes default in adding such a statement, or if a promoter, director or secretary makes default in giving the notice required by paragraph (3), then—
a
he is liable to a fine, and
b
he is also liable for any damage which the person so elected or appointed may sustain from the default;
but the liability of the person elected or appointed is not affected by the default.
Special resolution making liability of directors unlimited315
1
A limited company, if so authorised by its articles, may by special resolution alter its memorandum so as to render unlimited the liability of its directors or of any managing director.
2
When such a special resolution is passed, its provisions are as valid as if they had been originally contained in the memorandum.
Assignment of office by directors316
If provision is made by a company's articles, or by any agreement entered into between any person and the company, for empowering a director of the company to assign his office as such to another person, any assignment of office made in pursuance of that provision is (notwithstanding anything to the contrary contained in the provision) of no effect unless and until it is approved by a special resolution of the company.
Directors to have regard to interests of employees317
F421. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provisions protecting directors from liability317A
1
This Article applies in relation to any liability attaching to a director of a company in connection with any negligence, default, breach of duty or breach of trust by him in relation to the company.
2
Any provision which purports to exempt (to any extent) a director of a company from any liability within paragraph (1) is void.
3
Subject to paragraphs (4) and (5), any provision by which a company directly or indirectly provides (to any extent) an indemnity for a director of—
a
the company, or
b
an associated company,
against any liability within paragraph (1) is void.
4
Paragraph (3) does not apply to a qualifying third party indemnity provision within the meaning of Article 317B(1).
5
Paragraph (3) does not prevent a company from purchasing and maintaining for a director of—
a
the company, or
b
an associated company,
insurance against any liability within paragraph (1).
6
In this Article—
“associated company”, in relation to a company (“C”), means a company which is C's subsidiary, or C's holding company or a subsidiary of C's holding company;
“provision” means a provision of any nature, whether or not it is contained in a company's articles or in any contract with a company.
Qualifying third party indemnity provisions317B
1
For the purposes of Article 317A(4) a provision is a qualifying third party indemnity provision if it is a provision such as is mentioned in Article 317A(3) in relation to which conditions A to C are satisfied.
2
Condition A is that the provision does not provide any indemnity against any liability incurred by the director—
a
to the company, or
b
to any associated company.
3
Condition B is that the provision does not provide any indemnity against any liability incurred by the director to pay—
a
a fine imposed in criminal proceedings, or
b
a sum payable to a regulatory authority by way of a penalty in respect of non-compliance with any requirement of a regulatory nature (however arising).
4
Condition C is that the provision does not provide any indemnity against any liability incurred by the director—
a
in defending any criminal proceedings in which he is convicted, or
b
in defending any civil proceedings brought by the company, or an associated company, in which judgment is given against him, or
c
in connection with any application under any of the following provisions in which the court refuses to grant him relief, namely—
i
Article 154(3) or (4), or
ii
Article 675.
5
In sub-paragraph (a), (b) or (c) of paragraph (4) the reference to any such conviction, judgment or refusal of relief is a reference to one that has become final.
6
For the purposes of paragraph (5) a conviction, judgment or refusal of relief becomes final—
a
if not appealed against, at the end of the period for bringing an appeal, or
b
if appealed against, at the time when the appeal (or any further appeal) is disposed of.
7
An appeal is disposed of—
a
if it is determined and the period for bringing any further appeal has ended, or
b
if it is abandoned or otherwise ceases to have effect.
8
In this Article “associated company” and “provision” have the same meaning as in Article 317A.
Disclosure of qualifying third party indemnity provisions317C
1
Paragraphs (2) and (3) impose disclosure requirements in relation to a directors' report under Article 242 in respect of a financial year.
2
If —
a
at the time when the report is approved under Article 242A, any qualifying third party indemnity provision (whether made by the company or otherwise) is in force for the benefit of one or more directors of the company, or
b
at any time during the financial year, any such provision was in force for the benefit of one or more persons who were then directors of the company,
the report must state that any such provision is or (as the case may be) was so in force.
3
If the company has made a qualifying third party indemnity provision and—
a
at the time when the report is approved under Article 242A, any qualifying third party indemnity provision made by the company is in force for the benefit of one or more directors of an associated company, or
b
at any time during the financial year, any such provision was in force for the benefit of one or more persons who were then directors of an associated company,
the report must state that any such provision is or (as the case may be) was so in force.
4
Paragraph (5) applies where a company has made a qualifying third party indemnity provision for the benefit of a director of the company or of an associated company.
5
Article 326 shall apply to—
a
the company, and
b
if the director is a director of an associated company, the associated company,
as if a copy of the provision, or (if it is not in writing) a memorandum setting out its terms, were included in the list of documents in Article 326(1).
6
In this Article—
“associated company” and “provision” have the same meaning as in Article 317A; and
“qualifying third party indemnity provision” has the meaning given by Article 317B(1).
Provisions F422protecting auditors from liability318
F423. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PART XIENFORCEMENT OF FAIR DEALING BY DIRECTORS
Restrictions on directors taking financial advantage
Prohibition on tax-free payments to directors319
F424. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payment to director for loss of office, etc.320
F425. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Company approval for property transfer321
F426. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Director's duty of disclosure on takeover, etc.322
F427. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consequences of non-compliance with Article 322323
F428. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provisions supplementing Articles 320 to 323324
F429. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Directors to disclose interest in contracts325
F430. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Directors' service contracts to be open to inspection326
F431. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Director's contract of employment for more than 5 years327
F432. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Substantial property transactions involving directors, etc.328 F433
F434. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exceptions from Article 328329
F435. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Liabilities arising from contravention of Article 328330
F436. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F437Invalidity of certain transactions involving directors, etc.330A
1
This Article applies where a company enters into a transaction to which the parties include—
a
a director of the company or of its holding company, or
b
a person connected with such a director or a company with whom such a director is associated,
and the board of directors, in connection with the transaction, exceed any limitation on their powers under the company's constitution.
2
The transaction is voidable at the instance of the company.
3
Whether or not it is avoided, any such party to the transaction as is mentioned in paragraph (1)(a) or (b), and any director of the company who authorised the transaction, is liable—
a
to account to the company for any gain which he has made directly or indirectly by the transaction, and
b
to indemnify the company for any loss or damage resulting from the transaction.
4
Nothing in the above provisions shall be construed as excluding the operation of any other statutory provision or rule of law by virtue of which the transaction may be called in question or any liability to the company may arise.
5
The transaction ceases to be voidable if—
a
restitution of any money or other asset which was the subject-matter of the transaction is no longer possible, or
b
the company is indemnified for any loss or damage resulting from the transaction, or
c
rights acquired bona fide for value and without actual notice of the directors' exceeding their powers by a person who is not party to the transaction would be affected by the avoidance, or
d
the transaction is ratified by the company in general meeting, by ordinary or special resolution or otherwise as the case may require.
6
A person other than a director of the company is not liable under paragraph (3) if he shows that at the time the transaction was entered into he did not know that the directors were exceeding their powers.
7
This Article does not affect the operation of Article 45A in relation to any party to the transaction not within paragraph (1)(a) or (b).
But where a transaction is voidable by virtue of this Article and valid by virtue of that Article in favour of such a person, the court may, on the application of that person or of the company, make such order affirming, severing or setting aside the transaction, on such terms, as appear to the court to be just.
8
In this Article “transaction” includes any act; and the reference in paragraph (1) to limitations under the company's constitution includes limitations deriving—
a
from a resolution of the company in general meeting or a meeting of any class of shareholders, or
b
from any agreement between the members of the company or of any class of shareholders.
Contracts with sole members who are directors330B
F438. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restrictions on a company's power to make loans, etc. to directors and persons connected with them
General restriction on loans, etc. to directors and persons connected with them338
F448. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interpretation for Articles 338ff.339
F449. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Short-term quasi-loans340
F450. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inter-company loans in the same group341
F451. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loans of small amounts342
F452. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Minor and business transactions343
F453. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Transactions at behest of holding company344
F454. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Funding of director's expenditure on duty to company345
F455. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F456Funding of director's expenditure on defending proceedings345A
F457. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loan or quasi-loan by money-lending company346
F458. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
“Relevant amounts” for the purposes of Articles 342ff.347
F459. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
“Value” of transactions and arrangements348
F460. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Civil remedies for breach of Article 338349
F461. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Criminal penalties for breach of Article 338350
F462. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Record of transactions not disclosed in company accounts351
F463. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exceptions from Article 351352
F464. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Supplementary
Power to increase financial limits353
F465. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
“Connected persons”, etc.354
F466. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Transactions under foreign law355
F467. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PART XIICOMPANY ADMINISTRATION AND PROCEDURE
CHAPTER ICompany Identification
Company name to appear outside place of business356
F468. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Company's name to appear in its correspondence, etc.357
F469. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Company seal358 F470
F4711
A company which has a common seal shall have its name engraved in legible characters on the seal; and if it fails to comply with this paragraph it is liable to a fine.
2
If an officer of a company or a person on its behalf uses or authorises the use of any seal purporting to be a seal of the company on which its name is not engraved as required by paragraph (1), he is liable to a fine.
Particulars in correspondence, etc.359
F472. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CHAPTER IIRegister of Members
Obligation to keep and enter up register360
F4741
Every company shall keep a register of its members and enter in it the particulars required by this Article.
2
There shall be entered in the register—
a
the names and addresses of the members;
b
the date on which each person was registered as a member; and
c
the date at which any person ceased to be a member.
3
This paragraph applies in the case of a company having a share capital—
a
with the names and addresses of the members there shall be entered a statement—
i
of the shares held by each member, distinguishing each share by its number (so long as the share has a number) and, where the company has more than one class of issued shares, by its class, and
ii
of the amount paid or agreed to be considered as paid on the shares of each member;
b
where the company has converted any of its shares into stock and given notice of the conversion to the register, the register shall show the amount and class of stock held by each member, instead of the amount of shares and the particulars relating to shares specified in sub-paragraph (a).
F4733A
Where a company purchases one or more of its own shares in circumstances in which Article 172A applies—
a
the requirements of paragraphs (2) and (3) must be complied with unless the company cancels all of the shares forthwith after the purchase in accordance with Article 172D(1), but
b
any share which is so cancelled must be disregarded for the purposes of paragraph (3).
4
In the case of a company which does not have a share capital but has more than one class of members, there shall be entered in the register, with the names and addresses of the members, the class to which each member belongs.
5
If a company makes default in complying with this Article, the company and every officer of it who is in default is liable to a fine and, for continued contravention, to a daily default fine.
6
An entry relating to a former member of a company may be removed from the register after the expiration of 20 years from the date on which he ceased to be a member.
7
Liability incurred by a company from the making or deletion of an entry in its register of members or debenture holders, or from a failure to make or delete any such entry, is not enforceable more than 20 years after the date on which the entry was made or deleted or, in the case of any such failure, the failure first occurred.
This is without prejudice to any lesser period of limitation.
F475Statement that company has only one member360A
1
If the number of members of a private company limited by shares or by guarantee falls to one there shall upon the occurrence of that event be entered in the company's register of members with the name and address of the sole member—
i
a statement that the company has only one member; and
ii
the date on which the company became a company having only one member.
2
If the membership of a private company limited by shares or by guarantee increases from one to two or more members there shall upon the occurrence of that event be entered in the company's register of members, with the name and address of the person who was formerly the sole member, a statement that the company has ceased to have only one member together with the date on which that event occurred.
3
If a company makes default in complying with this Article, the company and every officer of it who is in default is liable to a fine and, for continued contravention, to a daily default fine.
Location of register361
1
A company's register of members shall be kept at its registered office, except that—
a
if the work of making it up is done at another office of the company, it may be kept there; and
b
if the company arranges with some other person for the making up of the register to be undertaken on its behalf by that other, it may be kept at the office of the other at which the work is done;
but it must not be kept at a place outside Northern Ireland.
2
Subject to paragraph (3), every company shall send notice in the prescribed form to the registrar of the place where its register of members is kept, and of any change in that place.
3
The notice need not be sent if the register has, at all times since it came into existence (or, in the case of a register in existence on 1st April 1961, at all times since then) been kept at the company's registered office.
4
If a company makes default for 14 days in complying with paragraph (2), the company and every officer of it who is in default is liable to a fine and, for continued contravention, to a daily default fine.
Index of members362
1
Every company having more than 50 members shall, unless the register of members is in such a form as to constitute in itself an index of the names of the members of the company and shall, within 14 days after the date on which any alteration is made in the register of members, make any necessary alteration in the index.
2
The index shall in respect of each member contain a sufficient indication to enable the account of that member in the register to be readily found.
3
The index shall be at all times kept at the same place as the register of members.
4
If default is made in complying with this Article, the company and every officer of it who is in default is liable to a fine and, for continued contravention, to a daily default fine.
Entries in register in relation to share warrants363
1
On the issue of a share warrant the company shall strike out of its register of members the name of the member then entered therein as holding the shares specified in the warrant as if he had ceased to be a member, and shall enter in the register the following particulars, namely—
a
the fact of the issue of the warrant;
b
a statement of the shares included in the warrant, distinguishing each share by its number so long as the share has a number; and
c
the date of the issue of the warrant.
2
Subject to the company's articles, the bearer of a share warrant is entitled, on surrendering it for cancellation, to have his name entered as a member in the register of members.
3
The company is responsible for any loss incurred by any person by reason of the company entering in the register the name of a bearer of a share warrant in respect of the shares therein specified without the warrant being surrendered and cancelled.
4
Until the warrant is surrendered, the particulars specified in paragraph (1) are deemed to be those required by this Order to be entered in the register of members; and, on the surrender, the date of the surrender must be entered.
5
Except as provided by Article 299(2) (director's share qualification), the bearer of a share warrant may, if the articles of the company so provide, be deemed a member of the company within the meaning of this Order, either to the full extent or for any purposes defined in its articles.
Inspection of register and index364
F476. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-compliance with Articles 361, 362 and 364; agent's default365
Where under Article 361(1)(b) the register of members is kept at the office of some person other than the company, and by reason of any default of his the company fails to comply with—
Article 361(2) (notice to registrar),
Article 362(3) (index to be kept with register), or
F477. . . ,
or with any requirement of this Order as to the production of the register, that other person is liable to the same penalties as if he were an officer of the company who was in default, F477. . .
Power to close register366
A company may, on giving notice by advertisement in a newspaper circulating in the district in which the company's registered office is situated, close the register of members for any time or times not exceeding in the whole 30 days in each year.
Power of court to rectify register367
1
If—
a
the name of any person is, without sufficient cause, entered in or omitted from a company's register of members, or
b
default is made or unnecessary delay takes place in entering on the register the fact of any person ceased to be a member,
the person aggrieved, or any member of the company, or the company, may apply to the court for rectification of the register.
2
The court may either refuse the application or may order rectification of the register and payment by the company of any damages sustained by any party aggrieved.
3
On such an application the court may decide any question relating to the title of a person who is a party to the application to have his name entered in or omitted from the register, whether the question arises between members or alleged members, or between members or alleged members on the one hand and the company on the other hand, and generally may decide any question necessary or expedient to be decided for rectification of the register.
4
In the case of a company required by this Order to send a list of its members to the registrar, the court, when making an order for rectification of the register, shall by its order direct notice of the rectification to be given to the registrar.
Trusts not be entered on register368
No notice of any trust, expressed, implied or constructive, shall be entered on the register, or be receivable by the registrar.
Register to be evidence369
The register of members is prima facie evidence of any matters which are by this Order directed or authorised to be inserted in it.
External branch registers370
1
A company having a share capital whose objects comprise the transaction of business in any of the countries or territories specified in Part I of Schedule 14 may cause to be kept in any such country or territory in which it transacts business a branch register of members resident in that country or territory.
2
Such a branch register is to be known as an “external branch register”; and—
a
any dominion register kept by a company under section 116 of the Act of 1960 is to become known as an external branch register of the company;
b
where any statutory provision or instrument (including in particular a company's articles) refers to a company's dominion register, that reference is to be read (unless the context otherwise requires) as being to an external branch register kept under this Article; and
c
references to a colonial register occurring in articles registered before 1st January 1933 are to be read as referring to an external branch register.
3
Part II of Schedule 14 has effect with respect to external branch registers kept under this Article.
CHAPTER IIIANNUAL RETURN
Duty to deliver annual returns371 F478
1
Every company shall deliver to the registrar successive annual returns each of which is made up to a date not later than the date which is from time to time the company's “return date”, that is—
a
the anniversary of the company's incorporation, or
b
if the company's last return delivered in accordance with this Chapter was made up to a different date, the anniversary of that date.
2
Each return shall—
a
be in the prescribed form,
b
contain the information required by or under the following provisions of this Chapter, and
c
be signed by a director or the secretary of the company;
and it shall be delivered to the registrar within 28 days after the date on which it is made up.
3
If a company fails to deliver an annual return in accordance with this Chapter before the end of the period of 28 days after a return date, the company is guilty of an offence and liable to a fine and, in the case of continued contravention, to a daily default fine.
The contravention continues until such time as an annual return made up to that return date and complying with the requirements of paragraph (2) (except as to date of delivery) is delivered by the company to the registrar.
4
Where a company is guilty of an offence under paragraph (3), every director or secretary of the company is similarly liable unless he shows that he took all reasonable steps to avoid the commission or continuation of the offence.
5
The references in this Article to a return being delivered “in accordance with this Chapter” are—
a
in relation to a return made after the coming into operation of Article 74 of the Companies (No. 2) (Northern Ireland) Order 1990, to a return with respect to which all the requirements of paragraph (2) are complied with;
b
in relation to a return made before that time, to a return with respect to which the formal and substantive requirements of this Chapter as it then had effect were complied with, whether or not the return was delivered in time.
Contents of annual return: general372 F479
1
Every annual return shall state the date to which it is made up and shall contain the following information—
a
the address of the company's registered office;
b
the type of company it is and its principal business activities;
c
the name and address of the company secretary F480(if any);
d
the name and address of every director of the company;
e
in the case of each individual director—
i
his nationality, date of birth and business occupation, F481. . .
ii
F481. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
f
F482. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
g
if the register of members is not kept at the company's registered office, the address of the place where it is kept;
h
if any register of debenture holders (or a duplicate of any such register or a part of it) is not kept at the company's registered office, the address of the place where it is kept;
i
F483. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F484j
whether the company was a traded company at any time during the return period.
2
The information as to the company's type shall be given by reference to the classification scheme prescribed for the purposes of this Article.
3
The information as to the company's principal business activities may be given by reference to one or more categories of any prescribed system of classifying business activities.
4
A person's “name” and “address” mean, respectively—
a
in the case of an individual, his Christian name (or other forename) and surname and his usual residential address;
b
in the case of a corporation or Scottish firm, its corporate or firm name and its registered or principal office.
5
In the case of a peer, or an individual usually known by a title, the title may be stated instead of his Christian name (or other forename) and surname or in addition to either or both of them.
6
Where all the partners in a firm are joint secretaries, the name and principal office of the firm may be stated instead of the names and addresses of the partners.
Contents of annual return: particulars of share capital F485. . . 372A
1
The annual return of a company having a share capital shall contain the following information with respect to its share capital F486. . . .
2
The return shall state the total number of issued shares of the company at the date to which the return is made up and the aggregate nominal value of those shares.
3
The return shall state with respect to each class of shares in the company—
a
the nature of the class, and
b
the total number and aggregate nominal value of issued shares of that class at the date to which the return is made up.
4
F487. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5
F487. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6
F487. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7
F487. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8
Where the company has converted any of its shares into stock, the return shall give the corresponding information in relation to that stock, stating the amount of stock instead of the number or nominal value of shares.
Contents of annual return: information about shareholders: non-traded companies372B
1
The annual return of a company that was a non-traded company throughout the return period shall also contain the following information.
2
The return shall contain a list of the names of every person who was a member of the company at any time during the return period. If the names are not arranged in alphabetical order the return shall have annexed to it an index sufficient to enable the name of any person in the list to be easily found.
3
The return shall also state—
a
the number of shares of each class held at the end of the date to which the return is made up by each person who was a member of the company at that time,
b
the number of shares of each class transferred during the return period by or to each person who was a member of the company at any time during that period, and
c
the dates of registration of those transfers.
4
If either of the two immediately preceding returns has given the full particulars required by paragraphs (2) and (3), the return need only give such particulars as relate—
a
to persons who became, or ceased to be, members during the return period, and
b
to shares transferred during that period.
5
Paragraphs (2) and (3) do not require the inclusion of particulars entered in an overseas branch register if copies of those entries have not been received at the company's registered office by the date to which the return is made up. Those particulars shall be included in the company's next annual return after they are received.
Contents of annual return: information about shareholders: traded companies372C
1
The annual return of a company that was a traded company at any time during the return period shall also contain the following information.
2
The return shall contain a list of the names and addresses of every person who held at least 5% of the issued shares of any class of the company at any time during the return period. If the names are not arranged in alphabetical order the return shall have annexed to it an index sufficient to enable the name of any person in the list to be easily found.
3
The return shall also state—
a
the number of shares of each class held at the end of the date to which the return is made up by each person who held at least 5% of the issued shares of any class of the company at that time,
b
the number of shares of each class transferred during the return period by or to each person who held at least 5% of the issued shares of any class of the company at any time during the return period, and
c
the dates of registration of those transfers.
4
If either of the two immediately preceding returns has given the full particulars required by paragraphs (2) and (3), the return need only give such particulars as relate—
a
to persons who came to hold, or ceased to hold, at least 5% of the issued shares of any class of the company during the return period, and
b
to shares transferred during that period.
5
Paragraphs (2) and (3) do not require the inclusion of particulars entered in an overseas branch register if copies of those entries have not been received at the company's registered office by the date to which the return is made up. Those particulars shall be included in the company's next annual return after they are received.
Contents of annual return: information about shareholders: supplementary372D
1
In Articles 372, 372B and 372C—
“non-traded company” means a company none of whose shares are shares admitted to trading on a regulated market (so that “traded company” means a company any of whose shares are shares admitted to trading on a regulated market);
“regulated market” means a market which appears on the list drawn up by an EEA State pursuant to Article 47 of Directive 2004/39/EC of the European Parliament and of the Council of 21 April 2004 on markets in financial instruments; and
“return period”, in relation to an annual return, means the period beginning immediately after the date to which the last return was made up (or, in the case of the first return, with the incorporation of the company) and ending with the date to which the return is made up.
2
Where a company has converted any of its shares into stock, the return shall give information in relation to that stock corresponding to that required by Article 372B or 372C (as the case may be) in relation to shares of the company, stating the amount of stock instead of the number of shares.
Supplementary provisions: regulations and interpretation373
1
The Department may by regulations make further provision as to the information to be given in a company's annual return, which may amend or repeal the provisions of Articles 372 and 372A.
2
For the purposes of this Chapter, except Article 371(2)(c) (signature of annual return), a shadow director shall be deemed to be a director.
CHAPTER IVMeetings and Resolutions
Meetings
Annual general meeting374
F488. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Election by private company to dispense with annual general meetings374A
F489. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Department's power to call meeting in default375
F490. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Extraordinary general meeting on member's requisition376
F491. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Length of notice for calling meetings377
F492. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
General provisions as to meetings and votes378
F493. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Quorum at meetings of the sole member378A
F494. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Power of court to order meeting379
F495. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proxies380
F496. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Right to demand a poll381
F497. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Voting on a poll382
F498. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Representation of bodies corporate at meetings383
F499. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Resolutions
Circulation of members' resolutions384
F500. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
In certain cases, compliance with Article 384 not required385
F501. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Extraordinary and special resolutions386
F502. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Resolution requiring special notice387
F503. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F504Elective resolution of private company387A
F5071
An election by a private company for the purposes of—
a
Article 90A (election as to duration of authority to allot shares),
b
Article 260 (election to dispense with laying of accounts and reports before general meeting),
c
Article 374A (election to dispense with holding of annual general meeting),
d
Article 377(4) or 386(3) (election as to majority required to authorise short notice of meeting), or
e
Article 394 (election to dispense with appointment of auditors annually),
shall be made by resolution of the company in general meeting in accordance with this Article.
Such a resolution is referred to in this Order as an “elective resolution”.
2
An elective resolution is not effective unless—
a
at least 21 days' notice in writing is given of the meeting, stating that an elective resolution is to be proposed and stating the terms of the resolution, and
b
the resolution is agreed to at the meeting, in person or by proxy, by all the members entitled to attend and vote at the meeting.
F5052A
An elective resolution is effective notwithstanding the fact that less than 21 days' notice in writing of the meeting is given if all the members entitled to attend and vote at the meeting so agree.
F5062B
For the purposes of this Article, notice in writing of the meeting is to be taken as given to a person where notice of the meeting is sent using electronic communications to such address as may for the time being be notified by that person to the company for that purpose.
2C
For the purposes of this Article a notice in writing of the meeting is also to be treated as given to a person where—
a
the company and that person have agreed that notices of meetings required to be given to that person may instead be accessed by him on a web site;
b
the meeting is a meeting to which that agreement applies;
c
that person is notified, in manner for the time being agreed between him and the company for the purpose, of—
i
the publication of the notice on a web site;
ii
the address of that web site; and
iii
the place on that web site where the notice may be accessed, and how it may be accessed; and
d
the notice continues to be published on that web site throughout the period beginning with the giving of that notification and ending with the conclusion of the meeting;
and for the purposes of this Article a notice treated in accordance with this paragraph as given to any person is to be treated as so given at the time of the notification mentioned in sub-paragraph (c).
2D
A notification given for the purposes of paragraph (2C)(c) must—
a
state that it concerns a notice of a company meeting at which an elective resolution is to be proposed, and
b
specify the place, date and time of the meeting.
2E
Nothing in paragraph (2C) shall invalidate the proceedings of a meeting where—
a
any notice that is required to be published as mentioned in sub-paragraph (d) of that paragraph is published for a part, but not all, of the period mentioned in that sub-paragraph; and
b
the failure to publish that notice throughout that period is wholly attributable to circumstances which it would not be reasonable to have expected the company to prevent or avoid.
2F
In so far as the articles of the company do not provide for notices and notifications to be served using electronic communications, the provisions of Table A (as for the time being in operation) as to such service shall apply.
3
The company may revoke an elective resolution by passing an ordinary resolution to that effect.
4
An elective resolution shall cease to have effect if the company is re-registered as a public company.
5
An elective resolution may be passed or revoked in accordance with this Article, and the provisions referred to inF506 paragraphs (1) and (2B) to (2E) have effect, notwithstanding any contrary provision in the company's articles of association.
F5066
In this article, “address” includes any number or address used for the purposes of electronic communications.
Registration, etc. of resolutions and agreements388
F5131
A copy of every resolution or agreement to which this Article applies shall, within 15 days after it is passed or made, be forwarded to the registrar and recorded by him; and it must be either a printed copy or else a copy in some other form approved by the registrar.
2
Where a company's articles have been registered, a copy of F514every such resolution, and every resolution or agreement to which Chapter 3 of Part 3 of the Companies Act 2006 applies (resolutions and agreements affecting a company's constitution), which is for the time being in force shall be embodied in or annexed to every copy of the articles issued after the passing of the resolution or the making of the agreement.
3
Where a company's articles have not been registered, a printed copy of every such resolution or agreement shall be forwarded to any member at his request on payment of 5 pence or such less sum as the company may direct.
4
This Article applies to—
a
special resolutions;
b
extraordinary resolutions;
F508bb
an elective resolution or a resolution revoking such a resolution;
c
resolutions or agreements which have been agreed to by all the members of a company but which, if not so agreed to, would not have been effective for their purpose unless (as the case may be) they had been passed as special resolutions or as extraordinary resolutions;
d
resolutions or agreements which have been agreed to by all the members of some class of shareholders but which, if not agreed to, would not have been effective for their purpose unless they had been passed by some particular majority or otherwise in some particular manner, and all resolutions or agreements which effectively bind all the members of any class of shareholders though not agreed to by all those members;
e
a resolution passed by the directors of a company in compliance with a direction under Article 41(2) (change of name on Department's direction);
f
a resolution of a company to give, vary, revoke or renew an authority to the directors for the purposes of Article 90 (allotment of relevant securities);
g
a resolution of the directors passed under Article 157(2) (alteration of memorandum on company ceasing to be a public company, following acquisition of its own shares);
h
a resolution conferring, varyingF509, revoking or renewing authority under Article 176 (market purchase of company's own shares);
j
a resolution for voluntary winding up, passed underF510 Article 70(1)(a) of the Insolvency Order; and
k
a resolution passed by the directors of an old public company, under Article 4(1) of the Consequential Provisions Order, that the company should be re-registered as a public company.
F511l
a resolution of the directors passed by virtue of regulation 16(2) of the Uncertificated Securities Regulations 1995 (which allow title to a company's shares to be evidenced and transferred without written instrument); and
m
a resolution of a company passed by virtue of regulation 16(6) of the Uncertificated Securities Regulations 1995 (which prevents or reverses a resolution of the directors under regulation 16(2) of those Regulations).
F5124A
For the purposes of this Article, references to a member of a company do not include the company itself where it is such a member by virtue only of its holding shares as treasury shares, and accordingly, in such circumstances, the company is not, for those purposes, to be treated as a member of any class of the company's shareholders.
5
If a company fails to comply with paragraph (1), the company and every officer of it who is in default is liable to a fine and, for continued contravention, to a daily default fine.
6
If a company fails to comply with paragraph (2) or (3), the company and every officer of it who is in default is liable to a fine.
7
For the purposes of paragraphs (5) and (6), a liquidator of a company is deemed an officer of it.
Resolution passed at adjourned meeting389
F515. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Written resolutions of private companies
Written resolutions of private companies389A
F516. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Duty to notify auditors of proposed written resolution389B
F517. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Written resolutions: supplementary provisions389C
F518. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Records of proceedings
Minutes of meetings390
F519. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Recording of written resolutions390A
F520. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Recording of decisions by the sole member390B
F521. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inspection of minute books391
F522. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Chapter VAUDITORS
Appointment of auditors
Duty to appoint auditors392
F523. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Appointment at general meeting at which accounts laid393
F524. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Appointment by private company which is not obliged to lay accounts393A
F525. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Election by private company to dispense with annual appointment394
F526. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Appointment by Department in default of appointment by company395
F527. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Filling of casual vacancies396
F528. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Certain companies exempt from obligation to appoint auditors396A
F529. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Art. 397 rep. by 1990 NI 5
Rights of auditors
Rights to information397A
F530. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Offences relating to the provision of information to auditors397B
F532. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Right to attend company meetings, &c.398
F531. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Remuneration of auditors
Remuneration of auditors398A
F533. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Remuneration of auditors or their associates for non-audit workF534398B F535
F536. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Removal, resignation, &c. of auditors
Removal of auditors399
F537. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Rights of auditors who are removed or not re-appointed399A
F538. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Resignation of auditors400
F539. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Rights of resigning auditors400A
F540. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Termination of appointment of auditors not appointed annually401
F541. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Statement by person ceasing to hold office as auditor401A F542
F543. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Offences of failing to comply with Article 401A401B F544
F545. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F546C6PART XIIIREGISTRATION OF CHARGES
Pt. XIII (arts. 402-417J) substituted (prosp.) for arts. 402-417 by 1990 NI 10, arts. 28-40 (never in operation; amending provisions repealed 1.10.2009 by 2006 c. 46, Sch. 16)
Pt. XIII excluded (21.2.2009) by Banking Act 2009 (c. 1), ss. 252(2)(b), 263(1) (with s. 247); S.I. 2009/296, art. 3, Sch. para. 11
Certain charges void if not registered402 F547
1
Subject to the provisions of this Part, a charge created by a company and being a charge to which this Article applies is, so far as any security on the company's property or undertaking is conferred by the charge, void against the liquidatorF548 or administrator and any creditor of the company, unless the prescribed particulars of the charge together with the instrument (if any) by which the charge is created or evidenced, are delivered to or received by the registrar for registration in the manner required by this Part, within 21 days after the date of the charge's creation.
2
Paragraph (1) is without prejudice to any contract or obligation for repayment of the money secured by the charge; and when a charge becomes void under this Article, the money secured by it immediately becomes payable.
Charges which have to be registered403
1
Article 402 applies to the following charges—
a
a charge for the purposes of securing any issue of debentures,
b F549
a charge on uncalled share capital of the company,
c
a charge created or evidenced by an instrument which, if executed by an individual, would require registration as a bill of sale,
d
a charge on land (wherever situated) or any interest in it, but not including a charge for any rent or other periodical sum issuing out of land,
e
a charge on book debts of the company,
f
a floating charge on the company's undertaking or property,
g F549
a charge on calls made but not paid,
h
a charge on a ship or aircraft, or any share in a ship,
j
a charge on goodwill,F550 or on any intellectual property.
2
Where a negotiable instrument has been given to secure the payment of any book debts of a company, the deposit of the instrument for the purpose of securing an advance to the company is not, for the purposes of Article 402 and this Article, to be treated as a charge on those book debts.
3
The holding of debentures entitling the holder to a charge on land is not for the purposes of this Article deemed to be an interest in land.
F5503A
The following are “intellectual property” for the purposes of this Article—
b
any licence under or in respect of any such right.
4
In this Part, “charge” includes mortgage.
Formalities of registration (debentures)404
1
Where a series of debentures containing, or giving by reference to another instrument, any charge to the benefit of which the debenture holders of that series are entitled pari passu is created by a company, it is for the purposes of Article 402 sufficient if there are delivered to or received by the registrar, within 21 days after the execution of the deed containing the charge (or, if there is no such deed, after the execution of any debentures of the series), the following particulars in the prescribed form—
a
the total amount secured by the whole series, and
b F553
the dates of the resolutions authorising the issue of the series and the date of the covering deed (if any) by which the security is created or defined, and
c
a general description of the property charged, and
d
the names of the trustees (if any) of the debenture holders,
together with the deed containing the charge or, if there is no such deed, one of the debentures of the series, so, however, that there shall be sent to the registrar for entry in the register particulars in the prescribed form of the date and amount of each issue of debentures of the series, but any omission to do this does not affect the validity of any of those debentures.
2
Where any commission, allowance or discount has been paid or made either directly or indirectly by a company to a person in consideration of his—
a
subscribing or agreeing to subscribe, whether absolutely or conditionally, for debentures of the company, or
b
procuring or agreeing to procure subscriptions, whether absolute or conditional, for such debentures,
the particulars required to be sent for registration under Article 402 shall include particulars as to the amount or rate per cent. of the commission, discount or allowance so paid or made, but omission to do this does not affect the validity of the debentures issued.
3
The deposit of debentures as security for a debt of the company is not, for the purposes of paragraph (2), treated as the issue of the debentures at a discount.
Verification of charge on property outside Northern Ireland405 F554
1
In the case of a charge created out of the United Kingdom comprising property situated outside the United Kingdom, the delivery to and the receipt by the registrar of a copy (verified in the prescribed manner) of the instrument by which the charge is created or evidenced has the same effect for the purposes of Articles 402 to 404 and this Article as the delivery and receipt of the instrument itself.
2
In that case, 21 days after the date on which the instrument or copy could, in due course of post (and if despatched with due diligence), have been received in Northern Ireland are substituted for the 21 days mentioned in Article 402(1) (or as the case may be, Article 404(1)) as the time within which the particulars and instrument or copy are to be delivered to the registrar.
3
Where a charge is created in the United Kingdom but comprises property outside the United Kingdom, the instrument creating or purporting to create the charge may be sent for registration under Article 402 notwithstanding that further proceedings may be necessary to make the charge valid or effectual according to the law of the country in which the property is situated.
4
Where a charge comprises property situated in Great Britain and registration in the country where the property is situated is necessary to make the charge valid or effectual according to the law of that country, the delivery to and the receipt by the registrar of a copy (verified in the prescribed manner) of the instrument by which the charge is created or evidenced, together with a certificate in the prescribed form stating that the charge was presented for registration in the country in which the property is situated on the date on which it was so presented has, for the purposes of Articles 402 to 404 and this Article, the same effect as the delivery and receipt of the instrument itself.
Company's duty to notify registrar of charges it creates406 F555
1
It is a company's duty to send to the registrar for registration the particulars of every charge created by the company and of the issues of debentures of a series requiring registration under Articles 402 to 405; but registration of any such charge may be effected on the application of any person interested in it.
2
Where registration is effected on the application of some person other than the company, that person is entitled to recover from the company the amount of any fees properly paid by him to the registrar on the registration.
3
If a company fails to comply with paragraph (1), then, unless the registration has been effected on the application of some other person, the company and every officer of it who is in default is liable to a fine and, for continued contravention, to a daily default fine.
Charges existing on property acquired407 F556
1
This Article applies where a company acquires property which is subject to a charge of any such kind as would, if it had been created by the company after the acquisition of the property, have been required to be registered under this part.
2
The company shall cause the prescribed particulars of the charge, together with a copy (certified in the prescribed manner to be a correct copy) of the instrument (if any) by which the charge was created or is evidenced, to be delivered to the registrar for registration in the manner required by this Part within 21 days after the date on which the acquisition is completed.
3
However, if the property is situated and the charge was created outside Northern Ireland, 21 days after the date on which the copy of the instrument could in due course of post, and if despatched with due diligence, have been received in Northern Ireland is substituted for the 21 days mentioned in paragraph (2) as the time within which the particulars and copy of the instrument are to be delivered to the registrar.
4
If default is made in complying with this Article, the company and every officer of it who is in default is liable to a fine and, for continued contravention, to a daily default fine.
Registration of orders charging land, etc.408
1
Where—
a
a charge imposed under Article 46 of the [1981 NI 6] Judgments Enforcement (Northern Ireland) Order 1981 or notice thereof is registered in the Land Registry against registered land or any estate in registered land of a company; or
b
any such order is registered in the Registry of Deeds against any unregistered land or estate in land of a company;
the Registrar of Titles in the case of sub-paragraph (a) and the Registrar of Deeds in the case of sub-paragraph (b) shall as soon as may be cause 2 copies of the order made under Article 46 of that Order or of any notice registered under Article 48 of that order to be delivered to the registrar.
2
The registrar shall on receipt of such copies—
a
register one of them in accordance with the provisions of Article 409; and
b
not later than 7 days from the date of such receipt, cause the other copy together with a certificate of registration under Article 409(3) to be sent to the company against which the judgment was given.
3
Where any charge to which paragraph (1) applies is vacated, the Registrar of Titles or, as the case may be, the Registrar of Deeds shall cause a certified copy of the certificate of satisfaction lodged under Article 132(1) of the Judgments Enforcement (Northern Ireland) Order 1981 to be delivered to the registrar for entry of a memorandum of satisfaction pursuant to Article 411.
Register of charges to be kept by registrar409 F557
1
The registrar shall keep, with respect to each company, a register in the prescribed form of all the charges requiring registration under this Part.
2
He shall enter in the register with respect to such charges the following particulars—
a
in the case of a charge to the benefit of which the holders of a series of debentures are entitled, the particulars specified in Article 404(1);
b
in the case of a charge imposed by the Enforcement of Judgments Office under Article 46 of the Judgments Enforcement (Northern Ireland) Order 1981, the date on which the charge became effective;
c
in the case of any other charge—
i
if it is a charge created by the company, the date of its creation, and if it is a charge which was existing on property acquired by the company, the date of the acquisition of the property, and
ii
the amount secured by the charge, and
iii
short particulars of the property charged, and
iv
the persons entitled to the charge.
3
The registrar shall give a certificate of the registration of any charge registered in pursuance of this Part, stating the amount secured by the charge.
The certificate—
- a
shall be signed by the registrar, and
- b
is conclusive evidence that the requirements of this Part as to registration have been satisfied.
4
The register kept in pursuance of this Article shall be open to inspection by any person.
Endorsement of certificate on debentures410 F558
1
The company shall cause a copy of every certificate of registration given under Article 409 to be endorsed on every debenture or certificate of debenture stock which is issued by the company and the payment of which is secured by the charge so registered.
2
But this does not require a company to cause a certificate of registration of any charge so given to be endorsed on any debenture or certificate of debenture stock issued by the company before the charge was created.
3
If a person knowingly and wilfully authorises or permits the delivery of a debenture or certificate of debenture stock which under this Article is required to have endorsed on it a copy of a certificate of registration without the copy being so endorsed upon it, he is liable (without prejudice to any other liability) to a fine.
Entries of satisfaction and release411
1
F559Subject to paragraph (1A), the registrar, on receipt of a statutory declaration in the prescribed form verifying, with respect to a registered charge—
a
that the debt for which the charge was created has been paid or satisfied in whole or in part, or
b
that part of the property or undertaking charged has been released from the charge or has ceased to form part of the company's property or undertaking,
may enter on the register a memorandum of satisfaction in whole or in part, or of the fact that part of the property or undertaking has been released from the charge or has ceased to form part of the company's property or undertaking (as the case may be).
F5591A F560
The registrar may make any such entry as is mentioned in paragraph (1) where, instead of receiving such a statutory declaration as is mentioned in that paragraph, he receives a statement by a director, secretary, administrator or administrative receiver of the company which is contained in an electronic communication and that statement—
a
verifies the matters set out in sub-paragraph (a) or (b) of that paragraph,
b
contains a description of the charge,
c
states the date of creation of the charge and the date of its registration under this Part,
d
states the name and address of the chargee or, in the case of a debenture, trustee, and
e
where sub-paragraph (b) of paragraph (1) applies, contains short particulars of the property or undertaking which has been released from the charge, or which has ceased to form part of the company's property or undertaking (as the case may be).
2
Where the registrar enters a memorandum of satisfaction in whole, he shall, if required, furnish the company with a copy of it.
F5593
Any person who makes a false statement under paragraph (1A) which he knows to be false or does not believe to be true is liable to imprisonment or a fine, or both.
Rectification of register of charges412
1 F561
This Article applies if the court is satisfied that the omission to register a charge within the time required by this Part or that the omission or mis-statement of any particular with respect to any such charge or in a memorandum of satisfaction was accidental, or due to inadvertence or to some other sufficient cause, or is not of a nature to prejudice the position of creditors or shareholders of the company, or that on other grounds it is just and equitable to grant relief.
2
The court may, on the application of the company or a person interested, and on such terms and conditions as seem to the court just and expedient, order that the time for registration shall be extended or, as the case may be, that the omission or mis-statement shall be rectified.
Registration of enforcement of security413 F562
1
If a person obtains an order for the appointment of a receiver or manager of a company's property, or appoints such a receiver or manager under powers contained in an instrument, he shall within 7 days of the order or of the appointment under those powers, give notice of the fact to the registrar; and the registrar shall enter the fact in the register of charges.
2
Where a person appointed receiver or manager of a company's property under powers contained in an instrument ceases to act as such receiver or manager, he shall, on so ceasing, give the registrar notice to that effect, and the registrar shall enter the fact in the register of charges.
3
A notice under this Article shall be in the prescribed form.
4
If a person makes default in complying with the requirements of this Article, he is liable to a fine and, for continued contravention, to a daily default fine.
Companies to keep copies of instruments creating charges414 F563
1
Every company shall cause a copy of every instrument creating a charge requiring registration under this Part, including every order or notice a copy of which has been delivered to the company under Article 408, to be kept at the same office as its register of members is kept.
2
In the case of a series of uniform debentures, a copy of one debenture of the series is sufficient.
Company's register of charges415
1 F564
Every limited company shall keep at the same office as its register of members is kept a register of charges and enter in it all charges specifically affecting property of the company and all floating charges on the company's undertaking or any of its property.
2
The entry shall in each case give a short description of the property charged, the amount of the charge and, except in the case of securities to bearer, the names of the persons entitled to the charge.
3
If an officer of the company knowingly and wilfully authorises or permits the omission of any entry required to be made in pursuance of this Article, he is liable to a fine.
Right to inspect instruments which create charges, etc.416
1 F565
The copies of instruments referred to in Article 414 and the register of charges kept in pursuance of Article 415, shall be open during business hours (subject to such reasonable restrictions as the company in general meeting may impose, but so that not less than 2 hours each day are allowed for inspection) to the inspection of any creditor or member of the company without fee.
2
The register of charges shall also be open to the inspection of any other person on payment of such fee, not exceeding 5 pence for each inspection, as the company may determine.
3
If inspection of the copies referred to, or of the register, is refused, every officer of the company who is in default is liable to a fine and, for continued contravention, to a daily default fine.
4
If such a refusal occurs the court may by order compel an immediate inspection of the copies or register.
Application of this Part to companies incorporated outside Northern Ireland417
1
This Part extends to charges on property in Northern Ireland which are created, and to charges on property in Northern Ireland which is acquired, by a company (whether a company within the meaning of this Order or not) incorporated outside Northern Ireland which has an established place of business in Northern Ireland.
2
In relation to such a company, Articles 414 and 415 apply with the substitution, for the reference to the office at which the register of members is kept, of a reference to the company's principal place of business in Northern Ireland.
PART XIVARRANGEMENTS AND RECONSTRUCTIONS
Power of company to compromise with creditors and members418
F566. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Information as to compromise to be circulated419
F567. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provisions for facilitating company reconstruction or amalgamation420
F568. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Application of Articles 418 to 420 mergers and divisions of public companies420A
F569. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PART XIVATAKEOVER OFFERS
Takeover offers421
F570. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Right of offeror to buy out minority shareholders422
F571. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of notice under Article 422423
F572. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Right of minority shareholder to be bought out by offeror423A
F573. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of requirement under Article 423A423B
F574. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Applications to the court423C
F575. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Joint offers423D
F576. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Associates423E
F577. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Convertible securities423F
F578. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PART XVINVESTIGATION OF COMPANIES AND THEIR AFFAIRS; REQUISITION OF DOCUMENTS
Appointment and functions of inspectors
Investigation of a company on its own application or that of its members424
1
The Department may appoint one or more competent inspectors to investigate the affairs of a company and to report on them to the Department in such manner as the Department may direct.
2 F579
The appointment may be made—
a
in the case of a company having a share capital, on the application either of not less than 200 members or of members holding not less than one-tenth of the shares issuedF580 (excluding any shares held as treasury shares);
b
in the case of a company not having a share capital, on the application of not less than one-fifth in number of the persons on the company's register of members, and
c
in any case, on application of the company.
3
The application shall be supported by such evidence as the Department may require for the purpose of showing that the applicant or applicants have good reason for requiring the investigation.
4
The Department may, before appointing inspectors, require the applicant or applicants to give security, to an amount not exceeding £5,000, or such other sum as it may by order, subject to negative resolution, specify, for payment of the costs of the investigation.
Other company investigations425
1
The Department shall appoint one or more competent inspectors to investigate the affairs of a company and report on them in such manner as the Department directs, if the court by order declares that the company's affairs ought to be so investigated.
2
The Department may make such an appointment if it appears to the Department that there are circumstances suggesting—
a
that the company's affairs are being or have been conducted with intent to defraud its creditors or the creditors of any other person or otherwise for a fraudulent or unlawful purpose, or in a manner which is unfairly prejudicial to some part of its members, or
b
that any actual or proposed act or omission of the company (including an act or omission on its behalf) is or would be so prejudicial, or that the company was formed for any fraudulent or unlawful purpose, or
c
that persons concerned with the company's formation or the management of its affairs have in connection therewith been guilty of fraud, misfeasance or other misconduct towards it or towards its members, or
d
that the company's members have not been given all the information with respect to its affairs which they might reasonably expect.
F5812A
Inspectors may be appointed under paragraph (2) on terms that any report they may make is not for publication; and in such a case, the provisions of Article 430(3) (availability and publication of inspectors' reports) do not apply.
3
Paragraphs (1) and (2) are without prejudice to the powers of the Department under Article 424; and the power conferred by paragraph (2) is exercisable with respect to a body corporate notwithstanding that it is in course of being voluntarily wound up.
4 F582
The reference in paragraph (2)(a) to a company's members includes any person who is not a member but to whom shares in the company have been transferred or transmitted by operation of law.
Inspectors' powers during investigation426 F583
1
If inspectors appointed under Article 424 or 425 to investigate the affairs of a company think it necessary for the purposes of their investigation to investigate also the affairs of another body corporate which is or at any relevant time has been the company's subsidiary or holding company, or a subsidiary of its holding company or a holding company of its subsidiary, they have power to do so; and they shall report on the affairs of the other body corporate so far as they think that the results of their investigation of its affairs are relevant to the investigation of the affairs of the company first mentioned.
Para. (2) rep. by 1986 c. 60
Production of documents and evidence to inspectors427 F584
1
When inspectors are appointed under Article 424 or 425, it is the duty of all officers and agents of the company, and of all officers and agents of any other body corporate whose affairs are investigated under Article 426(1)—
a
to produce to the inspectors allF585 documents of or relating to the company or, as the case may be, the other body corporate which are in their custody or power,
b
to attend before the inspectors when required to do so, and
c
otherwise to give the inspectors all assistance in connection with the investigation which they are reasonably able to give.
F5852
If the inspectors consider that an officer or agent of the company or other body corporate, or any other person, is or may be in possession of information relating to a matter which they believe to be relevant to the investigation, they may require him—
a
to produce to them any documents in his custody or power relating to that matter,
b
to attend before them, and
c
otherwise to give them all assistance in connection with the investigation which he is reasonably able to give;
and it is that person's duty to comply with the requirement.
F5853
An inspector may for the purposes of the investigation examine any person on oath, and may administer an oath accordingly.
4
In this Article, a reference to officers or to agents includes past as well as present, officers or agents (as the case may be); and “agents”, in relation to a company or other body corporate, includes its bankers and solicitors and persons employed by it as auditors, whether those persons are or are not officers of the company or other body corporate.
5
An answer given by a person to a question put to him in exercise of powers conferred by this Article (whether as it has effect in relation to an investigation under any of Articles 424 to 426, or as applied by any other Article in this Part) may be used in evidence against him.
F5865A
However, in criminal proceedings in which that person is charged with an offence to which this paragraph applies—
a
no evidence relating to the answer may be adduced, and
b
no question relating to it may be asked,
by or on behalf of the prosecution, unless evidence relating to it is adduced, or a question relating to it is asked, in the proceedings by or on behalf of that person.
5B
Paragraph (5A) applies to any offence other than an offence under Article 7 or 10 of the Perjury (Northern Ireland) Order 1979 (false statements made on an oath otherwise than in judicial proceedings or made otherwise than on oath).
F5856
In this Article “documents” includes information recorded in any form; and, in relation to information recorded otherwise than in legible form, the power to require its production includes power to require the production of a copy of the information in legible formF587, or in a form from which it can readily be produced in visible and legible form.
Art. 428 rep. by 1990 NI 10
Obstruction of inspectors treated as contempt of court429 F588
F5891
If any person—
a
fails to comply with article 427(1)(a) or (c),
b
refuses to comply with a requirement under Article 427(1)(b) or (2), or
c
refuses to answer any question put to him by the inspectors for the purposes of the investigation,
the inspectors may certify that fact in writing to the court.
3
The court may thereupon inquire into the case; and, after hearing any witnesses who may be produced against or on behalf of the alleged offender and after hearing any statement which may be offered in defence, the court may punish the offender in like manner as if he had been guilty of contempt of the court.
Inspectors' reports430 F590
1
The inspectors may, and if so directed by the Department shall, make interim reports to the Department, and on the conclusion of their investigation shall make a final report to the Department.
Any such report shall be written or printed, as the Department directs.
F5911A
Any persons who have been appointed under Article 424 or 425 may at any time and, if the Department directs them to do so shall, inform it of any matters coming to their knowledge as a result of their investigation.
F5921B
If it appears to the Department that matters have come to light in the course of the inspectors' investigation which suggest that a criminal offence has been committed, and those matters have been referred to the appropriate prosecuting authority, it may direct the inspectors to take no further steps in the investigation or to take only such further steps as are specified in the direction.
1C
Where an investigation is the subject of a direction under paragraph (1B), the inspectors shall make a final report to the Department only where—
a
they were appointed under Article 425(1) (appointment in pursuance of an order of the court), or
b
the Department directs them to do so.
2
If the inspectors were appointed under Article 425 in pursuance of an order of the court, the Department shall furnish a copy of any report of theirs to the court.
3
In any case the Department may, if it thinks fit—
a
forward a copy of any report made by the inspectors to the company's registered office,
b
furnish a copy on request and on payment of the prescribed fee to—
i
any member of the company or other body corporate which is the subject of the report,
ii
any person whose conduct is referred to in the report,
iii
the auditors of that company or body corporate,
iv
the applicants for the investigation,
v
any other person whose financial interests appear in the Department to be affected by the matters dealt with in the report, whether as a creditor of the company or body corporate, or otherwise, and
c
cause any such report to be printed and published.
Power to bring civil proceedings on company's behalf431
F593. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expenses of investigating a company's affairs432
F596F5941
The expenses of an investigation under any of the powers conferred by this Part shall be defrayed in the first instance by the Department but it may recover those expenses from the persons liable in accordance with this Article.
There shall be treated as expenses of the investigation, in particular, such reasonable sums as the Department may determine in respect of general staff costs and overheads.
2
A person who is convicted on a prosecution instituted as a result of the investigation, or is ordered to pay the whole or any part of the costs of proceedings brought under Article 431, may in the same proceedings be ordered to pay those expenses to such extent as may be specified in the order.
3
A body corporate in whose name proceedings are brought under that Article is liable to the amount or vale of any sums or property recovered by it as a result of those proceedings; and any amount for which a body corporate is liable under this paragraph is a first charge on the sums or property recovered.
4
A body corporate dealt with byF594 an inspectors' report, where the inspectors were appointed otherwise than of the Department's own motion, is liable except where it was the applicant for the investigation and except so far as the Department otherwise directs.
F5945
Where inspectors were appointed—
a F595
under Article 424, or
b F595
on an application under Article 435(3),
the applicant or applicants for the investigation is or are liable to such extent (if any) as the Department may direct.
6
The report of inspectors appointed otherwise than of the Department's own motion may, if they think fit, and shall if the Department so directs, include a recommendation as to the directions (if any) which they think appropriate, in the light of their investigation, to be given under paragraph (4) or (5).
7
For the purposes of this Article, any costs or expenses incurred by the Department in or in connection with proceedings brought under Article 431 (including expenses incurred under paragraph (2) of it) are to be treated as expenses of the investigation giving rise to the proceedings.
8
Any liability to repay the Department imposed by paragraphs (2) and (3) is (subject to satisfaction of the Department's right to repayment) a liability also to indemnify all persons against liability under paragraphs (4) and (5); and any such liability imposed by paragraph (2) is (subject as mentioned above) a liability also to indemnify all persons against liability under paragraph (3).
9
A person liable under any one of paragraphs (2) to (5) is entitled to contribution from any other person liable under the same paragraph, according to the amount of their respective liabilities under it.
Art. 433 rep. by 1990 NI 10
Inspectors' report to be evidence434 F597
1
A copy of any report of inspectors appointed underF598 this Part certified by the Department to be a true copy, is admissible in any legal proceedings as evidence of the opinion of the inspectors in relation to any matter contained in the reportF599 and in proceedings on an application underF600 Article 11 of the Company Directors Disqualification (Northern Ireland) Order 2002, as evidence of any fact stated in the report.
2
A document purporting to be such a certificate as is mentioned in paragraph (1) shall be received in evidence and be deemed to be such a certificate, unless the contrary is proved.
Other powers of investigation available to the Department
Power to investigate company ownership435
1
Where it appears to the Department that there is good reason to do so, the Department may appoint one or more competent inspectors to investigate and report on the membership of any company, and otherwise with respect to the company, for the purpose of determining the true persons who are or have been financially interested in the success or failure (real or apparent) of the company or able to control or materially to influence its policy.
2
The appointment of inspectors under this Article may define the scope of their investigation (whether as respects the matters or the period to which it is to extend or otherwise) and in particular may limit the investigation to matters connected with particular shares or debentures.
F6013
If an application for investigation under this Article with respect to particular shares or debentures of a company is made to the Department by members of the company, and the number of applicants or the amount of shares held by them is not less than that required for an application for the appointment of inspectors under Article 424(2)(a) or (b), then, subject to the following provisions, the Department shall appoint inspectors to conduct the investigation applied for.
3A
The Department shall not appoint inspectors if it is satisfied that the application is vexatious; and where inspectors are appointed their terms of appointment shall exclude any matter in so far as the Department is satisfied that it is unreasonable for it to be investigated.
3B
The Department may, before appointing inspectors, require the applicant or applicants to give security, to an amount not exceeding £5,000, or such other sum as it may by order subject to negative resolution specify, for payment of the costs of the investigation.
3C
If on an application under paragraph (3) it appears to the Department that the powers conferred by Article 437 are sufficient for the purposes of investigating the matters which inspectors would be appointed to investigate, it may instead conduct the investigation under that Article.
4
Subject to the terms of their appointment, the inspectors' powers extend to the investigation of any circumstances suggesting the existence of an arrangement or understanding which, though not legally binding, is or was observed or likely to be observed in practice and which is relevant to the purposes of the investigation.
Provisions applicable on investigation under Article 435436
1
For the purposes of an investigation under Article 435, Articles 426(1), 427, 429 and 430 apply with the necessary modifications of references to the affairs of the company or to those of any other body corporate, subject however to paragraphs (2)F602 and (3).
2
Those Articles apply to—
a
all persons who are or have been, or whom the inspector has reasonable cause to believe to be or have been, financially interested in the success or failure or the apparent success or failure of the company or any other body corporate whose membership is investigated with that of the company, or able to control or materially influence its policy (including persons concerned only on behalf of others), and
b
any other person whom the inspector has reasonable cause to believe possesses information relevant to the investigation.
as they apply in relation to officers and agents of the company or other body corporate (as the case may be).
3
If the Department is of opinion that there is good reason for not divulging any part of a report made by virtue of Article 435 and this Article, the Department may under Article 430 disclose the report with the omission of that part; and the Department may cause to be kept by the registrar a copy of the report with that part omitted or, in the case of any other such report, a copy of the whole report.
Power to obtain information as to those interested in shares, etc.437
1
If it appears to the Department that there is good reason to investigate the ownership of any shares in or debentures of a company and that it is unnecessary to appoint inspectors for the purpose, the Department may require any person whom the Department has reasonable cause to believe to have or to be able to obtain any information as to the present and past interests in those shares or debentures and the names and addresses of the persons interested and of any persons who act or have acted on their behalf in relation to the shares or debentures to give any such information to the Department.
2
For this purpose a person is deemed to have an interest in shares or debentures if he has any right to acquire or dispose of them or of any interest in them, or to vote in respect of them, or if his consent is necessary for the exercise of any of the rights of other persons interested in them, or if other persons interested in them can be required, or are accustomed, to exercise their rights in accordance with his instructions.
3
A person who fails to give information required of him under this Article, or who in giving such information makes any statement which he knows to be false in a material particular, or recklessly makes any statement which is false in a material particular, is liable to imprisonment or a fine, or both.
Power to impose restrictions on shares and debentures438
1
If in connection with an investigation under either Article 435 or 437 it appears to the Department that there is difficulty in finding out the relevant facts about any shares (whether issued or to be issued), the Department may by order direct that the shares shall until further order be subject to the restrictions imposed by Part XVI.
F6031A
If the Department is satisfied that an order under paragraph (1) may unfairly affect the rights of third parties in respect of shares then the Department, for the purpose of protecting such rights and subject to such terms as it thinks fit, may direct that such acts by such persons and for such purposes as may be set out in the order, shall not constitute a breach of the restrictions of Part XVI.
2
This Article, and Part XVI in its application to orders under it, apply in relation to debentures as in relation to sharesF603 save that paragraph (1A) shall not apply.
Investigation of share dealings439
1
If it appears to the Department that there are circumstances suggesting that contraventions may have occurred, in relation to a company's shares or debentures, of Article 331 or 332 (taken with Schedule 13), or of Article 336(3) to (5) (restrictions on share dealings by directors and their families; obligation of director to disclose shareholding in his own company), the Department may appoint one or more competent inspectors to carry out such investigations as are requisite to establish whether or not such contraventions have occurred and to report the result of their investigations to the Department.
2
The appointment of inspectors under this Article may limit the period to which their investigation is to extend or confine it to shares or debentures of a particular class, or both.
F6043
Articles 427 to 429 apply for the purposes of an investigation under this Article to the following persons as they apply to officers of the company or of the other body corporate—
a
an authorised person;
b
a relevant professional;
c
a person not falling within sub-paragraph (a) or (b) who may carry on a regulated activity without contravening the prohibition imposed by section 19 of the Financial Services and Markets Act 2000; and
d
in relation to an authorised person, to a relevant professional or to a person falling within sub-paragraph (c)—
i
if it is a body corporate, any person who is or has been an officer of it,
ii
if it is a partnership, any person who is or has been a partner in it,
iii
if it is an unincorporated association, any person who is or has been a member of its governing body or an officer of it.
3A
In paragraph (3)—
“authorised person” has the meaning given in section 31(2) of the Financial Services and Markets Act 2000;
“relevant professional” means a member of a profession if a body has been designated under section 326(1) of that Act in relation to that profession, and, in relation to such a profession, "member" has the meaning given in section 325(2) of that Act.
4
Articles 427 to 429 apply under paragraph (3)—
F605a
to an individual who is an authorised person within the meaning of the Financial Services Act 1986;
b
to any individual who holds a permission granted under paragraph 23 of Schedule 1 to that Act;
c
to an officer (whether past or present) of a body corporate which is such an authorised person or holds such a permission;
d
to any partner (whether past or present) in a partnership which is such an authorised person or holds such a permission;
e
to any member of the governing body or officer (in either case whether past or present) of an unincorporated association which is such an authorised person or holds such a permission,
as they apply to officers of the company or of the other body corporate.
Paras. (5), (6) rep. by 1986 c. 60
Requisition and seizure of books and papers
Department's power to require production of documentsF606440 F607
Para. (1) rep. by 1990 NI 10
2
3
The Department may at any time, if it thinks there is good reason to do so, authorise an officer of the DepartmentF608 or any other competent person, on producing (if so required) evidence of his authority, to requireF608 a company to produce to him forthwith anyF608 documents whichF608 he may specify.
4
Where by virtue of paragraph (2) or (3) the Department or an officer of the DepartmentF608 or other person has power to require the production ofF608 documents fromF608 a company, the Department or the officerF608 or other person has the like power to require production of thoseF608 documents from any person who appears to the Department or the officerF608 or other person to be in possession of them; but where any such person claims a lien onF608 documents produced by him, the production is without prejudice to the lien.
(5)The power under this Article to requireF608 a company or other person to produceF608 documents includes power—
- a
if theF608 documents are produced—
- i
to take copies of them or extracts from them, and
- ii
to require that person, or any other person who is a present or past officer of, or is or was at any time employed by,F608 the company in question, to provide an explanation of any of them;
- i
- b
if theF608 documents are not produced, to require the person who was required to produce them to state, to the best of his knowledge and belief, where they are.
6
F608Articles 680 (restriction on prosecutions), 680A (liability of individuals for corporate default) and 680B (criminal proceedings against unincorporated bodies) apply to this offence.
7
However, where a person is charged with an offence under paragraph (6) in respect of a requirement to produce anyF608 documents, it is a defence to prove that they were not in his possession or under his control and that it was not reasonably practicable for him to comply with the requirement.
8
A statement made by a person in compliance with such a requirement may be used in evidence against him.
F6098A
However, in criminal proceedings in which that person is charged with an offence to which this paragraph applies—
a
no evidence relating to the statement may be adduced, and
b
no question relating to it may be asked,
by or on behalf of the prosecution, unless evidence relating to it is adduced, or a question relating to it is asked, in the proceedings by or on behalf of that person.
8B
Paragraph (8A) applies to any offence other than—
a
an offence under paragraph (6) or Article 444; or
b
an offence under Article 10 of the Perjury (Northern Ireland) Order 1979 (false statements made otherwise than an oath.
F6089
In this Article “documents” includes information recorded in any form; and, in relation to information recorded otherwise than in legible form, the power to require its production includes power to require the production of a copy of it in legible formF610, or in a form from which it can readily be produced in visible and legible form.
F612Entry and search of premises441 F613
1
A justice of the peace may issue a warrant under this Article if satisfied by complaint on oath made by or on behalf of the Department, or by a person appointed or authorised to exercise powers under this Part, that there are reasonable grounds for believing that there are on any premises documents whose production has been required under this Part and which have not been produced in compliance with the requirement.
2
A justice of the peace may also issue a warrant under this Article if satisfied by complaint on oath made by or on behalf of the Department, or by a person appointed or authorised to exercise powers under this Part—
a
that there are reasonable grounds for believing that an offence has been committed for which the penalty on conviction on indictment is imprisonment for a term of not less than two years and that there are on any premises documents relating to whether the offence has been committed,
b
that the Department, or the person so appointed or authorised, has power to require the production of the documents under this Part, and
c
that there are reasonable grounds for believing that if production was so required the documents would not be produced but would be removed from the premises, hidden, tampered with or destroyed.
3
A warrant under this Article shall authorise a constable, together with any other person named in it and any other constables—
a
to enter the premises specified in the complaint, using such force as is reasonably necessary for the purpose;
b
to search the premises and take possession of any documents appearing to be such documents as are mentioned in paragraph (1) or (2), as the case may be, or to take, in relation to any such documents, any other steps which may appear to be necessary for preserving them or preventing interference with them;
c
to take copies of any such documents; and
d
to require any person named in the warrant to provide an explanation of them or to state where they may be found.
4
If in the case of a warrant under paragraph (2) the justice of the peace is satisfied by complaint on oath that there are reasonable grounds for believing that there are also on the premises other documents relevant to the investigation, the warrant shall also authorise the actions mentioned in paragraph (3) to be taken in relation to such documents.
5
A warrant under this Article shall continue in force until the end of the period of one month beginning with the day on which it is issued.
6
Any documents of which possession is taken under this Article may be retained—
a
for a period of three months; or
b
if within that period proceedings to which the documents are relevant are commenced against any person for any criminal offence, until the conclusion of those proceedings.
7
Any person who intentionally obstructs the exercise of any rights conferred by a warrant issued under this Article or fails without reasonable excuse to comply with any requirement imposed in accordance with paragraph (3)(d) is guilty of an offence and liable to a fine.
Articles 680 (restriction on prosecutions), 680A (liability of individuals for corporate default) and 680B (criminal proceedings against unincorporated bodies) apply to this offence.
8
For the purposes of Articles 442 and 444A (provision for security of information) documents obtained under this Article shall be treated as if they had been obtained under the provision of this Part under which their production was or, as the case may be, could have been required.
9
In this Article “document” includes information recorded in any form.
Provision for security of information obtained442 F615
1
No information or document relating to aF616 company which has been obtained under Article 440F616. . . shall, without the previous consent in writing of thatF616 company, be published or disclosed, except to a competent authority, unless the publication or disclosure is required—
F617a
with a view to the institution of or otherwise for the purposes of criminal proceedings;
F618b
with a view to the institution of, or otherwise for the purposes of, any proceedings on an application underF619 Article 9, 10 or 11 of the Company Directors Disqualification (Northern Ireland) Order 2002;
F616c
for the purposes of enabling or assisting any inspector appointed under this Part,F620. . . , to discharge his functions;
F616cc
for the purpose of enabling or assisting any person authorised to exercise powersF620 Article 440 of this Order or section 84 of the Companies Act 1989 to discharge his functions;
F620cd
for the purposes of enabling or assisting a person appointed under—
i
section 167 of the Financial Services and Markets Act 2000 (general investigations),
ii
section 168 of that Act (investigations in particular cases),
iii
section 169(1)(b) of that Act (investigation in support of overseas regulator),
iv
section 284 of that Act (investigations into affairs of certain collective investment schemes), or
v
regulations made as a result of section 262(2)(k) of that Act (investigations into open-ended investment companies),
to conduct an investigation to discharge his functions;
F617d
dd
for the purpose of enabling or assisting the Secretary of State to exercise any functions conferred on him by the enactments relating to companies or insolvency, the Prevention of Fraud (Investments) Act 1958,F621 or the Financial Services and Markets Act 2000, or for the purpose of enabling or assisting any inspector appointed by him under the enactments relating to companies to discharge his functions;
Sub.‐paras. (de), (df) rep. by SI 2001/3649
F625dg
for the purpose of enabling or assisting the Pensions Regulator to discharge the functions conferred on it by or by virtue of the Pension Schemes (Northern Ireland) Act 1993, the Pensions (Northern Ireland) Order 1995, the Welfare Reform and Pensions (Northern Ireland) Order 1999 or the Pensions (Northern Ireland) Order 2005 or any enactment in force in Great Britain corresponding to any of those provisions;
dh
for the purpose of enabling or assisting the Board of the Pensions Protection Fund to discharge the functions conferred on it by or by virtue of Part III of the Pensions (Northern Ireland) Order 2005 or any provision in force in Great Britain corresponding to that Part.
Sub-para. (e) rep. by 1990 NI 10
F620fa
for the purposes of enabling or assisting the Financial Services Authority ot discharge its functions under the legislation relating to friendly societies or to industrial and provident societies, under the Building Societies Act 1986, under Part 7 of the Companies Act 1989 or under the Financial Services and Markets Act 2000;
g
for the purposes of enabling or assisting a body corporate established in accordance with section 212(1) of the Financial Services and Markets Act 2000 (compensation scheme manager) to discharge its functions;
h
for the purposes of any proceedings before the Financial Services Tribunal by virtue of the Financial Services and Markets Act 2000 (Transitional Provisions) (Partly Completed Procedures) Order 2001;
ha
with a view to the institution of or otherwise for the purposes of proceedings before the Financial Services and Markets Tribunal;
hb
for the purpose of enabling or assisting a recognised investment exchange or a recognised clearing house to discharge its functions as such;
hc
for the purpose of enabling or assisting a body designated under section 326(1) of the Financial Services and Markets Act 2000 (designated professional bodies) to discharge its functions in its capacity as a body designated under that section;
Sub.‐para. (i) rep. by SI 2001/3649
Sub.‐para. (j) rep. by SI 2001/1283
k
for the purpose of enabling or assisting the official assignee to discharge his functions under the enactments relating to companies or bankruptcy;
l
with a view to the institution of, or otherwise for the purposes of, any disciplinary proceedings relating to the exercise by a solicitor, auditor, accountant, valuer or actuary of his professional duties;
F616ll
with a view to the institution of, or otherwise for the purposes of, any disciplinary proceedings relating to the discharge by a public servant of his duties;
F616m
for the purpose of enabling or assisting an overseas regulatory authority to exercise its regulatory functions.
F626n
for the purposes of proceedings before the Pensions Regulator Tribunal.
F617F6161A
In paragraph (1)—
F620aa
in sub-paragraph (hb) “recognised investment exchange” and “recognised clearing house” have the same meaning as in section 285 of the Financial Services and Markets Act 2000;
a
in sub-paragraph (ll) “public servant” means an officer or servant of the Crown or of any public or other authority for the time being designated for the purposes of that sub-paragraph by the Department by order;
b
in sub-paragraph (m) “overseas regulatory authority” and “regulatory functions” have the same meaning as in section 82 of the Companies Act 1989.
1B
Subject to paragraph (1C), paragraph (1) shall not preclude publication or disclosure for the purpose of enabling or assisting any public or other authority for the time beingF616 designated for the purposes of this paragraph by an order made by the Department to discharge any functions which are specified in the order.
1C
An order under paragraph (1B) designating an authority for the purpose of that paragraph may—
a
impose conditions subject to which the publication or disclosure of any information or document is permitted by that paragraph; and
b
otherwise restrict the circumstances in which that paragraph permits publication or disclosure.
Para. (1D) rep. by SI 2001/3649
2
A person who publishes or discloses any information or document in contravention of this Article is guilty of an offence and liable to imprisonment or a fine, or both.
F616Articles 680 (restriction on prosecutions), 680A (liability of individuals for corporate default) and 680B (criminal proceedings against unincorporated bodies) apply to this offence.
F6163
For the purposes of this Article each of the following is a competent authority—
a
the Department,
b
an inspector appointed under this PartF620. . . ,
F620ba
a person appointed under—
i
section 167 of the Financial Services and Markets Act 2000 (general investigations),
ii
section 168 of that Act (investigations in particular cases),
iii
section 169(1)(b) of that Act (investigation in support of overseas regulator),
iv
section 284 of that Act (investigations into affairs of certain collective investment schemes), or
v
regulations made as a result of section 262(2)(k) of that Act (investigations into open-ended investment companies),
to conduct an investigation;
c
d
the Secretary of State,
e
the Treasury,
f
the Bank of England,
g
the Lord Advocate,
h
the Director of Public Prosecutions for Northern Ireland and the Director of Public Prosecutions in England and Wales,
F620ha
the Financial Services Authority;
l
any constable,
m
any procurator fiscal.
3A
Any information which may by virtue of this Article be disclosed to a competent authority may be disclosed to any officer or servant of the authority.
Punishment for destroying, mutilating, etc. company documents443
1
a
destroys, mutilates or falsifies, or is privy to the destruction, mutilation or falsification of a document affecting or relating to theF627 company's property or affairs, or
b
makes, or is privy to the making of, a false entry in such a document,
is guilty of an offence, unless he proves that he had no intention to conceal the state of affairs ofF627 the company or to defeat the law.
F6281A F629
Paragraph (1) applies to an officer of an authorised insurance company which is not a body corporate as it applies to an officer of a company.
2
Such a person as is mentioned in paragraph (1) who fraudulently either parts with, alters or makes an omission in any such document or is privy to fraudulent parting with, fraudulent altering or fraudulent making of an omission in, any such document, is guilty of an offence.
3
A person guilty of an offence under this Article is liable to imprisonment or a fine, or both.
F6274
Articles 680 (restriction on prosecutions), 680A (liability of individuals for corporate default) and 680B (criminal proceedings against unincorporated bodies) apply to an offence under this Article.
F6275
In this Article “document” includes information recorded in any form.
Punishment for furnishing false informationF630444 F631
A person who, in purported compliance with a requirement imposed under Article 440 to provide an explanation or make a statement, provides or makes an explanation or statement which he knows to be false in a material particular or recklessly provides or makes an explanation or statement which is so false, is guilty of an offence and liable to imprisonment or a fine, or both.
F632Disclosure of information by Department or inspector444A
2
The Department may, if it thinks fit—
a
disclose any information to which this Article applies to any person to whom, or for any purpose for which, disclosure is permitted under Article 442, or
b
authorise or require an inspector appointed under this Part to disclose such information to any such person or for any such purpose.
F6353
Information to which this Article applies may also be disclosed by an inspector appointed under this Part to—
a
another inspector appointed under this Part;
b
a person appointed under—
i
section 167 of the Financial Services and Markets Act 2000 (general investigations),
ii
section 168 of that Act (investigations in particular cases),
iii
section 169(1)(b) of that Act (investigation in support of overseas regulator),
iv
section 284 of that Act (investigations into affairs of certain collective investment schemes), or
v
regulations made as a result of section 262(2)(k) of that Act (investigations into open-ended investment companies),
to conduct an investigation; or
c
a person authorised to exercise powers under—
i
Article 440 of this Order; or
ii
section 84 of the Companies Act 1989 (exercise of powers to assist overseas regulatory authority).
4
Any information which may by virtue of paragraph (3) be disclosed to any person may be disclosed to any officer or servant of that person.
5 F634
The Department may, if it thinks fit, disclose any information obtained under Article 437 to—
a
the company whose ownership was the subject of the investigation,
b
any member of the company,
c
any person whose conduct was investigated in the course of the investigation,
d
the auditors of the company, or
e
any person whose financial interests appear to the Department to be affected by matters covered by the investigation.F636
Supplementary
Privileged information445
F6371 F638
Nothing in Articles 424 to 439 requires the disclosure to the Department or to an inspector appointed by the Department—
a
by any person of information which he would in an action in the High Court be entitled to refuse to disclose on grounds of legal professional privilege except, if he is a lawyer, the name and address of his client,
Sub-para. (b) rep. by 1990 NI 10
F6391A F638
Nothing in Article 427, 436 or 439 requires a person (except as mentioned in paragraph (1B)) to disclose information or produce documents in respect of which he owes an obligation of confidence by virtue of carrying on the business of banking unless—
a
the person to whom the obligation of confidence is owed is the company or other body corporate under investigation,
b
the person to whom the obligation of confidence is owed consents to the disclosure or production, or
c
the making of the requirement is authorised by the Department.
1B
Paragraph (1A) does not apply where the person owing the obligation of confidence is the company or other body corporate under investigation under Article 424, 425 or 426.
F6372
Nothing in Articles 440 to 444 compels the production by any person of a document which he would in an action in the High Court be entitled to refuse on grounds of legalF640 professional privilege, or authorises the taking of possession of any such document which is in the person's possession.
F6373
The Department shall not under Article 440 require, or authorise an officer of the DepartmentF639 or other person to require, the production by a person carrying on the business of banking of a document relating to the affairs of a customer of his unless either it appears to the Department that it is necessary to do so for the purpose of investigating the affairs of the first-mentioned personF641 or the customer is—
F641a
a person on whom a requirement has been imposed under that Article, or
b
an authorised insurance company on whom a requirement to produce information or documents has been imposed by or on behalf of the Secretary of State under Part XI of the Financial Services and Markets Act 2000.
Investigation of bodies incorporated outside Northern Ireland446
F6421
The provisions of this Part apply to bodies corporate incorporated outside Northern Ireland which are carrying on business in Northern Ireland, or have at any time carried on business there, as they apply to companies under this Order; but subject to the following exceptions, adaptations and modifications.
2
The following provisions do not apply to such bodies—
a
Article 424 (investigation on application of company or its members),
b
Article 431 (power to bring civil proceedings on the company's behalf),
c
Articles 435 to 438 (investigation of company ownership and power to obtain information as to those interested in shares, &c.), and
d
Article 439 (investigation of share dealings).
3
The other provisions of this Part apply to such bodies subject to such adaptations and modifications as may be prescribed.
Offences by bodies corporate446D
Where an offence under any of Articles 441, 442 to 444 and 446B is committed by a body corporate, every officer of the body who is in default also commits the offence. For this purpose—
a
any person who purports to act as director, manager or secretary of the body is treated as an officer of the body, and
b
if the body is a company, any shadow director is treated as an officer of the company.
PART XVIORDERS IMPOSING RESTRICTIONS ON SHARES (F659ARTICLE 438)
Words in Pt. XVI heading substituted (1.10.2007) by Companies Act 2006 (Commencement No. 3, Consequential Amendments, Transitional Provisions and Savings) Order 2007 (S.I. 2007/2194), arts. 1(3), 10(1), Sch. 4 para. 27(2) (with art. 12)
Consequence of order imposing restrictions447
1
So long as any shares are directed to be subject to the restrictions of this PartF645 then, subject to any directions made in relation to an order F647pursuant to Article 438(1A) or 449(1A)
a
any transfer of those shares or, in the case of unissued shares, any transfer of the right to be issued with them, and any issue of them, is void;
b
no voting rights are exercisable in respect of the shares;
c
no further shares shall be issued in right of them or in pursuance of any offer made to their holder; and
d
except in a liquidation, no payment shall be made of any sums due from the company on the shares, whether in respect of capital or otherwise.
2
Where shares are subject to the restrictions of paragraph (1)(a), any agreement to transfer the shares or, in the case of unissued shares, the right to be issued with them is void (exceptF645 such agreement or right as may be made or exercised under the terms of directions made by the Department or the court under F648Article 438(1A) or 449(1A) or an agreement toF646 transfer the shares on the making of an order under Article 449(3)(b)).
3
Where shares are subject to the restrictions of paragraph (1)(c) or (d), an agreement to transfer any right to be issued with other shares in right of those shares, or to receive any payment on them (otherwise than in a liquidation) is void (exceptF645 such agreement or right as may be made or exercised under the terms of directions made by the Department or the court under F649Article 438(1A) or 449(1A) or an agreement to transfer any such right on theF646 transfer of the shares on the making of an order under Article 449(3)(b)).
Punishment for attempted evasion of restrictions448
1
F650Subject to the terms of any directions made under F651Article 438(1A) or 449 A person is liable to a fine if he—
a
exercise or purports to exercise any right to dispose of any shares which, to his knowledge, are for the time being subject to the restrictions of this Part or of any right to be issued with any such shares, or
b
votes in respect of any such shares (whether as holder or proxy), or appoints a proxy to vote in respect of them, or
c
being the holder of any such shares, fails to notify of their being subject to those restrictions any person whom he does not know to be aware of that fact but does know to be entitled (apart from the restrictions) to vote in respect of those shares whether as holder or as proxy, or
d
being the holder of any such shares, or being entitled to any right to be issued with other shares in right of them or to receive any payment on them (otherwise than in a liquidation), enters into any agreement which is void under Article 447(2) or (3).
2
3
Article 680 (restriction on prosecutions) applies to an offence under this Article.
Relaxation and removal of restrictions449
1
Where shares in a company are by order made subject to the restrictions of this Part, application may be made to the court for an order directing that the shares be no longer so subject.
F6531A
Where the court is satisfied that an order subjecting the shares to the restrictions of this Part unfairly affects the rights of third parties in respect of shares then the court, for the purpose of pretecting such rights and subject to such terms as it thinks fit and in addition to any order it may make under paragraph (1), may direct on an application made under that paragraph that such acts by such persons and for such purposes as may be set out in the order, shall not constitute breach of the restrictions of Part XVI.
Paragraph (3) does not apply to an order made under this paragragh.
2
If the order applying the restrictions was made by the Department, or it has refused to make an order disapplying them, the application may be made by any person aggrieved; F655. . .
3
Subject as follows, and order of the court or the Department directing that shares shall cease to be subject to the restrictions may be made only if—
a
the court or (as the case may be) the Department is satisfied that the relevant facts about the shares have been disclosed to the company and no unfair advantage has accrued to any person as a result of the earlier failure to make that disclosure, or
4
F653Without prejudice to the power of the court to give directions under paragraph (1A), where shares in a company are subject to the restrictions, the court may on application order the shares to be sold, subject to the court's approval as to the sale, and may also direct that the shares shall cease to be subject to the restrictions.
An application to the court under this paragraph may be made by the Department F657. . . , or by the company.
5
Where an order has been made under paragraph (4), the court may on application make such further order relating to the sale or transfer of the shares as it thinks fit.
An application to the court under this paragraph may be made—
- a
by the Department F658. . . , or
- b
by the company, or
- c
by the person appointed by or in pursuance of the order to effect the sale, or
- d
by any person interested in the shares.
6
An order (whether of the Department or the court) directing that shares shall cease to be subject to the restrictions of this Part, if it is—
a
expressed to be made with a view to permitting a transfer of the shares, or
b
made under paragraph (4),
may continue the restrictions mentioned in Article 447(1)(c) and (d), either in whole or in part, so far as they relate to any right acquired or offer made before the transfer.
7
Paragraph (3) does not apply to an order directing that shares shall cease to be subject to any restrictions which have been continued in force in relation to those shares under paragraph (6).
Further provisions on sale by court order of restricted shares450
1
Where shares are sold in pursuance of an order of the court under Article 449(4) the proceeds of sale, less the costs of the sale, shall be paid into court for the benefit of the persons who are beneficially interested in the shares; and any such person may apply to the court for the whole or part of those proceeds to be paid to him.
2
On application under paragraph (1) the court shall (subject to paragraph (3)) order the payment to the applicant of the whole of the proceeds of sale together with any interest thereon or, if any other person had a beneficial interest in the shares at the time of their sale, such proportion of those proceeds and interest as is equal to the proportion which the value of the applicant's interest in the shares bears to the total value of the shares.
3
On granting an application for an order under Article 449(4) or (5) the court may order that the applicant's costs be paid out of the proceeds of sale; and if that order is made, the applicant is entitled to payment of his costs out of those proceeds before any person interested in the shares in question receives any part of those proceeds.
PART XVIIFRAUDULENT TRADING BY A COMPANY
Punishment for fraudulent trading451
F660. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PART XVIIIPROTECTION OF COMPANY'S MEMBERS AGAINST UNFAIR PREJUDICE
Order on application of company member452
F661. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Order on application of the Department453
F662. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provisions as to petitions and orders under this Part454
F663. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Part XIX - rep. by 1989 NI 19
PART XXWINDING UP OF COMPANIES REGISTERED UNDER THIS ORDER OR THE FORMER COMPANIES ACTS
CHAPTER I - V - Rep. by 1989 NI 19
CHAPTER VIPROVISIONS AS TO DISSOLUTION
Power of court to declare dissolution of company void602 F664
C71
Where a company has been dissolved, the court mayF665. . . , on an application made for the purpose by the liquidator of the company or by any other person appearing to the court to be interested, make an order, on such terms as the court thinks fit, declaring the dissolution to have been void.
2
Thereupon such proceedings may be taken as might have been taken if the company had not been dissolved.
3
It is the duty of the person on whose application the order was made, within 7 days after its making (or such further time as the court may allow), to deliver to the registrar for registration an office copy of the order.
If the person fails to do so, he is liable to a fine and, for continued contravention, to a daily default fine.
F6654
Subject to the following provisions, an application under this Article may not be made after the end of the period of two years from the date of the dissolution of the company.
5
An application for the purpose of bringing proceedings against the company—
a
for damages in respect of personal injuries (including any sum claimed by virtue of section 14(2)(c) of the Law Reform (Miscellaneous Provisions) Act (Northern Ireland) 1937 (funeral expenses)), or
b
for damages under the Fatal Accidents (Northern Ireland) Order 1977,
may be made at any time; but no order shall be made on such an application if it appears to the court that the proceedings would fail by virtue of any statutory provision as to the time within which proceedings must be brought.
6
Nothing in paragraph (5) affects the power of the court on making an order under this Article to direct that the period between the dissolution of the company and the making of the order shall not count for the purposes of any such statutory provision.
7
In paragraph (5)(a) “personal injuries” includes any disease and any impairment of a person's physical or mental condition.
Registrar may strike defunct company off register603
1
If the registrar has reasonable cause to believe that a company is not carrying on business or in operation, he may send to the company by post a letter inquiring whether the company is carrying on business or in operation.
C82
If the registrar does not within one month of sending the letter receive any answer to it, he shall within 14 days after the expiration of that month send to the company by registered post or recorded delivery service a letter referring to the first letter, and stating that no answer to it has been received, and that if an answer is not received to the second letter within one month from its date, a notice will be published in the Belfast Gazette with a view to striking the company's name off the register
3
If the registrar either receives an answer to the effect that the company is not carrying on business or in operation, or does not within one month after sending the second letter receive any answer, he may publish in the Belfast Gazette, and send to the company by post, a notice that at the expiration of 3 months from the date of that notice the name of the company mentioned in it will, unless cause is shown to the contrary, be struck off the register and the company will be dissolved.
4
If, in a case where a company is being wound up, the registrar has reasonable cause to believe either that no liquidator is acting, or that the affairs of the company are fully wound up, and the returns required to be made by the liquidator have not been made for a period of 6 consecutive months, the registrar shall publish in the Belfast Gazette and send to the company or the liquidator (if any) a like notice as is provided in paragraph (3).
5
At the expiration of the time mentioned in the notice the registrar may, unless cause to the contrary is previously shown by the company, strike its name off the register, and shall publish notice of this in the Belfast Gazette; and on the publication of that notice in the Belfast Gazette the company is dissolved.
6
However—
a F666
the liability (if any) of every director, managing officer and member of the company continues and may be enforced as if the company has not been dissolved, and
b
nothing in paragraph (5) or sub-paragraph (a) affects the power of the court to wind up a company the name of which has been struck off the register.
7
A notice to be sent to a liquidator under this Article may be addressed to him at his last known place of business; and a letter or notice to be sent under this Article to a company may be addressed to the company at its registered office, or if no office has been registered, to the care of some officer of the company.
If there is no officer of the company whose name and address are know to the registrar, the letter or notice may be sent to each of the persons who subscribed the memorandum, addressed to him at the address mentioned in the memorandum.
Registrar may strike private company off register on application603A F667
1 F667
On application by a private company, the registrar may strike the company's name off the register.
2
An application by a company under this Article shall—
a F667
be made on its behalf by its directors or by a majority of them,
b F667
be in the prescribed form, and
c
contain the prescribed information.
3
The registrar shall not strike a company off under this Article until after the expiration of 3 months from the publication by him in the Belfast Gazette of a notice—
a
stating that he may exercise his power under this Article in relation to the company, and
b
inviting any person to show cause why he should not do so.
4
Where the registrar strikes a company off under this Article, he shall publish notice of that fact in the Belfast Gazette.
5
On the publication in the Belfast Gazette of a notice under paragraph (4), the company to which the notice relates is dissolved.
6 F667
However, the liability (if any) of every director, managing officer and member of the company continues and may be enforced as if the company had not been dissolved.
7
Nothing in this Article affects the power of the court to wind up a company the name of which has been struck off the register.
Duties in connection with making application under Article 603A603B
1
A person shall not make an application under Article 603A on behalf of a company if, at any time in the previous 3 months, the company has—
a
changed its name,
b
traded or otherwise carried on business,
c
made a disposal for value of property or rights which, immediately before ceasing to trade or otherwise carry on business, it held for the purpose of disposal for gain in the normal course of trading or otherwise carrying on business, or
d
engaged in any other activity, except one which is—
i
necessary or expedient for the purpose of making an application under Article 603A, or deciding whether to do so,
ii
necessary or expedient for the purpose of concluding the affairs of the company,
iii
necessary or expedient for the purpose of complying with any statutory requirement, or
iv
specified for the purposes of this head by the Department by order made subject to negative resolution.
2
For the purposes of paragraph (1), a company shall not be treated as trading or otherwise carrying on business by virtue only of the fact that it makes a payment in respect of a liability incurred in the course of trading or otherwise carrying on business.
3
A person shall not make an application under Article 603A on behalf of a company at a time when any of the following is the case—
a
an application has been made to the court under Article 418 on behalf of the company for the sanctioning of a compromise or arrangement and the matter has not been finally concluded;
b
a voluntary arrangement in relation to the company has been proposed under Part II of the Insolvency (Northern Ireland) Order 1989 and the matter has not been finally concluded;
F669c
the company is in administration under Part III of that Order;
ca
an application to the court for an administration order in respect of the company has been made and not finally dealt with or withdrawn;
cb
a copy of notice of intention to appoint an administrator of the company under paragraph 15 of Schedule B1 to that Order has been filed with the court and neither of the events mentioned in paragraph 45(2)(a) and (b) of that Schedule has occurred;
cc
a copy of notice of intention to appoint an administrator of the company under paragraph 23 of that Schedule has been filed with the court and neither of the events mentioned in paragraph 45(4)(a) and (b) of that Schedule has occurred;
d
the company is being wound up under Part V of that Order, whether voluntarily or by the court, or a petition under that Part for the winding up of the company by the court has been presented and not finally dealt with or withdrawn;
e
there is a receiver or manager of the company's property.
4
For the purposes of paragraph (3)(a), the matter is finally concluded if—
a
the application has been withdrawn,
b
the application has been finally dealt with without a compromise or arrangement being sanctioned by the court, or
c
a compromise or arrangement has been sanctioned by the court and has, together with anything required to be done under any provision made in relation to the matter by order of the court, been fully carried out.
5
For the purposes of paragraph (3)(b), the matter is finally concluded if—
a F668
no meetings are to be summoned under Article 16 of the Insolvency (Northern Ireland) Order 1989,
b F668
meetings summoned under that Article fail to approve the arrangement with no, or the same, modifications,
c F668
an arrangement approved by meetings summoned under that Article, or in consequence of a direction under Article 19(4)(b) of that Order, has been fully implemented, or
d F668
the court makes an order under paragraph (5) of Article 19 of that Order revoking approval given at previous meetings and, if the court gives any directions under paragraph (6) of that Article, the company has done whatever it is required to do under those directions.
C96
A person who makes an application under Article 603A on behalf of a company shall secure that a copy of the application is given, within 7 days from the day on which the application is made, to every person who, at any time on that day, is—
a
a member of the company,
b
an employee of the company,
c
a creditor of the company,
d
a director of the company,
e
a manager or trustee of any pension fund established for the benefit of employees of the company, or
f
a person of a description specified for the purposes of this sub-paragraph by regulations made by the Department.
7
Paragraph (6) shall not require a copy of the application to be given to a director who is a party to the application.
8
The duty imposed by paragraph (6) shall cease to apply if the application is withdrawn before the end of the period for giving the copy application.
9
The Department may by order, made subject to negative resolution, amend paragraph (1) for the purpose of altering the period in relation to which the doing of the things mentioned in sub-paragraphs (a) to (d) of that paragraph is relevant.
Directors' duties following application under Article 603A603C
1
Paragraph (2) applies in relation to any time after the day on which a company makes an application under Article 603A and before the day on which the application is finally dealt with or withdrawn.
2 F670
A person who is a director of the company at the end of a day on which a person other than himself becomes—
a
a member of the company,
b
an employee of the company,
c
a creditor of the company,
d F670
a director of the company,
e
a manager or trustee of any pension fund established for the benefit of employees of the company, or
f
a person of a description specified for the purposes of this sub-paragraph by regulations made by the Department,
shall secure that a copy of the application is given to that person within 7 days from that day.
3
The duty imposed by paragraph (2) shall cease to apply if the application is finally dealt with or withdrawn before the end of the period for giving the copy application.
4
Paragraph (5) applies where, at any time on or after the day on which a company makes an application under Article 603A and before the day on which the application is finally dealt with or withdrawn—
a
the company—
i
changes its name,
ii
trades or otherwise carries on business,
iii
makes a disposal for value of any property or rights other than those which it was necessary or expedient for it to hold for the purpose of making, or proceeding with, an application under Article 603A, or
iv
engages in any other activity, except one to which paragraph (6) applies;
b
an application is made to the court under Article 418 on behalf of the company for the sanctioning of a compromise or arrangement;
c
a voluntary arrangement in relation to the company is proposed under Part II of the Insolvency (Northern Ireland) Order 1989;
F671d
an application to the court for an administration order in respect of the company is made under paragraph 13 of Schedule B1 to that Order;
da
an administrator is appointed in respect of the company under paragraph 15 or 23 of that Schedule;
db
a copy of notice of intention to appoint an administrator of the company under paragraph 15 or 23 of that Schedule is filed with the court;
e
there arise any of the circumstances in which, under Article 70(1) of that Order, the company may be voluntarily wound up;
f
a petition is presented for the winding up of the company by the court under Part V of that Order; or
g
a receiver or manager of the company's property is appointed.
5 F670
A person who, at the end of a day on which an event mentioned in any of sub-paragraphs (a) to (g) of paragraph (4) occurs, is a director of the company shall secure that the company's application is withdrawn forthwith.
6
This paragraph applies to any activity which is—
a
necessary or expedient for the purpose of making, or proceeding with, an application under Article 603A,
b
necessary or expedient for the purpose of concluding affairs of the company which are outstanding because of what has been necessary or expedient for the purpose of making, or proceeding with, such an application,
c
necessary or expedient for the purpose of complying with any statutory requirement, or
d F670
specified for the purposes of this paragraph by the Department by order made subject to negative resolution.
7
For the purposes of paragraph (4)(a), a company shall not be treated as trading or otherwise carrying on business by virtue only of the fact that it makes a payment in respect of a liability incurred in the course of trading or otherwise carrying on business.
Articles 603B and 603C: supplementary provisions603D F672
1
For the purposes of section 24 of the Interpretation Act (Northern Ireland) 1954 (which relates to the service of documents by post) in its application to a document required to be given to any person under Article 603B(6) or 603C(2), the principal office of a body corporate or partnership which—
a
is incorporated or formed under the law of a country or territory outside the United Kingdom, and
b
has a place of business in the United Kingdom,
shall be taken to be its principal office in the United Kingdom.
2
Where a creditor of the company has more than one place of business, section 24(2) of the Act of 1954 shall have effect, so far as concerns the giving of a document to him under Article 603B(6) or 603C(2), as if for paragraphs (b) and (c) there were substituted—
b
it is left, or sent by post to him in accordance with subsection (1), at each place of business of his with which the company has had dealings in relation to a matter by virtue of which he is a creditor of the company.
3
An order or regulations under Article 603B or 603C may make such transitional provisions as the Department considers appropriate.
4
For the purposes of Articles 603B and 603C, an application under Article 603A is withdrawn if notice of withdrawal in the prescribed form is given to the registrar.
5
In Articles 603B and 603C, "disposal" includes part disposal.
6
In Articles 603B and 603C and this Article, "creditor" includes a contingent or prospective creditor.
Articles 603B and 603C: enforcement603E F673
1
A person who breaches or fails to perform a duty imposed on him by Article 603B or 603C is guilty of an offence and liable to a fine.
2
A person who fails to perform a duty imposed on him by Article 603B(6) or 603C(2) with the intention of concealing the making of the application in question from the person concerned is guilty of an offence and liable to imprisonment or a fine, or both.
3
In any proceedings for an offence under paragraph (1) consisting of breach of a duty imposed by Article 603B(1) or (3), it shall be a defence for the accused to prove that he did not know, and could not reasonably have known, of the existence of the facts which led to the breach.
4
In any proceedings for an offence under paragraph (1) consisting of failure to perform the duty imposed by Article 603B(6), it shall be a defence for the accused to prove that he took all reasonable steps to perform the duty.
5
In any proceedings for an offence under paragraph (1) consisting of failure to perform a duty imposed by Article 603C(2) or (5) it shall be a defence for the accused to prove—
a
that at the time of the failure he was not aware of the fact that the company had made an application under Article 603A, or
b
that he took all reasonable steps to perform the duty.
Other offences connected with Article 603A603F F674
1
Where a company makes an application under Article 603A, any person who, in connection with the application, knowingly or recklessly furnishes any information to the registrar which is false or misleading in a material particular is guilty of an offence and liable to a fine.
2
Any person who knowingly or recklessly makes an application to the registrar which purports to be an application under Article 603A, but which is not, is guilty of an offence and liable to a fine.
Objection to striking off by person aggrieved604 F675
1
This Article applies if a company or any member or creditor of it feels aggrieved by the company having been struck off the register.
2
The court, on an application by the company or the member or creditor made before the expiration of 20 years from publication in the Belfast Gazette of notice under Article 603, may, if satisfied that the company was at the time of the striking off carrying on business or in operation, or otherwise that it is just that the company be restored to the register, order the company's name to be restored.
F6762A
Paragraphs (2B) and (2D) apply if a company has been struck off the register under Article 603A.
2B
The court, on an application by a notifiable person made before the expiration of 20 years from publication in the Belfast Gazette of notice under Article 603A(4), may, if satisfied—
a
that any duty under Article 603B or 603C with respect to the giving to that person of a copy of the company's application under Article 603A was not performed,
b
that the making of the company's application under Article 603A involved a breach of duty under Article 603B(1) or (3), or
c
that it is for some other reason just to do so,
order the company's name to be restored to the register.
2C
In paragraph (2B), “notifiable person” means a person to whom a copy of the company's application under Article 603A was required to be given under Article 603B or 603C.
2D
The court, on an application by the Department made before the expiration of 20 years from publication in the Belfast Gazette of notice under Article 603A(4), may, if satisfied that it is in the public interest to do so, order the company's name to be restored.
3
On an office copy ofF676 an order under paragraph (2), (2B) or (2D) being delivered to the registrar for registration the companyF676 to which the order relates is deemed to have continued in existence as if its name had not been struck off; and the court may by the order give such directions and make such provisions as seem just for placing the company and all other persons in the same position (as nearly as may be) as if the company's name had not been struck off.
Property of dissolved company to be a bona vacantia605 F677
F678F6791
When a company is dissolved, all property and rights whatsoever vested in or held on trust for the company immediately before its dissolution (including leasehold property, but not including property held by the company on trust for any other person) are deemed to be bona vacantia and—
a
accordingly belong to the Crown, and
b
vest and may be dealt with in the same manner as other bona vacantia accruing to the Crown.
2
Except as provided by Article 606, the foregoing provisions of this Article have effect subject and without prejudice to any order made by the court under Article 602 or 604.
Effect on Article 605 of company's revival after dissolution606 F680
F681F6821
The Crown, in whom any property or right is vested by Article 605, may dispose of, or an interest in, that property or right notwithstanding that an order may be made under Article 602 or 604.
2
Where such an order is made—
a
it does not affect the disposition (but without prejudice to the order so far as it relates to any other property or right previously vested in or held on trust for the company), and
b
the Crown shall pay to the company an amount equal to—
i
the amount of any consideration received for the property or right, or interest therein, or
ii
the value of any such consideration at the time of the disposition,
or if no consideration was received, an amount equal to the value of the property, right or interest disposed of, as at the date of the disposition.
3
This Article applies in relation to the disposition of any property, right or interest on or after 1st July 1983, whether the company concerned was dissolved before, on or after that day.
Crown disclaimer of property vesting as bona vacantia607 F683
F684F6851
Where any property vests in the Crown under Article 605 the Crown's title to it under that Article may be disclaimed by a notice signed by the Treasury Solicitor.
2
The right to execute a notice of disclaimer under this Article may be waived by or on behalf of the Crown either expressly or by taking possession or other act evincing that intention.
3
A notice of disclaimer under this Article is of no effect unless it is executed—
a
within 12 months of the date on which the vesting of the property under Article 605 came to the notice of the Treasury Solicitor, or
b
if an application in writing is made to the Treasury Solicitor by any person interested in the property requiring him to decide whether he will or will not disclaim, within a period of 3 months after the receipt of the application or such further period as may be allowed by the court.
4
A statement in a notice of disclaimer of any property under this Article that the vesting of it came to the notice of the Treasury Solicitor on a specified date, or that no such application as is mentioned in paragraph (3)(b) was received by him with respect to the property before a specified date, is sufficient evidence of the fact stated, until the contrary is proved.
5
A notice of disclaimer under this Article shall be delivered to the registrar for registration; and copies of it shall be published in the Belfast Gazette and sent to any persons who have given the Treasury Solicitor notice that they claim to be interested in the property.
Effect of Crown disclaimer under Article 607608 F686
F687F688Where notice of disclaimer is executed under Article 607 as respects any property, that property is deemed not to have vested in the Crown under Article 605 and as regards that property,F689 Article 152(3) and Articles 153 to 156 of the Insolvency Order shall apply as if the property had been disclaimed by the liquidator underF689 that Article 152 immediately before the dissolution of the company.
Liability for rentcharge on company's land after dissolution609 F690
2
In this Article “company” includes any body corporate.
Arts. 610-624 rep. by 1989 NI 19
CHAPTER VII - rep. by 1989 NI 19
PART XXI rep. by 1989 NI 19
PART XXIIBODIES CORPORATE SUBJECT, OR BECOMING SUBJECT, TO THIS ORDER (OTHERWISE THAN BY ORIGINAL FORMATION UNDER PART II)
CHAPTER ICOMPANIES FORMED OR REGISTERED UNDER FORMER COMPANIES ACTS
Companies formed and registered under former Companies Acts625
1
In its application to existing companies, this Order applies in the same manner—
a
in the case of a limited company (other than a company limited by guarantee) as if the company had been formed and registered under Part II as a company limited by shares,
b
in the case of a company limited by guarantee, as if the company had been formed and registered under that Part as a company limited by guarantee, and
c
in the case of a company other than a limited company, as if the company had been formed and registered under that Part as an unlimited company.
2
But reference, express or implied, to the date of registration is to be read as the date at which the company was registered under the former Companies Acts.
Companies registered but not formed under former Companies Acts626
1
This Order applies to every company registered but not formed under the former Companies Acts, in the same manner as it is in Chapter II declared to apply to companies registered but not formed under this Order.
2
But reference, express or implied, to the date of registration is to be read as referring to the date at which the company was registered under the former Companies Acts.
Companies re-registered with altered status under former Companies Acts627
1
This Order applies to every unlimited company registered or re-registered as limited in pursuance of the [1879 c. 76] Companies Act 1879, section 57 of the [1908 c. 69] Companies (Consolidation) Act 1908, section 16 of the [1932 c. 7(N.I.)] Companies Act (Northern Ireland) 1932, section 16 of the Act of 1960 or Article 119 of the Order of 1978 as it (this Order) applies to an unlimited company re-registered as limited in pursuance of Part III.
2
But reference, express or implied, to the date of registration or re-registration is to be read as referring to the date at which the company was registered or re-registered as a limited company under the relevant statutory provision.
Companies registered under Joint Stock Companies Acts628
1
A company registered under the Joint Stock Companies Acts may cause its shares to be transferred in manner hitherto in use, or in such other manner as the company may direct.
2
The power of altering a company's articles under Article 20 extends, in the case of an unlimited company formed and registered under the Joint Stock Companies Acts, to altering any regulations relating to the amount of capital or to its distribution into shares, notwithstanding that those regulations are contained in the memorandum.
CHAPTER IICOMPANIES NOT FORMED UNDER COMPANIES LEGISLATION, BUT AUTHORISED TO REGISTER
Companies capable of being registered under this Chapter629
1
With the exceptions and subject to the provisions contained in this Article and Article 630—
a
any company consisting of 2 or more members, which was in existence on 2nd November 1862, including any company registered under the Joint Stock Companies Acts, and
b
any company formed after that date (whether before or after the commencement of this Order), in pursuance of any statutory provision (other than this Order), or of letters patent, or being otherwise duly constituted according to law, and consisting of 2 or more members,
may at any time, on making application in the prescribed form, register under this Order as an unlimited company, or as a company limited by shares, or as a company limited by gurarantee; and the registration is not invalid by reason that it has taken place with a view to the company's being wound up.
F6941A
A company shall not be prevented from registering under this Order as a private company limited by shares or by guarantee solely because it has only one member.
2
A company registered under the [1862 c. 89] Companies Act 1862, the [1908 c. 69] Companies (Consolidation) Act 1908, the [1932 c. 7(N.I.)] Companies Act (Northern Ireland) 1932 or the Act of 1960 shall not register under this Article.
3
A company having the liability of its members limited by a statutory provision or letters patent, and not being a joint stock company, shall not register under this Article.
4
A company having the liability of its members limited by a statutory provision or letters patent shall not register under this Article as an unlimited company or as a company limited by guarantee.
5
A company that is not a joint stock company shall not register under this Article as a company limited by shares.
Procedural requirements for registration630
1
A company shall not register under Article 629 without the assent of a majority of such of its members as are present in person or by proxy (in cases where proxies are allowed) at a general meeting summoned for the purpose.
2
Where a company not having the liability of its members limited by a statutory provision or letters patent is about to register as a limited company, the majority required to assent as required by paragraph (1) shall consist of not less than three-fourths of the members present in person or by proxy at the meeting.
3
In computing any majority under this Article when a poll is demanded, regard is to be had to the number of votes to which each member is entitled according to the company's regulations.
4
Where a company is about to register (under Article 629) as a company limited by guarantee, the assent to its being so registered shall be accompanied by a resolution declaring that each member undertakes to contribute to the company's assets, in the event of its being wound up, while he is a member, or within one year after he ceases to be a member, for payment of the company's debts and liabilities contracted before he ceased to be a member, and of the costs and expenses of winding up and for the adjustment of the rights of the contributories among themselves, such amount as may be required, not exceeding a specified amount.
5
Before a company is registered under Article 629, is shall deliver to the registrar a statement in the prescribed form—
a
that the registered office of the company is to be situated in Northern Ireland, and
b
specifying the intended situation of the company's registered office after registration.
Change of name on registration631
1
Where the name of a company seeking registration under Article 629 is a name by which it is precluded from registration by Article 36, either because it falls within paragraph (1) of that Article or, if it falls within paragraph (2) of that Article, because the Department would not approve the company being registered with that name, the company may change its name with effect from the date on which it is registered under this Chapter.
2
A change of name under this Article requires the like assent of the company's members as is required by Article 630 for registration.
Definition of “joint stock company”632
1
For the purposes of this Chapter as far as relates to registration of companies as companies limited by shares, “joint stock company” means a company—
a
having a permanent paid-up or nominal share capital of fixed amount divided into shares, also of fixed amount, or held and transferable as stock, or divided and held partly in one way and partly in the other, and
b
formed on the principle of having for its members the holders of those shares or that stock, and no other persons.
2
Such a company when registered with limited liability under this Order is deemed a company limited by shares.
Requirements for registration by joint stock companies633
1
Before the registration under Article 629 of a joint stock company, there shall be delivered to the registrar the following documents—
a
a statement in the prescribed form specifying the name with which the company is proposed to be registered;
b
a list in the prescribed form showing the names and addresses of all persons who on a day named in the listF695 not more than 28 clear days before the day of registration were members of the company, with the addition of the shares or stock held by them respectively (distinguishing in cases, where the shares are numbered, each share by its number), and
c
a copy of any statutory provision, royal charter, letters patent, deed of settlement, contract of copartnery, or other instrument constituting or regulating the company.
2
If the company is intended to be registered as a limited company, there shall also be delivered to the registrar a statement in the prescribed form specifying the following particulars—
a
the nominal share capital of the company and the number of shares into which it is divided, or the amount of stock of which it consists, and
b
the number of shares taken and the amount paid on each share.
Registration of joint stock company as public company634
1
A joint stock company applying to be registered under Article 629 as a company limited by shares may, subject to—
a
satisfying the conditions set out in Article 54(2)(a) and (b) (where applicable) and Article 55(2) to (4) as applied by this Article, and
b
complying with paragraph (4),
apply to be so registered as a public company.
2
Articles 54 and 55 apply for this purpose as in the case of a private company applying to be re-registered under Article 53, but as if a reference to the special resolution required by Article 53 were to the joint stock company's resolution that it be a public company.
3
The resolution may change the company's name by deleting the word “company” or the words “and company”, including any abbreviation of them.
4
The joint stock company's application shall be made in the form prescribed for the purpose, and shall be delivered to the registrar together with the following documents (as well as those required by Article 633), namely—
a
a copy of the resolution that the company be a public company,
b
a copy of a written statement by an accountant with the appropriate qualifications that in his opinion a relevant balance sheet shows that at the balance sheet date the amount of the company's net assets was not less than the aggregate of its called-up share capital and undistributable reserves,
c
a copy of the relevant balance sheet, together with a copy of an unqualified report (by an accountant with such qualifications) in relation to that balance sheet,
d
a copy of any valuation report prepared under Article 54(2)(b) as applied by this Article, and
e
F696subject to paragraph (4A), a statutory declaration in the prescribed form by a director or secretary of the company—
i
that the conditions set out in Article 54(2)(a) and (b) (where applicable) and Article 55(2) to (4) have been satisfied, and
ii
that, between the balance sheet date referred to in sub-paragraph (b) and the joint stock company's application, there has been no change in the company's financial position that has resulted in the amount of its net assets becoming less than the aggregate of its called-up share capital and undistributable reserves.
F6964A
In place of the statutory declaration referred to in sub-paragraph (e) of paragraph (4), there may be delivered to the registrar using electronic communications a statement made by a director or secretary of the company as to the matters set out in heads (i) and (ii) of that sub-paragraph.
5
The registrar may accept a declaration under paragraph (4)(e)F696 or statement under paragraph (4A) as sufficient evidence that the conditions referred to in that paragraph have been satisfied.
6
In this Article—
“accountant with the appropriate qualifications” meansF697 a person who would be eligible for appointment as the company's auditor, if it were a company registered under this Order,
“relevant balance sheet” means a balance sheet prepared as at a date not more than 7 months before the joint stock company's application to be registered as a public company limited by shares, and
“undistributable reserves” has the meaning gives by F698section 831(4) of the Companies Act 2006;
and Article 56 applies (with the necessary modifications) for the interpretation of the reference in paragraph (4)(c) to an unqualified report by the accountant.
F6967
Any person who makes a false statement under paragraph (4A) which he knows to be false or does not believe to be true is liable to imprisonment or a fine, or both.
Other requirements for registration635
1
Before the registration in pursuance of this Chapter of any company (not being a joint stock company), there shall be delivered to the registrar—
a
a statement in the prescribed form specifying the name with which the company is proposed to be registered,
F699b
a list showing with respect to each director or manager of the company—
i
in the case of an individual, his name, address, occupation and date of birth,
ii
in the case of a corporation or Scottish firm, its corporate or firm name and registered or principal office,
c
a copy of any statutory provision, letters patent, deed of settlement, contract of copartnery, or other instrument constituting or regulating the company, and
d
in the case of a company intended to be registered as a company limited by guarantee, a copy of the resolution declaring the amount of the guarantee.
F6991A
For the purposes of paragraph (1)(b)(i) a person's “name” means his Christian name (or other forename) and surname, except that in the case of a peer, or an individual usually known by a title, the title may be stated instead of his Christian name (or other forename) and surname or in addition to either or both of them.
2
F700Subject to paragraph (2A), the lists of members and directors and any other particulars relating to the company which are required by this Chapter to be delivered to the registrar shall be verified by a statutory declaration in the prescribed form made by any 2 or more directors or other principal officers of the company.
F7002A
In place of the statutory declaration referred to in paragraph (2), there may be delivered to the registrar using electronic communications a statement made by any two or more directors or other principal officers of the company verifying the matters set out in that paragraph.
3
The registrar may require such evidence as he thinks necessary for the purpose of satisfying himself whether a company proposing to be registered is or is not a joint stock company as defined by Article 632.
F7004
Any person who makes a false statement under paragraph (2A) which he knows to be false or does not believe to be true is liable to imprisonment or a fine, or both.
Name of company registering636
1
This Article applies with respect to a company registering under this Chapter (whether a joint stock company or not).
2
If the company is to be registered as a public company, its name must end with the words “public limited company”; and those words may not be preceded by the words “limited”.
3
In the case of a company limited by shares or by guarantee (not being a public company), the name must have “limited” as its last word' but this is subject to Article 40 (exempting a company, in certain circumstances, from having “limited” as part of its name).
4
If the company is registered with limited liability, then any additions to the company's name set out in the statements delivered under Article 633(1)(a) or 635(1)(a) shall form and be registered as the last part of the company's name.
Certificate of registration under this Chapter637
1
On compliance with the requirements of this Chapter with respect to registration, the registrar shall certify under his hand that the company applying for registration is incorporated as a company under this Order and, in the case of a limited company, that it is limited.
2
On the issue of the certificate, the company shall be so incorporated.
3
The certificate is conclusive evidence that the requirements of this Chapter in respect of registration, and of matters precedent and incidental to it, have been complied with.
4
Where on an application by a joint stock company to register as a public company limited by shares the registrar is satisfied that the company may be registered as a public company so limited, the certificate of incorporation given under this Article shall state that the company is a public company; and that statement is conclusive evidence that the requirements of Article 634 have been complied with and that the company is a public company so limited.
Effect of registration638
Schedule 20 has effect with respect to the consequences of registration under this Chapter, the vesting of property, savings for existing liabilities, continuation of existing actions, status of the company following registration, and other connected matters.
Power to substitute memorandum and articles for deed of settlement639
1
Subject as follows, a company registered in pursuance of this Chapter may by special resolution alter the form of its constitution by substituting a memorandum and articles for a deed of settlement.
2
The provisions of Articles 15 to 17 with respect to applications to the court for cancellation of alterations of the objects of a company and matters consequential on the passing of resolutions for such alterations (so far as applicable) apply, but with the following modifications—
a
there is substituted for the printed copy of the altered memorandum required to be delivered to the registrar a printed copy of the substituted memorandum and articles, and
b
on the delivery to the registrar of the substituted memorandum and articles or the date when the alteration is no longer liable to be cancelled by order of the court (whichever is the later)—
i
the substituted memorandum and articles apply to the company in the same manner as if it were a company registered under Part II with that memorandum and those articles, and
ii
the company's deed of settlement ceases to apply to the company.
3
An alteration under this Article may be made either with or without alteration of the company's objects.
4
In this Article “deed of settlement” includes any contract of copartnery or other instrument constituting or regulating the company, not being a statutory provision, a royal charter or letters patent.
PART XXIIICOMPANIES INCORPORATED OUTSIDE NORTHERN IRELAND CARRYING ON BUSINESS IN NORTHERN IRELAND
CHAPTER IREGISTRATION, ETC.
Application of this Part640
1
This Part applies to—
a
a company incorporated outside Northern Ireland which after the commencement of this Order, establishes a place of business in Northern Ireland, and
b
a company so incorporated which has, before the commencement of this Order, established a place of business in Northern Ireland and continues to have an established place of business in Northern Ireland at the commencement of this Order.
2
A company to which this Part applies is in this Order referred to as a “Part XXIII company”.
F701Branch registration under the Eleventh Company Law Directive (89/666/EEC)640A
1
This Article applies to any limited company which—
a
is incorporated outside the United Kingdom and Gibraltar, and
b
has a branch in Northern Ireland.
2
Schedule 20A (branch registration under the Eleventh Company Law Directive (89/666/EEC) shall have effect in relation to any company to which this Article applies.
F702Scope of Articles 641 and 642640B
Article 641 and 642 shall not apply to any limited company which—
a
is incorporated outside the United Kingdom and Gibraltar, and
b
has a branch in the United Kingdom.
Documents to be delivered to registrar641
1
When a company incorporated outside Northern Ireland establishes a place of business in Northern Ireland, it shall within one month of doing so deliver to the registrar for registration—
a
a certified copy of the charter, statutes or memorandum and articles of the company or other instrument constituting or defining the company's constitution, and, if the instrument is not written in the English language, a certified translation of it; and
b
a return in the prescribed form containing—
i
a list of the company's directors and secretary, containing the particulars specified in paragraph (2),
ii
a list of the names and addresses of some one or more persons resident in Northern Ireland authorised to accept on the company's behalf service of process and any notices required to be served on it,
iii
a list of the documents delivered in compliance with sub-paragraph (a), and
iv
F703subject to paragraph (3A), a statutory declaration (made by a director or secretary of the company or by any person whose name and address are given in the list required by head (ii)), stating the date on which the company's place of business in Northern Ireland was established.
F7042
The list referred to in paragraph (1)(b)(i) shall contain the following particulars with respect to each director—
a
in the case of an individual—
i
his name,
ii
any former name,
iii
his usual residential address,
iv
his nationality,
v
his business occupation (if any),
vi
if he has no business occupation but holds other directorships, particulars of them, and
vii
his date of birth;
b
in the case of a corporation or Scottish firm, its corporate or firm name and registered or principal office.
3
The list referred to in paragraph (1)(b)(i) shall contain the following particulars with respect to the secretary (or, where there are joint secretaries, with respect to each of them)—
a
in the case of an individual, his name, any former name and his usual residential address;
b
in the case of a corporation or Scottish firm, its corporate or firm name and registered or principal office.
Where all the partners in a firm are joint secretaries of the company, the name and principal office of the firm may be stated instead of the particulars required by sub-paragraph (a).
F7033A
In place of the statutory declaration referred to in head (iv) of sub-paragraph (b) of paragraph (1), there may be delivered to the registrar using electronic communications a statement made by any person by whom the declaration could have been made stating the date on which the company's place of business in Northern Ireland was established.
4
In paragraphs (2)(a) and (3)(a)—
a
“name” means a person's Christian name (or other forename) and surname, except that in case of a peer, or an individual usually known by a title, the title may be stated instead of his Christian name (or other forename) and surname, or in addition to either or both of them; and
b
the reference to a former name does not include—
i
in the case of a peer, or an individual normally known by a British title, the name by which he was known previous to the adoption of or succession to the title, or
ii
in the case of any person, a former name which was changed or disused before he attained the age of 18 years or which has been changed or disused for 20 years or more, or
iii
in the case of a married woman, the name by which she was known previous to the marriage.
F7035
Any person who makes a false statement under paragraph (3A) which he knows to be false or does not believe to be true is liable to imprisonment or a fine, or both.
Registration of altered particulars642
1
If any alteration is made in—
a
the charter, statutes, or memorandum and articles of a Part XXIII company or any such instrument as is mentioned in Article 641, or
b
the directors or secretary of a Part XXIII company or the particulars contained in the list of the directors and secretary, or
c
the names or addresses of the persons authorised to accept service on behalf of a Part XXIII company,
the company shall, within the time specified in paragraph (3), deliver to the registrar for registration a return containing the prescribed particulars of the alteration.
2
If any change is made in the corporate name of a Part XXIII company, the company shall within the time specified in paragraph (3) deliver to the registrar for registration a return containing the prescribed particulars of the change.
3
The time for delivery of the returns required by paragraphs (1) and (2) is—
a
in the case of an alteration to which paragraph (1)(c) applies, 21 days after the making of the alteration, and
b
otherwise, 21 days after the date on which notice of the alteration or change in question could have been received in Northern Ireland in due course of post (if despatched with due diligence).
F705Change in registration regime642A
1
Where a company ceases to be a company to which Article 640A applies and, immediately after ceasing to be such a company—
a
continues to have in Northern Ireland a place of business which it had immediately before ceasing to be such a company, and
b
does not have a branch in Great Britain,
it shall be treated for the purposes of Article 641 as having established the place of business on the date when it ceased to be a company to which Article 640A applies.
2
Where a limited company incorporated outside the United Kingdom and Gibraltar—
a
ceases to have a branch in Great Britain, and
b
both immediately before and immediately after ceasing to do so, has a place of business, but not a branch, in Northern Ireland,
it shall be treated for the purposes of Article 641 as having established the place of business on the date when it ceased to have a branch in Great Britain.
3
Schedule 20B (transitional provisions in relation to change in registration regime) shall have effect.
Obligation to state name and other particulars643
1 F706
Every Part XXIII company shall—
Sub‐para. (a) rep. by 1986 c. 60
b
conspicuously exhibit on every place where it carries on business in Northern Ireland the company's name and the country in which it is incorporated.
c
cause the company's name and the country in which it is incorporated to be stated in legible characters in all bill-heads and letter paper, and in all notices and other official publications of the company,
d
if the liability of the members of the company is limited, cause notice of that fact to be stated in legible charactersF707. . . in all bill-heads, letter paper, notices and other official publications of the company in Northern Ireland, and to be affixed on every place where it carries on its business.
2
Paragraph (1)(b) and (c) does not apply to a company incorporated in Great Britain.
F7083 F706
Every company to which Article 640A applies shall, in the case of each branch of the company registered under paragraph 1 of Schedule 20A, cause the following particulars to be stated in legible characters in all letter paper and order forms used in carrying on the business of the branch—
a
the place of registration of the branch, and
b
the registered number of the branch.
4 F706
Every company to which Article 640A applies, which is not incorporated in a Member State and which is required by the law of the country in which it is incorporated to be registered under paragraph 1 of Schedule 20A, cause the following particulars to be stated in legible characters in all letter paper and order forms used in carrying on the business of the branch—
a
the identity of the registry in which the company is registered in its country of incorporation, and
b
the number with which it is registered.
5 F706
Every company to which Article 640A applies and which is not incorporated in a Member State shall, in the case of each branch of the company registered under paragraph 1 of Schedule 20A, cause the following particulars to be stated in legible character in all letter paper and order forms used in carrying on the business of the branch—
a
the legal form of the company,
b
the location of its head office,
c
if applicable, the fact that it is being wound up.
Regulation of Part XXIII companies in respect of their names644
1
If it appears to the Department that the corporate name of a Part XXIII company is a name by which the company, had it been formed under this Order, would on the relevant dateF709 (determined in accordance with paragraphs (3A) and (3B)) have been precluded from being registered by Article 36 either—
a
because it falls within paragraph (1) of that Article, or
b
if it falls within paragraph (2) of that Article, because the Department would not approve the company's being registered by that name,
the Department may serve a notice on the company, stating why the name would not have been registered.
2
If the corporate name of a Part XXIII company is in the Department's opinion too like a name appearing on the relevant date in the index of names kept by the registrar under Article 663 or which should have appeared in that index on that date, or is the same as a name which should have so appeared, the Department may serve a notice on the company specifying the name in the index which the company's name is too like or which is the same as the company's name.
3
No notice shall be served on a company under paragraph (1) or (2) later than 12 months after the relevant date,F709. . .
F7093A
For the purposes of paragraphs (1) to (3), the relevant date, in relation to a company, is the date on which it has complied with paragraph 1 of Schedule 20A or Article 641(1) or, if there is more than one such date, the first date on which it has complied with either of those provisions since becoming a Part XXIII company.
3B
But where the company's corporate name has changed since the date ascertained in accordance with paragraph (3A), the relevant date is the date on which the company has, in respect of the change or, if more than one, the latest change, complied with paragraph 7(1) of Schedule 20A or Article 642(2), as the case may be.
4
A Part XXIII company on which a notice is served under paragraph (1) or (2)—
a
may deliver to the registrar for registration a statement in the prescribed form specifying a name approved by the Department other than its corporate name under which it proposes to carry on business in Northern Ireland, and
b
may, after that name has been registered, at any time deliver to the registrar for registration a statement in the prescribed form specifying a name approved by the Department (other than its corporate name) in substitution for the name previously registered.
5
The name by which a Part XXIII company is for the time being registered under paragraph (4) is, for all purposes of the law applying in Northern Ireland (including this Order and the [1986 NI 7] Business (Northern Ireland) Order 1986), deemed to be the company's corporate name; but—
a
this does not affect references to the corporate name in this Article, or any rights or obligations of the company, or render defective any legal proceedings by or against the company, and
b
any legal proceedings that might have been continued or commenced against the company by its corporate name or its name previously registered under this Article may be continued or commenced against it by its name for the time being so registered.
6
A Part XXIII company on which a notice is served under paragraph (1) or (2) shall not at any time after the expiration of 2 months from the service of that notice (or such longer period as may be specified in that notice) carry on business in Northern Ireland under its corporate name.
Nothing in this paragraph, or in Article 647(2) (which imposes penalties for its contravention) invalidates any transaction entered into by the company.
7
The Department may withdraw a notice served under paragraph (1) or (2) at any time before the end of the period mentioned in paragraph (6); and that paragraph does not apply to a company served with a notice which has been withdrawn.
Service of documents: companies to which Article 640A applies644A
1
This Article applies to any company to which Article 640A applies.
2
Any process or notice required to be served on a company to which this Article applies in respect of the carrying on of the business of a branch registered by it under paragraph 1 of Schedule 20A is sufficiently served if—
a
addressed to any person whose name has, in respect of the branch, been delivered to the registrar as a person falling within paragraph 3(e) of that Schedule, and
b
left at or sent by post to the address for that person which has been so delivered.
3
Where—
a
a company to which this Article applies makes default, in respect of a branch, in delivering to the registrar the particulars mentioned in paragraph 3(e) of Schedule 20A, or
b
all the persons whose names have, in respect of a branch, been delivered to the registrar under paragraph 1 of that Schedule as persons falling within paragraph 3(e) are dead or have ceased to reside in Northern Ireland, or refuse to accept service on the company's behalf, or for any reason cannot be served,
a document may be served on the company in respect of the carrying on of the business of the branch by leaving it at, or sending it by post to, any place of business established by the company in Northern Ireland.
4
Where a company to which this Article applies has more than one branch in Northern Ireland, any notice or process required to be served on the company which is not required to be served in respect of the carrying on of the business of one branch rather than another shall be treated for the purposes of this Article as required to be served in respect of the carrying on of the business of each of its branches.
Service of documents on a Part XXIII company645
1
Any process or notice required to be served on a Part XXIII companyF710 to which Article 641 applies is sufficiently served if addressed to any person whose name has been delivered to the registrar under the foregoing provisions of this Part and left at or sent by post to the address which has been so delivered.
2
However—
a
where such a company makes default in delivering to the registrar the name and address of a person resident in Northern Ireland who is authorised to accept on behalf of the company service of process or notices, or
b
if at any time all the persons whose names and addresses have been so delivered are dead or have ceased so to reside, or refuse to accept service on the company's behalf, or for any reason cannot be served,
a document may be served on the company by leaving it at, or sending it by post to, any place of business established by the company in Northern Ireland.
Documents to be filed on cessation of business: companies to which Article 640A applies645A
If a company to which Article 640A applies closes a branch in Northern Ireland, it shall forthwith give notice of that fact to the registrar; and from the date on which notice is so given it is no longer obliged to deliver documents to the registrar in respect of that branch.
Documents to be filed on cessation of business646
If a Part XXIII companyF711 to which Article 641 applies ceases to have a place of business in Northern Ireland, it shall forthwith give notice of that fact to the registrar; and as from the date on which notice is so given the obligation of the company to deliver any document to the registrar ceases.
Penalties for non-compliance647
1
If a Part XXIII company fails to comply with any of Articles 641 to 643 and 646 the company, and every officer or agent of the company who knowingly and wilfully authorises or permits the default, is liable to a fine and, in the case of a continuing offence, to a daily default fine for continued contravention.
2
If a Part XXIII company contravenes Article 644(6), the company and every officer or agent of it who knowingly and wilfully authorises or permits the contravention is guilty of an offence and liable to a fine and, for continued contravention, to a daily default fine.
F7123
If a Part XXIII company fails to comply with Article 645A or Schedule 20A, the company and every officer or agent of the company who knowingly and wilfully authorises or permits the default is liable to a fine, and in the case of a continuing offence, to a daily default fine for continued contravention.
Interpretation F713. . . 648
F7131
For the purposes of this Chapter—
“certified” means certified in the prescribed manner to be a true copy or a correct translation;
“director”, in relation to a Part XXIII company, includes a shadow director; and
“secretary” includes any person occupying the position of secretary by whatever name called.
F7132
For the purposes of this Part (except Article 648A and Schedule 20C):
a
where a branch comprises places of business in more than one part of the United Kingdom the branch shall be treated as being situated in that part of the United Kingdom where its principal place of business is situated; and
b
“branch” means a branch within the meaning of the Council Directive concerning disclosure requirements in respect of branches opened in a Member State by certain types of company governed by the law of another State (the Eleventh Company Law Directive, 89/666/EEC).
F714CHAPTER IIF714DELIVERY OF ACCOUNTS AND REPORTS
F715Credit and financial institutions to which the Bank Branches Directive (89/117/EEC) applies648A
1
This Article applies to any credit or financial institution—
a
which is incorporated or otherwise formed outside the United Kingdom and Gibraltar,
b
whose head office is outside the United Kingdom and Gibraltar, and
c
which has a branch in Northern Ireland.
2
Schedule 20C (delivery of accounts and reports) shall have effect in relation to any institution to which this Article applies.
3
In this Article—
“branch,” in relation to a credit or financial institution, means a place of business which forms a legally dependent part of the institution and which conducts directly all or some of the operations inherent in its business;
“credit institution” means a credit institution as defined in Article 1 of the First Council Directive on the coordination of laws, regulations and administrative provisions relating to the taking up and pursuit of the business of credit institutions (77/780/EEC), that is to say an undertaking whose business is to receive deposits or other repayable funds from the public and to grant credits for its own account;
“financial institution” means a financial institution within the meaning of Article 1 of the Council Directive on the obligations of branches established in a Member State of credit and financial institutions having their head offices outside that Member State regarding the publication of annual accounting documents (the Bank Branches Directive, 89/117/EEC); and
“undertaking” has the same meaning is in Part VIII.
F716Companies to which the Eleventh Company Law Directive applies648AA
1
This Article applies to any limited company which—
a
is incorporated outside the United Kingdom and Gibraltar,
b
has a branch in Northern Ireland, and
c
is not an institution to which Article 648A applies.
2
Schedule 20D (delivery of accounts and reports) shall have effect in relation to any company to which this Article applies.
F717Scope of Articles 649 to 652648B
Articles 649 to 652 shall not apply to any institution to which Article 648A appliesF718 or to any limited company which is incorporated outside the United Kingdom and Gibraltar and has a branch in the United Kingdom.
Preparation of accounts and reports by Part XXIII companies649
1
Every Part XXIII company shall in respect in each financial year of the company prepare the like accounts and directors' report, and cause to be prepared such an auditors' report, as would be required if the company were formed and registered under this Order.
2
The Department may by order—
a
modify the requirements referred to in paragraph (1) for the purpose of their application to Part XXIII companies;
b
exempt a Part XXIII company from those requirements or from such of them as may be specified in the order.
3
An order may contain such incidental and supplementary provisions as the Department thinks fit.
4
An order under this Article shall be subject to negative resolution.
Part XXIII company's financial year and accounting reference periods650
1
F719Sections 390 to 392 of the Companies Act 2006 (financial year and accounting reference periods) apply to a Part XXIII company, subject to the following modifications.
2
For the references to the incorporation of the company substitute references to the company establishing a place of business in Northern Ireland.
3
Omit F720section 392(3) (restriction on frequency with which current accounting reference period may be extended).
Delivery to registrar of accounts and reports of Part XXIII company651
1
A Part XXIII company shall in respect of each financial year of the company deliver to the registrar copies of the accounts and reports prepared in accordance with Article 649.
If any document comprised in those accounts or reports is in a language other than English, the directors shall annex to the copy delivered a translation of it into English, certified in the prescribed manner to be a correct translation.
2
In relation to a Part XXIII company the period allowed for delivering accounts and reports is 13 months after the end of the relevant accounting reference period.
This is subject to the following provisions of this Article.
3
If the relevant accounting reference period is the company's first and is a period of more than 12 months, the period allowed is 13 months from the first anniversary of the company's establishing a place of business in Northern Ireland.
4
If the relevant accounting period is treated as shortened by virtue of a notice given by the company under F721section 392 of the Companies Act 2006 (alteration of accounting reference date), the period allowed is that applicable in accordance with the above provisions or 3 months from the date of the notice under that Article, whichever last expires.
5
If for any special reason the Department thinks fit it may, on an application made before the expiry of the period otherwise allowed, by notice in writing to a Part XXIII company extend that period by such further period as may be specified in the notice.
6
In this Article “the relevant accounting reference period” means the accounting reference period by reference to which the financial year for the accounts in question was determined.
Penalty for non-compliance652
1
If the requirements of Article 651(1) are complied with before the end of the period allowed for delivering accounts and reports, or if the accounts and reports delivered do not comply with the requirements of this Order, the company and every person who immediately before the end of that period was a director of the company is guilty of an offence and liable to a fine and, for continued contravention, to a daily default fine.
2
It is defence for a person charged with such an offence to prove that he took all reasonable steps for securing that the requirements in question would be complied with.
3
It is not a defence in relation to a failure to deliver copies to the registrar to prove that the documents in question were not in fact prepared as required by this Order.
CHAPTER III REGISTRATION OF CHARGES
{prosp insertion of arts. 652A-652M by 1990 NI 10} 652A-652MF723
F724CHAPTER IVF724WINDING UP, ETC.
SR 1993/198
F725Scope of Chapter652N
This Chapter applies to any company to which Article 640A applies.
F726Particulars to be delivered to the registrar: winding up652O
1
Subject to paragraph (8), where a company to which this Chapter applies is being wound up, it shall deliver to the registrar for registration a return in the prescribed form containing the following particulars—
a
the name of the company;
b
whether the company is being wound up by an order of a court and, if so, the name and address of the court and the date of the order;
c
if the company is not being so wound up, as a result of what action the winding up has commenced;
d
whether the winding up has been instigated by:
i
the company's members;
ii
the company's creditors; or
iii
some other person or persons,
and, in the case of (iii) the identity of that person or those persons shall be given; and
e
the date on which the winding up became or will become effective.
2
The period allowed for delivery of a return under paragraph (1) is 14 days from the date on which the winding up begins.
3
Subject to paragraph (8), a person appointed to be the liquidator of a company to which this Chapter applies shall deliver to the registrar for registration a return in the prescribed form containing the following particulars—
a
his name and address,
b
the date of his appointment, and
c
a description of such of his powers, if any, as are derived otherwise than from the general law of the company's constitution.
4
The period allowed for delivery of a return under paragraph (3) is 14 days from the date of the liquidator's appointment.
5
Subject to paragraph (8), the liquidator of a company to which this Chapter applies shall deliver to the registrar for registration a return in the prescribed form upon the occurrence of the following events—
a
the termination of the winding up of the company, and
b
the company ceasing to be registered, in circumstances where ceasing to be registered is an event of legal significance.
The following particulars shall be given:
- i
in the case of (a), the name of the company and the date on which the winding up terminated; and
- ii
in the case of (b), the name of the company and the date on which the company ceased to be registered.
6
The period allowed for delivery of a return under paragraph (5) is 14 days from the date of the event concerned.
7
The obligation to deliver a return under paragraph (1), (3) or (5) shall apply in respect of each branch which the company has in Northern Ireland (though where the company has more than one branch in Northern Ireland a return which gives the branch numbers of two or more such branches is to be regarded as a return in respect of each branch whose number is given).
8
No return is required under paragraph (1), (3) or (5) in respect of a winding up under Part VI of the Insolvency (Northern Ireland) Order 1989.
F727Particulars to be delivered to the registrar: insolvency proceedings etc.652P
1
Where a company to which this Chapter applies becomes subject to any of the following proceedings (other than proceedings for the winding up of the company), that is to say, insolvency proceedings or an arrangement or composition or any analogous proceedings, it shall deliver to the registrar for registration a return in the prescribed form containing the following particulars—
a
the name of the company;
b
whether the proceedings are by order of a court and, if so, the name and address of the court and the date of the order;
c
if the proceedings are not by order of a court, as a result of what action the proceedings have been commenced;
d
whether the proceedings have been instigated by:
i
the company's members;
ii
the company's creditors; or
iii
some other person or persons,
and, in the case of (iii) the identity of that person or those persons shall be given; and
e
the date on which the proceedings became or will become effective.
2
Where a company to which this Chapter applies ceases to be subject to any of the proceedings mentioned in paragraph (1) it shall deliver to the registrar for registration a return in the prescribed form containing the following particulars:
a
the name of the company; and
b
the date on which it ceased to be subject to the proceedings.
3
The period allowed for delivery of a return under sub-paragraph (1) or (2) is 14 days from the date on which the company becomes subject to the proceedings concerned.
4
The obligation to deliver a return under this Article shall apply in respect of each branch which the company has in Northern Ireland (though where the company has more than one branch in Northern Ireland a return which gives the branch number of two or more such branches is to be regarded as a return in respect of each branch whose number is given).
F728Penalty for non-compliance652Q
1
If a company fails to comply with Article 652O(1) or 652P(1) or (2) within the period allowed for compliance, it, and every person who immediately before the end of that period was a director of it, is guilty of an offence and liable to a fine and, for continued contravention, to a daily default fine.
2
If a liquidator fails to comply with Article 652O(3) or (5) within the period allowed for compliance, he is guilty of an offence and liable to a fine and, for continued contravention, to a daily default fine.
3
It is a defence for a person charged with an offence under this Article to prove that he took all reasonable steps for securing compliance with the requirements concerned.
PART XXIVTHE REGISTRAR OF COMPANIES, HIS FUNCTIONS AND OFFICE
Registration office and registrar653 F729
1
For the purposes of the registration of companies under the Companies Orders, the Department shall continue to maintain and administer an office of the Department in Northern Ireland at such place as the Department thinks fit.
2
The Department may for those purposes appoint an officer as registrar of companies and one or more than one officer as assistant registrar of companies.
3
The Department may direct a seal or seals to be prepared for the authentication of documents required for or in connection with the registration of companies.
F7304
Paragraph (5) applies where by virtue of Article 11(1) of the Deregulation and Contracting Out (Northern Ireland) Order 1996 a person is authorised by the registrar to accept delivery of any class of documents which are under any provision of the Companies Orders to be delivered to the registrar.
5
If—
a
the registrar directs that documents of that class shall be delivered to a specified address of the authorised person; and
b
the direction is printed and made available to the public (with or without payment),
any document of that class which is delivered to an address other than the specified address shall be treated for the purposes of those Orders as not having been delivered.
Companies' registered numbers654
1
The registrar shall allocate to every company a number, which shall be known as the company's registered number.
2
Companies' registered numbers shall be in such form, consisting of one or more sequences of figures or letters, as the registrar may from time to time determine.
3
The registrar may upon adopting a new form of registered number make such changes of existing registered numbers as appear to him necessary.
4
A change of a company's registered number has effect from the date on which the company is notified by the registrar of the change; but for a period of three years beginning with the date on which that notification is sent by the registrar F734any requirement imposed by regulations made under section 82 of the Companies Act 2006 as to the use of the company's registered number on F733business letters, order forms and websites is satisfied by the use of either the old number or the new.
5 F731
In this Article “company” includes—
F732za
any Part XXIII company which has complied with paragraph 1 of Schedule 20A other than a company which appears to the registrar not to have a branch in Northern Ireland;
a
any Part XXIII company which has complied with Article 641 (delivery of statutes to registrar, &c.), other than a company which appears to the registrar not to have a place of business in Northern Ireland, and
b
any body to which any provision of this Order applies by virtue of Article 667 (unregistered companies).
Registration of branches of Part XXIII companies654A
1
For each company to which Article 640A applies the registrar shall keep, in such form as he thinks fit, a register of the branches registered by the company under paragraph 1 of Schedule 20A.
2
The registrar shall allocate to every branch registered by him under this Article a number, which shall be known as the branch's registered number.
3
Branches' registered numbers shall be in such form, consisting of one or more sequences of figures or letters, as the registrar may from time to time determine.
4
The registrar may upon adopting a new form of registered number make such changes of existing registered numbers as appear to him necessary.
5
A change of a branch's registered number has effect from the date on which the company is notified by the registrar of the change; but for a period of three years beginning with the date on which that notification is sent by the registrar the requirement of Article 643(3) as to the use of the branch's registered number on business letters and order forms is satisfied by the use of either the old number or the new.
6
Where a Part XXIII company to which Article 640A applies files particulars, in any circumstances permitted by this Order, by:
a
adopting particulars already filed in respect of another branch; or
b
including in one document particulars which are to relate to two or more branches,
the registrar shall ensure that the particulars concerned become part of the registered particulars of each branch concerned.
F735Delivery to the registar of documents in legible form655
1
This Article applies to the delivery to the registrar under any provision of the Companies Orders of documents in legible form.
2
The document must—
a F736
state in a prominent position the registered number of the company to which it relates,F737 and, if the document is delivered under Article 645A, 652O or 652P or Schedule 20A or 20D, the registered number of the branch to which it relates,
b
satisfy any requirements prescribed by regulations for the purposes of this Article, and
c
conform to such requirements as the registrar may specify for the purpose of enabling him to copy the document.
3
If a document is delivered to the registrar which does not comply with the requirements of this Article, he may serve on the person by whom the document was delivered (or, if there are two or more such persons, on any of them) a notice indicating the respect in which the document does not comply.
4
Where the registrar serves such a notice, then, unless a replacement document—
a
is delivered to him within 14 days after the service of the notice, and
b
complies with the requirements of this Article (or ArticleF738 656B) or is not rejected by him for failure to comply with those requirements,
the original document shall be deemed not to have been delivered to him.
But for the purposes of any statutory provision imposing a penalty for failure to deliver, so far as it imposes a penalty for continued contravention, no account shall be taken of the period between the delivery of the original document and the end of the period of 14 days after service of the registrar's notice.
Art. 656 rep. by SR 2003/3
The keeping of company records by the registrar656A
F7401
The information contained in a document delivered to the registrar under the Companies Orders may be recorded and kept by him in any form he thinks fit, provided it is possible to inspect the information and to produce a copy of it in legible form.
This is sufficient compliance with any duty of his to keep, file or register the document.
2
The originals of documents delivered to the registrar in legible form shall be kept by him for ten years, after which they may be destroyed.
3
Where a company has been dissolved, the registrar may, at any time after the expiration of two years from the date of the dissolution, direct that any records in his custody relating to the company may be removed to the Public Record Office of Northern Ireland; and records in respect of which such a direction is given shall be disposed of in accordance with the statutory provisions relating to that Office.
4 F739
In paragraph (3) “company” includes a company provisionally or completely registered under the Joint Stock Companies Act 1844.
Delivery to the registrar using electronic communications656B
1
Electronic communications may be used for the delivery of any document to the registrar under any provision of the Companies Orders (including delivery of a document in the prescribed form), provided that such delivery is in such form and manner as is directed by the registrar.
2
Where the document is required under any provision of the Companies Orders to be signed or sealed, it shall instead be authenticated in such manner as is directed by the registrar.
3
The document must contain in a prominent position—
a F741
the name and registered number of the company to which it relates, or
b F741
if the document is delivered under Part XXIII, the registered number of the branch or place of business of the company to which it relates.
4
If a document is delivered to the registrar which does not comply with the requirements imposed by or under this Article, he may serve on the person by whom the document was delivered (or, if there are two or more such persons, on any of them) a notice indicating the respect in which the document does not comply.
5
Where the registrar serves such a notice, then unless a replacement document—
a
is delivered to him within 14 days after the service of the notice, and
b
complies with the requirements of this Article (or Article 655) or is not rejected by him for failure to comply with those requirements,
the original document shall be deemed not to have been delivered to him.
But for the purposes of any statutory provision imposing a penalty for failure to deliver, so far as it imposes a penalty for continued contravention, no account shall be taken of the period between the delivery of the original document and the end of the period of 14 days after service of the registrar's notice.
6
In this Article references to the delivery of a document include references to the forwarding, lodging, registering, sending or submission of a document and to the giving of a notice.
Fees payable to registrar657 F742
1
The Department may by regulations require the payment to the registrar of such fees as may be specified in the regulations in respect of—
a
the performance by the registrar of such functions under the Companies Orders as may be so specified, including the receipt by him ofF743 any document which under those Orders is required to be delivered to him;
b
the inspection of documentsF743. . . kept by him under those Orders.
2
Regulations made under paragraph (1)(a) requiring the payment of a fee in respect of a matter for which no fee was previously payable or increasing a fee shall be subject to affirmative resolution.
3
Fees paid to the registrar under the Companies Orders shall beF744 paid into the Consolidated Fund.
4
It is hereby declared that the registrar may charge a fee for any services provided by him otherwise than in pursuance of any obligation imposed on him by law.
Inspection, &c. of records kept by the registrar658
F745. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F746Certificate of incorporation659 F747
Any person may require a certificate of the incorporation of a company, signed by the registrar or authenticated by his official seal.
F748Provision and authentication by registrar of documents is non-legible form659A F749
1
Any requirement of the Companies Orders as to the supply by the registrar of a document may, if the registrar thinks fit, be satisfied by the communication by the registrar of the requisite information in any non-legible form prescribed for the purposes of this Article by regulations or approved by him.
2
Where the document is required to be signed by him or sealed with his official seal, it shall instead be authenticated in such manner as may be prescribed by regulations or approved by the registrar.
Public notice by registrar of receipt or issue of certain documents660
F750. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Art. 661 rep. by 1990 NI 10
Enforcement of company's duty to make returnsC10662
1 F751
If a company, having made default in complying with any provision of the Companies Orders which requires it toF752 deliver a document to the registrar, or to give notice to him of any matter, fails to make good the default within 14 days after the service of a notice on the company requiring it to do so, the court may, on an application made to it by any member or creditor of the company or by the registrar, make an order directing the company and any officer of it to make good the default within such time as may be specified in the order.
2 F751
The court's order may provide that all costs of and incidental to the application shall be borne by the company or by any officers of it responsible for the default.
3 F751
Nothing in this Article prejudices the operation of any statutory provision imposing penalties on a company or its officers in respect of any such default as is mentioned in paragraph (1).
Registrar's index of company and corporate names663 F753
1
The registrar shall keep an index of the names of the following bodies—
a
companies as defined by this Order,
F754aa
companies incorporated outside the United Kingdon and Gibraltar which have complied with paragraph 1 of Schedule 20A and which do not appear to the registrar not to have a branch in Northern Ireland,
b
companies incorporated outside Northern Ireland which have complied with Article 641 and which do not appear to the registrar not to have a place of business in Northern Ireland,
c
incorporated and unincorporated bodies to which any provision of this Order applies by virtue of Article 667 (unregistered companies),
d
limited partnerships registered under the [1907 c. 24] Limited Partnerships Act 1907,
F755da
limited liability partnerships incorporated under the Limited Liability Partnerships Act (Northern Ireland) 2002,
e
companies within the meaning of the [1985 c. 6] Companies Act 1985,
f
companies incorporated outside Great Britain which have complied with section 691 of the Companies Act 1985 (which corresponds with Article 641 of this Order) and which do not appear to the registrar not to have a place of business in Great Britain, and
g
societies registered under the [1969 c. 24 (N.I.)] Industrial and Provident Societies Act (Northern Ireland) 1969 or the [1965 c. 12] Industrial and Provident Societies Act 1965.
2
The Department may by order subject to negative resolution vary paragraph (1) by the addition or deletion of any class of body, except any within paragraph (1)(a) or (b) whether incorporated or unincorporated.
Art. 664 rep. by 1990 NI 10
F756Interpretation664A F757
1
In this Part—
“document” includes information recorded in any form; and
“legible”, in the context of documents in legible or non-legible form, means capable of being read with the naked eye.
2
References in this Part to delivering a document include sending, forwarding, producing or (in the case of a notice) giving it.
PART XXVMISCELLANEOUS AND SUPPLEMENTARY PROVISIONS
Arts. 665‐666 rep. by 2003 NI 17
Unregistered companies667
1
The provisions of this Order specified in the first column of Schedule 21 (relating respectively to the matters specified in the second column of the Schedule) apply to all bodies corporate incorporated in and having a principal place of business in Northern Ireland, other than those mentioned in paragraph (2), as if they were companies registered under this Order, but subject to any limitations mentioned in relation to those provisions respectively in the third column and to such adaptations and modifications (if any) as may be specified by regulations made by the Department.
2
The said provisions do not apply by virtue of this Article to any of the following—
a
any body incorporated by or registered under any statutory provision,
b
any body not formed for the purpose of carrying on a business which has for its object the acquisition of gain by the body or its individual members,
c
any body for the time being exempted by direction of the Department.
F758d
any open‐ended investment company within the meaning of the Open‐Ended Investment Companies Regulations (Northern Ireland) 2004.
3
Where against any provision of this Order specified in the first column of Schedule 21 there appears in the third column the entry “Subject to Article 667(3)”, it means that the provision is to apply by virtue of this Article so far only as may be specified by regulations made by the Department and to such bodies corporate as may be so specified.
4
The provisions specified in the first column of the Schedule also apply in like manner in relation to any unincorporated body of persons entitled by virtue of letters patent to any of the privileges conferred by the [1837 c. 73] Chartered Companies Act 1837 and not registered under any other statutory provision, but subject to the like exceptions as are provided for in the case of bodies corporate by paragraph (2)(b) and (c).
5
This Article does not repeal or revoke in whole or in part any statutory provision, royal charter or other instrument constituting or regulating any body in relation to which the said provisions are applied by virtue of this Article or restrict the power of Her Majesty to grant a charter in lieu of or supplementary to any such charter as aforesaid; but, in relation to any such body, the operation of any such statutory provision, charter or instrument is suspended in so far as it is inconsistent with any of the said provisions as they apply for the time being to that body.
Power of company to provide for employees on cessation or transfer of business668
1
The powers of a company include (if they would not otherwise do so apart from this Article) power to make the following provision for the benefit of persons employed or formerly employed by the company or any of its subsidiaries, that is to say, provision in connection with the cessation or the transfer to any person of the whole or part of the undertaking of the company or that subsidiary.
2
The power conferred by paragraph (1) is exercisable notwithstanding that its exercise is not in the best interests of the company.
3
The power which a company may exercise by virtue only of paragraph (1) shall only be exercised by the company if sanctioned—
a
in a case not falling within sub-paragraph (b) or (c), by an ordinary resolution of the company, or
b
if so authorised by its memorandum or articles, by a resolution of the directors, or
c
if its memorandum or articles require the exercise of the power to be sanctioned by a resolution of the company of some other description for which more than a simple majority of the members voting is necessary, with the sanction of a resolution of that description;
and in any case after compliance with any other requirements of its memorandum or articles applicable to its exercise.
4
Any payment which may be made by a company under this Article may, if made before the commencement of any winding up of the company, be made out of profits of the company which are available for dividend.
Certain companies to publish periodical statement669
F759. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Production and inspection of books where offence suspected670
1
This Article applies if, on an application made in accordance with rules of court to the High Court by the Director of Public Prosecutions for Northern Ireland, the Department or a chief superintendent of the Royal Ulster Constabulary there is shown to be reasonable cause to believe that any person has, while an officer of a company, committed an offence in connection with the management of the company's affairs and that evidence of the commission of the offence is to be found in any books or papers of or under the control of the company.
2
An order may be made—
a
authorising any person named in it to inspect the books or papers in question, or any of them, for the purpose of investigating and obtaining evidence of the offence, or
b F760
requiring the secretary of the company or such other officer of it as may be named in the order to produce the books or papers (or any of them) to a person named in the order at a place so named.
3
Paragraph (2) applies also in relation to any books or papers of a person carrying on the business of banking so far as they relate to the company's affairs, as it applies to any books or papers of or under the control of the company, except that no such order as is referred to in paragraph (2)(b) shall be made by virtue of this paragraph.
4
The decision of the High Court on an application under this Article is not appealable.
Form of company registers, etc.671 F761
1
Any register, index, minute book or accounting records required by the Companies Orders to be kept by a company may be kept either by making entries in bound books or by recording the matters in question in any other manner.
2
Where any such register, index, minute book or accounting record is not kept by making entries in a bound book, but by some other means, adequate precautions shall be taken for guarding against falsification and facilitating its discovery.
3
If default is made in complying with paragraph (2), the company and every officer of it who is in default is liable to a fine and, for continued contravention, to a daily default fine.
Use of computers for company records672
1
The power conferred on a company by Article 671 to keep a register or other record by recording the matters in question otherwise than by making entries in bound books includes power to keep the register or other record by recording those matters otherwise than in a legible form, so long as the recording is capable of being reproduced in a legible form.
2 F762
Any provision of an instrument made by a company before 1st January 1982 which requires a register of holders of the company's debentures to be kept in a legible form is to be read as requiring the register to be kept in a legible or non-legible form.
3
If any such register or other record of a company as is mentioned in Article 671(1), or a register of holders of a company's debentures, is kept by the company by recording the matters in question otherwise than in a legible form, any duty imposed on the company by this Order to allow inspection of, or to furnish a copy of, the register or other record or any part of it is to be treated as a duty to allow inspection of, or to furnish, a reproduction of the recording or of the relevant part of it in a legible form.
4
The Department may by regulations make such provision in addition to paragraph (3) as it considers appropriate in connection with such registers or other records as are mentioned in that paragraph and are kept as there mentioned; and the regulations may make modifications of provisions of this Order relating to such registers or other records.
F763Obligations of company as to inspection of registers, &c.672A F764
1
The Department may make provision by regulations as to the obligations of a company which is required by any provision of this Order—
a
to make available for inspection any register, index or document, or
b
to provide copies of any such register, index or document, or part of it;
and a company which fails to comply with the regulations shall be deemed to have refused inspection or, as the case may be, to have failed to provide a copy.
2
The regulations may make provision as to the time, duration and manner of inspection, including the circumstances in which and extent to which the copying of information is permitted in the course of inspection.
3
The regulations may define what may be required of the company as regards the nature, extent and manner of extracting or presenting any information for the purposes of inspection or the provision of copies.
4
Where there is power to charge a fee, the regulations may make provision as to the amount of the fee and the basis of its calculation.
5
Nothing in any provision of this Order or in the regulations shall be construed as preventing a company from affording more extensive facilities than are required by the regulations or, where a fee may be charged, from charging a lesser fee than that prescribed or no fee at all.
Service of documents673
A document may be served on a company by leaving it at, or sending it by post to, the company's registered office.
Costs and expenses in actions by certain limited companies674 F765
Where a limited company is plaintiff in an action or other legal proceeding, the court having jurisdiction in the matter may, if it appears by credible testimony that there is reason to believe that the company will be unable to pay the defendant's costs if successful in his defence, require sufficient security to be given for those costs, and may stay all proceedings until the security is given.
Power of court to grant relief in certain cases675
F766. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Enforcement of High Court orders676 F767
Orders made by the High Court under this Order may be enforced in the same manner as orders made in an action pending in that court.
Annual report by the Department677
F768. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Punishment of offences678 F769
1
Schedule 23 has effect with respect to the way in which offences under this Order are punishable on conviction.
2
In relation to an offence under a provision of this Order specified in the first column of the Schedule (the general nature of the offence being described in the second column), the third column shows whether the offence is punishable on conviction on indictment, or on summary conviction, or either in the one way or the other.
3
The fourth column of the Schedule shows, in relation to an offence, the maximum punishment by way of fine or imprisonment under this Order which may be imposed on a person convicted of the offence in the way specified in relation to it in the third column (that is to say, on indictment or summarily), a reference to a period of years or months being to a term of imprisonment of that duration.
C114
The fifth column shows (in relation to an offence for which there is an entry in that column) that a person convicted of the offence after continued contravention is liable to a daily default fine; that is to say, he is liable on a second or subsequent summary conviction of the offence to the fine specified in that column for each day on which the contravention is continued (instead of the penalty specified for the offence in the fourth column of the Schedule).
C125
For the purpose of any provision of the Companies Orders which provides that an officer of a companyF770 or other body who is in default is liable to a fine or penalty, the expression “officer who is in default” means any officer of the companyF770 or other body who knowingly and wilfully authorises or permits the default, refusal or contravention mentioned in that provision.
Summary proceedingsC13679 F771
1
Summary proceedings for any offence under the Companies Orders may (without prejudice to any jurisdiction exercisable apart from this paragraph) be taken against a body corporate at any place at which the body has a place of business, and against any other person at any place at which he is for the time being.
2
Notwithstanding anything in Article 19(1)(a) of the [1981 NI 26] Magistrates' Courts (Northern Ireland) Order 1981, a magistrates' court shall have jurisdiction to hear and determine a complaint charging the commission of a summary offence under the Companies Orders provided that the complaint is made within 3 years from the time when the offence was committed and within 12 months from the date on which evidence, sufficient in the opinion of the Director of Public Prosecutions for Northern Ireland or the Department (as the case may be) to justify the proceedings, comes to his or the Department's knowledge.
3
For the purposes of this Article, a certificate of the Director of Public Prosecutions for Northern Ireland or the Department (as the case may be) as to the date on which such evidence as is referred to in paragraph (2) came to his or its knowledge is conclusive evidence.
Prosecution by public authorities680
F772. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Offences by bodies corporate680A
F773. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Criminal proceedings against unincorporated bodies680B
F774. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Regulations681 F775
1
Subject to paragraph (4), the Department may make regulations for prescribing anything which is authorised or required by the Companies Orders to be prescribed.
2
Regulations under those Orders may contain such consequential, incidental or supplementary provisions as the Department thinks appropriate.
3
Save as otherwise expressly provided by those Orders, all regulations under them shall be subject to negative resolution.
Para. (4) rep. by 1989 NI 19
SCHEDULES
SCHEDULE 1PARTICULARS OF DIRECTORS, ETC. TO BE CONTAINED IN STATEMENT UNDER AERTICLE 21
Directors
1
Subject to paragraph 2, the statement under Article 21(2) shall contain the following particulars with respect to each person named as director—
a
2
1
It is not necessary for the statement to contain particulars of a directorship—
a
which has not been held by a director at any time during the 5 years preceding the date on which the statement is delivered to the registrar,
b
which is held by a director in a company which—
i
is dormant or grouped with the company delivering the statement, and
ii
if he also held that directorship for any period during those 5 years, was for the whole of that period either dormant or so grouped,
c
which was held by a director for any period during those 5 years in a company which for the whole of that period was either dormant or grouped with the company delivering the statement.
2
For these purposes, “company” includes any body corporate incorporated in Northern Ireland; and—
a
F777section 481 of the Companies Act 2006 applies as regards whether and when a company is or has been “dormant”, and
b
a company is treated as being or having been at any time grouped with another company if at that time it is or was a company of which that other is or was a wholly-owned subsidiary, or if it is or was a wholly-owned subsidiary of the other or of another company of which that other is or was a wholly-owned subsidiary.
Secretaries
3
1
The statement shall contain the following particulars with respect to the person named as secretary or, where there are to be joint secretaries, with respect to each person named as one of them—
a
b
in the case of a body corporate or a Scottish firm, its corporate or firm name and registered or principal office.
2
However, if all the partners in the firm are joint secretaries, the name and principal office of the firm may be stated instead of the particulars otherwise required by this paragraph.
Interpretation
4
In paragraphs 1(a) and 3(1)(a)—
a
“name” means a person's Christian name (or other forename) and surname, except that in the case of a peer, or an individual usually known by a title, the title may be stated instead of his Christian name (or other forename) and surname or in addition to either or both of them; and
b
the reference to a former name does not include—
i
in the case of a peer, or an individual normally known by a British title, the name by which he was known previous to the adoption of or succession to the title, or
ii
in the case of any person, a former name which was changed or disused before he attained the age of 18 years or which has been changed or disused for 20 years or more, or
iii
in the case of a married woman, the name by which she was known previous to the marriage.
SCHEDULE 2INTERPRETATION OF REFERNECES TO “BENEFICIAL INTEREST”
F779PART IF779REFERENCES IN ARTICLES 33, 155, 156 AND 158
Employer's charges and other rights of recovery
3
1
Where shares in a company are held on trust, there are to be disregarded—
a
if the trust is for the purposes of a pension scheme, any such rights as are mentioned in sub-paragraph (2), and
b
if the trust is for the purposes of an employees' share scheme, any such rights as are mentioned in sub-paragraph (2)(a),
2
The rights referred to in sub-paragraph (1) are—
a
any charge or lien on, or set-off against any benefit or other right or interest under the scheme for the purpose of enabling the employer or former employer of a member of the scheme to obtain the discharge of a monetary obligation due to him from the member, and
b
any right to receive from the trustee of the scheme, or as trustee of the scheme to retain, an amount that can be recovered or retained underF785 section 57 of the Pension Schemes (Northern Ireland) Act 1993 (deduction of contributions equivalent premium from refund of scheme contributions) or otherwise as reimbursement or partial reimbursement for anyF786 contributions equivalent premium paid in connection with the scheme underF785 Chapter III of Part III of that Act.
Sub-para. (3) rep. by 1990 NI 5
Trustee's right to expenses, remuneration, indemnity, etc.
4
1
Where a company is a trusteeF787. . . , there are to be disregarded any rights which the company has in its capacity as trustee including, in particular, any right to recover its expenses or be remunerated out of the trust property and any right to be indemnified out of that property for any liability incurred by reason of any act or omission of the company in the performance of its duties as trustee.
2
F7873
As respects Articles 155, 156 and 158, sub-paragraph (1) applies where a company is a personal representative as it applies where a company is a trustee.
Supplementary
5
1
This paragraph applies for the interpretation ofF789 this Part of this Schedule.
2
“Pension scheme” means any scheme for the provision of benefits consisting of or including relevant benefits for or in respect of employees or former employees; and “relevant benefits” means any pension, lump sum, gratuity or other like benefit given or to be given on retirement or on death or in anticipation of retirement or, in connection with past service, after retirement or death.
3
In sub-paragraph (2) and in paragraph 3(2)(a), “employer” and “employee” are to be read as if a director of a company were employed by it.
F792F792PART IIREFERENCES IN SCHEDULE 5
Sch. 2 Pt. II (paras. 6-9) repealed (6.4.2008) by Companies Act 2006 (Consequential Amendments etc) Order 2008 (S.I. 2008/948), arts. 2(2), 3(1)(b)(2), Sch. 1 para. 146 {Sch. 2} (with arts. 6, 11, 12)
Employer's charges and other rights of recovery
7
1
Where shares in an undertaking are held on trust, there shall be disregarded—
a
if the trust is for the purposes of a pension scheme, any such rights as are mentioned in sub‐paragraph (2);
b
if the trust is for the purposes of an employees' share scheme, any such rights as are mentioned in head (a) of that sub‐paragraph,
being rights of the undertaking or any of its subsidiary undertakings.
2
The rights referred to are—
a
any charge or lien on, or set‐off against, any benefit or other right or interest under the scheme for the purpose of enabling the employer or former employer of a member of the scheme to obtain the discharge of a monetary obligation due to him from the member, and
b
any right to receive from the trustee of the scheme, or as trustee of the scheme to retain, an amount that can be recovered or retained underF790 section 57 of the Pension Schemes (Northern Ireland) Act 1993 (deduction of contributions equivalent premium from refund of scheme contributions) or otherwise as reimbursement or partial reimbursement for anyF791 contributions equivalent premium paid in connection with the scheme underF790 Chapter III of Part III of that Act.
Trustee's right to expenses, remuneration, indemnity, &c.
8
Where an undertaking is a trustee, there shall be disregarded any rights which the undertaking has in its capacity as trustee including, in particular, any right to recover its expenses or be remunerated out of the trust property and any right to be indemnified out of that property for any liability incurred by reason of any act or omission of the undertaking in the performance of its duties as trustee.
Supplementary
9
1
The following applies for the interpretation of this Part of this Schedule.
2
“Undertaking”, and “shares” in relation to an undertaking, have the same meaning as in Part VIII of this Order.
3
This Part of this Schedule applies in relation to debentures as it applies in relation to shares.
4
“Pension scheme” means any scheme for the provision of benefits consisting of or including relevant benefits for or in respect of employees or former employees; and “relevant benefits” means any pension, lump sum, gratuity or other like benefit given or to be given on retirement or on death or in anticipation of retirement or, in connection with past service, after retirement or death.
5
In sub‐paragraph (4) and in paragraph 7(2) “employee” and “employer” shall be read as if a director of an undertaking were employed by it.
F793SCHEDULE 3MANDATORY CONTENTS OF PROSPECTUS
prosp. in part rep. by 1986 c. 60
PART IMATTERS TO BE STATED
The company's proprietorship, management and its capital requirement
1
1
The prospectus must state—
a
the number of founders or management or deferred shares (if any) and the nature and extent of the interest of the holders in the property and profits of the company;
b
the number of shares (if any) fixed by the company's articles as the qualification of a director, and any provision in its articles as to the remuneration of directors; and
c
the names, descriptions and addresses of the directors or proposed directors.
2
As this paragraph applies for the purposes of Article 82(3), sub-paragraph (1)(b) is to be read with the substitution for the reference to the company's articles of a reference to its constitution.
3
Sub-paragraphs (1)(b) and (1)(c) do not apply in the case of a prospectus issued more than 2 years after the date at which the company is entitled to commence business.
2
Where shares are offered to the public for subscription, the prospectus must give particulars as to—
a
the minimum amount which, in the opinion of the directors, must be raised by the issue of those shares in order to provide the sums (or, if any part of them is to be defrayed in any other manner, the balance of the sums) required to be provided in respect of each of the following—
i
the purchase price of any property purchased or to be purchased which is to be defrayed in whole or in part out of the proceeds of the issue,
ii
any preliminary expenses payable by the company, and any commission so payable to any person in consideration of his agreeing to subscribe for, or of his procuring or agreeing to procure subscriptions for, any shares in the company,
iii
the repayment of any money borrowed by the company in respect of any of the foregoing matters,
iv
working capital, and
b
the amounts to be provided in respect of the matters mentioned in sub-paragraph (a) otherwise than out of the proceeds of the issue and the sources of which those amounts are to be provided.
Details relating to the offer
3
1
The prospectus must state—
a
the time of the opening of the subscription lists; and
b
the amount payable on application and allotment on each share (including the amount, if any, payable by way of premium).
2
In the case of a second or subsequent offer of shares, there must also be stated the amount offered for subscription on each previous allotment made within the 2 preceding years, the amount actually allotted and the amount (if any) paid on the shares so allotted, including the amount (if any) paid by way of premium.
4
1
There must be stated the number, description and amount of any shares in or debentures of the company for which any person has, or is entitled to be given, an option to subscribe.
2
The following particulars of the option must be given—
a
the period during which it is exercisable;
b
the price to be paid for shares or debentures subscribed for under it;
c
the consideration (if any) given or to be given for it or the right to it;
d
the names and addresses of the persons to whom it or the right to it was given or, if given to existing shareholders or debenture holders as such, the relevant shares or debentures.
3
References in this paragraph to subscribing for shares or debentures include acquiring them from a person to whom they have been allotted or agreed to be allotted with a view to his offering them for sale.
5
The prospectus must state the number and amount of shares and debentures which within the 2 preceding years have been issued, or agreed to be issued, as fully or partly paid up otherwise than in cash; and—
a
in the latter case the extent to which they are so paid up; and
b
in either case the consideration for which those shares or debentures have been issued or are proposed or intended to be issued.
Property acquired or to be acquired by the company
6
1
For the purposes of paragraphs 7 and 8, “relevant property” is property purchased or acquired by the company, or proposed so to be purchased or acquired,
a
which is to be paid for wholly or partly out of the proceeds of the issue offered for subscription by the prospectus; or
b
the purchase or acquisition of which has not been completed at the date of the issue of the prospectus.
2
But those two paragraphs do not apply to property—
a
the contract for whose purchase or acquisition was entered into in the ordinary course of the company's business, the contract not being made in contemplation of the issue nor the issue in consequence of the contract; or
b
as respects which the amount of the purchase money is not material.
7
As respects any relevant property, the prospectus must state—
a
the names and addresses of the vendors;
b
the amount payable in cash, shares or debentures to the vendor and, where there is more than one separate vendor, or the company is a sub-purchaser, the amount so payable to each vendor;
c
short particulars of any transaction relating to the property completed within the 2 preceding years in which any vendor of the property to the company or any person who is, or was at the time of the transaction, a promoter or a director or proposed director of the company had any interest direct or indirect.
8
There must be stated the amount (if any) paid or payable as purchase money in cash, shares or debentures for any relevant property, specifying the amount (if any) payable for goodwill.
9
1
This paragraph applies for the interpretation of paragraphs 6, 7 and 8.
2
Every person is deemed a vendor who has entered into any contract (absolute or conditional) for the sale or purchase, or for any option of purchase, of any property to be acquired by the company, in any case where—
a
the purchase money is not fully paid at the date of the issue of the prospectus;
b
the purchase money is to be paid or satisfied wholly or in part out of the proceeds of the issue offered for subscription by the prospectus;
c
the contract depends for its validity or fulfilment on the result of that issue.
3
Where any property to be acquired by the company is to be taken on lease, paragraphs 6, 7 and 8 apply as if “vendor” included the lessor, “purchase money” included the consideration for the lease, and “sub-purchaser” included a sub-lessee.
4
For the purposes of paragraph 7, where the vendors or any of them are a firm, the members of the firm are not to be treated as separate vendors.
Commissions, preliminary expenses, etc.
10
1
The prospectus must state—
a
the amount (if any) paid within the 2 preceding years, or payable, as commission (but not including commission to sub-underwriters) for subscribing or agreeing to subscribe, or procuring or agreeing to procure subscriptions, for any shares in or debentures of the company, or the rate of any such commission;
b
the amount or estimated amount of any preliminary expenses and the persons by whom any of those expenses have been paid or are payable, and the amount or estimated amount of the expenses of the issue and the persons by whom any of those expenses have been paid or are payable;
c
any amount or benefit paid or given within the 2 preceding years or intended to be paid or given to any promoter, and the consideration for the payment or the giving of the benefit.
2
Sub-paragraph (1)(b), so far as it relates to preliminary expenses, does not apply in the case of a prospectus issued more than 2 years after the date at which the company is entitled to commence business.
Contracts
11
1
The prospectus must give the dates of, parties to and general nature of every material contract.
2
This does not apply to a contract entered into in the ordinary course of the business carried on or intended to be carried on by the company, or a contract entered into more than 2 years before the date of issue of the prospectus.
Auditors
12
The prospectus must state the names and addresses of the company's auditors (if any).
Interests of directors
13
1
The prospectus must give full particulars of—
a
the nature and extent of the interest (if any) of every director in the promotion of, or in the property proposed to be acquired by, the company; or
b
where the interest of such a director consists in being a partner in a firm, the nature and extent of the interest of the firm.
2
With the particulars under sub-paragraph (1)(b) must be provided a statement of all sums paid or agreed to be paid to the director or the firm in cash or shares or otherwise by any person either to induce him to become, or to qualify him as, a director, or otherwise for services rendered by him or the firm in connection with the promotion or formation of the company.
3
This paragraph does not apply in the case of a prospectus issued more than 2 years after the date at which the company is entitled to commence business.
Other matters
14
If the prospectus invites the public to subscribe for shares in the company and the company's share capital is divided into different classes of shares, the prospectus must state the right of voting at meetings of the company conferred by, and the rights in respect of capital and dividends attached to, the several classes of shares respectively.
15
In the case of a company which has been carrying on business, or of a business which has been carried on for less than 3 years, the prospectus must state the length of time during which the business of the company (or the business to be acquired, as the case may be) has been carried on.
PART IIAUDITORS' AND ACCOUNTANTS' REPORTS TO BE SET OUT IN PROSPECTUS
Auditors' report
16
1
The prospectus shall set out a report by the company's auditors with respect to—
a
profits and losses and assets and liabilities, in accordance with sub-paragraphs (2) and (3), as the case requires, and
b
the rates of the dividends (if any) paid by the company in respect of each class of shares in respect of each of the 5 financial years immediately preceding the issue of the prospectus, giving particulars of each such class of shares on which such dividends have been paid and particulars of the cases in which no dividends have been paid in respect of any class of shares in respect of any of those years.
If no accounts have been made up in respect of any part of the 5 years ending on a date 3 months before the issue of the prospectus, the report shall contain a statement of that fact.
2
If the company has noF794 subsidiary undertakings, the report shall—
a
deal with profits and losses of the company in respect of each of the 5 financial years immediately preceding the issue of the prospectus; and
b
deal with the assets and liabilities of the company at the last date to which the company's accounts were made up.
F7943
If the company has subsidiary undertakings, the report shall—
a
deal separately with the company's profits and losses as provided by sub‐paragraph (2), and in addition deal either—
i
as a whole with the combined profits or losses of its subsidiary undertakings, so far as they concern members of the company, or
ii
individually with the profits or losses of each of its subsidiary undertakings, so far as they concern members of the company,
or, instead of dealing separately with the company's profits or losses, deal as a whole with the profits or losses of the company and (so far as they concern members of the company) with the combined profits and losses of its subsidiary undertakings; and
b
deal separately with the company's assets and liabilities as provided by sub‐paragraph (2), and in addition deal either—
i
as a whole with the combined assets and liabilities of its subsidiary undertakings, with or without the company's assets and liabilities, or
ii
individually with the assets and liabilities of each of its subsidiary undertakings,
indicating, as respects the assets and liabilities of its subsidiary undertakings, the allowance to be made for persons other than members of the company.
Accountants' reports
17
If the proceeds of the issue of the shares or debentures are to be applied directly or indirectly in the purchase of any business, or any part of the proceeds of the issue is to be so applied, there shall be set out in the prospectus a report made by accountants upon—
a
the profits or losses of the business in respect of each of the 5 financial years immediately preceding the issue of the prospectus, and
b
the assets and liabilities of the business at the last date to which the accounts of the business were made up.
18
1
The following provisions apply if—
a
the proceeds of the issue are to be applied directly or indirectly in any manner resulting in the acquisition by the company of shares in any other undertaking, or any part of the proceeds is to be so applied, and
b
by reason of that acquisition or anything to be done in consequence of or in connection with it, that undertaking will become a subsidiary undertaking of the company.
2
There shall be set out in the prospectus a report made by accountants upon—
a
the profits or losses of the other undertaking in respect of each of the 5 financial years immediately preceding the issue of the prospectus, and
b
the assets and liabilities of the other undertaking at the last date to which its accounts were made up.
3
The report shall—
a
indicate how the profits or losses of the other undertaking would in respect of the shares to be acquired have concerned members of the company and what allowance would have fallen to be made, in relation to assets and liabilities so dealt with, for holders of other shares, if the company had at all material times held the shares to be acquired, and
b
where the other undertaking is a parent undertaking, deal with the profits or losses and the assets and liabilities of the undertaking and its subsidiary undertakings in the manner provided by paragraph 16(3) in relation to the company and its subsidiary undertakings.
4
In this paragraph “undertaking” and “shares”, in relation to an undertaking, have the same meaning as in Part VIII of this Order.
Provisions interpreting preceding paragraphs, and modifying them in certain cases
19
If in the case of a company which has been carrying on business, or of a business which has been carried on for less than 5 years, the accounts of the company or business have only been made up in respect of 4 years, 3 years, 2 years or one year, the preceding paragraphs of this Part have effect as if references to 4 years, 3 years, 2 years or one year (as the case may be) were substituted for references to 5 years.
20
“Financial year” in this Part means the year in respect of which the accounts of the company or of the business (as the case may be) are made up; and where by reason of any alteration of the date on which the financial year of the company or business terminates the accounts have been made up for a period greater or less than one year, that greater or less period is for the purposes of this Part deemed to be a financial year.
21
Any report required by this Part shall either indicate by way of note any adjustments as respects the figures of any profits or losses or assets and liabilities dealt with by the report which appear to the persons making the report necessary, or shall make those adjustments and indicate that adjustments have been made.
22
1
A report required by paragraph 17 or 18 shall be made by accountants qualified under this Order for appointment as auditors of a company.
F7952
Such a report shall not be made by an accountant who is an officer or servant, or a partner of or in the employment of an officer or servant, of—
a
the company or any of its subsidiary undertakings,
b
a parent undertaking of the company or any subsidiary undertaking of such an undertaking.
In this paragraph, “officer” includes a proposed director, but not an auditor.
3
The accountants making any report required for the purposes of paragraph 17 or 18 shall be named in the prospectus.
SCHEDULE 4
PART IGENERAL RULES AND FORMATS
SECTION AGENERAL RULES
1
1
Subject to the following provisions of this Schedule—
a
every balance sheet of a company shall show the items listed in either of the balance sheet formats set out in section B; and
b
every profit and loss account of a company shall show the items listed in any one of the profit and loss account formats so set out,
in either case in the order and under the headings and sub-headings given in the format adopted.
2
Sub-paragraph (1) is not to be read as requiring the heading or sub-heading for any item to be distinguished by any letter or number assigned to that item in the format adopted.
2
1
Where in accordance with paragraph 1 a company's balance sheet or profit and loss account for any financial year has been prepared by reference to one of the formats set out in section B, the directors of the company shall adopt the same format in preparing the accounts for subsequent financial years of the company unless in their opinion there are special reasons for a change.
2
Particulars of any change in the format adopted in preparing a company's balance sheet or profit and loss account in accordance with paragraph 1 shall be disclosed, and the reasons for the change shall be explained, in a note to the accounts in which the new format is first adopted.
3
1
Any item required in accordance with paragraph 1 to be shown in a company's balance sheet or profit and loss account may be shown in greater detail than required by the format adopted.
2
A company's balance sheet or profit and loss account may include an item representing or covering the amount of any asset or liability, income or expenditure not otherwise covered by any of the items listed in the format adopted, but the following shall not be treated as assets in any company's balance sheet—
a
preliminary expenses;
b
expenses of and commission on any issue of shares or debentures; and
c
costs of research.
3
In preparing a company's balance sheet or profit and loss account the directors of the company shall adapt the arrangement and headings and sub-headings otherwise required by paragraph 1 in respect of items to which an Arabic number is assigned in the format adopted, in any case where the special nature of the company's business requires such adaptation.
4
Items to which Arabic numbers are assigned in any of the formats set out in section B may be combined in a company's accounts for any financial year if either—
a
their individual amounts are not material to assessing the state of affairs or profit or loss of the company for that year; or
b
the combination facilitates that assessment,
but in a case within head (b) the individual amounts of any items so combined shall be disclosed in a note to the accounts.
5
Subject to paragraph 4(3), a heading or sub-heading corresponding to an item listed in the format adopted in preparing a company's balance sheet or profit and loss account shall not be included if there is no amount to be shown for that item in respect of the financial year to which the balance sheet or profit and loss account relates.
6
Every profit and loss account of a company shall show the amount of the company's profit or loss on ordinary activities before taxation.
Sub‐para. (7) rep. by SR 2004/496
4
1
In respect of every item shown in a company's balance sheet or profit and loss account the corresponding amount for the financial year immediately preceding that to which the balance sheet or profit and loss account relates shall also be shown.
2
Where that corresponding amount is not comparable with the amount to be shown for the item in question in respect of the financial year to which the balance sheet or profit and loss account relates, the former amount F796may be adjusted and F797particulars of the non-comparability and of any adjustment shall be disclosed in a note to the accounts.
3
Paragraph 3(5) does not apply in any case where an amount can be shown for the item in question in respect of the financial year immediately preceding that to which the balance sheet or profit and loss account relates, and that amount shall be shown under the heading or sub-heading required by paragraph 1 for that item.
5
Amounts in respect of items representing assets or income may not be set off against amounts in respect of items representing liabilities or expenditure (as the case may be), or vice versa.
5A
The directors of a company must, in determining how amounts are presented within items in the profit and loss account and balance sheet, have regard to the substance of the reported transaction or arrangement, in accordance with generally accepted accounting principles or practice.
SECTION BTHE REQUIRED FORMATS FOR ACCOUNTS
Preliminary
6
References in this Part to the items listed in any of the formats set out below are to those items read together with any of the notes following the formats which apply to any of those items, and the requirement imposed by paragraph 1 to show the items listed in any such format in the order adopted in the format is subject to any provision in those notes for alternative positions for any particular items.
7
A number in brackets following any item in any of the formats set out below is a reference to the note of that number in the notes following the formats.
8
In the notes following the formats—
a
the heading of each note gives the required heading or sub-heading for the item to which it applies and a reference to any letters and numbers assigned to that item in the formats set out below (taking a reference in the case of Format 2 of the balance sheet formats to the item listed under “Assets” or under “Liabilities” as the case may require); and
b
references to a numbered format are references to the balance sheet format or (as the case may require) to the profit and loss account format of that number set out below.
Balance Sheet Formats
Format 1F798
A
Called-up share capital not paid (1)
B
Fixed assets
I
Intangible assets
1
Development costs
2
Concessions, patents, licences, trade marks and similar rights and assets (2)
3
Goodwill (3)
4
Payments on account
II
Tangible assets
1
Land and buildings
2
Plant and machinery
3
Fixtures, fittings, tools and equipment
4
Payments on account and assets in course of construction
III
Investments
1
Shares inF799 group undertakings
2
Loans toF799 group undertakings
3
F799Participating interests
4
Loans toF799 undertakings in which the company has a participating interest
5
Other investments other than loans
6
Other loans
7
Own shares (4)
C
Current assets
I
Stocks
1
Raw materials and consumables
2
Work in progress
3
Finished goods and goods for resale
4
Payments on account
II
Debtors (5)
1
Trade debtors
2
Amounts owed byF800 group undertakings
3
Amounts owed byF800 undertakings in which the company has a participating interest
4
Other debtors
5
Called-up share capital not paid (1)
6
Prepayments and accrued income (6)
III
Investments
1
Shares inF800 group undertakings
2
Own shares (4)
3
Other investments
IV
Cash at bank and in hand
D
Prepayments and accrued income (6)
E
Creditors: amounts falling due within one year
1
Debenture loans (7)
2
Bank loans and overdrafts
3
Payments received on account (8)
4
Trade creditors
5
Bills of exchange payable
6
Amounts owed toF801 group undertakings
7
Amounts owed toF801 undertakings in which the company has a participating interest
8
Other creditors including taxation and social security (9)
9
Accruals and deferred income (10)
F
Net current assets (liabilities) (11)
G
Total assets less current liabilities
H
Creditors: amounts falling due after more than one year
1
Debenture loans (7)
2
Bank loans and overdrafts
3
Payments received on account (8)
4
Trade creditors
5
Bills of exchange payable
6
Amounts owed toF802 group undertakings
7
Amounts owed toF802 undertakings in which the company has a participating interest
8
Other creditors including taxation and social security (9)
9
Accruals and deferred income (10)
I
F803Provisions for liabilities
1
Pensions and similar obligations
2
Taxation, including deferred taxation
3
Other provisions
J
Accruals and deferred income (10)
K
Capital and reserves
I
Called-up share capital (12)
II F804
Share premium account
III
Revaluation reserve
IV
Other reserves
1
Capital redemption reserve
2
Reserve for own shares
3
Reserved provided for by the articles of association
4
Other reserves
V
Profit and loss account
Balance Sheet Formats
Format 2F805
ASSETS
A
Called-up share capital not paid (1)
B
Fixed assets
I
Intangible assets
1
Development costs
2
Concessions, patents, licences, trade marks and similar rights and assets (2)
3
Goodwill (3)
4
Payments on account
II
Tangible assets
1
Land and buildings
2
Plant and machinery
3
Fixtures, fittings, tools and equipment
4
Payments on account and assets in course of construction
III
Investments
1
Shares inF806 group undertakings
2
Loans toF806 group undertakings
3
F806Participating interests
4
Loans toF806 undertakings in which the company has a participating interest
5
Other investments other than loans
6
Other loans
7
Own shares (4)
C
Current assets
I
Stocks
1
Raw materials and consumables
2
Work in progress
3
Finished goods and goods for resale
4
Payments on account
II
Debtors (5)
1
Trade debtors
2
Amounts owed byF807 group undertakings
3
Amounts owed byF807 undertakings in which the company has a participating interest
4
Other debtors
5
Called-up share capital not paid (1)
6
Prepayments and accrued income (6)
III
Investments
1
Shares inF807 group undertakings
2
Own shares (4)
3
Other investments
IV
Cash at bank and in hand
D
Prepayments and accrued income (6)
LIABILITIES
A
Capital and reserves
I
Called-up share capital (12)
II
Share premium account
F808III
Revaluation reserve
IV
Other reserves
1
Capital redemption reserve
2
Reserve for own shares
3
Reserves provided for by the articles of association
4
Other reserves
V
Profit and loss account
B
F809Provisions for liabilities
1
Pensions and similar obligations
2
Taxation including deferred taxation
3
Other provisions
C
Creditors (13)
1
Debenture loans (7)
2
Bank loans and overdrafts
3
Payments received on account (8)
4
Trade creditors
5
Bills of exchange payable
6
Amounts owed toF810 group undertakings
7
Amounts owed toF810 undertakings in which the company has a participating interest
8
Other creditors including taxation and social security (9)
9
Accruals and deferred income (10)
D
Accruals and deferred income (10)
Notes on the balance sheet formats
- 1
Called-up share capital not paid
(Formats 1 and 2, items A and C.II.5.)
This item may be shown in either of the two positions given in Formats 1 and 2.
- 2
F811Concessions, patents, licences, trade marks and similar rights and assets
(Formats 1 and 2, item B.I.2.)
Amounts in respect of assets shall only be included in a company's balance sheet under this item if either—
- a
the assets were acquired for valuable consideration and are not required to be shown under goodwill; or
- b
the assets in question were created by the company itself.
- 3
Goodwill
(Formats 1 and 2, item B.I.3.)
Amounts representing goodwill shall only be included to the extent that the goodwill was acquired for valuable consideration.
- 4
Own shares
(Formats 1 and 2, items B.III.7 and C.III.2.)
The nominal value of the shares held shall be shown separately.
- 5
Debtors
(Formats 1 and 2, items C.II.1 to 6.)
The amount falling due after more than one year shall be shown separately for each item included under debtors.
- 6
Prepayments and accrued income
(Formats 1 and 2, items C.II.6 and D.)
This item may be shown in either of the two positions given in Formats 1 and 2.
- 7
Debenture loans
(Format 1, items E.1 and H.1 and Format 2, item C.1.)
The amount of any convertible loans shall be shown separately.
- 8
Payments received on account
(Format 1, items E.3 and H.3 and Format 2, item C.3.)
Payments received on account of orders shall be shown for each of these items in so far as they are not shown as deductions from stocks.
- 9
Other creditors including taxation and social security
(Format 1, items E.8 and H.8 and Format 2, item C.8.)
The amount for creditors in respect of taxation and social security shall be shown separately from the amount for other creditors.
- 10
Accruals and deferred income
(Format 1, items E.9, H.9 and J and Format 2, items C.9 and D.)
The two positions given for this item in Format 1 at E.9 and H.9 are an alternative to the position at J, but if the item is not shown in a position corresponding to that at J it may be shown in either or both of the other two positions (as the case may require).
The two positions given for this item in Format 2 are alternatives.
- 11
Net current assets (liabilities)
(Format 1, item F.)
In determining the amount to be shown for this item any amounts shown under “prepayments and accrued income” shall be taken into account wherever shown.
- 12
Called-up share capital
(Format 1, item K.I and Format 2, item A.I.)
The amount of allotted share capital and the amount of called-up share capital which has been paid up shall be shown separately.
- 13
Creditors
(Format 2, items C.1 to 9.)
Amounts falling due within one year and after one year shall be shown separately for each of these itemsF812 and for the aggregate of all these items.
Profit and loss account formats
Format 1
(see note (17) below)
- 1
Turnover
- 2
Cost of sales (14)
- 3
Gross profit or loss
- 4
Distribution costs (14)
- 5
Administrative expenses (14)
- 6
Other operating income
- 7
Income from shares inF813 group undertakings
- 8
Income fromF813 participating interests
- 9
Income from other fixed asset investments (15)
- 10
Other interest receivable and similar income (15)
- 11
Amounts written off investments
- 12
Interest payable and similar charges (16)
- 13
Tax on profit or loss on ordinary activities
- 14
Profit or loss on ordinary activities after taxation
- 15
Extraordinary income
- 16
Extraordinary charges
- 17
Extraordinary profit or loss
- 18
Tax on extraordinary profit or loss
- 19
Other taxes not shown under the above items
- 20
Profit or loss for the financial year
Profit and loss account formats
Format 2
- 1
Turnover
- 2
Change in stocks of finished goods and in work in progress
- 3
Own work capitalised
- 4
Other operating income
- 5
- a
Raw materials and consumables
- b
Other external charges
- a
- 6
Staff costs:
- a
wages and salaries
- b
social security costs
- c
other pension costs
- a
- 7
- a
Depreciation and other amounts written off tangible and intangible fixed assets
- b
Exceptional amounts written off current assets
- a
- 8
Other operating charges
- 9
Income from shares inF814 group undertakings
- 10
Income fromF814 participating interests
- 11
Income from other fixed asset investments (15)
- 12
Other interest receivable and similar income (15)
- 13
Amounts written off investments
- 14
Interest payable and similar charges (16)
- 15
Tax on profit or loss on ordinary activities
- 16
Profit or loss on ordinary activities after taxation
- 17
Extraordinary income
- 18
Extraordinary charges
- 19
Extraordinary profit or loss
- 20
Tax on extraordinary profit or loss
- 21
Other taxes not shown under the above items
- 22
Profit or loss for the financial year
Profit and loss account formats
Format 3
(see note (17) below)
A
Charges
1
Cost of sales (14)
2
Distribution costs (14)
3
Administrative expenses (14)
4
Amounts written off investments
5
Interest payable and similar charges (16)
6
Tax on profit or loss on ordinary activities
7
Profit or loss on ordinary activities after taxation
8
Extraordinary charges
9
Tax on extraordinary profit or loss
10
Other taxes not shown under the above items
11
Profit or loss for the financial year
B
Income
1
Turnover
2
Other operating income
3
Income from shares inF815 group undertakings
4
Income fromF815 participating interests
5
Income from other fixed asset investments (15)
6
Other interest receivable and similar income (15)
7
Profit or loss on ordinary activities after taxation
8
Extraordinary income
9
Profit or loss for the financial year
Profit and loss account formats
Format 4
A
Charges
1
Reduction in stocks of finished goods and in work in progress
2
a
Raw materials and consumables
b
Other external charges
3
Staff costs:
a
wages and salaries
b
social security costs
c
other pension costs
4
a
Depreciation and other amounts written off tangible and intangible fixed assets
b
Exceptional amounts written off current assets
5
Other operating charges
6
Amounts written off investments
7
Interest payable and similar charges (16)
8
Tax on profit or loss on ordinary activities
9
Profit or loss on ordinary activities after taxation
10
Extraordinary charges
11
Tax on extraordinary profit or loss
12
Other taxes not shown under the above items
13
Profit or loss for the financial year
B
Income
1
Turnover
2
Increase in stocks of finished goods and in work in progress
3
Own work capitalised
4
Other operating income
5
Income from shares inF816 group undertakings
6
Income fromF816 participating interests
7
Income from other fixed asset investments (15)
8
Other interest receivable and similar income (15)
9
Profit or loss on ordinary activities after taxation
10
Extraordinary income
11
Profit or loss for the financial year
Notes on the profit and loss account formats
- 14
Cost of sales: distribution costs: administrative expenses
(Format 1, items 2, 4 and 5 and Format 3, items A.1, 2 and 3.)
These items shall be stated after taking into account any necessary provisions for depreciation or diminution in value of assets.
- 15
Income from other fixed asset investments: other interest receivable and similar income
(Format 1, items 9 and 10: Format 2, items 11 and 12: Format 3, items B.5 and 6: Format 4, items B.7 and 8.)
Income and interest derived fromF817 group undertakings shall be shown separately from income and interest derived from other sources.
- 16
Interest payable and similar charges
(Format 1, item 12: Format 2, item 14: Format 3, item A.5: Format 4, item A.7.)
The amount payable toF817 group undertakings shall be shown separately.
- 17
Formats 1 and 3
The amount of any provisions for depreciation and diminution in value of tangible and intangible fixed assets falling to be shown under items 7(a) and A.4(a) respectively in Formats 2 and 4 shall be disclosed in a note to the accounts in any case where the profit and loss account is prepared by reference to Format 1 or Format 3.
PART IIACCOUNTING PRINCIPLES AND RULES
SECTION AACCOUNTING PRINCIPLES
Preliminary
9
Subject to paragraph 15, the amounts to be included in respect of all items shown in a company's accounts shall be determined in accordance with the principles set out in paragraphs 10 to 14.
Accounting principles
10
The company shall be presumed to be carrying on business as a going concern.
11
Accounting policies shall be applied consistently within the same accounts and from one financial year to the next.
12
The amount of any item shall be determined on a prudent basis, and in particular—
a
only profits realised at the balance sheet date shall be included in the profit and loss account; and
b
all liabilitiesF818. . . which have arisenF818. . . in respect of the financial year to which the accounts relate or a previous financial year shall be taken into account, including those which only become apparent between the balance sheet date and the date on which it is signed on behalf of the board of directors in pursuance ofF819 Article 241.
13
All income and charges relating to the financial year to which the accounts relate shall be taken into account, with regard to the date of receipt or payment.
14
In determining the aggregate amount of any item the amount of each individual asset or liability that falls to be taken into account shall be determined separately.
Departure from the accounting principles
15
If it appears to the directors of a company that there are special reasons for departing from any of the principles stated above in preparing the company's accounts in respect of any financial year they may do so, but particulars of the departure, the reasons for it and its effect shall be given in a note to the accounts.
SECTION BHISTORICAL COST ACCOUNTING RULES
Preliminary
16
F820Subject to sections C and D, the amounts to be included in respect of all items shown in a company's accounts shall be determined in accordance with the rules set out in paragraphs 17 to 28.
Fixed assets
General rules17
Subject to any provision for depreciation or diminution in value made in accordance with paragraph 18 or 19, the amount to be included in respect of any fixed asset shall be its purchase price or production cost.
18
In the case of any fixed asset which has a limited useful economic life, the amount of—
a
its purchase price or production cost; or
b
where it is estimated that any such asset will have a residual value at the end of the period of its useful economic life, its purchase price or production cost less that estimated residual value,
shall be reduced by provisions for depreciation calculated to write off that amount systematically over the period of the asset's useful economic life.
19
1
Where a fixed asset investment of a description falling to be included under item B.III of either of the balance sheet formats set out in Part I has diminished in value provisions for diminution in value may be made in respect of it and the amount to be included in respect of it may be reduced accordingly; and any such provisions which are not shown in the profit and loss account shall be disclosed (either separately or in aggregate) in a note to the accounts.
2
Provisions for diminution in value shall be made in respect of any fixed asset which has diminished in value if the reduction in its value is expected to be permanent (whether its useful economic life is limited or not), and the amount to be included in respect of it shall be reduced accordingly; and any such provisions which are not shown in the profit and loss account shall be disclosed (either separately or in aggregate) in a note to the accounts.
3
Where the reasons for which any provision was made in accordance with sub-paragraph (1) or (2) have ceased to apply to any extent, that provision shall be written back to the extent that it is no longer necessary; and any amounts written back in accordance with this sub-paragraph which are not shown in the profit and loss account shall be disclosed (either separately or in aggregate) in a note to the accounts.
Rules for determining particular fixed asset items20
1
Notwithstanding that an item in respect of “development costs” is included under “fixed assets” in the balance sheet formats set out in Part I, an amount may only be included in a company's balance sheet in respect of development costs in special circumstances.
2
If any amount is included in a company's balance sheet in respect of development costs the following information shall be given in a note to the accounts—
a
the period over which the amount of those costs originally capitalised is being or is to be written off; and
b
the reasons for capitalising the development costs in question.
21
1
The application of paragraphs 17 to 19 in relation to goodwill (in any case where goodwill is treated as an asset) is subject to the following provisions of this paragraph.
2
Subject to sub-paragraph (3), the amount of the consideration for any goodwill acquired by a company shall be reduced by provisions for depreciation calculated to write off that amount systematically over a period chosen by the directors of the company.
3
The period chosen shall not exceed the useful economic life of the goodwill in question.
4
In any case where any goodwill acquired by a company is shown or included as an asset in the company's balance sheet the period chosen for writing off the consideration for that goodwill and the reasons for choosing that period shall be disclosed in a note to the accounts.
Current assets
22
Subject to paragraph 23, the amount to be included in respect of any current asset shall be its purchase price or production cost.
23
1
If the net realisable value of any current asset is lower than its purchase price or production cost the amount to be included in respect of that asset shall be the net realisable value.
2
Where the reasons for which any provision for diminution in value was made in accordance with sub-paragraph (1) have ceased to apply to any extent, that provision shall be written back to the extent that it is no longer necessary.
Miscellaneous and supplementary provisions
Excess of money owed over value received as an asset item24
1
Where the amount repayable on any debt owed by a company is greater than the value of the consideration received in the transaction giving rise to the debt, the amount of the difference may be treated as an asset.
2
Where any such amount is so treated—
a
it shall be written off by reasonable amounts each year and must be completely written off before repayment of the debt; and
b
if the current amount is not shown as a separate item in the company's balance sheet it must be disclosed in a note to the accounts.
Assets included at a fixed amount25
1
Subject to sub-paragraph (2), assets which fall to be included—
a
amongst the fixed assets of a company under the item “tangible assets”; or
b
amongst the current assets of a company under the item “raw materials and consumables”,
may be included at a fixed quantity and value.
2
Sub-paragraph (1) applies to assets of a kind which are constantly being replaced, where—
a
their overall value is not material to assessing the company's state of affairs; and
b
their quantity, value and composition are not subject to material variation.
Determination of purchase price or production cost26
1
The purchase price of an asset shall be determined by adding to the actual price paid any expenses incidental to its acquisition.
2
The production cost of an asset shall be determined by adding to the purchase price of the raw materials and consumables used the amount of the costs incurred by the company which are directly attributable to the production of that asset.
3
In addition, there may be included in the production cost of an asset—
a
a reasonable proportion of the costs incurred by the company which are only indirectly attributable to the production of that asset, but only to the extent that they relate to the period of production; and
b
interest on capital borrowed to finance the production of that asset, to the extent that it accrues in respect of the period of production,
so, however, that in a case within head (b) the inclusion of the interest in determining the cost of that asset and the amount of the interest so included shall be disclosed in a note to the accounts.
4
In the case of current assets distribution costs may not be included in production costs.
27
1
Subject to the qualification mentioned below, the purchase price or production cost of—
a
any assets which fall to be included under any item shown in a company's balance sheet under the general item “stocks”; and
b
any assets which are fungible assets (including investments),
may be determined by the application of any of the methods mentioned in sub-paragraph (2) in relation to any such assets of the same class.
The method chosen must be one which appears to the directors to be appropriate in the circumstances of the company.
2
Those methods are—
a
the method known as “first in, first out” (FIFO);
b
the method known as “last in, first out” (LIFO);
c
a weighted average price; and
d
any other method similar to any of the methods mentioned above.
3
Where in the case of any company—
a
the purchase price or production cost of assets falling to be included under any item shown in the company's balance sheet has been determined by the application of any method permitted by this paragraph; and
b
the amount shown in respect of that item differs materially from the relevant alternative amount given below in this paragraph,
the amount of that difference shall be disclosed in a note to the accounts.
4
Subject to sub-paragraph (5), for the purposes of sub-paragraph (3)(b), the relevant alternative amount, in relation to any item shown in a company's balance sheet, is the amount which would have been shown in respect of that item if assets of any class included under that item at an amount determined by any method permitted by this paragraph had instead been included at their replacement cost as at the balance sheet date.
5
The relevant alternative amount may be determined by reference to the most recent actual purchase price or production cost before the balance sheet date of assets of any class included under the item in question instead of by reference to their replacement cost as at that date, but only if the former appears to the directors of the company to constitute the more appropriate standard of comparison in the case of assets of that class.
6
For the purposes of this paragraph, assets of any description shall be regarded as fungible if assets of that description are substantially indistinguishable one from another.
Substitution of original stated amount where price or cost unknown28
Where there is no record of the purchase price or production cost of any asset of a company or of any price, expenses or costs relevant for determining its purchase price or production cost in accordance with paragraph 26, or any such record cannot be obtained without unreasonable expense or delay, its purchase price or production cost shall be taken for the purposes of paragraphs 17 to 23 to be the value ascribed to it in the earliest available record of its value made on or after its acquisition or production by the company.
SECTION CALTERNATIVE ACCOUNTING RULES
Preliminary
29
1
The rules set out in section B are referred to below in this Schedule as the historical cost accounting rules.
2
Those rules, with the omission of paragraphs 16, 21 and 25 to 28, are referred to below in this Part as the depreciation rules; and references below in this Schedule to the historical cost accounting rules do not include the depreciation rules as they apply by virtue of paragraph 32.
30
Subject to paragraphs 32 to 34, the amounts to be included in respect of assets of any description mentioned in paragraph 31 may be determined on any basis so mentioned.
Alternative accounting rules
31
1
Intangible fixed assets, other than goodwill, may be included at their current cost.
2
Tangible fixed assets may be included at a market value determined as at the date of their last valuation or at their current cost.
3
Investments of any description falling to be included under item B.III of either of the balance sheet formats set out in Part I may be included either—
a
at a market value determined as at the date of their last valuation; or
b
at a value determined on any basis which appears to the directors to be appropriate in the circumstances of the company,
but in the latter case particulars of the method of valuation adopted and of the reasons for adopting it shall be disclosed in a note to the accounts.
4
Investments of any description falling to be included under item C.III of either of the balance sheet formats set out in Part I may be included at their current cost.
5
Stocks may be included at their current cost.
Application of the depreciation rules
32
1
Where the value of any asset of a company is determined on any basis mentioned in paragraph 31, that value shall be, or (as the case may require) be the starting point for determining, the amount to be included in respect of that asset in the company's accounts, instead of its purchase price or production cost or any value previously so determined for that asset; and the depreciation rules shall apply accordingly in relation to any such asset with the substitution for any reference to its purchase price or production cost of a reference to the value most recently determined for that asset on any basis mentioned in paragraph 31.
2
The amount of any provision for depreciation required in the case of any fixed asset by paragraph 18 or 19 as it applies by virtue of sub-paragraph (1) is referred to in this paragraph as the adjusted amount, and the amount of any provision which would be required by that paragraph in the case of that asset according to the historical cost accounting rules is referred to as the historical cost amount.
3
Where sub-paragraph (1) applies in the case of any fixed asset the amount of any provision for depreciation in respect of that asset—
a
included in any item shown in the profit and loss account in respect of amounts written off assets of the description in question; or
b
taken into account in stating any item so shown which is required by note (14) of the notes on the profit and loss account formats set out in Part I to be stated after taking into account any necessary provisions for depreciation or diminution in value of assets included under it,
may be the historical cost amount instead of the adjusted amount, so, however, that the amount of any difference between the two shall be shown separately in the profit and loss account or in a note to the accounts.
Additional information to be provided in case of departure from historical cost accounting rules
33
1
This paragraph applies where the amounts to be included in respect of assets covered by any items shown in a company's accounts have been determined on any basis mentioned in paragraph 31.
2
The items affected and the basis of valuation adopted in determining the amounts of the assets in question in the case of each such item shall be disclosed in a note to the accounts.
3
In the case of each balance sheet item affected (except stocks) either—
a
the comparable amounts determined according to the historical cost accounting rules; or
b
the differences between those amounts and the corresponding amounts actually shown in the balance sheet in respect of that item,
shall be shown separately in the balance sheet or in a note to the accounts.
4
In sub-paragraph (3), references in relation to any item to the comparable amounts determined as there mentioned are references to—
a
the aggregate amount which would be required to be shown in respect of that item if the amounts to be included in respect of all the assets covered by that item were determined according to the historical cost accounting rules; and
b
the aggregate amount of the cumulative provisions for depreciation or diminution in value which would be permitted or required in determining those amounts according to those rules.
Revaluation reserve
34
1
With respect to any determination of the value of an asset of a company on any basis mentioned in paragraph 31, the amount of any profit or loss arising from that determination (after allowing, where appropriate, for any provisions for depreciation or diminution in value made otherwise than by reference to the value so determined and any adjustments of any such provisions made in the light of that determination) shall be credited or (as the case may be) debited to a separate reserve ( “the revaluation reserve”).
2
The amount of the revaluation reserve shall be shown in the company's balance sheet under a separate sub-heading in the position given for the item “revaluation reserve” in Format 1 or 2 of the balance sheet formats set out in Part I, but need not be shown under that name.
F8213
An amount may be transferred
F822a
from the revaluation reserve—
i
to the proft and loss account, if the amount was previously charged to that account or represents realised profit, or
ii
on capitalisation,
b
to or from the revaluation reserve in respect of the taxation relating to any profit or loss credited or debited to the reserve;
and the revaluation reserve shall be reduced to the extent that the amounts transferred to it are no longer necessary for the purposes of the valuation method used.
3A
InF822 sub-paragraph (3)(a)(ii) “capitalisation”, in relation to an amount standing to the credit of the revaluation reserve, means applying it in wholly or partly paying up unissued shares in the company to be allotted to members of the company as fully or partly paid shares.
3B
The revaluation reserve shall not be reduced except as mentioned in this paragraph.
4
The treatment for taxation purposes of amounts credited or debited to the revaluation reserve shall be disclosed in a note to the accounts.
SECTION DFAIR VALUE ACCOUNTING
Inclusion of financial instruments at fair value
34A
1
Subject to sub-paragraphs (2) to (4), financial instruments (including derivatives) may be included at fair value.
2
Sub-paragraph (1) does not apply to financial instruments which constitute liabilities unless—
a
they are held as part of a trading portfolio, or
b
they are derivatives.
3
Sub-paragraph (1) does not apply to—
a
financial instruments (other than derivatives) held to maturity;
b
loans and receivables originated by the company and not held for trading purposes;
c
interests in subsidiary undertakings, associated undertakings and joint ventures;
d
equity instruments issued by the company;
e
contracts for contingent consideration in a business combination;
f
other financial instruments with such special characteristics that the instruments, according to generally accepted accounting principles or practice, should be accounted for differently from other financial instruments.
4
If the fair value of a financial instrument cannot be determined reliably in accordance with paragraph 34B, sub-paragraph (1) does not apply to that financial instrument.
5
In this paragraph—
“associated undertaking” has the meaning given by paragraph 20 of Schedule 4A; and
“joint venture” has the meaning given by paragraph 19 of that Schedule.
Determination of fair value
34B
1
The fair value of a financial instrument is determined in accordance with this paragraph.
2
If a reliable market can readily be identified for the financial instrument, its fair value is determined by reference to its market value.
3
If a reliable market cannot readily be identified for the financial instrument but can be identified for its components or for a similar instrument, its fair value is determined by reference to the market value of its components or of the similar instrument.
4
If neither sub-paragraph (2) nor (3) applies, the fair value of the financial instrument is a value resulting from generally accepted valuation models and techniques.
5
Any valuation models and techniques used for the purposes of sub-paragraph (4) must ensure a reasonable approximation of the market value.
Inclusion of hedged items at fair value
34C
A company may include any assets and liabilities that qualify as hedged items under a fair value hedge accounting system, or identified portions of such assets or liabilities, at the amount required under that system.
Other assets that may be included at fair value
34D
1
This paragraph applies to—
a
investment property, and
b
living animals and plants,
that, under international accounting standards, may be included in accounts at fair value.
2
Such investment property and such living animals and plants may be included at fair value, provided that all such investment property or, as the case may be, all such living animals and plants are so included where their fair value can reliably be determined.
3
In this paragraph, “fair value” means fair value determined in accordance with relevant international accounting standards.
Accounting for changes in value
34E
1
This paragraph applies where a financial instrument is valued in accordance with paragraph 34A or 34C or an asset is valued in accordance with paragraph 34D.
2
Notwithstanding paragraph 12 and subject to sub-paragraphs (3) and (4), a change in the value of the financial instrument or of the investment property or living animal or plant must be included in the profit and loss account.
3
Where—
a
the financial instrument accounted for is a hedging instrument under a hedge accounting system that allows some or all of the change in value not to be shown in the profit and loss account, or
b
the change in value relates to an exchange difference arising on a monetary item that forms part of a company's net investment in a foreign entity,
the amount of the change in value must be credited to or (as the case may be) debited from a separate reserve ( “the fair value reserve”).
4
Where the instrument accounted for—
a
is an available for sale financial asset, and
b
is not a derivative,
the change in value may be credited to or (as the case may be) debited from the fair value reserve.
The fair value reserve
34F
1
The fair value reserve must be adjusted to the extent that the amounts shown in it are no longer necessary for the purposes of paragraph 34E(3) or (4).
2
The treatment for taxation purposes of amounts credited to or debited from the fair value reserve must be disclosed in a note to the accounts.
PART IIINOTES TO THE ACCOUNTS
Preliminary
35
Any information required in the case of any company by the following provisions of this Part shall (if not given in the company's accounts) be given by way of a note to those accounts.
Reserves and dividends
35A
There must be stated—
a
any amount set aside or proposed to be set aside to, or withdrawn or proposed to be withdrawn from, reserves,
b
the aggregate amount of dividends paid in the financial year (other than those for which a liability existed at the immediately preceding balance sheet date),
c
the aggregate amount of dividends that the company is liable to pay at the balance sheet date, and
d
the aggregate amount of dividends that are proposed before the date of approval of the accounts, and not otherwise disclosed under sub-paragraph (b) or (c).
Disclosure of accounting policies
36
The accounting policies adopted by the company in determining the amounts to be included in respect of items shown in the balance sheet and in determining the profit or loss of the company shall be stated (including such policies with respect to the depreciation and diminution in value of assets).
36A
It shall be stated whether the accounts have been prepared in accordance with applicable accounting standards and particulars of any material departure from those standards and the reasons for it shall be given.
Information supplementing the balance sheet
37
Paragraphs 38 to 51 require information which either supplements the information given with respect to any particular items shown in the balance sheet or is otherwise relevant to assessing the company's state of affairs in the light of the information so given.
Share capital and debentures38
1
The following information shall be given with respect to the company's share capital—
a
the authorised share capital;F824. . .
b
where shares of more than one class have been allotted, the number and aggregate nominal value of shares of each class allottedF824; and
F824c
where shares are held as treasury shares, the number and aggregate nominal value of the treasury shares and, where shares of more than one class have been allotted, the number and aggregate nominal value of the shares of each class held as treasury shares.
.
2
In the case of any part of the allotted share capital that consists of redeemable shares, the following information shall be given—
a
the earliest and latest dates on which the company has power to redeem those shares;
b
whether those shares must be redeemed in any event or are liable to be redeemed at the option of the company or of the shareholder; and
c
whether any (and, if so, what) premium is payable on redemption.
39
If the company has allotted any shares during the financial year, the following information shall be given—
Sub-para. (a) rep. by SR 1997/314
b
the classes of shares allotted; and
c
as respects each class of shares, the number allotted, their aggregate nominal value, and the consideration received by the company for the allotment.
40
1
With respect to any contingent right to the allotment of shares in the company the following particulars shall be given—
a
the number, description and amount of the shares in relation to which the right is exercisable;
b
the period during which it is exercisable; and
c
the price to be paid for the shares allotted.
2
In sub-paragraph (1) “contingent right to the allotment of shares” means any option to subscribe for shares and any other right to require the allotment of shares to any person whether arising on the conversion into shares of securities of any other description or otherwise.
41
1
If the company has issued any debentures during the financial year to which the accounts relate, the following information shall be given—
Head (a) rep. by SR 1997/314
b
the classes of debentures issued; and
c
as respects each class of debentures, the amount issued and the consideration received by the company for the issue.
Sub-para. (2) rep. by SR 1997/314
3
Where any of the company's debentures are held by a nominee of or trustee for the company, the nominal amount of the debentures and the amount at which they are stated in the accounting records kept by the company in accordance with Article 229 shall be stated.
Fixed assets42
1
In respect of each item which is or would but for paragraph 3(4)(b) be shown under the general item “fixed assets” in the company's balance sheet the following information shall be given—
a
the appropriate amounts in respect of that item as at the date of the beginning of the financial year and as at the balance sheet date respectively;
b
the effect on any amount shown in the balance sheet in respect of that item of—
i
any revision of the amount in respect of any assets included under that item made during that year on any basis mentioned in paragraph 31;
ii
acquisitions during that year of any assets;
iii
disposals during that year of any assets; and
iv
any transfers of assets of the company to and from that item during that year.
2
The reference in sub-paragraph (1)(a) to the appropriate amounts in respect of any item as at any date there mentioned is a reference to amounts representing the aggregate amounts determined, as at that date, in respect of assets falling to be included under that item on either of the following bases, that is to say—
a
on the basis of purchase price or production cost (determined in accordance with paragraphs 26 and 27); or
b
on any basis mentioned in paragraph 31,
(leaving out of account in either case any provisions for depreciation or diminution in value).
3
In respect of each item within sub-paragraph (1)—
a
the cumulative amount of provisions for depreciation or diminution in value of assets included under that item as at each date mentioned in sub-paragraph (1)(a);
b
the amount of any such provisions made in respect of the financial year;
c
the amount of any adjustments made in respect of any such provisions during that year in consequence of the disposal of any assets; and
d
the amount of any other adjustments made in respect of any such provisions during that year,
shall also be stated.
43
Where any fixed assets of the company (other than listed investments) are included under any item shown in the company's balance sheet at an amount determined on any basis mentioned in paragraph 31, the following information shall be given—
a
the years (so far as they are known to the directors) in which the assets were severally valued and the several values; and
b
in the case of assets that have been valued during the financial year, the names of the persons who valued them or particulars of their qualifications for doing so and (whichever is stated) the bases of valuation used by them.
44
In relation to any amount which is or would but for paragraph 3(4)(b) be shown in respect of the item “land and buildings” in the company's balance sheet there shall be stated—
a
how much of that amount is ascribable to land of freehold tenure and how much to land of leasehold tenure; and
b
how much of the amount ascribable to land of leasehold tenure is ascribable to land held on long lease and how much to land held on short lease.
Investments45
1
In respect of the amount of each item which is or would but for paragraph 3(4)(b) be shown in the company's balance sheet under the general item “investments” (whether as fixed assets or as current assets) there shall be stated—
a
how much of that amount is ascribable to listed investments;F825. . .
Head (b) rep. by SR 1997/314
2
Where the amount of any listed investments is stated for any item in accordance with sub-paragraph (1)(a), the following amounts shall also be stated—
a
the aggregate market value of those investments where it differs from the amount so stated; and
b
both the market value and the stock exchange value of any investments of which the former value is, for the purposes of the accounts, taken as being higher than the latter.
Information about fair value of assets and liabilities45A
1
This paragraph applies where financial instruments have been valued in accordance with paragraph 34A or 34C.
2
There must be stated—
a
where the fair value of the instruments has been determined in accordance with paragraph 34B(4), the significant assumptions underlying the valuation models and techniques used,
b
for each category of financial instruments, the fair value of the instruments in that category and the changes in value—
i
included in the profit and loss account, or
ii
credited to or (as the case may be) debited from the fair value reserve,
in respect of those instruments, and
c
for each class of derivatives, the extent and nature of the instruments, including significant terms and conditions that may affect the amount, timing and certainty of future cash flows.
3
Where any amount is transferred to or from the fair value reserve during the financial year, there must be stated in tabular form—
a
the amount of the reserve as at the date of the beginning of the financial year and as at the balance sheet date respectively;
b
the amount transferred to or from the reserve during that year; and
c
the source and application respectively of the amounts so transferred.
45B
Where the company has derivatives that it has not included at fair value, there must be stated for each class of such derivatives—
a
the fair value of the derivatives in that class, if such a value can be determined in accordance with paragraph 34B, and
b
the extent and nature of the derivatives.
45C
1
Sub-paragraph (2) applies if—
a
the company has financial fixed assets that could be included at fair value by virtue of paragraph 34A,
b
the amount at which those assets are included under any item in the company's accounts is in excess of their fair value, and
c
the company has not made provision for diminution in value of those assets in accordance with paragraph 19(1).
2
There must be stated—
a
the amount at which either the individual assets or appropriate groupings of those individual assets are included in the company's accounts,
b
the fair value of those assets or groupings, and
c
the reasons for not making a provision for diminution in value of those assets, including the nature of the evidence that provides the basis for the belief that the amount at which they are stated in the accounts will be recovered.
Information where investment property and living animals and plants included at fair value45D
1
This paragraph applies where the amounts to be included in a company's accounts in respect of investment property or living animals and plants have been determined in accordance with paragraph 34D.
2
The balance sheet items affected and the basis of valuation adopted in determining the amounts of the assets in question in the case of each such item must be disclosed in a note to the accounts.
3
In the case of investment property, for each balance sheet item affected there must be shown, either separately in the balance sheet or in a note to the accounts—
a
the comparable amounts determined according to the historical cost accounting rules; or
b
the differences between those amounts and the corresponding amounts actually shown in the balance sheet in respect of that item.
4
In sub-paragraph (3), references in relation to any item to the comparable amounts determined in accordance with that sub-paragraph are references to—
a
the aggregate amount which would be required to be shown in respect of that item if the amounts to be included in respect of all the assets covered by that item were determined according to the historical cost accounting rules; and
b
the aggregate amount of the cumulative provisions for depreciation or diminution in value which would be permitted or required in determining those amounts according to those rules.
Reserves and provisions46
1
Where any amount is transferred—
a
to or from any reserves; or
b
to anyF826 provisions for liabilities; or
c
from anyF826 provision for liabilities otherwise than for the purpose for which the provision was established,
and the reserves or provisions are or would but for paragraph 3(4)(b) be shown as separate items in the company's balance sheet, the information mentioned in sub-paragraph (2) shall be given in respect of the aggregate of reserves or provisions included in the same item.
2
That information is—
a
the amount of the reserves or provisions as at the date of the beginning of the financial year and as at the balance sheet date respectively;
b
any amounts transferred to or from the reserves or provisions during that year; and
c
the source and application respectively of any amounts so transferred.
3
Particulars shall be given of each provision included in the item “other provisions” in the company's balance sheet in any case where the amount of that provision is material.
Provision for taxationF82747
F827The amount of any provision for deferred taxation shall be stated separately from the amount of any provision for other taxation.
Details of indebtedness48
F8281
In respect of each item shown under “creditors” in the company's balance sheet there shall be stated the aggregate of the following amounts, that is to say—
a
the amount of any debts included under that item which are payable or repayable otherwise than by instalments and fall due for payment or repayment after the end of the period of five years beginning with the day next following the end of the financial year; and
F829b
in the case of any debts so included which are payable or repayable by instalments, the amount of any instalments which fall due for payment after the end of that period.
2
Subject to sub-paragraph (3), in relation to each debt falling to be taken into account under sub-paragraph (1), the terms of payment or repayment and the rate of any interest payable on the debt shall be stated.
3
If the number of debts is such that, in the opinion of the directors, compliance with sub-paragraph (2) would result in a statement of excessive length, it shall be sufficient to give a general indication of the terms of payment or repayment and the rates of any interest payable on the debts.
4
In respect of each item shown under “creditors” in the company's balance sheet there shall be stated—
a
the aggregate amount of any debts included under that item in respect of which any security has been given by the company; and
b
an indication of the nature of the securities so given.
5
References above in this paragraph to an item shown under “creditors” in the company's balance sheet include references, where amounts falling due to creditors within one year and after more than one year are distinguished in the balance sheet—
a
in a case within sub-paragraph (1), to an item shown under the latter of those categories; and
b
in a case within sub-paragraph (4), to an item shown under either of those categories,
and references to items shown under “creditors” include references to items which would but for paragraph 3(4)(b) be shown under that heading.
49
If any fixed cumulative dividends on the company's shares are in arrear, there shall be stated—
a
the amount of the arrears; and
b
the period for which the dividends or, if there is more than one class, each class of them are in arrear.
Guarantees and other financial commitments50
1
Particulars shall be given of any charge on the assets of the company to secure the liabilities of any other person, including, where practicable, the amount secured.
2
The following information shall be given with respect to any other contingent liability not provided for—
a
the amount or estimated amount of that liability;
b
its legal nature; and
c
whether any valuable security has been provided by the company in connection with that liability and if so, what.
3
There shall be stated, where practicable—
a
the aggregate amount or estimated amount of contracts for capital expenditure, so far as not provided for;F830. . .
Head (b) rep. by SR 1997/314
4
Particulars shall be given of—
a
any pension commitments included under any provision shown in the company's balance sheet; and
b
any such commitments for which no provision has been made,
and where any such commitment relates wholly or partly to pensions payable to past directors of the company separate particulars shall be given of that commitment so far as it relates to such pensions.
5
Particulars shall also be given of any other financial commitments which—
a
have not been provided for; and
b
are relevant to assessing the company's state of affairs.
Sub-para. (6) rep. by 1990 NI 5
Miscellaneous matters51
1
Particulars shall be given of any case where the purchase price or production cost of any asset is for the first time determined under paragraph 28.
2 F831
Where any outstanding loans made under the authority of Article 163(4)(b)F832,(bb) or (c) (loans to employees for acquisition of company's shares) or 165 (private companies) are included under any item shown in the company's balance sheet, the aggregate amount of those loans shall be disclosed for each item in question.
Sub-para. (3) rep. by SR 1997/314
Information supplementing the profit and loss account
52
Paragraphs 53 to 57 require information which either supplements the information given with respect to any particular items shown in the profit and loss account or otherwise provides particulars of income or expenditure of the company or of circumstances affecting the items shown in the profit and loss account.
Separate statement of certain items of income and expenditure53
1
Subject to the following provisions of this paragraph, each of the amounts mentioned below shall be stated.
2
The amount of the interest on or any similar charges in respect of—
a
bank loans and overdrafts,F833. . . and
b
loans of any other kind made to the company.
This sub-paragraph does not apply to interest or charges on loans to the company fromF834 group undertakings, but, with that exception, it applies to interest or charges on all loans, whether made on the security of debentures or not.
Sub-paras. (3)‐(6) rep. by SR 1997/314
Sub-para. (7) rep. by 1990 NI 10
Particulars of tax54
Sub-para. (1) rep. by SR 1997/314
2
Particulars shall be given of any special circumstances which affect liability in respect of taxation of profits, income or capital gains for the financial year or liability in respect of taxation of profits, income or capital gains for succeeding financial years.
3
The following amounts shall be stated—
a
the amount of the charge for United Kingdom corporation tax;
b
if that amount would have been greater but for relief from double taxation, the amount which it would have been but for such relief;
c
the amount of the charge for United Kingdom income tax; and
d
the amount of the charge for taxation imposed outside the United Kingdom of profits, income and (so far as charged to revenue) capital gains.
These amounts shall be stated separately in respect of each of the amounts which is or would but for paragraph 3(4)(b) be shown under the following items in the profit and loss account, that is to say “tax on profit or loss on ordinary activities” and “tax on extraordinary profit or loss”.
Particulars of turnover55
1
If in the course of the financial year the company has carried on business of two or more classes that, in the opinion of the directors, differ substantially from each other, there shall be stated in respect of each class (describing it)—
a
the amount of the turnover attributable to that class;F835. . .
Head (b) rep. by SR 1997/314
2
If in the course of the financial year the company has supplied markets that, in the opinion of the directors, differ substantially from each other, the amount of the turnover attributable to each such market shall also be stated.
In this paragraph “market” means a market delimited by geographical bounds.
3
In analysing for the purposes of this paragraph the source (in terms of business or in terms of market) of turnoverF835. . . , the directors of the company shall have regard to the manner in which the company's activities are organised.
4
For the purposes of this paragraph—
a
classes of business which, in the opinion of the directors, do not differ substantially from each other shall be treated as one class; and
b
markets which, in the opinion of the directors, do not differ substantially from each other shall be treated as one market,
and any amounts properly attributable to one class of business or (as the case may be) to one market which are not material may be included in the amount stated in respect of another.
5
Where in the opinion of the directors the disclosure of any information required by this paragraph would be seriously prejudicial to the interests of the company, that information need not be disclosed, but the fact that any such information has not been disclosed must be stated.
Para. 56 rep. by SR 2004/496
Miscellaneous matters57
1
Where any amount relating to any preceding financial year is included in any item in the profit and loss account, the effect shall be stated.
2
Particulars shall be given of any extraordinary income or charges arising in the financial year.
3
The effect shall be stated of any transactions that are exceptional by virtue of size or incidence though they fall within the ordinary activities of the company.
General
58
1
Where sums originally denominated in foreign currencies have been brought into account under any items shown in the balance sheet or profit and loss account, the basis on which those sums have been translated into sterling shall be stated.
2
F836. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3
F836. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dormant companies acting as agents58A
Where the directors of a company take advantage of the exemption conferred by Article 257AA, and the company has during the financial year in question acted as an agent for any person, the fact that it has so acted must be stated.
F837PART IVF837SPECIAL PROVISIONS WHERE COMPANY IS A PARENT COMPANY OR SUBSIDIARY UNDERTAKING
Company's own accounts
Para. 59 rep. by SR 1997/314
Guarantees and other financial commitments in favour of group undertakings
59A
Commitments within any of sub‐paragraphs (1) to (5) of paragraph 50 (guarantees and other financial commitments) which are undertaken on behalf of or for the benefit of—
a
any parent undertaking or fellow subsidiary undertaking, or
b
any subsidiary undertaking of the company,
shall be stated separately from the other commitments within that sub‐paragraph, and commitments within head (a) shall also be stated separately from those within head (b).
Paras. 60‐70 rep. by 1990 NI 5
PART VSPECIAL PROVISIONS WHERE THE COMPANY IS AN INVESTMENT COMPANY
71 F838
1
Paragraph 34 does not apply to the amount of any profit or loss arising from a determination of the value of any investments of an investment company on any basis mentioned in paragraph 31(3).
2
Any provisions made by virtue of paragraph 19(1) or (2) in the case on an investment company in respect of any fixed asset investments need not be charged to the company's profit and loss account if they are either—
a
charged against any reserve account to which any amount excluded by sub-paragraph (1) from the requirements of paragraph 34 has been credited; or
b
shown as a separate item in the company's balance sheet under the sub-heading “other reserves”.
3
For the purposes of this paragraph, as it applies in relation to any company, “fixed asset investment” means any asset falling to be included under any item shown in the company's balance sheet under the subdivision “investments” under the general item “fixed assets”.
72 F839
1
Any distribution made by an investment company which reduces the amount of its net assets to less than the aggregate of its called-up share capital and undistributable reserves shall be disclosed in a note to the company's accounts.
2
For the purposes of this paragraph, a company's net assets are the aggregate of its assets less the aggregate of its liabilities (including anyF840 provision for liabilities within paragraph 88F840 that is made in Companies Order accounts and any provision that is made in IAS accounts ); and “undistributable reserves” has the meaning given by Article 272(3).
73 F841
A company shall be treated as an investment company for the purposes of this Part in relation to any financial year of the company if—
a
during the whole of that year it was an investment company as defined by Article 274, and
b
it was not at any time during that year prohibited under Article 273(4) (no distribution where capital profits have been distributed, etc.) from making a distribution by virtue of that Article.
Para. 74 rep. by 1990 NI 5
PART VISPECIAL PROVISIONS WHERE THE COMPANY HAS ENTERED INTO ARRANGEMENTS SUBJECT TO MERGER RELIEF
Para. 75 rep. by 1990 NI 5
PART VIIINTERPRETATION OF SCHEDULE
76
The following paragraphs apply for the purposes of this Schedule and its interpretation.
Financial instruments76A
References to “derivatives” include commodity‐based contracts that give either contracting party the right to settle in cash or in some other financial instrument, except when such contracts—
a
were entered into for the purpose of, and continue to meet, the company's expected purchase, sale or usage requirements,
b
were designed for such purpose at their inception, and
c
are expected to be settled by delivery of the commodity.
76B
1
The expressions listed in sub‐paragraph (2) have the same meaning as they have in Council Directive 78/660/EEC on the annual accounts of certain types of companies, as amended.
2
Those expressions are “available for sale financial asset”, “business combination”, “commodity‐based contracts”, “derivative”, “equity instrument”, “exchange difference”, “fair value hedge accounting system”, “financial fixed asset”, “financial instrument”, “foreign entity”, “hedge accounting”, “hedge accounting system”, “hedged items”, “hedging instrument”, “held for trading purposes”, “held to maturity”, “monetary item”, “receivables”, “reliable market” and “trading portfolio”.
Paras. 77‐80 rep. by 1990 NI 5
Historical cost accounting rules81
References to the historical cost accounting rules shall be read in accordance with paragraph 29.
Investment property81A
“Investment property” means land held to earn rent or for capital appreciation.
Leases82
1
“Long lease” means a lease in the case of which the portion of the term for which it was granted remaining unexpired at the end of the financial year is not less than 50 years.
2
“Short lease” means a lease which is not a long lease.
3
“Lease” includes an agreement for a lease.
Listed investmentsF84283
F842F8421
“Listed investment” means an investment as respects which there has been granted a listing on—
a
a recognised investment exchange other than an overseas investment exchange; or
b
a stock exchange of repute outside Northern Ireland.
2
“Recognised investment exchange” and “overseas investment exchange” have the meaning given in Part 18 of the Financial Services and Markets Act 2000.
Loans84
A loan is treated as falling due for repayment, and an instalment of a loan is treated as falling due for payment, on the earliest date on which the lender could require repayment or (as the case may be) payment, if he exercised all options and rights available to him.
Materiality85
Amounts which in the particular context of any provision of this Schedule are not material may be disregarded for the purposes of that provision.
Para. 86 rep. by 1990 NI 5
Provisions87
1
References to provisions for depreciation or diminution in value of assets are to any amount written off by way of providing for depreciation or diminution in value of assets.
2
Any reference in the profit and loss account formats set out in Part I to the depreciation of, or amounts written off, assets of any description is to any provision for depreciation or diminution in value of assets of that description.
88
References toF843 provisions for liabilities are to any amount retained as reasonably necessary for the purpose of providing for any liabilityF843 the nature of which is clearly defined and which is either likely to be incurred, or certain to be incurred but uncertain as to amount or as to the date on which it will arise.
Paras. 89‐91 rep. by 1990 NI 5
Staff costs92
1
“Social security costs” means any contributions by the company to any state social security or pension scheme, fund or arrangement.
F8442
“pension costs” includes any costs incurred by the company in respect of any pension scheme established for the purpose of providing pensions for persons currently or formerly employed by the company, any sums set aside for the future payment of pensions directly by the company to current or former employees and any pensions paid directly to such persons without having first been set aside.
3
Any amount stated in respect ofF844 the item “social security costs” or in respect of the item “wages and salaries” in the company's profit and loss account shall be determined by reference to payments made or costs incurred in respect of all persons employed by the company during the financial year who are taken into account in determining the relevant annual number for the purposes ofF845 Article 239A(1)(a).
Para. 93 rep. by 1990 NI 5
SCHEDULE 4AFORM AND CONTENT OF GROUP ACCOUNTS
General rules
1
1
Sub-para. (2) rep. by SR 1997/436
3
Where the parent company is treated as an investment company for the purposes of Part V of that Schedule (special provisions for investment companies) the group shall be similarly treated.
2
1
The consolidated balance sheet and profit and loss account shall incorporate in full the information contained in the individual accounts of the undertakings included in the consolidation, subject to the adjustments authorised or required by the following provisions of this Schedule and to such other adjustments (if any) as may be appropriate in accordance with generally accepted accounting principles or practice.
2
If the financial year of a subsidiary undertaking included in the consolidationF848 does not end with that of the parent company, the group accounts shall be made up—
a
from the accounts of the subsidiary undertaking for its financial year last ending before the end of the parent company's financial year, provided that year ended no more than 3 months before that of the parent company, or
b
from interim accounts prepared by the subsidiary undertaking as at the end of the parent company's financial year.
3
1
Where assets and liabilities to be included in the group accounts have been valued or otherwise determined by undertakings according to accounting rules differing from those used for the group accounts, the values or amounts shall be adjusted so as to accord with the rules used for the group accounts.
2
If it appears to the directors of the parent company that there are special reasons for departing from sub‐paragraph (1) they may do so, but particulars of any such departure, the reasons for it and its effect shall be given in a note to the accounts.
3
The adjustments referred to in this paragraph need not be made if they are not material for the purpose of giving a true and fair view.
4
Any differences of accounting rules as between a parent company's individual accounts for a financial year and its group accounts shall be disclosed in a note to the latter accounts and the reasons for the difference given.
5
Amounts which in the particular context of any provision of this Schedule are not material may be disregarded for the purposes of that provision.
Elimination of group transactions
6
1
Debts and claims between undertakings included in the consolidation, and income and expenditure relating to transactions between such undertakings, shall be eliminated in preparing the group accounts.
2
Where profits and losses resulting from transactions between undertakings included in the consolidation are included in the book value of assets, they shall be eliminated in preparing the group accounts.
3
The elimination required by sub‐paragraph (2) may be effected in proportion to the group's interest in the shares of the undertakings.
4
Sub‐paragraphs (1) and (2) need not be complied with if the amounts concerned are not material for the purpose of giving a true and fair view.
Acquisition and merger accounting
7
1
The following provisions apply where an undertaking becomes a subsidiary undertaking of the parent company.
2
That event is referred to in those provisions as an “acquisition”, and references to the “undertaking acquired” shall be construed accordingly.
8
An acquisition shall be accounted for by the acquisition method of accounting unless the conditions for accounting for it as a merger are met and the merger method of accounting is adopted.
9
1
The acquisition method of accounting is as follows.
2
The identifiable assets and liabilities of the undertaking acquired shall be included in the consolidated balance sheet at their fair values as at the date of acquisition.
In this paragraph the “identifiable” assets or liabilities of the undertaking acquired means the assets or liabilities which are capable of being disposed of or discharged separately, without disposing of a business of the undertaking.
3
The income and expenditure of the undertaking acquired shall be brought into the group accounts only as from the date of the acquisition.
4
There shall be set off against the acquisition cost of the interest in the shares of the undertaking held by the parent company and its subsidiary undertakings the interest of the parent company and its subsidiary undertakings in the adjusted capital and reserves of the undertaking acquired.
For this purpose—
“the acquisition cost” means the amount of any cash consideration and the fair value of any other consideration, together with such amount (if any) in respect of fees and other expenses of the acquisition as the company may determine, and
“the adjusted capital and reserves” of the undertaking acquired means its capital and reserves at the date of the acquisition after adjusting the identifiable assets and liabilities of the undertaking to fair values as at that date.
5
The resulting amount if positive shall be treated as goodwill, and if negative as a negative consolidation difference.
10
1
The conditions for accounting for an acquisition as a merger are—
a
that at least 90 per cent. of the nominal value of the relevant shares in the undertaking acquiredF849 (excluding any shares in the undertaking held as treasury shares) is held by or on behalf of the parent company and its subsidiary undertakings,
b
that the proportion referred to in head (a) was attained pursuant to an arrangement providing for the issue of equity shares by the parent company or one or more of its subsidiary undertakings,
c
that the fair value of any consideration other than the issue of equity shares given pursuant to the arrangement by the parent company and its subsidiary undertakings did not exceed 10 per cent. of the nominal value of the equity shares issued, and
d
that adoption of the merger method of accounting accords with generally accepted accounting principles or practice.
2
The reference in sub‐paragraph (1)(a) to the “relevant shares” in an undertaking acquired is to those carrying unrestricted rights to participate both in distributions and in the assets of the undertaking upon liquidation.
11
1
The merger method of accounting is as follows.
2
The assets and liabilities of the undertaking acquired shall be brought into the group accounts at the figures at which they stand in the undertaking's accounts, subject to any adjustment authorised or required by this Schedule.
3
The income and expenditure of the undertaking acquired shall be included in the group accounts for the entire financial year, including the period before the acquisition.
4
The group accounts shall show corresponding amounts relating to the previous financial year as if the undertaking acquired had been included in the consolidation throughout that year.
5
There shall be set off against the aggregate of—
a
the appropriate amount in respect of qualifying shares issued by the parent company or its subsidiary undertakings in consideration for the acquisition of shares in the undertaking acquired, and
b
the fair value of any other consideration for the acquisition of shares in the undertaking acquired, determined as at the date when those shares were acquired,
the nominal value of the issued share capital of the undertaking acquired held by the parent company and its subsidiary undertakings.
6
The resulting amount shall be shown as an adjustment to the consolidated reserves.
7
In sub‐paragraph (5)(a) “qualifying shares” means—
a
shares in relation to which Article 141 (merger relief) applies, in respect of which the appropriate amount is the nominal value; or
b
shares in relation to which Article 142 (relief in respect of group reconstructions) applies, in respect of which the appropriate amount is the nominal value together with any minimum premium value within the meaning of that Article.
12
1
Where a group is acquired, paragraphs 9 to 11 apply with the following adaptations.
2
References to shares of the undertaking acquired shall be construed as references to shares of the parent undertaking of the group.
3
Other references to the undertaking acquired shall be construed as references to the group; and references to the assets and liabilities, income and expenditure and capital and reserves of the undertaking acquired shall be construed as references to the assets and liabilities, income and expenditure and capital and reserves of the group after making the set‐offs and other adjustments required by this Schedule in the case of group accounts.
13
1
The following information with respect to acquisitions taking place in the financial year shall be given in a note to the accounts.
2
There shall be stated—
a
the name of the undertaking acquired or, where a group was acquired, the name of the parent undertaking of that group, and
b
whether the acquisition has been accounted for by the acquisition or the merger method of accounting;
and in relation to an acquisition which significantly affects the figures shown in the group accounts, the following further information shall be given.
3
The composition and fair value of the consideration for the acquisition given by the parent company and its subsidiary undertakings shall be stated.
Sub-para. (4) rep. by SR 1997/314
5
Where the acquisition method of accounting has been adopted, the book values immediately prior to the acquisition, and the fair values at the date of acquisition, of each class of assets and liabilities of the undertaking or group acquired shall be stated in tabular form, including a statement of the amount of any goodwill or negative consolidation difference arising on the acquisition, together with an explanation of any significant adjustments made.
6
Where the merger method of accounting has been adopted, an explanation shall be given of any significant adjustments made in relation to the amounts of the assets and liabilities of the undertaking or group acquired, together with a statement of any resulting adjustment to the consolidated reserves (including the restatement of opening consolidated reserves).
7
In ascertaining for the purposes of sub‐paragraphF850. . . (5) or (6) the profit or loss of a group, the book values and fair values of assets and liabilities of a group or the amount of the assets and liabilities of a group, the set‐offs and other adjustments required by this Schedule in the case of group accounts shall be made.
14
1
There shall also be stated in a note to the accounts the cumulative amount of goodwill resulting from acquisitions in that and earlier financial years which has been written offF851 otherwise than in the consolidated profit and loss account for that or any earlier financial year.
2
That figure shall be shown net of any goodwill attributable to subsidiary undertakings or businesses disposed of prior to the balance sheet date.
15
Where during the financial year there has been a disposal of an undertaking or group which significantly affects the figures shown in the group accounts, there shall be stated in a note to the accounts—
a
the name of that undertaking or, as the case may be, of the parent undertaking of that group, and
b
the extent to which the profit or loss shown in the group accounts is attributable to profit or loss of that undertaking or group.
16
The information required by paragraph 13, 14 or 15 need not be disclosed with respect to an undertaking which—
a
is established under the law of a country outside the United Kingdom, or
b
carries on business outside the United Kingdom,
if in the opinion of the directors of the parent company the disclosure would be seriously prejudicial to the business of that undertaking or to the business of the parent company or any of its subsidiary undertakings and the Department agrees that the information should not be disclosed.
Minority interests
17
1
The formats set out in Schedule 4 have effect in relation to group accounts with the following additions.
2
In the Balance Sheet Formats a further item headed “
Minority interests
”
shall be added—
a
in Format 1, either after item J or at the end (after item K), and
b
in Format 2, under the general heading “LIABILITIES”, between items A and B;
and under that item shall be shown the amount of capital and reserves attributable to shares in subsidiary undertakings included in the consolidation held by or on behalf of persons other than the parent company and its subsidiary undertakings.
3
In the Profit and Loss Account Formats a further item headed “
Minority interests
”
shall be added—
a
in Format 1, between items 14 and 15,
b
in Format 2, between items 16 and 17,
c
in Format 3, between items 7 and 8 in both sections A and B, and
d
in Format 4, between items 9 and 10 in both sections A and B;
and under that item shall be shown the amount of any profit or loss on ordinary activities attributable to shares in subsidiary undertakings included in the consolidation held by or on behalf of persons other than the parent company and its subsidiary undertakings.
4
In the Profit and Loss Account Formats a further item headed “
Minority interests
”
shall be added—
a
in Format 1, between items 18 and 19,
b
in Format 2, between items 20 and 21,
c
in Format 3, between items 9 and 10 in section A and between items 8 and 9 in section B, and
d
in Format 4, between items 11 and 12 in section A and between items 10 and 11 in section B;
and under that item shall be shown the amount of any profit or loss on extraordinary activities attributable to shares in subsidiary undertakings included in the consolidation held by or on behalf of persons other than the parent company and its subsidiary undertakings.
5
For the purposes of paragraph 3(3) and (4) of Schedule 4 (power to adapt or combine items)—
a
the additional item required by sub‐paragraph (2) shall be treated as one to which a letter is assigned, and
b
the additional items required by sub‐paragraphs (3) and (4) shall be treated as ones to which an Arabic number is assigned.
Para. 18 rep. by SR 2004/496
Joint ventures
19
1
Where an undertaking included in the consolidation manages another undertaking jointly with one or more undertakings not included in the consolidation, that other undertaking ( “the joint venture”) may, if it is not—
a
a body corporate, or
b
a subsidiary undertaking of the parent company,
be dealt with in the group accounts by the method of proportional consolidation.
2
The provisions ofF852 this Schedule relating to the preparation of consolidated accounts apply, with any necessary modifications, to proportional consolidation under this paragraph.
Associated undertakings
20
1
An “associated undertaking” means an undertaking in which an undertaking included in the consolidation has a participating interest and over whose operating and financial policy it exercises a significant influence, and which is not—
a
a subsidiary undertaking of the parent company, or
b
a joint venture dealt with in accordance with paragraph 19.
2
Where an undertaking holds 20 per cent. or more of the voting rights in another undertaking, it shall be presumed to exercise such an influence over it unless the contrary is shown.
3
The voting rights in an undertaking means the rights conferred on shareholders in respect of their shares or, in the case of an undertaking not having a share capital, on members, to vote at general meetings of the undertaking on all, or substantially all, matters.
4
The provisions of paragraphs 5 to 11 of Schedule 10A (rights to be taken into account and attribution of rights) apply in determining for the purposes of this paragraph whether an undertaking holds 20 per cent. or more of the voting rights in another undertaking.
21
1
The formats set out in Schedule 4 have effect in relation to group accounts with the following modifications.
2
In the Balance Sheet Formats the items headed “Participating interests”, that is—
a
in Format 1, item B.III.3, and
b
in Format 2, item B.III.3 under the heading “ASSETS”,
shall be replaced by two items, ” “
Interests in associated undertakings
”
and “
Other participating interests
”
.
3
In the Profit and Loss Account Formats, the items headed “Income from participating interests”, that is—
a
in Format 1, item 8,
b
in Format 2, item 10,
c
in Format 3, item B.4, and
d
in Format 4, item B.6,
shall be replaced by two items, “Income from interests in associated undertakings” and “Income from other participating interests”.
22
1
The interest of an undertaking in an associated undertaking, and the amount of profit or loss attributable to such an interest, shall be shown by the equity method of accounting (including dealing with any goodwill arising in accordance with paragraphs 17 to 19 and 21 of Schedule 4).
2
Where the associated undertaking is itself a parent undertaking, the net assets and profits or losses to be taken into account are those of the parent and its subsidiary undertakings (after making any consolidation adjustments).
3
The equity method of accounting need not be applied if the amounts in question are not material for the purpose of giving a true and fair view.
SCHEDULE 5DISCLOSURE OF INFORMATION: RELATED UNDERTAKINGS
PART ICOMPANIES NOT REQUIRED TO PREPARE GROUP ACCOUNTS
Subsidiary undertakings
1
1
The following information shall be given where at the end of the financial year the company has subsidiary undertakings.
2
The name of each subsidiary undertaking shall be stated.
3
There shall be stated with respect to each subsidiary undertaking—
a
if it is incorporated outside Northern Ireland, the country in which it is incorporated;
b
if it is unincorporated, the address of its principal place of business.
4
The reason why the company is not required to prepare group accounts shall be stated.
5
If the reason is that all the subsidiary undertakings of the company fall within the exclusions provided for in Article 237, it shall be stated with respect to each subsidiary undertaking which of those exclusions applies.
Holdings in subsidiary undertakings
2
1
There shall be stated in relation to shares of each class held by the company in a subsidiary undertaking—
a
the identity of the class, and
b
the proportion of the nominal value of the shares of that class represented by those shares.
2
The shares held by or on behalf of the company itself shall be distinguished from those attributed to the company which are held by or on behalf of a subsidiary undertaking.
Financial information about subsidiary undertakings
3
1
There shall be disclosed with respect to each subsidiary undertaking—
a
the aggregate amount of its capital and reserves as at the end of its relevant financial year, and
b
its profit or loss for that year.
2
That information need not be given if the company is exempt by virtue of Article 236 from the requirement to prepare group accounts (parent company included in accounts of larger group).
F8532A
That information need not be given if the company's investment in the subsidiary undertaking is included in the company's accounts by way of the equity method of valuation.
3
That information need not be given if—
a
the subsidiary undertaking is not required by any provision of this Order to deliver a copy of its balance sheet for its relevant financial year and does not otherwise publish that balance sheet in Northern Ireland or elsewhere, and
b
the company's holding is less than 50 per cent. of the nominal value of the shares in the undertaking.
4
Information otherwise required by this paragraph need not be given if it is not material.
5
For the purposes of this paragraph the “relevant financial year” of a subsidiary undertaking is—
a
if its financial year ends with that of the company, that year, and
b
if not, its financial year ending last before the end of the company's financial year.
Financial years subsidiary undertakings
4
Where—
a
disclosure is made under paragraph 3(1) with respect to a subsidiary undertaking, and
b
that undertaking's financial year does not end with that of the company,
there shall be stated in relation to that undertaking the date on which its last financial year ended (last before the end of the company's financial year).
Para. 5 rep. by SR 1997/314
Significant holdings in undertakings other than subsidiary undertakings
7
1
The information required by paragraphs 8 and 9 shall be given where at the end of the financial year the company has a significant holding in an undertaking which is not a subsidiary undertaking of the company.
2
A holding is significant for this purpose if—
a
it amounts toF855 20 per cent. or more of the nominal value of any class of shares in the undertaking, or
b
the amount of the holding (as stated or included in the company's accounts) exceedsF855 one‐fifth of the amount (as so stated) of the company's assets.
8
1
The name of the undertaking shall be stated.
2
There shall be stated—
a
if the undertaking is incorporated outside Northern Ireland, the country in which it is incorporated;
b
if it is unincorporated, the address of its principal place of business.
3
There shall also be stated—
a
the identity of each class of shares in the undertaking held by the company, and
b
the proportion of the nominal value of the shares of that class represented by those shares.
9
1
F856. . . ,there shall also be stated—
a
the aggregate amount of the capital and reserves of the undertaking as at the end of its relevant financial year, and
b
its profit or loss for that year.
2
That information need not be given if—
a
the company is exempt by virtue of Article 236 from the requirement to prepare group accounts (parent company included in accounts of larger group), and
b
the investment of the company in all undertakings in which it has such a holding as is mentioned in sub‐paragraph (1) is shown, in aggregate, in the notes to the accounts by way of the equity method of valuation.
3
That information need not be given in respect of an undertaking if—
a
the undertaking is not required by any provision of this Order to deliver a copy of its balance sheet for its relevant financial year and does not otherwise publish that balance sheet in Northern Ireland or elsewhere, and
b
the company's holding is less than 50 per cent. of the nominal value of the shares in the undertaking.
4
Information otherwise required by this paragraph need not be given if it is not material.
5
For the purposes of this paragraph the “relevant financial year” of an undertaking is—
a
if its financial year ends with that of the company, that year, and
b
if not, its financial year ending last before the end of the company's financial year.
Membership of certain undertakings
9A
1
The information required by this paragraph shall be given where at the end of the financial year the company is a member of a qualifying undertaking.
2
There shall be stated—
a
the name and legal form of the undertaking, and
b
the address of the undertaking's registered office (whether in or outside Northern Ireland) or, if it does not have such an office, its head office (whether in or outside Northern Ireland).
3
Information otherwise required by sub-paragraph (2) need not be given if it is not material.
4
In this paragraph—
“member”, “qualifying company” and “qualifying partnership” have the same meanings as in the Partnerships and Unlimited Companies (Accounts) Regulations (Northern Ireland) 1994.
“qualifying undertaking” means a qualifying partnership or a qualifying company.
Para. 10 rep. by SR 1997/314
Parent undertaking drawing up accounts for larger group
11
1
Where the company is a subsidiary undertaking, the following information shall be given with respect to the parent undertaking of—
a
the largest group of undertakings for which group accounts are drawn up and of which the company is a member, and
b
the smallest such group of undertakings.
2
The name of the parent undertaking shall be stated.
3
There shall be stated—
a
if the undertaking is incorporated outside Northern Ireland, the country in which it is incorporated;
b
if it is unincorporated, the address of its principal place of business.
4
If copies of the group accounts referred to in sub‐paragraph (1) are available to the public, there shall also be stated the addresses from which copies of the accounts can be obtained.
Identification of ultimate parent company
12
1
Where the company is a subsidiary undertaking, the following information shall be given with respect to the company (if any) regarded by the directors as being the company's ultimate parent company.
2
The name of that company shall be stated.
3
If known to the directors, there shall be stated, if that company is incorporated outside Northern Ireland, the country in which it is incorporated.
4
In this paragraph “company” includes any body corporate.
PART IICOMPANIES REQUIRED TO PREPARE GROUP ACCOUNTS
Introductory
14
In this Part “the group” means the group consisting of the parent company and its subsidiary undertakings.
Subsidiary undertakings
15
1
The following information shall be given with respect to the undertakings which are subsidiary undertakings of the parent company at the end of the financial year.
2
The name of each undertaking shall be stated.
3
There shall be stated—
a
if the undertaking is incorporated outside Northern Ireland, the country in which it is incorporated;
b
if it is unincorporated, the address of its principal place of business.
4
It shall also be stated whether the subsidiary undertaking is included in the consolidation and, if it is not, the reasons for excluding it from consolidation shall be given.
5
It shall be stated with respect to each subsidiary undertaking by virtue of which of the conditions specified in Article 266(2) or (4) it is a subsidiary undertaking of its immediate parent undertaking.
That information need not be given if the relevant condition is that specified in paragraph (2)(a) of that Article (holding of a majority of the voting rights) and the immediate parent undertaking holds the same proportion of the shares in the undertaking as it holds voting rights.
Holdings in subsidiary undertakings
16
1
The following information shall be given with respect to the shares of a subsidiary undertaking held—
a
by the parent company, and
b
by the group;
and the information under heads (a) and (b) shall (if different) be shown separately.
2
There shall be stated—
a
the identity of each class of shares held, and
b
the proportion of the nominal value of the shares of that class represented by those shares.
Financial information about subsidiary undertakings not included in the consolidation
17
1
There shall be shown with respect to each subsidiary undertaking not included in the consolidation—
a
the aggregate amount of its capital and reserves as at the end of its relevant financial year, and
b
its profit or loss for that year.
2
That information need not be given if the group's investment in the undertaking is included in the accounts by way of the equity method of valuation or if—
a
the undertaking is not required by any provision of this Order to deliver a copy of its balance sheet for its relevant financial year and does not otherwise publish that balance sheet in Northern Ireland or elsewhere, and
b
the holding of the group is less than 50 per cent. of the nominal value of the shares in the undertaking.
3
Information otherwise required by this paragraph need not be given if it is not material.
4
For the purposes of this paragraph the “relevant financial year” of a subsidiary undertaking is—
a
if its financial year ends with that of the company, that year, and
b
if not, its financial year ending last before the end of the company's financial year.
Paras. 18, 19 rep. by SR 1997/314
Joint ventures
21
1
The following information shall be given where an undertaking is dealt with in the consolidated accounts by the method of proportional consolidation in accordance with paragraph 19 of Schedule 4A (joint ventures)—
a
the name of the undertaking;
b
the address of the principal place of business of the undertaking;
c
the factors on which joint management of the undertaking is based; and
d
the proportion of the capital of the undertaking held by undertakings included in the consolidation.
2
Where the financial year of the undertaking did not end with that of the company, there shall be stated the date on which a financial year of the undertaking last ended before that date.
Associated undertakings
22
1
The following information shall be given where an undertaking included in the consolidation has an interest in an associated undertaking.
2
The name of the associated undertaking shall be stated.
3
There shall be stated—
a
if the undertaking is incorporated outside Northern Ireland, the country in which it is incorporated;
b
if it is unincorporated, the address of its principal place of business.
4
The following information shall be given with respect to the shares of the undertaking held—
a
by the parent company, and
b
by the group;
and the information under heads (a) and (b) shall be shown separately.
5
There shall be stated—
a
the identity of each class of shares held, and
b
the proportion of the nominal value of the shares of that class represented by those shares.
6
In this paragraph “associated undertaking” has the meaning given by paragraph 20 of Schedule 4A; and the information required by this paragraph shall be given notwithstanding that paragraph 22(3) of that Schedule (materiality) applies in relation to the accounts themselves.
Other significant holdings of parent company or group
23
1
The information required by paragraphs 24 and 25 shall be given where at the end of the financial year the parent company has a significant holding in an undertaking which is not one of its subsidiary undertakings and does not fall within paragraph 21 (joint ventures) or paragraph 22 (associated undertakings).
2
A holding is significant for this purpose if—
a
it amounts toF859 20 per cent. or more of the nominal value of any class of shares in the undertaking, or
b
the amount of the holding (as stated or included in the company's individual accounts) exceedsF859 one‐fifth of the amount of its assets (as so stated).
24
1
The name of the undertaking shall be stated.
2
There shall be stated—
a
if the undertaking is incorporated outside Northern Ireland, the country in which it is incorporated;
b
if it is unincorporated, the address of its principal place of business.
3
The following information shall be given with respect to the shares of the undertaking held by the parent company.
4
There shall be stated—
a
the identity of each class of shares held, and
b
the proportion of the nominal value of the shares of that class represented by those shares.
25
1
F860. . . there shall also be stated—
a
the aggregate amount of the capital and reserves of the undertaking as at the end of its relevant financial year, and
b
its profit or loss for that year.
2
That information need not be given in respect of an undertaking if—
a
the undertaking is not required by any provision of this Order to deliver a copy of its balance sheet for its relevant financial year and does not otherwise publish that balance sheet in Northern Ireland or elsewhere, and
b
the company's holding is less than 50 per cent. of the nominal value of the shares in the undertaking.
3
Information otherwise required by this paragraph need not be given if it is not material.
4
For the purposes of this paragraph the “relevant financial year” of an undertaking is—
a
if its financial year ends with that of the company, that year, and
b
if not, its financial year ending last before the end of the company's financial year.
26
1
The information required by paragraphs 27 and 28 shall be given where at the end of the financial year the group has a significant holding in an undertaking which is not a subsidiary undertaking of the parent company and does not fall within paragraph 21 (joint ventures) or paragraph 22 (associated undertakings).
2
A holding is significant for this purpose if—
a
it amounts toF861 20 per cent. or more of the nominal value of any class of shares in the undertaking, or
b
the amount of the holding (as stated or included in the group accounts) exceedsF861 one‐fifth of the amount of the group's assets (as so stated).
27
1
The name of the undertaking shall be stated.
2
There shall be stated—
a
if the undertaking is incorporated outside Northern Ireland, the country in which it is incorporated;
b
if it is unincorporated, the address of its principal place of business.
3
The following information shall be given with respect to the shares of the undertaking held by the group.
4
There shall be stated—
a
the identity of each class of shares held, and
b
the proportion of the nominal value of the shares of that class represented by those shares.
28
1
F862. . . there shall also be stated—
a
the aggregate amount of the capital and reserves of the undertaking as at the end of its relevant financial year, and
b
its profit or loss for that year.
2
That information need not be given if—
a
the undertaking is not required by any provision of this Order to deliver a copy of its balance sheet for its relevant financial year and does not otherwise publish that balance sheet in Northern Ireland or elsewhere, and
b
the holding of the group is less than 50 per cent. of the nominal value of the shares in the undertaking.
3
Information otherwise required by this paragraph need not be given if it is not material.
4
For the purposes of this paragraph the “relevant financial year” of an undertaking is—
a
if its financial year ends with that of the parent company, that year, and
b
if not, its financial year ending last before the end of the parent company's financial year.
Parent company's or group's membership of certain undertakings
28A
1
The information required by this paragraph shall be given where at the end of the financial year the parent company or group is a member of a qualifying undertaking.
2
There shall be stated—
a
the name and legal form of the undertaking, and
b
the address of the undertaking's registered office (whether in or outside Northern Ireland) or, if it does not have such an office, its head office (whether in or outside Northern Ireland).
3
Information otherwise required by sub‐paragraph (2) need not be given if it is not material.
4
In this paragraph—
“member”, “qualifying company” and “qualifying partnership” have the same meanings as in the Partnerships and Unlimited Companies (Accounts) Regulations (Northern Ireland) 1994.
“qualifying undertaking” means a qualifying partnership or a qualifying company.
Para. 29 rep. by SR 1997/314
Parent undertaking drawing up accounts for larger group
30
1
Where the parent company is itself a subsidiary undertaking, the following information shall be given with respect to that parent undertaking of the company which heads—
a
the largest group of undertakings for which group accounts are drawn up and of which that company is a member, and
b
the smallest such group of undertakings.
2
The name of the parent undertaking shall be stated.
3
There shall be stated—
a
if the undertaking is incorporated outside Northern Ireland, the country in which it is incorporated;
b
if it is unincorporated, the address of its principal place of business.
4
If copies of the group accounts referred to in sub‐paragraph (1) are available to the public, there shall also be stated the addresses from which copies of the accounts can be obtained.
Identification of ultimate parent company
31
1
Where the parent company is itself a subsidiary undertaking, the following information shall be given with respect to the company (if any) regarded by the directors as being that company's ultimate parent company.
2
The name of that company shall be stated.
3
If known to the directors, there shall be stated, if that company is incorporated outside Northern Ireland, the country in which it is incorporated.
4
In this paragraph “company” includes any body corporate.
SCHEDULE 6
F863PART IF863CHAIRMAN'S AND DIRECTORS' EMOLUMENTS, PENSIONS AND COMPENSATION FOR LOSS OF OFFICE
F864CHAPTER 1F864PROVISIONS APPLYING TO QUOTED AND UNQUOTED COMPANIES
SR 2005/56
Aggregate amount of directors' emoluments etc.1
1
Subject to sub-paragraph (2), the following shall be shown, namely—
a
the aggregate amount of emoluments paid to or receivable by directors in respect of qualifying services;
b
the aggregate of the amount of gains made by directors on the exercise of share options;
c
the aggregate of the following, namely—
i
the amount of money paid to or receivable by directors under long term incentive schemes in respect of qualifying services; and
ii
the net value of assets (other than money and share options) received or receivable by directors under such schemes in respect of such services;
d
the aggregate value of any company contributions paid, or treated as paid, to a pension scheme in respect of directors' qualifying services, being contributions by reference to which the rate or amount of any money purchase benefits that may become payable will be calculated; and
e
in the case of each of the following, namely—
i
money purchase schemes; and
ii
defined benefit schemes,
the number of directors (if any) to whom retirement benefits are accruing under such schemes in respect of qualifying services.
2
F865In the case of a company which is not a quoted company and whose equity share capital is not listed on the market known as AIM
a
sub-paragraph (1) shall have effect as if head (b) were omitted and, in head (c)(ii), “assets” did not include shares; and
b
the number of each of the following (if any) shall be shown, namely—
i
the directors who exercised share options; and
ii
the directors in respect of whose qualifying services shares were received or receivable under long term incentive schemes.
3
In this paragraph “emoluments” of a director—
a
includes salary, fees and bonuses, sums paid by way of expenses allowances (so far as they are chargeable to United Kingdom income tax) and, subject to head (b), the estimated money value of any other benefits received by him otherwise than in cash; but
b
does not include any of the following, namely—
i
the value of any share options granted to him or the amount of any gains made on the exercise of any such options;
ii
any company contributions paid, or treated as paid, in respect of him under any pension scheme or any benefits to which he is entitled under any such scheme; or
iii
any money or other assets paid to or received or receivable by him under any long term incentive scheme.
4
In this paragraph “long term incentive scheme” means any agreement or arrangement under which money or other assets may become receivable by a director and which includes one or more qualifying conditions with respect to service or performance which cannot be fulfilled within a single financial year; and for this purpose the following shall be disregarded, namely—
a
bonuses the amount of which falls to be determined by reference to service or performance within a single financial year;
b
compensation for loss of office, payments for breach of contract and other termination payments; and
c
retirement benefits.
5
In this paragraph—
“amount”, in relation to a gain made on the exercise of a share option, means the difference between—
- a
the market price of the shares on the day on which the option was exercised; and
- b
the price actually paid for the shares;
- a
“company contributions”, in relation to a pension scheme and a director, means any payments (including insurance premiums) made, or treated as made, to the scheme in respect of the director by a person other than the director;
“defined benefits” means retirement benefits payable under a pension scheme which are not money purchase benefits;
“defined benefit scheme”, in relation to a director, means a pension scheme which is not a money purchase scheme;
Definition rep. by SR 2005/56
“money purchase benefits”, in relation to a director, means retirement benefits payable under a pension scheme the rate or amount of which is calculated by reference to payments made, or treated as made, by the director or by any other person in respect of the director and which are not average salary benefits;
“money purchase scheme”, in relation to a director, means a pension scheme under which all of the benefits that may become payable to or in respect of the director are money purchase benefits;
“net value”, in relation to any assets received or receivable by a director, means value after deducting any money paid or other value given by the director in respect of those assets;
F866“the official list” has the meaning given in section 103(1) of the Financial Services and Markets Act 2000;
“qualifying services”, in relation to any person, means his services as a director of the company, and his services while director of the company—
- a
as director of any of its subsidiary undertakings; or
- b
otherwise in connection with the management of the affairs of the company or any of its subsidiary undertakings;
- a
F866“recognised investment exchange” has the same meaning as in the Financial Services and Markets Act 2000;
“shares” means shares (whether allotted or not) in the company, or any undertaking which is a group undertaking in relation to the company, and includes a share warrant as defined by Article 198(1);
“share option” means a right to acquire shares;
“value”, in relation to shares received or receivable by a director on any day, means the market price of the shares on that day.
6
For the purposes of this paragraph—
a
any information, other than the aggregate amount of gains made by directors on the exercise of share options, shall be treated as shown if it is capable of being readily ascertained from other information which is shown; and
b
emoluments paid or receivable or share options granted in respect of a person's accepting office as a director shall be treated as emoluments paid or receivable or share options granted in respect of his services as a director.
7
Where a pension scheme provides for any benefits that may become payable to or in respect of any director to be whichever are the greater of—
a
money purchase benefits as determined by or under the scheme; and
b
defined benefits as so determined;
the company may assume for the purposes of this paragraph that those benefits will be money purchase benefits, or defined benefits, according to whichever appears more likely at the end of the financial year.
8
For the purpose of determining whether a pension scheme is a money purchase or defined benefit scheme, any death in service benefits provided for by the scheme shall be disregarded.
F867CHAPTER IIF867PROVISIONS APPLYING ONLY TO UNQUOTED COMPANIES
SR 2005/56
Details of highest paid director's emoluments etc.2
1
Where the aggregates shown under paragraph 1(1)(a), (b) and (c) total ÿ£200,000 or more, the following shall be shown, namely—
a
so much of the total of those aggregates as is attributable to the highest paid director; and
b
so much of the aggregate mentioned in paragraph 1(1)(d) as is so attributable.
2
Where sub-paragraph (1) applies and the highest paid director has performed qualifying services during the financial year by reference to which the rate or amount of any defined benefits that may become payable will be calculated, there shall also be shown—
a
the amount at the end of the year of his accrued pension; and
b
where applicable, the amount at the end of the year of his accrued lump sum.
3
Subject to sub-paragraph (4), where sub-paragraph (1) applies in the case of a company which is not a listed company, there shall also be shown—
a
whether the highest paid director exercised any share options; and
b
whether any shares were received or receivable by that director in respect of qualifying services under a long term incentive scheme.
4
Where the highest paid director has not been involved in any of the transactions specified in sub-paragraph (3), that fact need not be stated.
5
In this paragraph—
“accrued pension” and “accrued lump sum”, in relation to any pension scheme and any director, mean respectively the amount of the annual pension, and the amount of the lump sum, which would be payable under the scheme on his attaining normal pension age if—
- a
he had left the company's services at the end of the financial year;
- b
there were no increase in the general level of prices in Northern Ireland during the period beginning with the end of that year and ending with his attaining that age;
- c
no question arose of any commutation of the pension or inverse commutation of the lump sum; and
- d
any amounts attributable to voluntary contributions paid by the director to the scheme, and any money purchase benefits which would be payable under the scheme, were disregarded;
- a
“the highest paid director” means the director to whom is attributable the greatest part of the total of the aggregates shown under paragraph 1(1)(a), (b) and (c);
“normal pension age”, in relation to any pension scheme and any director, means the age at which the director will first become entitled to receive a full pension on retirement of an amount determined without reduction to take account of its payment before a later age (but disregarding any entitlement to pension upon retirement in the event of illness, incapacity or redundancy).
6
Sub-paragraphs (4) to (8) of paragraph 1 apply for the purposes of this paragraph as they apply for the purpose of that paragraph.
Excess retirement benefits of directors and past directors7
1
Subject to sub-paragraph (2) there shall be shown the aggregate amount of—
a
so much of retirement benefits paid to or receivable by directors under pension schemes; and
b
so much of retirement benefits paid to or receivable by past directors under such schemes,
as (in each case) is in excess of the retirement benefits to which they were respectively entitled on the date on which the benefits first became payable or 16th February 1998, whichever is the later.
2
Amounts paid or receivable under a pension scheme need not be included in the aggregate amount if—
a
the funding of the scheme was such that the amounts were or, as the case may be, could have been paid without recourse to additional contributions; and
b
amounts were paid to or receivable by all pensioner members of the scheme on the same basis;
and in this sub-paragraph “pensioner member”, in relation to a pension scheme, means any person who is entitled to the present payment of retirement benefits under the scheme.
3
In this paragraph—
a
references to retirement benefits include benefits otherwise than in cash; and
b
in relation to so much of retirement benefits as consists of a benefit otherwise than in cash, references to their amount are to the estimated money value of the benefit;
and the nature of any such benefit shall also be disclosed.
Compensation to directors for loss of office8
1
There shall be shown the aggregate amount of any compensation to directors or past directors in respect of loss of office.
2
This amount includes compensation received or receivable by a director or past director for—
a
loss of office as director of the company, or
b
loss, while director of the company or on or in connection with his ceasing to be a director of it, of—
i
any other office in connection with the management of the company's affairs, or
ii
any office as director or otherwise in connection with the management of the affairs of any subsidiary undertaking of the company;
F868. . .
3
References to compensation include benefits otherwise than in cash; and in relation to such compensation references to its amount are to the estimated money value of the benefit.
The nature of any such compensation shall be disclosed.
F8684
In this paragraph, references to compensation for loss of office include the following, namely—
a
compensation in consideration for, or in connection with, a person's retirement from office; and
b
where such a retirement is occasioned by a breach of the person's contract with the company or with a subsidiary undertaking of the company—
i
payments made by way of damages for the breach; or
ii
payments made by way of settlement or compromise of any claim in respect of the breach.
5
Sub-paragraph (6)(a) of paragraph 1 applies for the purposes of this paragraph as it applies for the purposes of that paragraph.
Sums paid to third parties in respect of directors' services9
1
There shall be shown the aggregate amount of any consideration paid to or receivable by third parties for making available the services of any person—
a
as a director of the company, or
b
while director of the company—
i
as director of any of its subsidiary undertakings, or
ii
otherwise in connection with the management of the affairs of the company or any of its subsidiary undertakings.
2
The reference to consideration includes benefits otherwise than in cash; and in relation to such consideration the reference to its amount is to the estimated money value of the benefit.
The nature of any such consideration shall be disclosed.
3
The reference to third parties is to persons other than—
a
the director himself or a person connected with him or body corporate controlled by him, and
b
the company or any of its subsidiary undertakings.
Supplementary10
1
The following applies with respect to the amounts to be shown underF869 this Part.
2
The amount in each case includes all relevant sums paid by or receivable from—
a
the company; and
b
the company's subsidiary undertakings; and
c
any other person,
except sums to be accounted for to the company or any of its subsidiary undertakings or, by virtue of Articles 322 and 323 (duty of directors to make disclosure on company takeover; consequence of non‐compliance), to past or present members of the company or any of its subsidiaries or any class of those members.
Sub-para. (3) rep. by SR 1997/545
4
References to amounts paid to or receivable by a person include amounts paid to or receivable by a person connected with him or a body corporate controlled by him (but not so as to require an amount to be counted twice).
11
1
The amounts to be shown for any financial year underF870 this Part are the sums receivable in respect of that year (whenever paid) or, in the case of sums not receivable in respect of a period, the sums paid during that year.
2
But where—
a
any sums are not shown in a note to the accounts for the relevant financial year on the ground that the person receiving them is liable to account for them as mentioned in paragraph 10(2), but the liability is thereafter wholly or partly released or is not enforced within a period of 2 years; or
b
any sums paid by way of expenses allowance are charged to United Kingdom income tax after the end of the relevant financial year,
those sums shall, to the extent to which the liability is released or not enforced or they are charged as mentioned above (as the case may be), be shown in a note to the first accounts in which it is practicable to show them and shall be distinguished from the amounts to be shown apart from this provision.
12
Where it is necessary to do so for the purpose of making any distinction required by the preceding paragraphs in an amount to be shown in compliance with this Part, the directors may apportion any payments between the matters in respect of which these have been paid or are receivable in such manner as they think appropriate.
Interpretation13
1
The following applies for the interpretation of this Part.
2
A reference to a subsidiary undertaking of the company—
a
in relation to a person who is or was, while a director of the company, a director also, by virtue of the company's nomination (direct or indirect) of any other undertaking, includes (subject to the following head) that undertaking, whether or not it is or was in fact a subsidiary undertaking of the company, and
b
for the purposes of paragraphs 1 to 7F871. . . is to an undertaking which is a subsidiary undertaking at the time the services were rendered, and for the purposes of paragraph 8 to a subsidiary undertaking immediately before the loss of office as director.
F8713
The following definitions apply—
a
“pension scheme” has the meaning assigned to “retirement benefits scheme” by section 611 of the Income and Corporation Taxes Act 1988;
b
“retirement benefits” has the meaning assigned to “relevant benefits” by section 612(1) of that Act.
4
References in this Part to a person being “connected” with a director, and to a director “controlling” a body corporate, shall be construed in accordance with Article 354.
Supplementary14
This Part requires information to be given only so far as it is contained in the company's books and papers or the company has the right to obtain it from the persons concerned.
F872PART IIF872LOANS, QUASI‐LOANS AND OTHER DEALINGS IN FAVOUR OF DIRECTORS
F87315
F873The group accounts of a holding company, or if it is not required to prepare group accounts its individual accounts, shall contain the particulars required by this Schedule of—
a
any transaction or arrangement of a kind described in F874section 197, 198, 200, 201 or 203 of the Companies Act 2006 entered into by the company or by a subsidiary of the company for a person who at any time during the financial year was a director of the company or its holding company, or was connected with such a director;
b
an agreement by the company or by a subsidiary of the company to enter into any such transaction or arrangement for a person who was at any time during the financial year a director of the company or its holding company, or was connected with such a director; and
c
any other transaction or arrangement with the company or a subsidiary of it in which a person who at any time during the financial year was a director of the company or its holding company had, directly or indirectly, a material interest.
F87516
The accounts prepared by a company other than a holding company shall contain the particulars required by this Schedule of—
a
any transaction or arrangement of a kind described in F876section 197, 198, 200, 201 or 203 of the Companies Act 2006 entered into by the company for a person who at any time during the financial year was a director of it or of its holding company, or was connected with such a director;
b
an agreement by the company to enter into any such transaction or arrangement for a person who at any time during the financial year was a director of the company or its holding company or was connected with such a director; and
c
any other transaction or arrangement with the company in which a person who at any time during the financial year was a director of the company or its holding company had, directly or indirectly, a material interest.
F87717
1
For the purposes of paragraphsF877 15(c) andF877 16(c), a transaction or arrangement between a company and a director of it or of its holding company, or a person connected with such a director, is to be treated (if it would not otherwise be so) as a transaction, arrangement or agreement in which that director is interested.
2
An interest in such a transaction or arrangement is not “material” for the purposes of paragraphsF877 15(c) andF877 16(c) if in the board's opinion it is not so; but this is without prejudice to the question whether or not such an interest is material in a case where the board have not considered the matter.
“This board” here means the directors of the company preparing the accounts, or a majority of those directors, but excluding in either case the director whose interest it is.
F87818
ParagraphsF878 15 andF878 16 do not apply in relation to the following transactions, arrangements and agreements—
a
a transaction, arrangement or agreement between one company and another in which a director of the former or of its subsidiary or holding company is interested only by virtue of his being a director of the latter;
b
a contract of service between a company and one of its directors or a director of its holding company, or between a director of a company and any of that company's subsidiaries;
c
a transaction, arrangement or agreement which was not entered into during the financial year and which did not subsist at any time during that year.
F87919
a
the transaction or arrangement F880was one in respect of which approval was required under section 197, 198, 200, 201 or 203 of the Companies Act 2006;
b
the person for whom it was made was a director of the company or was connected with a director of it at the time it was made;
c
in the case of a transaction or arrangement made by a company which at any time during a financial year is a subsidiary of another company, it was a subsidiary of that other company at the time the transaction or arrangement was made.
F88120
Neither paragraphF881 15(c) nor paragraphF881 16(c) applies in relation to any transaction or arrangement if—
a
each party to the transaction or arrangement which is a member of the same group of companies (meaning a holding company and its subsidiaries) as the company entered into the transaction or arrangement in the ordinary course of business, and
b
the terms of the transaction or arrangement are not less favourable to any such party than it would be reasonable to expect if the interest mentioned in either of those paragraphs had not been an interest of a person who was a director of the company or of its company.
F88221
Neither paragraphF882 15(c) nor paragraphF882 16(c) applies in relation to any transaction or arrangement if—
a
the company is a member of a group of companies (meaning a holding company and its subsidiaries), and
b
either the company is a wholly-owned subsidiary or no body corporate (other than the company or a subsidiary of the company) which is a member of the group of companies which includes the company's ultimate holding company was a party to the transaction or arrangement, and
c
the director in question was at some time during the relevant period associated with the company, and
d
the material interest of the director in question in the transaction or arrangement would not have arisen if he had not been associated with the company at any time during the relevant period.
F883The particulars required by this PartF88322
1
Subject to paragraphF883 23, the particulars by this Part are those of the principal terms of the transaction, arrangement or agreement.
2
Without prejudice to the generality of sub-paragraph (1), the following particulars are required—
a
a statement of the fact either that the transaction, arrangement or agreement was made or subsisted (as the case may be) during the financial year;
b
the name of the person for whom it was made and where that person is or was connected with a director of the company or of its holding company, the name of that director;
c
d
in the case of a loan or an agreement for a loan or an arrangement within F884section 203 of the Companies Act 2006 relating to a loan—
i
the amount of the liability of the person to whom the loan was or was agreed to be made, in respect of principal and interest, at the beginning and at the end to the financial year;
ii
the maximum amount of that liability during that year;
iii
the amount of any interest which, having fallen due, has not been paid; and
iv
the amount of any provision (within the meaning of Schedule 4) made in respect of any failure or anticipated failure by the borrower to repay the whole or part of the loan or to pay the whole or part of any interest on it;
e
in the case of a guarantee or security or an arrangement within F885section 203(1)(b) of the Companies Act 2006 relating to a guarantee or security—
i
the amount for which the company (or its subsidiary) was liable under the guarantee or in respect of the security both at the beginning and at the end of the financial year;
ii
the maximum amount for which the company (or its subsidiary) may become so liable; and
iii
any amount paid and any liability incurred by the company (or its subsidiary) for the purpose of fulfilling the guarantee or discharging the security (including any loss incurred by reason of the enforcement of the guarantee or security); and
f
in the case of any transaction, arrangement or agreement, other than those mentioned in heads (d) and (e) the value of the transaction or arrangement or (as the case may be) the value of the transaction or arrangement to which the agreement relates.
F88623
In paragraphF886 22(2), heads (c) to (f) do not apply in the case of a loan or quasi-loan made or agreed to be made by a company to or for a body corporate which is either—
a
a body corporate of which that company is a wholly-owned subsidiary,or
b
a wholly-owned subsidiary of a body corporate of which that company is a wholly-owned subsidiary, or
c
a wholly-owned subsidiary of that company,
if particulars of that loan, quasi-loan or agreement for it would not have been required to be included in that company's annual accounts if the first-mentioned body corporate had not been associated with a director of that company at any time during the relevant period.
F887Excluded transactionsF88724
1
In relation to a company's accounts for a financial year, compliance with this Part is not required in the case of transactions of a kind mentioned in sub-paragraph (2) which are made by the company or a subsidiary of it for a person who at any time during that financial year was a director of the company or of its holding company, or was connected with such a director, if the aggregate of the values of each transaction, arrangement or agreement so made for that director or any person connected with him, less the amount (if any) by which the liabilities of the person for whom the transaction or arrangement was made has been reduced, did not at any time during the financial year exceed £5,000.
2
The transactions in question are—
a
credit transactions,
b
guarantees provided or securities entered into in connection with credit transactions,
c
arrangements within F888section 203 of the Companies Act 2006 relating to credit transactions, and
d
agreements to enter into credit transactions.
F88925
In relation to a company's accounts for a financial year, compliance with this Part is not required by virtue of paragraphF889 15(c) orF889 16(c) in the case of any transaction or arrangement with a company or any of its subsidiaries in which a director of the company or its holding company had, directly or indirectly, a material interest if—
a
b
the value of each transaction or arrangement which was made before the commencement of the financial year less the amount (if any) by which the liabilities of the person for whom the transaction or arrangement was made have been reduced,
did not at any time during the financial year exceed in the aggregate £1,000 or. if more, did not exceed £5,000 or one per cent. of the value of the net assets of the company preparing the accounts in question as at the end of the financial year, whichever is the less.
For this purpose a company's net assets are the aggregate of its assets less the aggregate of its liabilities ( “liabilities” to include anyF890 provision for liabilities within paragraph 88 of Schedule 4F890 that is made in Companies Order accounts and any provision that is made in IAS accounts. ).
F89126
InterpretationF89427
F8951
The following provisions of the Companies Act 2006 apply for the purposes of this Part—
a
section 202 (meaning of “credit transaction”);
b
section 211 (value of transactions and arrangements);
c
section 212 (person for whom a transaction or arrangement is entered into);
d
sections 252 to 255 and Schedule 1 (persons connected with a director).
F8942
In this Part “director” includes a shadow director.
F896PART IIIF896OTHER TRANSACTIONS, ARRANGEMENTS AND AGREEMENTS
F89728
This Part applies in relation to the following classes of transactions, arrangements and agreements—
a
loans, guarantees and securities relating to loans, arrangements of a kind described in F898section 203 of the Companies Act 2006 relating to loans and agreements to enter into any of the foregoing transactions and arrangements;
b
quasi-loans, guarantees and securities relating to quasi-loans, arrangements of a kind described in F899that section relating to quasi-loans and agreements to enter into any of the foregoing transactions and arrangements;
c
credit transactions, guarantees and securities relating to credit transactions, arrangements of a kind described in F899that section relating to credit transactions and agreements to enter into any of the foregoing transactions and arrangements.
F90029
1
To comply with this Part, the accounts must contain a statement, in relation to transactions, arrangements and agreementsF900 made by the company or a subsidiary of it for persons who at any time during the financial year were officers of the company (but not directors or shadow directors), of—
a
the aggregate amounts outstanding at the end of the financial year under transactions, arrangements and agreements within sub-paragraphs (a), (b) and (c) respectively of paragraphF900 28, and
b
the numbers of officers for whom the transactions, arrangements and agreements falling within each of those sub-paragraphs were made.
2
This paragraph does not apply to transactions, arrangements and agreements made by the company or any of its subsidiaries for an officer of the company if the aggregate amount outstanding at the end of the financial year under the transactions, arrangements and agreements so made for that officer does not exceed £2,500.
3
F90330
The following provisionsF904 of the Companies Act 2006 apply for the purposes of this Part—
a
section 199 (meaning of “quasi-loan”),
b
section 202 (meaning of “credit transaction”), and
and “amount outstanding” means the amount of the outstanding liabilities of the person for whom the transaction, arrangement or agreement was made or, in the case of a guarantee or security, the amount guaranteed or secured.
SCHEDULE 7
PART IMATTERS OF A GENERAL NATURE
Asset values
1
Sub-para. (1) rep. by SR 1997/314
2
If, in the case ofF905 such of the fixed assets of the companyF906. . . as consist in interests in land, their market value (as at the end of the financial year) differs substantially from the amount at which they are included in the balance sheet, and the difference is, in the director's opinion, of such significance as to require that the attention of members of the company or of holders of its debentures should be drawn to it, the report shall indicate the difference with such degree of precision as is practicable.
F9063
In relation to a group directors' report sub‐paragraph (2) has effect as if the reference to the fixed assets of the company was a reference to the fixed assets of the company and its subsidiary undertakings included in the consolidation.
Directors' interests
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
F907. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2A
F908. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2B
F909. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Political and charitable gifts
3
1
The following applies if the company (not being the wholly-owned subsidiary of a company incorporated in Northern Ireland) has in the financial year given money for political purposes or charitable purposes or both.
2
If the money given exceeded £200 in amount, there shall be contained in the directors' report for the year—
a
in the case of each of the purposes for which money has been given, a statement of the amount of money given for that purpose, and
b
in the case of political purposes for which money has been given, the following particulars (so far as applicable)—
i
the name of each person to whom money has been given for those purposes exceeding £200 in amount and the amount of money given,
ii
if money exceeding £200 in amount has been given by way of donation or subscription to a political party, the identity of the party and the amount of money given.
4
1
Paragraph 3 does not apply to a company which, at the end of the financial year, has subsidiaries which have, in that year, given money as mentioned in that paragraph, but is not itself the wholly-owned subsidiary of a company incorporated in Northern Ireland.
2
But in such a case there shall (if the amount of money so given in that year by the company and the subsidiaries between them exceeds £200) be contained in the director's report for the year—
a
in the case of each of the purposes for which money has been given by the company and the subsidiaries between them, a statement of the amount of money given for that purpose, and
b
in the case of political purposes for which money has been given, the like particulars (so far as applicable) as are required by paragraph 3.
5
1
This paragraph applies for the interpretation of paragraphs 3 and 4.
2
A company is to be treated as giving money for political purpose if, directly or indirectly—
a
it gives a donation or subscription to a political party of the United Kingdom or any part of it; or
b
it give a donation or subscription to a person who, to the company's knowledge, is carrying on, or proposing to carry on, any activities which can, at the time at which the donation or subscription was given, reasonably be regarded as likely to affect public support for such a political party as is mentioned in head (a).
3
Money given for charitable purposes to a person who, when it was given, was ordinarily resident outside the United Kingdom is to be left outs of account.
4
“Charitable purposes” means purposes which are exclusively charitable.
Para. 5A rep. by SR 1997/314
Miscellaneous
6
F9101
The directors' report shall contain—
a
particulars of any important event affecting the companyF910. . . which have occurred since the end of the financial year,
c
F911d
(unless the company is an unlimited company) an indication of the existence of branches (as defined in Article 648(2)) of the company outside the United Kingdom.
.
F9102
In relation to a group directors' report heads (a), (b) and (c) of sub‐paragraph (1) have effect as if the references to the company were references to the company and its subsidiary undertakings included in the consolidation.
PART IIDISCLOSURE REQUIRED BY COMPANY ACQUIRING ITS OWN SHARES, ETC.
7
This Part applies where shares in a company—
a
are purchased by the company or are acquired by it by forfeiture or surrender in lieu of forfeiture, or in pursuance of Article 153(3) (acquisition of own shares by limited company),
b
are acquired by another person in circumstances where Article 156(1) (c) or (d) applies (acquisition by company's nominee, or by another with company financial assistance, the company having a beneficial interest), or
c
are made subject to a lien or other charge taken (whether expressly or otherwise) by the company and permitted by Article 160(2) or (4), or Article 8(3) of the Consequential Provisions Order (exceptions from general rule against a company having a lien or charge on its own shares).
8
The directors' report with respect to a financial year shall state—
a
the number and nominal value of the shares so purchased, the aggregate amount of the consideration paid by the company for such shares and the reasons for their purchase;
b
the number and nominal value of the shares so acquired by the company, acquired by another person in such circumstances and so charged respectively during the financial year;
c
the maximum number and nominal value of shares which, having been so acquired by the company, acquired by another person in such circumstances or so charged (whether or not during that year) are held at any time by the company or that other person during that year;
d
the number and nominal value of the shares so acquired by the company, acquired by another person in such circumstances or so charged (whether or not during that year) which are disposed of by the company or that other person or cancelled by the company during that year;
e
where the number and nominal value of the shares of any particular description are stated in pursuance of any of the preceding sub-paragraphs, the percentage of the called-up share capital which shares of that description represent;
f
where any of the shares have been so charged, the amount of the charge in each case; and
g
where any of the shares have been disposed of by the company or the person who acquired them in such circumstances for money or money's worth, the amount or value of the consideration in each case.
PART IIIDISCLOSURE CONCERNING EMPLOYMENT, ETC. OF DISABLED PERSONS
9
1
This Part applies to the directors' report where the average number of persons employed by the company in each week during the financial year exceeded 250.
2
That average number is the quotient derived by dividing, by the number of weeks in the financial year, the number derived by ascertaining, in relation to each of those weeks, the number of persons who, under contracts of service, were employed in the week (whether throughout it or not) by the company, and adding up the numbers ascertained.
3
The directors' report shall in that case contain a statement describing such policy as the company has applied during the financial year—
a
for giving full and fair consideration to applications for employment by the company made by disabled persons, having regard to their particular aptitudes and abilities,
b
for continuing the employment of, and for arranging appropriate training for, employees of the company who have become disabled persons during the period when they were employed by the company, and
c
otherwise for the training, career development and promotion of disabled persons employed by the company.
4
In this Part—
a
“employment” means employment other than employment to work wholly or mainly outside the United Kingdom, and
b
“disabled person” means a disabled person within the meaning of theF912 Disability Discrimination Act 1995.
Part IV rep. by SR 1997/314
PART VEMPLOYEE INVOLVEMENT
11
1
This part applies to the director's report where the average number of persons employed by the company in each week during the financial year exceeded 250.
2
That average number is the quotient derived by dividing by the number of weeks in the financial year the number derived by ascertaining, in relation to each of those weeks, the number of persons who, under contracts of service, were employed in the week (whether throughout it or not) by the company, and adding up the numbers ascertained.
3
The directors' report shall in that case contain a statement describing the action that has been taken during the financial year to introduce, maintain or develop arrangements aimed at—
a
providing employees systematically with information on matters of concern to them as employees;
b
consulting employees or their representatives on a regular basis so that the views of employees can be taken into account in making decisions which are likely to affect their interests;
c
encouraging the involvement of employees in the company's performance through an employees' share scheme or by some other means;
d
achieving a common awareness on the part of all employees of the financial and economic factors affecting the performance of the company.
4
In sub-paragraph (3) “employee” does not include a person employed to work wholly or mainly outside the United Kingdom; and for the purposes of sub-paragraph (2) no regard is to be had to such a person.
Part VIPolicy and Practice on Payment of Creditors
12
1
This Part applies to the directors report for a financial year if—
a
the company was at any time within the financial year a public company, or
b
the company did not qualify as small or medium-sized in relation to the financial year by virtue of Article 255 and was at any time within the year a member of a group of which the parent company was a public company.
2
The report shall state, with respect to the next following financial year—
a
whether in respect of some or all of its suppliers it is the company's policy to follow any code or standard on payment practice and, if so, the name of the code or standard and the place where information about, and copies of, the code or standard can be obtained,
b
whether in respect of some or all of its suppliers it is the company's policy—
i
to settle the terms of payment with those suppliers when agreeing the terms of each transaction,
ii
to ensure that those suppliers are made aware of the terms of payment, and
iii
to abide by the terms of payment,
c
where the company's policy is not as mentioned in head (a) or (b) in respect of some or all of its suppliers, what its policy is with respect to the payment of those suppliers;
and if the company's policy is different for different suppliers or classes of suppliers, the report shall identify the suppliers to which the different policies apply. In this sub-paragraph references to the company's suppliers are references to persons who are or may become its suppliers.
3
The report shall also state the number of days which bears to the number of days in the financial year the same proportion as X bears to Y where—
X = the aggregate of the amounts which were owed to trade creditors at the end of the year; and
Y = the aggregate of the amounts in which the company was invoiced by suppliers during the year.
4
For the purposes of sub-paragraphs (2) and (3) a person is a supplier of the company at any time if—
a
at that time, he is owed an amount in respect of goods or services supplied, and
b
that amount would be included under the heading corresponding to item E. 4 (trade creditors) in Format 1 if—
i
the company's accounts fell to be prepared as at that time,
ii
those accounts were prepared in accordance with Schedule 4, and
iii
that Format were adopted.
5
For the purpose of sub-paragraph (3), the aggregate of the amounts which at the end of the financial year were owed to trade creditors shall be taken to be—
a
where in the company's accounts Format 1 of the balance sheet formats set out in Part I of Schedule 4 is adopted, the amount shown under the heading corresponding to item E. 4 (trade creditors) in that Format,
b
where Format 2 is adopted, the amount which, under the heading corresponding to item C. 4 (trade creditors) in that Format, is shown as falling due within one year, and
c
where the company's accounts are prepared in accordance with Schedule 9 or 9A, the amount which would be shown under the heading corresponding to Item E. 4 (trade creditors) in Format 1 if the company's accounts were prepared in accordance with Schedule 4 and that Format were adopted.
SCHEDULE 7ZAOPERATING AND FINANCIAL REVIEW
Review objective
1
An operating and financial review is a balanced and comprehensive analysis, consistent with the size and complexity of the business, of—
a
the development and performance of the business of the company during the financial year,
b
the position of the company at the end of the year,
c
the main trends and factors underlying the development, performance and position of the business of the company during the financial year, and
d
the main trends and factors which are likely to affect the company's future development, performance and position,
prepared so as to assist the members of the company to assess the strategies adopted by the company and the potential for those strategies to succeed.
Other general requirements
2
The review must include—
a
a statement of the business, objectives and strategies of the company;
b
a description of the resources available to the company;
c
a description of the principal risks and uncertainties facing the company; and
d
a description of the capital structure, the treasury policies and objectives and liquidity of the company.
Details of particular matters
3
1
To the extent necessary to comply with the general requirements of paragraphs 1 and 2, the review must comply with paragraphs 4 to 6.
2
If the review does not contain information and analysis of each kind mentioned in paragraphs 4 and 5, it must state which of those kinds of information and analysis it does not contain.
4
1
The review must include—
a
information about environmental matters (including the impact of the business of the company on the environment),
b
information about the company's employees, and
c
information about social and community issues.
2
The review must, in particular, include—
a
information about the policies of the company in each area mentioned in sub‐paragraph (1), and
b
information about the extent to which those policies have been successfully implemented.
5
The review must also include—
a
information about persons with whom the company has contractual or other arrangements which are essential to the business of the company; and
b
information about receipts from, and returns to, members of the company in respect of shares held by them.
6
1
The review must include analysis using financial and, where appropriate, other key performance indicators, including information relating to environmental matters and employee matters.
2
In sub‐paragraph (1), “key performance indicators” means factors by reference to which the development, performance or position of the business of the company can be measured effectively.
Reference to and explanation of company accounts
7
To the extent necessary to comply with the general requirements of paragraphs 1 and 2, the review must, where appropriate, include references to, and additional explanations of, amounts included in the company's annual accounts.
Application of Schedule to group operating and financial review
8
In relation to a group operating and financial review this Schedule has effect as if the references to the company (other than the last such reference in paragraph 1) were references to the company and its subsidiary undertakings included in the consolidation.
SCHEDULE 7A
PART IINTRODUCTORY
1
1
In the directors' remuneration report for a financial year ( “the relevant financial year”) there shall be shown the information specified in Parts II and III.
2
Information required to be shown in the report for or in respect of a particular person shall be shown in the report in a manner that links the information to that person identified by name.
PART IIINFORMATION NOT SUBJECT TO AUDIT
Consideration by the directors of matters relating to directors' remuneration
2
1
If a committee of the company's directors has considered matters relating to the directors' remuneration for the relevant financial year, the directors' remuneration report shall—
a
name each director who was a member of the committee at any time when the committee was considering any such matter;
b
name any person who provided to the committee advice, or services, that materially assisted the committee in their consideration of any such matter;
c
in the case of any such person named under head (b), who is not a director of the company, state—
i
the nature of any other services that that person has provided to the company during the relevant financial year; and
ii
whether that person was appointed by the committee.
2
In sub‐paragraph (1)(b) “person” includes (in particular) any director of the company who does not fall within sub‐paragraph (1)(a).
Statement of company's policy on directors' remuneration
3
1
The directors' remuneration report shall contain a statement of the company's policy on directors' remuneration for the following financial year and for financial years subsequent to that.
2
The policy statement shall include—
a
for each director, a detailed summary of any performance conditions to which any entitlement of the director—
i
to share options, or
ii
under a long‐term incentive scheme,
is subject;
b
an explanation as to why any such performance conditions were chosen;
c
a summary of the methods to be used in assessing whether any such performance conditions are met and an explanation as to why those methods were chosen;
d
if any such performance condition involves any comparison with factors external to the company—
i
a summary of the factors to be used in making each such comparison, and
ii
if any of the factors relates to the performance of another company, of two or more other companies or of an index on which the securities of a company or companies are listed, the identity of that company, of each of those companies or of the index;
e
a description of, and an explanation for, any significant amendment proposed to be made to the terms and conditions of any entitlement of a director to share options or under a long‐term incentive scheme; and
f
if any entitlement of a director to share options, or under a long‐term incentive scheme, is not subject to performance conditions, an explanation as to why that is the case.
3
The policy statement shall, in respect of each director's terms and conditions relating to remuneration, explain the relative importance of those elements which are, and those which are not, related to performance.
4
The policy statement shall summarise, and explain, the company's policy on—
a
the duration of contracts with directors, and
b
notice periods, and termination payments, under such contracts.
5
In sub‐paragraphs (2) and (3), references to a director are to any person who serves as a director of the company at any time in the period beginning with the end of the relevant financial year and ending with the date on which the directors' remuneration report is laid before the company in general meeting.
Performance graph
4
1
The directors' remuneration report shall—
a
contain a line graph that shows for each of—
i
a holding of shares of that class of the company's equity share capital whose listing, or admission to dealing, has resulted in the company falling within the definition of quoted company, and
ii
a hypothetical holding of shares made up of shares of the same kinds and number as those by reference to which a broad equity market index is calculated,
a line drawn by joining up points plotted to represent, for each of the financial years in the relevant period, the total shareholder return on that holding; and
b
state the name of the index selected for the purposes of the graph and set out the reasons for selecting that index.
2
For the purposes of sub‐paragraphs (1) and (4), “relevant period” means the five financial years of which the last is the relevant financial year.
3
Where the relevant financial year—
a
is the company's second, third or fourth financial year, sub‐paragraph (2) has effect with the substitution of “
two
”
, “
three
”
or “
four
”
(as the case may be) for “five”; and
b
is the company's first financial year, “relevant period”, for the purposes of sub‐paragraphs (1) and (4), means the relevant financial year.
4
For the purposes of sub‐paragraph (1), the “total shareholder” return for a relevant period on a holding of shares must be calculated using a fair method that—
a
takes as its starting point the percentage change over the period in the market price of the holding;
b
involves making—
i
the assumptions specified in sub‐paragraph (5) as to reinvestment of income, and
ii
the assumption specified in sub‐paragraph (7) as to the funding of liabilities; and
c
makes provision for any replacement of shares in the holding by shares of a different description;
and the same method must be used for each of the holdings mentioned in sub‐paragraph (1).
5
The assumptions as to reinvestment of income are—
a
that any benefit in the form of shares of the same kind as those in the holding is added to the holding at the time the benefit becomes receivable; and
b
that any benefit in cash, and an amount equal to the value of any benefit not in cash and not falling within head (a), is applied at the time the benefit becomes receivable in the purchase at their market price of shares of the same kind as those in the holding and that the shares purchased are added to the holding at that time.
6
In sub‐paragraph (5) “benefit” means any benefit (including, in particular, any dividend) receivable in respect of any shares in the holding by the holder from the company of whose share capital the shares form part.
7
The assumption as to the funding of liabilities is that, where the holder has a liability to the company of whose capital the shares in the holding form part, shares are sold from the holding—
a
immediately before the time by which the liability is due to be satisfied, and
b
in such numbers that, at the time of the sale, the market price of the shares sold equals the amount of the liability in respect of the shares in the holding that are not being sold.
8
In sub‐paragraph (7) “liability” means a liability arising in respect of any shares in the holding or from the exercise of a right attached to any of those shares.
Service contracts
5
1
The directors' remuneration report shall contain, in respect of the contract of service or contract for services of each person who has served as a director of the company at any time during the relevant financial year, the following information—
a
the date of the contract, the unexpired term and the details of any notice periods;
b
any provision for compensation payable upon early termination of the contract; and
c
such details of other provisions in the contract as are necessary to enable members of the company to estimate the liability of the company in the event of early termination of the contract.
2
The directors' remuneration report shall contain an explanation for any significant award made to a person in the circumstances described in paragraph 14.
PART IIIINFORMATION SUBJECT TO AUDIT
Amount of each director's emoluments and compensation in the relevant financial year
6
1
The directors' remuneration report shall for the relevant financial year show, for each person who has served as a director of the company at any time during that year, each of the following—
a
the total amount of salary and fees paid to or receivable by the person in respect of qualifying services;
b
the total amount of bonuses so paid or receivable;
c
the total amount of sums paid by way of expenses allowance that are—
i
chargeable to United Kingdom income tax (or would be if the person were an individual); and
ii
paid to or receivable by the person in respect of qualifying services;
d
the total amount of—
i
any compensation for loss of office paid to or receivable by the person, and
ii
any other payments paid to or receivable by the person in connection with the termination of qualifying services;
e
the total estimated value of any benefits received by the person otherwise than in cash that—
i
do not fall within any of heads (a) to (d) or paragraphs 7 to 11,
ii
are emoluments of the person, and
iii
are received by the person in respect of qualifying services; and
f
the amount that is the total of the sums mentioned in heads (a) to (e).
2
The directors' remuneration report shall show, for each person who has served as a director of the company at any time during the relevant financial year, the amount that for the financial year preceding the relevant financial year is the total of the sums mentioned in heads (a) to (e) of sub‐paragraph (1).
3
The directors' remuneration report shall also state the nature of any element of a remuneration package which is not cash.
4
The information required by sub‐paragraphs (1) and (2) shall be presented in tabular form.
Long-term incentive schemes
10
1
The directors' remuneration report shall contain, in respect of each person who has served as a director of the company at any time in the relevant financial year, the information specified in paragraph 11.
2
Sub‐paragraph (1) does not require the report to contain share option details that are contained in the report in compliance with paragraphs 7 to 9.
3
The information specified in paragraph 11 shall be presented in tabular form in the report.
4
For the purposes of paragraph 11—
a
“scheme interest”, in relation to a person, means an interest under a long-term incentive scheme that is an interest in respect of which assets may become receivable under the scheme in respect of qualifying services of the person; and
b
such an interest “vests” at the earliest time when—
i
it has been ascertained that the qualifying conditions have been fulfilled, and
ii
the nature and quantity of the assets receivable under the scheme in respect of the interest have been ascertained.
5
In this Schedule “long‐term incentive scheme” means any agreement or arrangement under which money or other assets may become receivable by a person and which includes one or more qualifying conditions with respect to service or performance that cannot be fulfilled within a single financial year, and for this purpose the following shall be disregarded, namely—
a
any bonus the amount of which falls to be determined by reference to service or performance within a single financial year;
b
compensation in respect of loss of office, payments for breach of contract and other termination payments; and
c
retirement benefits.
11
1
The information required by sub‐paragraph (1) of paragraph 10 in respect of such a person as is mentioned in that sub-paragraph is—
a
details of the scheme interests that the person has at the beginning of the relevant financial year or if later on the date of the appointment of the person as a director of the company;
b
details of the scheme interests awarded to the person during the relevant financial year;
c
details of the scheme interests that the person has at the end of the relevant financial year or if earlier on the cessation of the person's appointment as a director of the company;
d
for each scheme interest within heads (a) to (c)—
i
the end of the period over which the qualifying conditions for that interest have to be fulfilled (or if there are different periods for different conditions, the end of whichever of those periods ends last); and
ii
a description of any variation made in the terms and conditions of the scheme interests during the relevant financial year; and
e
for each scheme interest that has vested in the relevant financial year—
i
the relevant details (see sub‐paragraph (3)) of any shares,
ii
the amount of any money, and
iii
the value of any other assets,
that have become receivable in respect of the interest.
2
The details that sub‐paragraph (1)(b) requires of a scheme interest awarded during the relevant financial year include, if shares may become receivable in respect of the interest, the following—
a
the number of those shares;
b
the market price of each of those shares when the scheme interest was awarded; and
c
details of qualifying conditions that are conditions with respect to performance.
3
In sub‐paragraph (1)(e)(i) “the relevant details”, in relation to any shares that have become receivable in respect of a scheme interest, means—
a
the number of those shares,
b
the date on which the scheme interest was awarded;
c
the market price of each of those shares when the scheme interest was awarded;
d
the market price of each of those shares when the scheme interest vested; and
e
details of qualifying conditions that were conditions with respect to performance.
Pensions
12
1
The directors' remuneration report shall, for each person who has served as a director of the company at any time during the relevant year, contain the information in respect of pensions that is specified in sub-paragraphs (2) and (3).
2
Where the person has rights under a pension scheme that is a defined benefit scheme in relation to the person and any of those rights are rights to which he has become entitled in respect of qualifying services of his—
a
details—
i
of any changes during the relevant financial year in the person's accrued benefits under the scheme, and
ii
of the person's accrued benefits under the scheme as at the end of that year;
b
the transfer value, calculated in a manner consistent with “Retirement Benefit Schemes - Transfer Values (GN 11)” published by the Institute of Actuaries and the Faculty of Actuaries and dated 6th April 2001, of the person's accrued benefits under the scheme at the end of the relevant financial year;
c
the transfer value of the person's accrued benefits under the scheme that in compliance with head (b) was contained in the director's remuneration report for the previous financial year or, if there was no such report or no such value was contained in that report, the transfer value, calculated in such a manner as is mentioned in head (b), of the person's accrued benefits under the scheme at the beginning of the relevant financial year;
d
the amount obtained by subtracting—
i
the transfer value of the person's accrued benefits under the scheme that is required to be contained in the report by head (c), from
ii
the transfer value of those benefits that is required to be contained in the report by head (b),
and then subtracting from the result of that calculation the amount of any contributions made to the scheme by the person in the relevant financial year.
3
Where—
a
the person has rights under a pension scheme that is a money purchase scheme in relation to the person, and
b
any of those rights are rights to which he has become entitled in respect of qualifying services of his,
details of any contribution to the scheme in respect of the person that is paid or payable by the company for the relevant financial year or paid by the company in that year for another financial year.
Excess retirement benefits of directors and past directors
13
1
Subject to sub‐paragraph (3), the directors' remuneration report shall show in respect of each person who has served as a director of the company—
a
at any time during the relevant financial year; or
b
at any time before the beginning of that year;
the amount of so much of retirement benefits paid to or receivable by the person under pension schemes as is in excess of the retirement benefits to which he was entitled on the date on which the benefits first became payable or 1st April 1999, whichever is the later.
2
In sub‐paragraph (1) “retirement benefits” means retirement benefits to which the person became entitled in respect of qualifying services of his.
3
Amounts paid or receivable under a pension scheme need not be included in an amount required to be shown under sub-paragraph (1) if—
a
the funding of the scheme was such that the amounts were or, as the case may be, could have been paid without recourse to additional contributions; and
b
amounts were paid to or receivable by all pensioner members of the scheme on the same basis;
and in this sub‐paragraph “pensioner member”, in relation to a pension scheme, means any person who is entitled to the present payment of retirement benefits under the scheme.
4
In this paragraph—
a
references to retirement benefits include benefits otherwise than in cash; and
b
in relation to so much of retirement benefits as consists of a benefit otherwise than in cash, references to their amount are to the estimated money value of the benefit;
and the nature of any such benefit shall also be shown in the report.
Compensation for past directors
14
The directors' remuneration report shall contain details of any significant award made in the relevant financial year to any person who was not a director of the company at the time the award was made but had previously been a director of the company, including (in particular) compensation in respect of loss of office and pensions but excluding any sums which have already been shown in the report under paragraph 6(1)(d).
Sums paid to third parties in respect of a director's services
15
1
The directors' remuneration report shall show, in respect of each person who served as a director of the company at any time during the relevant financial year, the aggregate amount of any consideration paid to or receivable by third parties for making available the services of the person—
a
as a director of the company, or
b
while director of the company—
i
as director of any of its subsidiary undertakings, or
ii
as director of any other undertaking of which he was (while director of the company) a director by virtue of the company's nomination (direct or indirect), or
iii
otherwise in connection with the management of the affairs of the company or any such other undertaking.
2
The reference to consideration includes benefits otherwise than in cash, and in relation to such consideration the reference to its amount is to the estimated money value of the benefit. The nature of any such consideration shall be shown in the report.
3
The reference to third parties is to persons other than—
a
the person himself or a person connected with him or a body corporate controlled by him; and
b
the company or any such undertaking as is mentioned in sub-paragraph (1)(b)(ii).
PART IVINTERPRETATION AND SUPPLEMENTARY
16
1
In this Schedule—
“amount”, in relation to a gain made on the exercise of a share option, means the difference between—
- a
the market price of the shares on the day on which the option was exercised; and
- b
the price actually paid for the shares;
- a
“company contributions”, in relation to a pension scheme and a person, means any payments (including insurance premiums) made, or treated as made, to the scheme in respect of the person by anyone other than the person;
“defined benefit scheme”, in relation to a person, means a pension scheme which is not a money purchase scheme in relation to the person;
“emoluments” of a person—
- a
includes salary, fees and bonuses, sums paid by way of expenses allowance (so far as they are chargeable to United Kingdom income tax or would be if the person were an individual) but,
- b
does not include any of the following, namely—
- i
the value of any share options granted to him or the amount of any gains made on the exercise of any such options;
- ii
any company contributions paid, or treated as paid, in respect of him under any pension scheme or any benefits to which he is entitled under any such scheme; or
- iii
any money or other assets paid to or received or receivable by him under any long-term incentive scheme;
- i
- a
“long‐term incentive scheme” has the meaning given by paragraph 10(5);
“money purchase benefits”, in relation to a person, means retirement benefits the rate or amount of which is calculated by reference to payments made, or treated as made, by the person or by any other person in respect of that person and which are not average salary benefits;
“money purchase scheme”, in relation to a person, means a pension scheme under which all of the benefits that may become payable to or in respect of the person are money purchase benefits in relation to the person;
“pension scheme” means a retirement benefits scheme within the meaning given by section 611 of the Income and Corporation Taxes Act 1988;
“qualifying services”, in relation to any person, means his services as a director of the company, and his services at any time while he is a director of the company—
- a
as a director of an undertaking that is a subsidiary undertaking of the company at that time;
- b
as a director of any other undertaking of which he is a director by virtue of the company's nomination (direct or indirect); or
- c
otherwise in connection with the management of the affairs of the company or any such subsidiary undertaking or any such other undertaking;
- a
“retirement benefits” means relevant benefits within the meaning given by section 612(1) of the Income and Corporation Taxes Act 1988;
“shares” means shares (whether allotted or not) in the company, or any undertaking which is a group undertaking in relation to the company, and includes a share warrant as defined by Article 198(1);
“share option” means a right to acquire shares;
“value”, in relation to shares received or receivable on any day by a person who is or has been a director of the company, means the market price of the shares on that day.
2
In this Schedule “compensation in respect of loss of office” includes compensation received or receivable by a person for—
a
loss of office as director of the company, or
b
loss, while director of the company or on or in connection with his ceasing to be director of it, of—
i
any other office in connection with the management of the company's affairs, or
ii
any office as director or otherwise in connection with the management of the affairs of any undertaking that, immediately before the loss, is a subsidiary undertaking of the company or an undertaking of which he is a director by virtue of the company's nomination (direct or indirect);
c
compensation in consideration for, or in connection with, a person's retirement from office; and
d
where such a retirement is occasioned by a breach of the person's contract with the company or with an undertaking that, immediately before the breach, is a subsidiary undertaking of the company or an undertaking of which he is a director by virtue of the company's nomination (direct or indirect)—
i
payments made by way of damages for the breach; or
ii
payments made by way of settlement or compromise of any claim in respect of the breach.
3
References in this Schedule to compensation include benefits otherwise than in cash; and in relation to such compensation references in this Schedule to its amount are to the estimated money value of the benefit.
4
References in this Schedule to a person being “connected” with a director, and to a director “controlling” a body corporate, shall be construed in accordance with Article 354.
17
1
For the purposes of this Schedule emoluments paid or receivable or share options granted in respect of a person's accepting office as a director shall be treated as emoluments paid or receivable or share options granted in respect of his services as a director.
2
Where a pension scheme provides for any benefits that may become payable to or in respect of a person to be whichever are the greater of—
a
such benefits determined by or under the scheme as are money purchase benefits in relation to the person; and
b
such retirement benefits determined by or under the scheme to be payable to or in respect of the person as are not money purchase benefits in relation to the person,
the company may assume for the purposes of this Schedule that those benefits will be money purchase benefits in relation to the person, or not, according to whichever appears more likely at the end of the relevant financial year.
3
In determining for the purposes of this Schedule whether a pension scheme is a money purchase scheme in relation to a person or a defined benefit scheme in relation to a person, any death in service benefits provided for by the scheme shall be disregarded.
18
1
The following applies with respect to the amounts to be shown under this Schedule.
2
The amount in each case includes all relevant sums paid by or receivable from—
a
the company; and
b
the company's subsidiary undertakings; and
c
any other person,
except sums to be accounted for to the company or any of its subsidiary undertakings or any other undertaking of which any person has been a director while director of the company, by virtue of Articles 322 and 323, to past or present members of the company or any of its subsidiaries or any class of those members.
3
References to amounts paid to or receivable by a person include amounts paid to or receivable by a person connected with him or a body corporate controlled by him (but not so as to require an amount to be counted twice).
19
1
The amounts to be shown for any financial year under Part III are the sums receivable in respect of that year (whenever paid) or, in the case of sums not receivable in respect of a period, the sums paid during that year.
2
But where—
a
any sums are not shown in the directors' remuneration report for the relevant financial year on the ground that the person receiving them is liable to account for them as mentioned in paragraph 18(2), but the liability is thereafter wholly or partly released or is not enforced within a period of 2 years; or
b
any sums paid by way of expenses allowance are charged to United Kingdom income tax after the end of the relevant financial year or, in the case of any such sums paid otherwise than to an individual, it does not become clear until the end of the relevant financial year that those sums would be charged to such tax were the person an individual,
those sums shall, to the extent to which the liability is released or not enforced or they are charged as mentioned above (as the case may be), be shown in the first directors' remuneration report in which it is practicable to show them and shall be distinguished from the amounts to be shown apart from this provision.
20
Where it is necessary to do so for the purpose of making any distinction required by the preceding paragraphs in an amount to be shown in compliance with this Part, the directors may apportion any payments between the matters in respect of which these have been paid or are receivable in such manner as they think appropriate.
21
This Schedule requires information to be given only so far as it is contained in the company's books and papers, available to members of the public or the company has the right to obtain it.
prosp. insertion by 2005 NI 17 (which amendment repealed (6.4.2008) by Companies Act 2006 (c. 46), s. 1295, Sch. 16; S.I. 2007/3495, art. 8(a), Sch. 2 Pt. 2)
SCHEDULE 8FORM AND CONTENT OF ACCOUNTS PREPARED BY SMALL COMPANIES
PART IGENERAL RULES AND FORMATS
SECTION AGENERAL RULES
1
1
Subject to the following provisions of this Schedule—
a
every balance sheet of a small company shall show the items listed in either of the balance sheet formats set out in section B; and
b
every profit and loss account of a small company shall show the items listed in any one of the profit and loss account formats so set out;
in either case in the order and under the headings and sub-headings given in the format adopted.
2
Sub-paragraph (1) is not to be read as requiring the heading or sub-heading for any item to be distinguished by any letter or number assigned to that item in the format adopted.
2
1
Where in accordance with paragraph 1 a small company's balance sheet or profit and loss account for any financial year has been prepared by reference to one of the formats set out in section B, the directors of the company shall adopt the same format in preparing their accounts for subsequent financial years of the company unless in their opinion there are special reasons for a change.
2
Particulars of any change in the format adopted in preparing a small company's balance sheet or profit and loss account in accordance with paragraph 1 shall be disclosed, and the reasons for the change shall be explained, in a note to the accounts in which the new format is first adopted.
3
1
Any item required in accordance with paragraph 1 to be shown in a small company's balance sheet or profit and loss account may be shown in greater detail than required by the format adopted.
2
A small company's balance sheet or profit and loss account may include an item representing or covering the amount of any asset or liability, income or expenditure not otherwise covered by any of the items listed in the format adopted, but the following shall not be treated as assets in any small company's balance sheet—
a
preliminary expenses;
b
expenses of and commission on any issue of shares or debentures; and
c
costs or research.
3
In preparing a small company's balance sheet or profit and loss account the directors of the company shall adapt the arrangement and headings and sub-headings otherwise required by paragraph 1 in respect of items to which an Arabic number is assigned in the format adopted, in any case where the special nature of the company's business requires such adaptation.
4
Items to which Arabic numbers are assigned in any of the formats set out in Section B may be combined in a small company's accounts for any financial year if either—
a
their individual amounts are not material to assessing the state of affairs or profit or loss of the company for that year; or
b
the combination facilitates that assessment;
but in a case with head (b) the individual amounts of any items so combined shall be disclosed in a note to the accounts.
5
Subject to paragraph 4(3), a heading or sub-heading corresponding to an item listed in the format adopted in preparing a small company's balance sheet or profit and loss account shall not be included if there is no amount to be shown for that item in respect of the financial year to which the balance sheet or profit and loss account relates.
6
Every profit and loss account of a small company shall show the amount of the company's profit or loss on ordinary activities before taxation.
Sub-para. (7) rep. by SR 2004/496
4
1
In respect of every item shown in a small company's balance sheet or profit and loss account the corresponding amount for the financial year immediately preceding that to which the balance sheet or profit and loss account relates shall also be shown.
2
Where that corresponding amount is not comparable with the amount to be shown for the item in question in respect of the financial year to which the balance sheet or profit and loss account relates, the former amount F914may be adjusted and F915particulars of the non-comparability and of any adjustment shall be disclosed in a note to the accounts.
3
Paragraph 3(5) does not apply in any case where an amount can be shown for the item in question in respect of the financial year immediately preceding that to which the balance sheet or profit and loss account relates, and that amount shall be shown under the heading or sub-heading required by paragraph 1 for that item.
5
Amounts in respect of items representing assets or income may not be set off against amounts in respect of items representing liabilities or expenditure (as the case may be), or vice versa.
5A
The directors of a company must, in determining how amounts are presented within items in the profit and loss account and balance sheet, have regard to the substance of the reported transaction or arrangement, in accordance with generally accepted accounting principles or practice.
SECTION BTHE REQUIRED FORMATS FOR ACCOUNTS
Preliminary
6
References in this Part to the items listed in any of the formats set out below are to those items read together with any of the notes following the formats which apply to any of those items, and the requirement imposed by paragraph 1 to show the items listed in any such format in the order adopted in the format is subject to any provision in those notes for alternative positions for any particular items.
7
A number in brackets following any item in any of the formats set out below is a reference to the note of that number in the notes following formats.
8
In the notes following the formats—
a
the heading of each note gives the required heading or sub-heading for the item to which it applies and a reference to any letters and numbers assigned to that item in the formats set out below (taking a reference in the case of Format 2 of the balance sheet formats to the item listed under “Assets” or under “Liabilities” as the case may require); and
b
references to a numbered format are to the balance sheet format or (as the case may require) to the profit and loss account format of that number set out below.
Balance Sheet Formats
Format 1
A
Called-up share capital not paid (1)
B
Fixed assets
I
Intangible assets
1
Goodwill (2)
2
Other intangible assets (3)
II
Tangible assets
1
Land and Buildings
2
Plant and machinery etc.
III
Investments
1
Shares in group undertakings and participating interests
2
Loans to group undertakings and undertakings in which the company has a participating interest
3
Other investments other than loans
4
Other investments (4)
C
Current assets
I
Stocks
1
Stocks
2
Payments on account
II
Debtors (5)
1
Trade debtors
2
Amounts owed by group undertakings and undertakings in which the company has a participating interest
3
Other debtors
III
Investments
1
Shares in group undertakings
2
Other investments
IV
Cash at bank and in hand
D
Prepayments and accrued income (6)
E
Creditors: amounts falling due within one year
1
Bank loans and overdrafts
2
Trade creditors
3
Amounts owed to group undertakings and undertakings in which the company has a participating interest
4
Other creditors (7)
F
Net current assets (liabilities) (8)
G
Total assets less current liabilities
H
Creditors: amounts falling due after more than one year
1
Bank loans and overdrafts
2
Trade creditors
3
Amounts owed to group undertakings and undertakings in which the company has a participating interest
4
Other creditors (7)
I
F916Provisions for liabilities
J
Accruals and deferred income (7)
K
Capital and reserves
I
Called up share capital (9)
II
Share premium account
III
Revaluation reserve
IV
Other reserves
V
Profit and loss account
Balance Sheet Formats
Format 2
ASSETS
A
Called up share capital not paid (1)
B
Fixed assets
I
Intangible assets
1
Goodwill (2)
2
Other intangible assets (3)
II
Tangible assets
1
Land and buildings
2
Plant and machinery etc.
III
Investments
1
Shares in group undertakings and participating interests
2
Loans to group undertakings and undertakings in which the company has a participating interest
3
Other investments other than loans
4
Other investments (4)
C
Current assets
I
Stocks
1
Stocks
2
Payments on account
II
Debtors (5)
1
Trade debtors
2
Amounts owed by group undertakings and undertakings in which the company has a participating interest
3
Other debtors
III
Investments
1
Shares in group undertakings
2
Other investments
IV
Cash at bank and in hand
D
Prepayments and accrued income (6)
LIABILITIES
A
Capital and reserves
I
Called up share capital (9)
II
Share premium account
III
Revaluation reserve
IV
Other reserves
V
Profit and loss account
B
F917Provisions for liabilities
C
Creditors (10)
1
Bank loans and overdrafts
2
Trade creditors
3
Amounts owed to group undertakings in which the company has a participating interest
4
Other creditors (7)
D
Accruals and deferred income (7)
Notes on the balance sheet formats
- 1
Called-up share capital not paid
(Formats 1 and 2, items A and C.II.3.)
This item may either be shown at item A or included under item C.II.3 in Format 1 or 2.
- 2
Goodwill
(Formats 1 and 2, item B.I.1.)
Amounts representing goodwill shall only be included to the extent that the goodwill was acquired for valuable consideration.
- 3
Other intangible assets
(Formats 1 and 2, item B.I.2.)
Amounts in respect of concessions, patents, licences, trade marks and similar rights and assets shall only be included in a company's balance sheet under this item if either—
- a
the assets were acquired for valuable consideration and are not required to be shown under goodwill; or
- b
the assets in question were created by the company itself.
- a
- 4
Others: Other investments
(Formats 1 and 2, items B.III.4 and C.III.2.)
Where amounts in respect of own shares held are included under either of these items, the nominal value of such shares shall be shown separately.
- 5
Debtors
(Formats 1 and 2, items C.II.1 to 3.)
The amount falling due after more than one year shall be shown separately for each item included under debtors unless the aggregate amount of debtors falling due after more than one year is disclosed in the notes to the accounts.
- 6
Prepayments and accrued income
(Formats 1 and 2, item D.)
This item may alternatively be included under item C.II.3 in Format 1 or 2.
- 7
Other creditors
(Format 1, items E.4, H.4 and J and Format 2, items C. 4 and D.)
There shall be shown separately—
- a
the amount of any convertible loans, and
- b
the amount for creditors in respect of taxation and social security.
- a
Payments received on account of orders shall be included in so far as they are not shown as deductions from stocks.
In Format 1, accruals and deferred income may be shown under item J or included under Item E.4 of H.4 or both (as the case may require). In Format 2, accruals and deferred income may be shown under item D or within item C.4 under Liabilities.
- 8
Net current assets (liabilities)
(Format 1, item F.)
In determining the amount to be shown under this item any prepayments and accrued income shall be taken into account wherever shown.
- 9
Called up share capital
(Format 1, item K.I and Format 2, item A.I.)
The amount of allotted share capital and the amount of called up share capital which has been paid up shall be shown separately.
- 10
Creditors
(Format 2, items C.1 to 4.)
Amounts falling due within one year and after one year shall be shown separately for each of these items and for the aggregate of all of these items unless the aggregate amount of creditors falling due within one year and the aggregate amount of creditors falling due after more than one year is disclosed in the notes to the accounts.
Profit and loss account formats
Format 1
(see note (14) below)
- 1
Turnover
- 2
Cost of sales (11)
- 3
Gross profit or loss
- 4
Distribution costs (11)
- 5
Administrative expenses (11)
- 6
Other operating income
- 7
Income from shares in group undertakings
- 8
Income from participating interests
- 9
Income from other fixed asset investments (12)
- 10
Other interest receivable and similar income (12)
- 11
Amounts written off in investments
- 12
Interest payable and similar charges (13)
- 13
Tax on profit or loss on ordinary activities
- 14
Profit or loss on ordinary activities after taxation
- 15
Extraordinary income
- 15
Extraordinary charges
- 16
Extraordinary profit or loss
- 18
Tax on extraordinary profit or loss
- 19
Other taxes not shown under the above items
- 20
Profit or loss for the financial year.
Profit and loss account formats
Format 2
- 1
Turnover
- 2
Change in stocks of finished goods and in work in progress
- 3
Own work capitalised
- 4
Other operating income
- 5
- a
Raw materials and consumables
- b
other external charges
- a
- 6
Staff costs
- a
wages and salaries
- b
social security costs
- c
other pension costs
- a
- 7
- a
Depreciation and other amounts written off tangible and intangible fixed assets
- b
Exceptional amounts written off current assets
- a
- 8
Other operating charges
- 9
Income from shares in group undertakings
- 10
Income from participating interests
- 11
Income from other fixed asset investments (12)
- 12
Other interest receivable and similar income (12)
- 13
Amounts written off investments
- 14
Interest payable and similar charges (13)
- 15
Tax on profit or loss on ordinary activities
- 16
Profit or loss on ordinary activities after taxation
- 17
Extraordinary income
- 18
Extraordinary charges
- 19
Extraordinary profit or loss
- 20
Tax on extraordinary profit or loss
- 21
Other taxes not shown under the above items
- 22
Profit or loss for the financial year
Profit and loss account formats
Format 3
(see note (14) below)
A
Charges
1
Cost of sales (11)
2
Distribution costs (11)
3
Administrative expenses (11)
4
Amounts written off investments
5
Interest payable and similar charges (13)
6
Tax on profit or loss on ordinary activities
7
Profit or loss on ordinary activities after taxation
8
Extraordinary charges
9
Tax on extraordinary profit or loss
10
Other taxes not shown under the above items
11
Profit or loss for the financial year.
B
Income
1
Turnover
2
Other operating income
3
Income from shares in group undertakings
4
Income from participating interests
5
Income from other fixed asset investments (12)
6
Other interest receivable and similar income (12)
7
Profit or loss on ordinary activities after taxation
8
Extraordinary income
9
Profit or loss for the financial year
Profit and loss account formats
Format 4
A
Charges
1
Reduction in stock of finished goods and in work in progress.
2
a
Raw materials and consumables
b
Other external charges
3
Staff costs
a
wages and salaries
b
social security costs
c
other pension costs
4
a
Depreciation and other amounts written off tangible and intangible fixed assets
b
Exceptional amounts written off current assets
5
Other operating charges
6
Amounts written off investments
7
Interest payable and similar charges (13)
8
Tax on profit or loss on ordinary activities
9
Profit or loss on ordinary activities after taxation
10
Extraordinary charges
11
Tax on extraordinary profit or loss
12
Other taxed not shown under the above items
13
Profit or loss for the financial year.
B
Income
1
Turnover
2
Increase in stocks of finished goods and in work in progress
3
Own work capitalised
4
Other operating income
5
Income from shares in group undertakings
6
Income from participating interests
7
Income from other fixed asset investments (12)
8
Other interest receivable and similar income (12)
9
Profit or loss on ordinary activities after taxation.
10
Extraordinary income.
11
Profit or loss for the financial year
Notes on the profit and loss account formats
- 11
Cost of sales: distribution costs: administrative expenses
(Format 1, items 2, 4 and 5 and Format 3, items A.1, 2 and 3.)
These items shall be stated after taking into account any necessary provisions for depreciation or diminution in value of assets.
- 12
Income from other fixed asset investments: other interest receivable and similar income
(Format 1, items 9 and 10: Format 2, items 11 and 12: Format 3, items B.5 and 6: Format 4, items B.7 and 8.)
Income and interest derived from group undertakings shall be shown separately from income and interest derived from other sources.
- 13
Interest payable and similar charges
(Format 1, item 12: Format 2, item 14: Format 3, item A.5: format 4, item A.7.)
The amount payable to group undertakings shall be shown separately.
- 14
Formats 1 and 3
The amount of any provisions for depreciation and diminution in value of tangible and intangible fixed assets falling to be shown under items 7(a) and A.4(a) respectively in Formats 2 and 4 shall be disclosed in a note to the accounts in any case where the profit and loss account in prepared by reference to Format 1 or Format 3.
PART IIACCOUNTING PRINCIPLES AND RULES
SECTION AACCOUNTING PRINCIPLES
Preliminary
9
Subject to paragraph 15, the amounts to be included in respect of all items shown in a small company's accounts shall be determined in accordance with the principles set out in paragraphs 10 to 14.
Accounting principles
10
The company shall be presumed to be carrying on business as a going concern.
11
Accounting policies shall be applied consistently within the same accounts and from one financial year to the next.
12
The amount of any item shall be determined on a prudent basis, and in particular—
a
only profits realised at the balance sheet date shall be included in the profit and loss account; and
b
all liabilitiesF918. . . which have arisenF918. . . in respect of the financial year to which the accounts relate or a previous financial year shall be taken into account, including those which only become apparent between the balance sheet date and the date on which it is signed on behalf of the board of directors in pursuance of Article 241.
13
All income and charges relating to the financial year to which the accounts relate shall be taken into account, without regard to the date of receipt or payment.
14
In determining the aggregate amount of any item the amount of each individual asset or liability that falls to be taken into account shall be determined separately.
Departure from the accounting principles
15
If it appears to the directors of a small company that there are special reasons for departing from any of the principles stated above in preparing the company's accounts in respect of any financial year they may do so, but particulars of the departure, the reasons for it and its effect shall be given in a note to the accounts.
SECTION BHISTORICAL COST ACCOUNTING RULES
Preliminary
16
F919Subject to sections C and D, the amounts to be included in respect of all items shown in a small company's accounts shall be determined in accordance with the rules set out in paragraphs 17 to 28.
Fixed assets
General rules17
Subject to any provision of depreciation or diminution in value made in accordance with paragraph 18 or 19 or the amount to be included in respect of any fixed asset shall be its purchase price or production cost.
18
In the case of any fixed asset which has a limited useful economic life, the amount of—
a
its purchase price or production cost; or
b
where it is estimated that any such asset will have a residual value at the end of the period of its useful economic life, its purchase price or production cost less that estimated residual value;
shall be reduced by provisions for depreciation calculated to write off that amount systematically over the period of the asset's useful economic life.
19
1
Where a fixed asset investment of a description falling to be included under item B.III of either of the balance sheet formats set out in Part I has diminished in value provisions for diminution in value may be made in respect of it and the amount to be included in respect of it may be reduced accordingly; and any such provisions which are not shown in the profit and loss account shall be disclosed (either separately or in aggregate) in a note to the accounts.
2
Provisions for diminution in value shall be made in respect of any fixed asset which has diminished in value if the reduction in its value is expected to be permanent (whether its useful economic life is limited or not), and the amount to be included in respect of it shall be reduced accordingly; and any such provisions which are not shown in the profit and loss account shall be disclosed (either separately or in aggregate) in a note to the accounts.
3
Where the reasons for which any provision was made in accordance with sub-paragraph (1) or (2) have ceased to apply to any extent, that provision shall be written back to the extent that it is no longer necessary; and any amounts written back in accordance with this sub-paragraph which are not shown in the profit and loss account shall be disclosed (either separately or in aggregate) in a note to the accounts.
Rules for determining particular fixed asset items20
1
Notwithstanding that an item in respect of “development costs” is included under “fixed assets” in the balance sheet formats set out in Part I, an amount may only be included in a small company's balance sheet in respect of development costs in special circumstances.
2
If any amount is included in a small company's balance sheet in respect of development costs the following information shall be given in a note to the accounts—
a
the period over which the amount of those costs originally capitalised is being or is to be written off; and
b
the reasons for capitalising the development costs in question.
21
1
The application of paragraphs 17 to 19 in relation to goodwill (if any case where goodwill is treated as an asset) is subject to the following provisions of this paragraph.
2
Subject to sub-paragraph (3), the amount of the consideration for any goodwill acquired by a small company shall be reduced by provisions for depreciation calculated to write off that amount systematically over a period chosen by the directors of the company.
3
The period chosen shall not exceed the useful economic life of the goodwill in question.
4
In any case where any goodwill acquired by a small company is shown or included as an asset in the company's balance sheet the period chosen for writing off the consideration for that goodwill and the reasons for choosing that period shall be disclosed in a note to the accounts.
Current assets
22
Subject to paragraph 23, the amount to be included in respect of any current asset shall be its purchase price or production cost.
23
1
If the net realisable value of any current asset is lower than its purchase price or production cost the amount to be included in respect of that asset shall be the net realisable value.
2
Where the reasons for which any provision for diminution in value was made in accordance with sub-paragraph (1) have ceased to apply to any extent, that provision shall be written back to the extent that it is no longer necessary.
Miscellaneous and supplementary provisions
Excess of money owed over value received as an asset item24
1
Where the amount repayable on any debt owed by a small company is greater than the value of the consideration received in the transaction giving rise to the debt, the amount of the difference may be treated as an asset.
2
Where any such amount is so treated—
a
it shall be written off by reasonable amounts each year and must be completely written off before repayment of the debt; and
b
if the current amount is not shown as a separate item in the company's balance sheet it must be disclosed in a note to the accounts.
Assets included at a fixed amount25
1
Subject to the following sub-paragraph, assets which fall to be included—
a
amongst the fixed assets of a small company under the item “tangible assets”; or
b
amongst the current assets of a small company under the item “raw materials and consumables”;
may be included at a fixed quantity and value.
2
Sub-paragraph (1) applies to assets of a kind which are constantly being replaced, where—
a
their overall value is not material to assessing the company's state of affairs; and
b
their quantity, value and composition are not subject to material variation.
Determination of purchase price or production cost26
1
The purchase price of an asset shall be determined by adding to the actual price paid any expenses incidental to its acquisition.
2
The production costs of an asset shall be determined by adding to the purchase price of the raw materials and consumables used the amount of the costs incurred by the company which are directly attributable to the production of that asset.
3
In addition, there may be included in the production cost of an asset—
a
a reasonable proportion of the costs incurred by the company which are only indirectly attributable to the production of that asset, but only to the extent that they relate to the period of production; and
b
interest on capital borrowed to finance the production of that asset, to the extent that it accrues in respect of the period of production;
provided, however, in a case within head (b), that the inclusion of the interest in determining the cost of that asset and the amount of the interest so included is disclosed in a note to the accounts.
4
In the case of current assets distribution costs may not be included in production costs.
27
1
Subject to the qualification mentioned below, the purchase price or production cost of—
a
any assets which fall to be included under any item shown in a small company's balance sheet under the general item “stocks”; and
b
any assets which are fungible assets (including investments);
may be determined by the application of any of the methods mentioned in sub-paragraph (2) in relation to any such assets of the same class. The method chosen must be one which appears to the directors to be appropriate in the circumstances of the company.
2
Those methods are—
a
the method known as “first in, first out” (FIFO);
b
the method known as “last in, first out” (LIFO);
c
a weighted average price; and
d
any other method similar to any of the methods mentioned above.
3
For the purposes of this paragraph, assets of any description shall be regarded as fungible if assets of that description are substantially indistinguishable one from another.
Substitution of original stated amount where price or cost unknown28
Where there is no need of the purchase price or production cost of any asset of a small company or of any price, expenses or costs relevant for determining its purchase price or production cost in accordance with paragraph 26, or any such record cannot be obtained without unreasonable expense or delay, its purchase price or production cost shall be taken for the purposes of paragraphs 17 to 23 to be the value ascribed to it in the earliest available record of its value made on or after its acquisition or production by the company.
SECTION CALTERNATIVE ACCOUNTING RULES
Preliminary
29
1
The rules set out in section B are referred to in this Schedule as the historical cost accounting rules.
2
These rules, with the omission of paragraphs 16, 21 and 25 to 28, are referred to in this Part as the depreciation rules; and references in this Schedule to the historical cost accounting rules do not include the depreciation rules as they apply by virtue of paragraph 32.
30
Subject to paragraphs 32 to 34, the amounts to be included in respect of assets of any description mentioned in paragraph 31 may be determined on any basis so mentioned.
Alternative accounting rules
31
1
Intangible fixed assets, other than goodwill, may be included at their current cost.
2
Tangible fixed assets may be included at a market value determined as at the date of their last valuation or at their current cost.
3
Investments of any description falling to be included under item B.III of either of the balance sheet formats set out in Part 1 may be included either—
a
at a market value determined as at the date of their last valuation; or
b
at a value determined on any basis which appears to the directors to be appropriate in the circumstances of the company;
but in the latter case particulars of the method of valuation adopted and of the reasons for adopting it shall be disclosed in a note to the accounts.
4
Investments of any description falling to be included under item C.III of either of the balance sheet formats set out in Part 1 may be included at their current cost.
5
Stocks may be included at their current cost.
Application of the depreciation rules
32
Where the value of any asset of a small company is determined on any basis mentioned in paragraph 31, that value shall be, or (as the case may require) be the starting point for determining, the amount to be included in respect of that asset in the company's accounts, instead of its purchase price or production cost or any value previously so determined for that asset; and the depreciation rules shall apply accordingly in relation to any such asset with the substitution for any reference to its purchase price or production cost of a reference to the value most recently determined for that asset on any basis mentioned in paragraph 31.
2
The amount of any provision for depreciation required in the case of any fixed asset by paragraph 18 or 19 as it applies by virtue of sub-paragraph (1) is referred to in this paragraph as the adjusted amount, and the amount of any provision which would be required by that paragraph in the case of that asset according to the historical cost accounting rules is referred to as the historical cost amount.
3
Where sub-paragraph (1) applies in the case of any fixed asset the amount of any provision for depreciation in respect of that asset—
a
included in any item shown in the profit and loss account in respect of amounts written off assets of the description in question; or
b
taken into account in stating any item so shown which is required by note (11) of the notes on the profit and loss account formats set out in Part I to be stated after taking into account any necessary provision for depreciation or diminution in value of assets included under it;
may be the historical cost amount instead of the adjusted amount, provided that the amount of any difference between the two is shown separately in the profit and loss account or in a note to the accounts.
Additional information to be provided in case of departure from historical cost accounting rules33
1
This paragraph applies where the amounts to be included in respect of assets covered by any items shown in a small company's accounts have been determined on any basis mentioned in paragraph 31.
2
The items affected and the basis of valuation adopted in determining the amounts of the assets in question in the case of each such item shall be disclosed in a note to the accounts.
3
In the case of each balance sheet item affected (except stocks) either—
a
the comparable amounts determined according to the historical cost accounting rules; or
b
the differences between those amounts and the corresponding amounts actually shown in the balance sheet in respect of that item;
shall be shown separately in the balance sheet or in a note to the accounts.
4
In sub-paragraph (3), references in relation to any item to the comparable amounts determined as there mentioned are references to—
a
the aggregate amount which would be required to be shown in respect of that item if the amounts to be included in respect of all the assets covered by that item were determined according to this historical cost accounting rules; and
b
the aggregate amount of the cumulative provisions for depreciation or diminution in value which would be permitted or required in determining those amounts according to those rules.
Revaluation reserve
34
1
With respect to any determination of the value of an asset of a small company on any basis mentioned in paragraph 31, the amount of any profit or loss arising from that determination (after allowing, where appropriate, for any provisions for depreciation or diminution in value made otherwise than by reference to the value so determined and any adjustments of any such provisions made in the light of that determination) shall be credited or (as the case may be) debited to a separate reserve ( “the revaluation reserve”).
2
The amount of the revaluation reserve shall be shown in the company's balance sheet under a separate sub-heading in the position given for the item “revaluation reserve” in Format 1 or 2 of the balance sheet formats set out in Part I, but need not be shown under that name.
3
An amount may be transferred—
a
from the revaluation reserve—
i
to the profit and loss account, if the amount was previously charged to that account or represents realised profit, or
ii
on capitalisation,
b
to or from the revaluation reserve in respect of the taxation relating to any profit or loss credited or debited to the reserve;
and the revaluation reserve shall be reduced to the extent that the amounts transferred to it are no longer necessary for the purposes of the valuation method used.
4
In sub-paragraph (3)(a)(ii) “capitalisation”, in relation to an amount standing to the credit of the revaluation reserve, means applying it in wholly or partly paying up unissued shares in the company to be allotted to members of the company as fully or partly paid shares.
5
The revaluation reserve shall not be reduced except as mentioned in this paragraph.
6
The treatment for taxation purposes of amounts credited or debited to the revaluation reserve shall be disclosed in a note to the accounts.
SECTION DFAIR VALUE ACCOUNTING
Inclusion of financial instruments at fair value
34A
1
Subject to sub‐paragraphs (2) to (4), financial instruments (including derivatives) may be included at fair value.
2
Sub‐paragraph (1) does not apply to financial instruments which constitute liabilities unless—
a
they are held as part of a trading portfolio, or
b
they are derivatives.
3
Sub‐paragraph (1) does not apply to—
a
financial instruments (other than derivatives) held to maturity;
b
loans and receivables originated by the company and not held for trading purposes;
c
interests in subsidiary undertakings, associated undertakings and joint ventures;
d
equity instruments issued by the company;
e
contracts for contingent consideration in a business combination;
f
other financial instruments with such special characteristics that the instruments, according to generally accepted accounting principles or practice, should be accounted for differently from other financial instruments.
4
If the fair value of a financial instrument cannot be determined reliably in accordance with paragraph 34B, sub‐paragraph (1) does not apply to that financial instrument.
5
In this paragraph—
“associated undertaking” has the meaning given by paragraph 20 of Schedule 4A; and
“joint venture” has the meaning given by paragraph 19 of that Schedule.
Determination of fair value
34B
1
The fair value of a financial instrument is determined in accordance with this paragraph.
2
If a reliable market can readily be identified for the financial instrument, its fair value is determined by reference to its market value.
3
If a reliable market cannot readily be identified for the financial instrument but can be identified for its components or for a similar instrument, its fair value is determined by reference to the market value of its components or of the similar instrument.
4
If neither sub‐paragraph (2) nor (3) applies, the fair value of the financial instrument is a value resulting from generally accepted valuation models and techniques.
5
Any valuation models and techniques used for the purposes of sub‐paragraph (4) must ensure a reasonable approximation of the market value.
Inclusion of hedged items at fair value
34C
A company may include any assets and liabilities that qualify as hedged items under a fair value hedge accounting system, or identified portions of such assets or liabilities, at the amount required under that system.
Other assets that may be included at fair value
34D
1
This paragraph applies to—
a
investment property, and
b
living animals and plants,
that, under international accounting standards, may be included in accounts at fair value.
2
Such investment property and such living animals and plants may be included at fair value, provided that all such investment property or, as the case may be, all such living animals and plants are so included where their fair value can reliably be determined.
3
In this paragraph, “fair value” means fair value determined in accordance with relevant international accounting standards.
Accounting for changes in value
34E
1
This paragraph applies where a financial instrument is valued in accordance with paragraph 34A or 34C or an asset is valued in accordance with paragraph 34D.
2
Notwithstanding paragraph 12, and subject to sub‐paragraphs (3) and (4), a change in the value of the financial instrument or of the investment property or living animal or plant must be included in the profit and loss account.
3
Where—
a
the financial instrument accounted for is a hedging instrument under a hedge accounting system that allows some or all of the change in value not to be shown in the profit and loss account, or
b
the change in value relates to an exchange difference arising on a monetary item that forms part of a company's net investment in a foreign entity,
the amount of the change in value must be credited to or (as the case may be) debited from a separate reserve ( “the fair value reserve”).
4
Where the instrument accounted for—
a
is an available for sale financial asset, and
b
is not a derivative,
the change in value may be credited to or (as the case may be) debited from the fair value reserve.
The fair value reserve
34F
1
The fair value reserve must be adjusted to the extent that the amounts shown in it are no longer necessary for the purposes of paragraph 34E(3) or (4).
2
The treatment for taxation purposes of amounts credited to or debited from the fair value reserve must be disclosed in a note to the accounts.
PART IIINOTES TO THE ACCOUNTS
Preliminary
35
Any information required in the case of any small company by the following provisions of this Part shall (if not given in the company's accounts) be given by way of a note to those accounts.
Reserves and dividends
35A
There must be stated—
a
any amount set aside or proposed to be set aside to, or withdrawn or proposed to be withdrawn from, reserves,
b
the aggregate amount of dividends paid in the financial year (other than those for which a liability existed at the immediately preceding balance sheet date),
c
the aggregate amount of dividends that the company is liable to pay at the balance sheet date, and
d
the aggregate amount of dividends that are proposed before the date of approval of the accounts, and not otherwise disclosed under sub‐paragraph (b) or (c).
Disclosure of account policies
36
The accounting policies adopted by the company in determining the amounts to be included in respect of items shown in the balance sheet and in determining the profit or loss of the company shall be stated (including such policies with respect to the depreciation and diminution in value of assets).
Information supplementing the balance sheet
37
Paragraphs 38 to 47 require information which either supplements the information given with respect to any particular items shown in the balance sheet or is otherwise relevant to assessing the company's state of affairs in the light of the information so given.
Share capital and debentures38
1
The following information shall be given with respect to the company's share capital—
a
the authorised share capital; and
b
where shares of more than one class have been allotted, the number and aggregate nominal value of shares of each class allotted.
2
In the case of any part of the allotted share capital that consists of redeemable shares, the following information shall be given—
a
the earliest and latest dates on which the company has power to redeem those shares;
b
whether those shares must be redeemed in any event or are liable to be redeemed at the option of the company or of the shareholder; and
c
whether any (and, if so, what) premium is payable on redemption.
39
If the company has allotted any shares during the financial year, the following information shall be given—
a
the classes of shares allotted; and
b
as respects each class of shares, the number allotted, their aggregate nominal value, and the consideration received by the company for the allotment.
Fixed assets40
1
In respect of each item which is or would but for paragraph 3(4)(b) be shown under the general item “fixed assets” in the company's balance sheet the following information shall be given—
a
the appropriate amounts in respect of that item as at the date of the beginning of the financial year and as at the balance sheet date respectively;
b
the effect on any amount shown in the balance sheet in respect of that item of—
i
any revision of the amount in respect of any assets included under that item made during that year on any basis mentioned in paragraph 31;
ii
acquisitions during that year of any assets;
iii
disposals during that year of any assets; and
iv
any transfers of assets of the company to and from that item during that year.
2
The reference in sub-paragraph (1)(a) to the appropriate amounts in respect of any item as at any date there mentioned is a reference to amounts representing the aggregate amounts determined, as at that date, in respect of assets falling to be included under that item on either of the following basis, that is to say—
a
on the basis of purchase price or production cost (determined in accordance with paragraphs 26 and 27); or
b
on any basis mentioned in paragraph 31,
(leaving out of account in either case any provisions for depreciation or diminution in value).
3
In respect of each item within sub-paragraph (1)—
a
the cumulative amount of provisions for depreciation or diminution in value of assets included under that item as at each date mentioned in sub-paragraph (1)(a);
b
the amount of any such provisions made in respect of the financial year;
c
the amount of any adjustments made in respect of any such provisions during that year in consequence of the disposal of any assets; and
d
the amount of any other adjustments made in respect of any such provisions during that year;
shall also be stated.
41
Where any fixed assets of the company (other than listed investments) are included under any item shown in the company's balance sheet at an amount determined on any basis mentioned in paragraph 31, the following information shall be given—
a
the years (so far as they are known to the directors) in which the assets were severally valued and the several values; and
b
in the case of assets that have been valued during the financial year, the names of the persons who valued them or particulars of their qualifications for doing so and (whichever is stated) the basis of valuation used by them.
Investments42
1
In respect of the amount of each item which is or would but for paragraph 3(4)(b) be shown in the company's balance sheet under the general item "investments" (whether as fixed assets or as current assets) there shall be stated how much of that amount is ascribable to listed investments.
2
Where the amount of any listed investments is stated for any item in accordance with sub-paragraph (1), the following amounts shall also be stated—
a
the aggregate market value of those investments where it differs from the amount so stated; and
b
both the market value and the stock exchange value of any investments of which the former value is, for the purpose of the accounts, taken as being higher than the latter.
Information about fair value of assets and liabilities42A
1
This paragraph applies where financial instruments have been valued in accordance with paragraph 34A or 34C.
2
There must be stated—
a
where the fair value of the instruments has been determined in accordance with paragraph 34B(4), the significant assumptions underlying the valuation models and techniques used,
b
for each category of financial instrument, the fair value of the instruments in that category and the changes in value—
i
included in the profit and loss account, and
ii
credited to or (as the case may be) debited from the fair value reserve,
in respect of those instruments, and
c
for each class of derivatives, the extent and nature of the instruments, including significant terms and conditions that may affect the amount, timing and certainty of future cash flows.
3
Where any amount is transferred to or from the fair value reserve during the financial year, there must be stated in tabular form—
a
the amount of the reserve as at the date of the beginning of the financial year and as at the balance sheet date respectively;
b
the amount transferred to or from the reserve during that year; and
c
the source and application respectively of the amounts so transferred.
42B
1
Sub‐paragraph (2) applies if—
a
the company has financial fixed assets that could be included at fair value by virtue of paragraph 34A,
b
the amount at which those assets are included under any item in the company's accounts is in excess of their fair value, and
c
the company has not made provision for diminution in value of those assets in accordance with paragraph 19(1).
2
There must be stated—
a
the amount at which either the individual assets or appropriate groupings of those individual assets are included in the company's accounts,
b
the fair value of those assets or groupings, and
c
the reasons for not making a provision for diminution in value of those assets, including the nature of the evidence that provides the basis for the belief that the amount at which they are stated in the accounts will be recovered.
Information where investment property and living animals and plants included at fair value42C
1
This paragraph applies where the amounts to be included in a company's accounts in respect of investment property or living animals and plants have been determined in accordance with paragraph 34D.
2
The balance sheet items affected and the basis of valuation adopted in determining the amounts of the assets in question in the case of each such item must be disclosed in a note to the accounts.
3
In the case of investment property, for each balance sheet item affected there must be shown, either separately in the balance sheet or in a note to the accounts—
a
the comparable amounts determined according to the historical cost accounting rules; or
b
the differences between those amounts and the corresponding amounts actually shown in the balance sheet in respect of that item.
4
In sub‐paragraph (3), references in relation to any item to the comparable amounts determined in accordance with that sub‐paragraph are references to—
a
the aggregate amount which would be required to be shown in respect of that item if the amounts to be included in respect of all the assets covered by that item were determined according to the historical cost accounting rules; and
b
the aggregate amount of the cumulative provisions for depreciation or diminution in value which would be permitted or required in determining those amounts according to those rules.
Reserves and provisions43
1
Where any amount is transferred—
a
to or from any reserves; or
b
to anyF920 provisions for liabilities; or
c
from anyF920 provision for liabilities otherwise than for the purpose for which the provision was established;
and the reserves or provisions are or would but for paragraph 3(4)(b) be shown as separate items in the company's balance sheet, the information mentioned in sub-paragraph (2) shall be given in respect of the aggregate of reserves or provisions included in the same item.
2
That information is—
a
the amount of the reserves or provisions as at the date of the beginning of the financial year and as at the balance sheet date respectively;
b
any amounts transferred to or from the reserves or provisions during that year; and
c
the source and application respectively of any amounts so transferred.
3
Particulars shall be given of each provision included in the item “other provisions” in the company's balance sheet in any case where the amount of that provision is material.
Details of indebtedness44
1
For the aggregate of all items shown under “creditors” in the company's balance sheet there shall be stated the aggregate of the following amounts, that is to say—
a
the amount of any debts included under “creditors” which are payable or repayable otherwise than by instalments and fall due for payment or repayment after the end of the period of five years beginning with the day next following the end of the financial year; and
b
in the case of any debts so included which are payable or repayable by instalments, the amount of any instalments which fall due for payment after the end of that period.
2
In respect of each item shown under “creditors” in the company's balance sheet there shall be stated the aggregate amount of any debts included under that item in respect of which any security has been given by the company.
3
References above in this paragraph to an item shown under “creditors” in the company's balance sheet include references, where amounts falling due to creditors within one year and after more than one year are distinguished in the balance sheet—
a
in a case within sub-paragraph (1), to an item shown under the latter of those categories; and
b
in a case within sub-paragraph (2), to an item shown under either of those categories;
and references to items shown under “creditors” include references to items which would but for paragraph 3(4)(b) be shown under that heading.
45
If any fixed cumulative dividends on the company's shares are in arrear, there shall be stated—
a
the amount of the arrears; and
b
the period for which the dividends or, if there is more than one class, each class of them are in arrear.
Guarantees and other financial commitments46
1
Particulars shall be given of any charge on the assets of the company to secure the liabilities of any other person, including, where practicable, the amount secured.
2
The following information shall be given with respect to any other contingent liability not provided for—
a
the amount or estimated amount of that liability;
b
its legal nature; and
c
whether any valuable security has been provided by the company in connection with that liability and if so, what.
3
There shall be stated, where practicable, the aggregate amount or estimated amount of contracts for capital expenditure, so far as not provided for.
4
Particulars shall be given of—
a
any pension commitments included under any provision shown in the company's balance sheet; and
b
any such commitments for which no provision has been made;
and where any such commitment relates wholly or partly to pensions payable to past directors of the company separate particulars shall be given of that commitment so far as it relates to such pensions.
5
Particulars shall also be given of any other financial commitments which—
a
have not been provided for; and
b
are relevant to assessing the company's state of affairs.
6
Commitments within any of sub-paragraphs (1) to (5) which are undertaken on behalf of or for the benefit of—
a
any parent undertaking or fellow subsidiary undertaking, or
b
any subsidiary undertaking of the company,
shall be stated separately from the other commitments within that sub-paragraph, and commitments within head (a) shall also be stated separately from those within head (b).
Miscellaneous matters47
Particulars shall be given of any case where the purchase price or production cost of any asset is for the first time determined under paragraph 28.
Information supplementing the profit and loss account
48
Paragraphs 49 and 50 require information which either supplements the information given with respect to any particular items shown in the profit and loss account or otherwise provides particulars of income or expenditure of the company or of circumstances affecting the items shown in the profit and loss account.
Particulars of turnover49
1
If the company has supplied geographical markets outside the United Kingdom during the financial year in question, there shall be stated the percentage of its turnover that, in the opinion of the directors, is attributable to those markets.
2
In analysing for the purposes of this paragraph the source of turnover, the directors of the company shall have regard to the manner in which the company's activities are organised.
Miscellaneous matters50
1
Where any amount relating to any preceding financial year is included in any item in the profit and loss account, the effect shall be stated.
2
Particulars shall be given of any extraordinary income or charges arising in the financial year.
3
The effect shall be stated of any transactions that are exceptional by virtue of size or incidence though they fall within the ordinary activities of the company.
General
51
1
Where sums originally denominated in foreign currencies have been brought into account under any items shown in the balance sheet or profit and loss account, the basis on which those sums have been translated into sterling shall be stated.
2
F921. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3
F921. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dormant companies acting as agents51A
Where the directors of a company take advantage of the exemption conferred by Article 257AA, and the company has during the financial year in question acted as an agent for any person, the fact that it has so acted must be stated.
PART IVINTERPRETATION OF SCHEDULE
52
The following paragraphs apply for the purposes of this Schedule and its interpretation.
Financial instruments52A
References to “derivatives” include commodity‐based contracts that give either contracting party the right to settle in cash or in some other financial instrument, except when such contracts—
a
were entered into for the purpose of, and continue to meet, the company's expected purchase, sale or usage requirements,
b
were designed for such purpose at their inception, and
c
are expected to be settled by delivery of the commodity.
52B
1
The expressions listed in sub‐paragraph (2) have the same meaning as they have in Council Directive 78/660/EEC on the annual accounts of certain types of companies, as amended.
2
Those expressions are “available for sale financial asset”, “business combination”, “commodity‐based contracts”, “derivative”, “equity instrument”, “exchange difference”, “fair value hedge accounting system”, “financial fixed asset”, “financial instrument”, “foreign entity”, “hedge accounting”, “hedge accounting system”, “hedged items”, “hedging instrument”, “held for trading purposes”, “held to maturity”, “monetary item”, “receivables”, “reliable market” and “trading portfolio”.
Historical cost accounting rules53
References to the historical cost accounting rules shall be read in accordance with paragraph 29.
Investment property53A
“Investment property” means land held to earn rent or for capital appreciation.
Listed investmentsF92254
F9221
“Listed investment” means an investment as respects which there has been granted a listing on—
a
a recognised investment exchange other than an overseas investment exchange; or
b
a stock exchange of repute outside Northern Ireland.
2
“Recognised investment exchange” and “overseas investment exchange” have the meaning given in Part 18 of the Financial Services and Markets Act 2000.
Loans55
A loan is treated as falling due for repayment, and an instalment of a loan is treated as falling due for payment, on the earliest date on which the lender could require repayment or (as the case may be) payment, if he exercised all options and rights available to him.
Materiality56
Amounts which in the particular context of any provision of this Schedule are not material may be disregarded for the purposes of that provision.
Provisions57
1
References to provisions for depreciation or diminution in value of assets are to any amount written off by way of providing for depreciation or diminution in value of assets.
2
Any reference in the profit and loss account formats set out in Part 1 to the depreciation of, or amounts written off, assets of any description is to any provision for depreciation or diminution in value of assets of that description.
58
References toF923 provisions for liabilities are to any amount retained as reasonably necessary for the purpose of providing for any liabilityF923 the nature of which is clearly defined and which is either likely to be incurred, or certain to be incurred but uncertain as to amount or as to the date on which it will arise.
Staff costs59
1
“Social security costs” means any contributions by the company to any state social security or pension scheme, fund or arrangement.
2
“Pension costs” includes any costs incurred by the company in respect of any pension scheme established for the purpose of providing pensions for persons currently of formerly employed by the company, any sums set aside for the future payment or pensions directly by the company to current or former employees and any pensions paid directly to such persons without having first been set aside.
3
Any amount stated in respect of the item “social security costs” or in respect of the item “wages and salaries” in the company's profit and loss account shall be determined by reference to payments made or costs incurred in respect of all persons employed by the company during the financial year under contracts of service.
SCHEDULE 8A Form and Content of Abbreviated Accounts of Small Companies delivered to Registrar
PART IBALANCE SHEET FORMATS
1
A small company may deliver to the registrar a copy of the balance sheet showing the items listed in either of the balance sheet formats set out in paragraph 2 in the order and under the headings and sub-headings given in the format adopted, but in other respects corresponding to the full balance sheet.
2
The formats referred to in paragraph 1 are as follows—
Balance Sheet Formats
Format 1
A
Called-up share capital not paid
B
Fixed assets
I
Intangible assets
II
Tangible assets
III
Investments
C
Current assets
I
Stocks
II
Debtors (1)
III
Investments
IV
Cash at bank and in hand
D
Prepayments and accrued income
E
Creditors: amounts falling due within one year
F
Net current assets (liabilities)
G
Total assets less current liabilities
H
Creditors: amounts falling due after more than one year
I
F924Provisions for liabilities
J
Accruals and deferred income
K
Capital and reserves
I
Called up share capital
II
Share premium account
III
Revaluation reserve
IV
Other reserves
V
Profit and loss account
Balance Sheet Formats
Format 2
ASSETS
A
Called up share capital not paid
B
Fixed assets
I
Intangible assets
II
Tangible assets
III
Investments
C
Current assets
I
Stocks
II
Debtors (1)
III
Investments
IV
Cash at bank and in hand
D
Prepayments and accrued income
LIABILITIES
A
Capital and reserves
I
Called up share capital
II
Share premium account
III
Revaluation reserve
IV
Other reserves
V
Profit and loss account
B
F925Provisions for liabilities
C
Creditors (2)
D
Accrurals and deferred income
Notes on the balance sheet formats
- 1
Debtors
(Formats 1 and 2, item C.II.)
The aggregate amount of debtors falling due after more than one year shall be shown separately, unless it is disclosed in the notes to the accounts.
- 2
Creditors
(Format 2, Liabilities C.)
The aggregate amount of creditors falling due within one year and of creditors falling due after more than one year shall be shown separately, unless it is discovered in the notes to the accounts.
PART IINOTES TO THE ACCOUNTS
Preliminary
3
Any information required in the case of any small company by the following provisions of this Part shall (if not given in the company's accounts) be given by way of a note to those accounts.
Disclosure of accounting policies
4
The accounting policies adopted by the company in determining the amounts to be included in respect of items shown in the balance sheet and in determining the profit or loss of the company shall be stated (including such policies with respect to the depreciation and diminution in value of assets).
Information supplementing the balance sheet
Share capital and debentures5
1
The following information shall be given with respect to the company's share capital—
a
the authorised share capital; and
b
where shares of more than one class have been allotted, the number and aggregate nominal value of shares of each class allotted.
2
In the case of any part of the allotted share capital that consists of redeemable shares, the following information shall be given—
a
the earliest and latest dates on which the company has power to redeem those shares;
b
whether those shares must be redeemed in any event or are liable to be redeemed at the option of the company or of the shareholder; and
c
whether any (and, if so, what) premium is payable on redemption.
6
If the company has allotted any shares during the financial year, the following information shall be given—
a
the classes of shares allotted; and
b
as respects each class of shares, the number allotted, their aggregate nominal value, and the consideration received by the company for the allotment.
Fixed assets7
1
In respect of each item to which a letter or Roman number is assigned under the general item “fixed assets” in the company's balance sheet the following information shall be given—
a
the appropriate amounts in respect of that item as at the date of the beginning of the financial year and as at the balance sheet date respectively;
b
the effect on any amount shown in the balance sheet in respect of that item of—
i
any revision of the amount in respect of any assets included under that item made during that year on any basis mentioned in paragraph 31 of Schedule 8;
ii
acquisitions during that year of any assets;
iii
disposals during that year of any assets; and
iv
any transfers of assets of the company to and from that item during that year.
2
The reference in sub-paragraph (1)(a) to the appropriate amounts in respect of any item as at any date there mentioned is a reference to amounts representing the aggregate amounts determined, as at that date, in respect of assets falling to be included under that item on either of the following basis, that is to say—
a
on the basis of purchase price or production cost (determined in accordance with paragraphs 26 and 27 of Schedule 8); or
b
on any basis mentioned in paragraph 31 of that Schedule,
(leaving out of account in either case any provisions for depreciation or diminution in value).
3
In respect of each item within sub-paragraph (1)—
a
the cumulative amount of provisions for depreciation or diminution in value of assets included under that item as at each date mentioned in sub-paragraph (1)(a);
b
the amount of any such provisions made in respect of the financial year;
c
the amount of any adjustments made in respect of any such provisions during that year in consequence of the disposal of any assets; and
d
the amount of any other adjustments made in respect of any such provisions during that year;
shall also be stated.
Financial fixed assets7A
1
Sub‐paragraph (2) applies if—
a
the company has financial fixed assets that could be included at fair value by virtue of paragraph 34A of Schedule 8,
b
the amount at which those assets are included under any item in the company's accounts is in excess of their fair value, and
c
the company has not made provision for diminution in value of those assets in accordance with paragraph 19(1) of that Schedule.
2
There must be stated—
a
the amount at which either the individual assets or appropriate groupings of those individual assets are included in the company's accounts,
b
the fair value of those assets or groupings, and
c
the reasons for not making a provision for diminution in value of those assets, including the nature of the evidence that provides the basis for the belief that the amount at which they are stated in the accounts will be recovered.
Details of indebtedness8
1
For the aggregate of all items shown under “creditors” in the company's balance sheet there shall be stated the aggregate of the following amounts, that is to say—
a
the amount of any debts included under “creditors” which are payable or repayable otherwise than by instalments and fall due for payment or repayment after the end of the period of five years beginning with the day next following the end of the financial year; and
b
in the case of any debts so included which are payable or repayable by instalments, the amount of any instalments which fall due for payment after the end of that period.
2
In respect of each item shown under “creditors” in the company's balance sheet there shall be stated the aggregate amount of any debts included under that item, in respect of which any security has been given by the company.
General
9
1
Where sums originally denominated in foreign currencies have been brought into account under any items shown in the balance sheet or profit and loss account, the basis on which those sums have been translated into sterling shall be stated.
2
F926. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3
F926. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dormant companies acting as agents9A
Where the directors of a company take advantage of the exemption conferred by Article 257AA, and the company has during the financial year in question acted as an agent for any person, the fact that it has so acted must be stated.
SCHEDULE 9
PART IINDIVIDUAL ACCOUNTS
CHAPTER IGENERAL RULES AND FORMATS
SECTION AGENERAL RULES
1
1
Subject to the following provisions of this Part:
a
every balance sheet of a company shall show the items listed in the balance sheet format set out in section B of this Chapter; and
b
every profit and loss account of a company shall show the items listed in either of the profit and loss account formats so set out;
in either case in the order and under the headings and sub-headings given in the format adopted.
2
Sub-paragraph (1) is not to be read as requiring the heading or sub-heading for any item to be distinguished by any number or letter assigned to that item in the format adopted.
3
Where the heading of an item in the format adopted contains any wording in square brackets, that wording may be omitted if not applicable to the company.
4
1
In respect of every item shown in the balance sheet or profit and loss account, there shall be shown or stated the corresponding amount for the financial year immediately preceding that to which the accounts relate.
2
Where the corresponding amount is not comparable with the amount to be shown for the item in question in respect of the financial year to which the balance sheet or profit and loss account relates, the former amount F927may be adjusted and F928particulars of the non-comparability and of any adjustment shall be given in a note to the accounts.
3
Paragraph 3(4) does not apply in any case where an amount can be shown for the item in question in respect of the financial year immediately preceding that to which the balance sheet or profit and loss account relates, and that amount shall be shown under the heading or sub-heading required by paragraph 1 for that item.
5
1
Subject to the following provisions of this paragraph and without prejudice to note (6) to the balance sheet format, amounts in respect of items representing assets or income may not be set off against amounts in respect of items representing liabilities or expenditure (as the case may be), or vice versa.
2
Charges required to be included in profit and loss account format 1, items 11(a) and 11(b) or format 2, items A7(a) and A7(b) may however be set off against income required to be included in format 1, items 12(a) and 12(b) or format 2, items B5(a) and B5(b) and the resulting figure shown as a single item (in format 2 at position A7 if negative and at position B5 if positive).
3
Charges required to be included in profit and loss account format 1, item 13 or format 2, item A8 may also set off against income required to be included in format 1, item 14 or format 2, item B6 and the resulting figure shown as a single item (in format 2 at position A8 if negative and at position B6 if positive).
6
1
Assets shall be shown under the relevant balance sheet headings even where the company has pledged them as security for its own liabilities or for those of third parties or has otherwise assigned them as security to third parties.
2
A company shall not include in its balance sheet assets pledged or otherwise assigned to it as security unless such assets are in the form of cash in the hands of the company.
7
Assets acquired in the name of and on behalf of third parties shall not be shown in the balance sheet.
Para. 8 rep. by SR 2004/496
8A
The directors of a company must, in determining how amounts are presented within items in the profit and loss account and balance sheet, have regard to the substance of the reported transaction or arrangement, in accordance with generally accepted accounting principles or practice.
SECTION BTHE REQUIRED FORMATS FOR ACCOUNTS
Preliminary
9
1
References in this Part to the balance sheet format or to profit and loss account formats are to the balance sheet format or profit and loss account formats set out below and references to the items listed in any of the formats are to those items read together with any of the notes following the formats which apply to any of those items.
2
The requirement imposed by paragraph 1 of this Part to show the items listed in any such format in the order adopted in the format is subject to any provision in the notes following the formats for alternative positions for any particular items.
10
A number in brackets following any item in any of the formats set out below is a reference to the note of that number in the notes following the formats.
Balance Sheet Format
ASSETS
1
Cash and balances at central [or post office] banks (1)
5
Debt securities [and other fixed income securities] (6), (20)
a
Issued by public bodies
b
Issued by other issuers
6
Equity shares [and other variable-yield securities]
7
Participating interests
8
Shares in group undertakings
9
Intangible fixed assets (7)
10
Tangible fixed assets (8)
11
Called up capital not paid (9)
12
Own Shares (10)
13
Other assets
14
Called up capital not paid (9)
15
Prepayments and accrued income
Total assets
LIABILITIES
1
Deposits by banks (11), (20)
a
Repayable on demand
b
With agreed maturity dates or periods of notice
5
Accruals and deferred income
6
F929Provisions for liabilities
a
Provisions for pensions and similar obligations
b
Provisions for tax
c
Other provisions
7
Subordinated liabilities (14), (20)
8
Called up share capital (15)
9
Share premium account
10
Reserves
a
Capital redemption reserve
b
Reserve for own shares
c
Reserves provided for by the articles of association
d
Other reserves
11
Revaluation reserve
12
Profit and loss account
Total liabilities
MEMORANDUM ITEMS
1
Contingent liabilities (16)
1
Acceptances and endorsements
2
Guarantees and assets pledged as collateral security (17)
3
Other contingent liabilities
Notes on the balance sheet format and memorandum items
1
Cash and balances at central [or post office] banks
(Assets item 1)
Cash shall comprise all currency including foreign notes and coins.
Only those balances which may be withdrawn without notice and which are deposited with central or post office banks of the country or countries in which the company is established shall be included in this item. All other claims on central or post office banks must be shown under Assets items 3 or 4.
(Assets item 2(a))
Treasury bills and similar securities shall comprise treasury bills and similar debt instruments issued by public bodies which are eligible for refinancing with central banks of the country or countries in which the company is established. Any treasury bills or similar debt instruments not so eligible shall be included under Assets item 5, sub-item (a).
(Assets item 2(b))
Other eligible bills shall comprise all bills purchased to the extent that they are eligible, under national law, for refinancing with the central banks of the country or countries in which the company is established.
(Assets item 3)
Loans and advances to banks shall comprise all loans and advances to domestic or foreign credit institutions made by the company arising out of banking transactions. However, loans and advances to credit institutions represented by debt securities or other fixed income securities shall be included under Assets item 5 and not this item.
5
Loans and advances to customers
(Assets item 4)
Loans and advances to customers shall comprise all types of assets in the form of claims on domestic and foreign customers other than credit institutions. However, loans and advances represented by debt securities or other fixed income securities shall be included under Assets item 5 and not this item.
6
Debt securities [and other fixed income securities]
(Assets item 5)
This item shall comprise transferable debt securities and any other transferable fixed income securities issued by credit institutions, other undertakings or public bodies. Debt securities and other fixed income securities issued by public bodies shall however only be included in this item if they may not be shown under Assets item 2.
Where a company holds its own debt securities these shall not be included under this item but shall be deducted from Liabilities item 3(a) or (b), as appropriate.
Securities bearing interest rates that vary in accordance with specific factors, for example the interest rate on the inter-bank market or on the Euromarket, shall also be regarded as fixed income securities to be included under this item.
7
Intangible fixed assets
(Assets item 9)
This item shall comprise:
- a
development costs;
- b
concessions, patents, licences, trade marks and similar rights and assets;
- c
goodwill; and
- d
payments on account.
Amounts shall, however, be included in respect of (b) only if the assets were acquired for valuable consideration or the assets in question were created by the company itself.
Amounts representing goodwill shall only be included to the extent that the goodwill was acquired for valuable consideration.
There shall be disclosed, in a note to the accounts, the amount of any goodwill included in this item.
8
Tangible fixed assets
(Assets item 10)
This item shall comprise:
—land and buildings;
—plant and machinery;
—fixtures and fittings, tools and equipment; and
—payments on account and assets in the course of construction.
There shall be disclosed in a note to the accounts the amount included in this item with respect to land and buildings occupied by the company for its own activities.
9
Called up capital not paid
(Assets items 11 and 14)
The two positions shown for this item are alternatives.
10
Own shares
(Assets item 12)
The nominal value of the shares held shall be shown separately under this item.
11
Deposits by banks
(Liabilities item 1)
Deposits by banks shall comprise all amounts arising out of banking transactions owed to other domestic or foreign credit institutions by the company. However liabilities in the form of debt securities and any liabilities for which transferable certificates have been issued shall be included under Liabilities item 3 and not this item.
12
Customer accounts
(Liabilities item 2)
This item shall comprise all amounts owed to creditors that are not credit institutions. However liabilities in the form of debt securities and any liabilities for which transferable certificates have been issued shall be shown under Liabilities item 3 and not this item.
13
Debt securities in issue
(Liabilities item 3)
This item shall include both debt securities and debts for which transferable certificates have been issued, including liabilities arising out of own acceptances and promissory notes. (Only acceptances which a company has issued for its own refinancing and in respect of which it is the first party liable shall be treated as own acceptances.)
14
Subordinated liabilities
(Liabilities item 7)
This item shall comprise all liabilities in respect of which there is a contractual obligation that, in the event of winding up or bankruptcy, they are to be repaid only after the claims of other creditors have been met. This item shall include all subordinated liabilities, whether or not a ranking has been agreed between the subordinated creditors concerned.
15
Called up share capital
(Liabilities item 8)
The amount of allotted share capital and the amount of called up share capital which has been paid up shall be shown separately.
16
Contingent liabilities
(Memorandum item 1)
This item shall include all transactions whereby the company has underwritten the obligations of a third party.
Liabilities arising out of the endorsement of rediscounted bills shall be included in this item. Acceptances other than own acceptances shall also be included.
17
Contingent liabilities: Guarantees and assets pledged as collateral security
(Memorandum item 1(2))
This item shall include all guarantee obligations incurred and assets pledged as collateral security on behalf of third parties, particularly in respect of sureties and irrevocable letters of credit.
18
Commitments
(Memorandum item 2)
This item shall include every irrevocable commitment which could give rise to a credit risk.
19
Commitments: Commitments arising out of sale and option to resell transactions
(Memorandum item 2(1))
This sub-item shall comprise commitments entered into by the company in the context of sale and option to resell transactions.
20
Claims on, and liabilities to, undertakings in which a participating interest is held or group undertakings
(Assets items 2 to 5, Liabilities items 1 to 3 and 7)
The following information must be given either by way of subdivision of the relevant items or by way of notes to the accounts.
The amount of the following must be shown for each of Assets items 2 to 5:
- a
claims on group undertakings included therein; and
- b
claims on undertakings in which the company has a participating interest included therein.
The amount of the following must be shown for each of Liabilities items 1, 2, 3 and 7:
- i
liabilities to group undertakings included therein; and
- ii
liabilities to undertakings in which the company has a participating interest included therein.
Special Rules
Subordinated assets11
1
The amount of any assets that are subordinated must be shown either as a subdivision of any relevant asset item or in the notes to the accounts; in the latter case disclosure shall be by reference to the relevant asset item or items in which the assets are included.
2
In the case of Assets items 2 to 5 in the balance sheet format, the amounts required to be shown by note (20) to the format as sub-items of those items shall be further subdivided so as to show the amount of any claims included therein that are subordinated.
3
For this purpose, assets are subordinated if there is a contractual obligation to the effect that, in the event of winding up or bankruptcy, they are to be repaid only after the claims of other creditors have been met, whether or not a ranking has been agreed between the subordinated creditors concerned.
Syndicated loans12
1
Where a company is a party to a syndicated loan transaction the company shall include only that part of the total loan which it itself has funded.
2
Where a company is a party to a syndicated loan transaction and has agreed to reimburse (in whole or in part) any other party to the syndicate any funds advanced by that party or any interest thereon upon the occurrence of any event, including the default of the borrower, any additional liability by reason of such a guarantee shall be included as a contingent liability in Memorandum item 1, sub-item (2).
Sale and repurchase transactions13
1
The following rules apply where a company is a party to a sale and repurchase transaction.
2
Where the company is the transferor of the assets under the transaction:
a
the assets transferred shall, notwithstanding the transfer, be included in its balance sheet;
b
the purchase price received by it shall be included in its balance sheet as an amount owed to the transferee; and
c
the value of the assets transferred shall be disclosed in a note to its accounts.
3
Where the company is the transferee of the assets under the transaction it shall not include the assets transferred in its balance sheet but the purchase price paid by it to the transferor shall be so included as an amount owed by the transferor.
Sale and option to resell transactions14
1
The following rules apply where a company is a party to a sale and option to resell transaction.
2
Where the company is the transferor of the assets under the transaction it shall not include in its balance sheet the assets transferred but it shall enter under Memorandum item 2 an amount equal to the price agreed in the event of repurchase.
3
Where the company is the transferee of the assets under the transaction it shall include those assets in its balance sheet.
Managed funds15
1
For the purposes of this paragraph “managed funds” are funds which the company administers in its own name but on behalf of others and to which it has legal title.
2
The company shall, in any case where claims and obligations arising in respect of managed funds fall to be treated as claims and obligations of the company, adopt the following accounting treatment: claims and obligations representing managed funds are to be included in the company's balance sheet, with the notes to the accounts disclosing the total amount included with respect to such assets and liabilities in the balance sheet and showing the amount included under each relevant balance sheet item in respect of such assets or (as the case may be) liabilities.
Profit and Loss Account Formats
FORMAT 1
Vertical layout
1
Interest receivable (1)
1
Interest receivable and similar income arising from debt securities [and other fixed income securities]
2
Other interest receivable and similar income
5
Fees and commissions payable (4)
6
Dealing [profits] [losses] (5)
7
Other operating income
8
Administrative expenses
a
Staff costs
i
Wages and salaries
ii
Social security costs
iii
Other pension costs
b
Other administrative expenses
9
Depreciation and amortisation (6)
10
Other operating charges
11
Provisions
a
Provisions for bad and doubtful debts (7)
b
Provisions for contingent liabilities and commitments (8)
12
Adjustments to provisions
a
Adjustments to provisions for bad and doubtful debts (9)
b
Adjustments to provisions for contingent liabilities and commitments (10)
13
Amounts written off fixed asset investments (11)
14
Adjustments to amounts written off fixed asset investments (12)
15
[Profit] [loss] on ordinary activities before tax
16
Tax on [profit] [loss] on ordinary activities
17
[Profit] [loss] on ordinary activities after tax
18
Extraordinary income
19
Extraordinary charges
20
Extraordinary [profit] [loss]
21
Tax on extraordinary [profit] [loss]
22
Extraordinary [profit] [loss] after tax
23
Other taxes not shown under the preceding items
24
[Profit] [loss] for the financial year
FORMAT 2
Horizontal layout
A
Charges
1
Interest payable (2)
2
Fees and commissions payable (4)
3
Dealing losses (5)
4
Administrative expenses
a
Staff costs
i
Wages and salaries
ii
Social security costs
iii
Other pension costs
b
Other administrative expenses
5
Depreciation and amortisation (6)
6
Other operating charges
7
Provisions
a
Provisions for bad and doubtful debts (7)
b
Provisions for contingent liabilities and commitments (8)
8
Amounts written off fixed asset investments (11)
9
Profit on ordinary activities before tax
10
Tax on [profit] [loss] on ordinary activities
11
Profit on ordinary activities after tax
12
Extraordinary charges
13
Tax on extraordinary [profit] [loss]
14
Extraordinary loss after tax
15
Other taxes not shown under the preceding items
16
Profit for the financial year
B
Income
1
Interest receivable (1)
1
Interest receivable and similar income arising from debt securities [and other fixed income securities]
2
Other interest receivable and similar income
2
Dividend income
a
Income from equity shares [and other variable-yield securities]
b
Income from participating interests
c
Income from shares in group undertakings
3
Fees and commissions receivable (3)
4
Dealing profits (5)
5
Adjustments to provisions
a
Adjustments to provisions for bad and doubtful debts (9)
b
Adjustments to provisions for contingent liabilities and commitments (10)
6
Adjustments to amounts written off fixed asset investments (12)
7
Other operating income
8
Loss on ordinary activities before tax
9
Loss on ordinary activities after tax
10
Extraordinary income
11
Extraordinary profit after tax
12
Loss for the financial year
Notes on the profit and loss account formats
1
Interest receivable
(Format 1, item 1; Format 2, item B1)
This item shall include all income arising out of banking activities, including:
- a
income from assets, included in Assets items 1 to 5 in the balance sheet format, however calculated;
- b
income resulting from covered forward contracts spread over the actual duration of the contract and similar in nature to interest; and
- c
fees and commissions receivable similar in nature to interest and calculated on a time basis or by reference to the amount of the claim (but not other fees and commissions receivable).
(Format 1, item 2; Format 2, item A1)
This item shall include all expenditure arising out of banking activities, including:
- a
charges arising out of liabilities included in Liabilities items 1, 2, 3 and 7 in the balance sheet format, however calculated;
- b
charges resulting from covered forward contracts, spread over the actual duration of the contract and similar in nature to interest; and
- c
fees and commissions payable similar in nature to interest and calculated on a time basis or by reference to the amount of the liability (but not other fees and commissions payable).
(Format 1, item 4; Format 2, item B3)
Fees and commissions receivable shall comprise income in respect of all services supplied by the company to third parties, but not fees or commissions required to be included under interest receivable (Format 1, item 1; Format 2, item B1).
In particular the following fees and commissions receivable must be included (unless required to be included under interest receivable):
fees and commissions for guarantees, loan administration on behalf of other lenders and securities transactions;
fees, commissions and other income in respect of payment transactions, account administration charges and commissions for the safe custody and administration of securities;
fees and commissions for foreign currency transactions and for the sale and purchase of coin and precious metals; and
fees and commissions charged for brokerage services in connection with savings and insurance contracts and loans.
(Format 1, item 5; Format 2, item A2)
Fees and commissions payable shall comprise charges for all services rendered to the company by third parties but not fees or commissions required to be included under interest payable (Format 1, item 2; Format 2, item A1).
In particular the following fees and commissions payable must be included (unless required to be included under interest payable):
fees and commissions for guarantees, loan administration and securities transactions;
fees, commissions and other charges in respect of payment transactions, account administration charges and commissions for the safe custody and administration of securities;
fees and commissions for foreign currency transactions and for the sale and purchase of coin and precious metals; and
fees and commissions for brokerage services in connection with savings and insurance contracts and loans.
5
Dealing [profits] [losses]
(Format 1, item 6; Format 2, items B4 and A3)
This item shall comprise:
- a
the net profit or net loss on transactions in securities which are not held as financial fixed assets together with amounts written off or written back with respect to such securities, including amounts written off or written back as a result of the application of paragraph 34(1);
- b
the net profit or loss on exchange activities, save in so far as the profit or loss is included in interest receivable or interest payable (Format 1, items 1 or 2; Format 2, items B1 or A1); and
- c
the net profits and losses on other dealing operations involving financial instruments including precious metals.
6
Depreciation and amortisation
(Format 1, item 9; Format 2, item A5)
This item shall comprise depreciation and other amounts written off in respect of balance sheet Assets items 9 and 10.
7
Provisions: Provisions for bad and doubtful debts
(Format 1, item 11(a); Format 2, item A7(a))
Provisions for bad and doubtful debts shall comprise charges for amounts written off and for provisions made in respect of loans and advances shown under balance sheet Assets items 3 and 4.
8
Provisions: Provisions for contingent liabilities and commitments
(Format 1, item 11(b); Format 2, item A7(b))
This item shall comprise charges for provisions for contingent liabilities and commitments of a type which would, if not provided for, be shown under Memorandum items 1 and 2.
9
Adjustments to provisions: Adjustments to provisions for bad and doubtful debts
(Format 1, item 12(a); Format 2, item B5(a))
This item shall include credits from the recovery of loans that have been written off, from other advances written back following earlier write offs and from the reduction of provisions previously made with respect to loans and advances.
10
Adjustments to provisions: Adjustments to provisions for contingent liabilities and commitments
(Format 1, item 12(b); Format 2, item B5(b))
This item comprises credits from the reduction of provisions previously made with respect to contingent liabilities and commitments.
11
Amounts written off fixed asset investments
(Format 1, item 13; Format 2, item A8)
Amounts written off fixed asset investments shall comprise amounts written off in respect of assets which are transferable securities held as financial fixed assets, participating interests and shares in group undertakings and which are included in Assets items 5 to 8 in the balance sheet format.
12
Adjustments to amounts written off fixed asset investments
(Format 1, item 14; Format 2, item B6)
Adjustments to amounts written off fixed asset investments shall include amounts written back following earlier write offs and provisions in respect of assets which are transferable securities held as financial fixed assets, participating interests and group undertakings and which are included in Assets items 5 to 8 in the balance sheet format.
CHAPTER IIACCOUNTING PRINCIPLES AND RULES
SECTION AACCOUNTING PRINCIPLES
16
Subject to paragraph 22, the amounts to be included in respect of all items shown in a company's accounts shall be determined in accordance with the principles set out in paragraphs 17 to 21.
Accounting principles
17
The company shall be presumed to be carrying on business as a going concern.
18
Accounting policies shall be applied consistently within the same accounts and from one financial year to the next.
19
The amount of any item shall be determined on a prudent basis, and in particular:
a
only profits realised at the balance sheet date shall be included in the profit and loss account; and
b
all liabilitiesF930. . . which have arisenF930. . . in respect of the financial year to which the accounts relate or a previous financial year shall be taken into account, including those which only become apparent between the balance sheet date and the date on which it is signed on behalf of the board of directors in pursuance of Article 241.
20
All income and charges relating to the financial year to which the accounts relate shall be taken into account, without regard to the date of receipt or payment.
21
In determining the aggregate amount of any item the amount of each individual asset or liability that falls to be taken into account shall be determined separately.
Departure from the accounting principles
22
If it appears to the directors of a company that there are special reasons for departing from any of the principles stated above in preparing the company's accounts in respect of any financial year they may do so, but particulars of the departure, the reasons for it and its effect shall be given in a note to the accounts.
SECTION BVALUATION RULES
HISTORICAL COST ACCOUNTING RULES
Preliminary
23
Subject toF931 paragraphs 39 to 44F, the amounts to be included in respect of all items shown in a company's accounts shall be determined in accordance with the rules set out in paragraphs 24 to 38.
Fixed assets
General rules24
Subject to any provision for depreciation or diminution in value made in accordance with paragraph 25 or 26 the amount to be included in respect of any fixed asset shall be its cost.
25
In the case of any fixed asset which has a limited useful economic life, the amount of:
a
its cost; or
b
where it is estimated that any such asset will have a residual value at the end of the period of its useful economic life, its cost less that estimated residual value;
shall be reduced by provisions for depreciation calculated to write off that amount systematically over the period of the asset's useful economic life.
26
1
Where a fixed asset investment of a description falling to be included under Assets items 7 (Participating interests) or 8 (Shares in group undertakings) in the balance sheet format, or any other holding of securities held as a financial fixed asset, has diminished in value, provisions for diminution in value may be made in respect of it and the amount to be included in respect of it may be reduced accordingly; and any such provisions which are not shown in the profit and loss account shall be disclosed (either separately or in aggregate) in a note to the accounts.
2
Provisions for diminution in value shall be made in respect of any fixed asset which has diminished in value if the reduction in its value is expected to be permanent (whether its useful economic life is limited or not), and the amount to be included in respect of it shall be reduced accordingly; and any such provisions which are not shown in the profit and loss account shall be disclosed (either separately or in aggregate) in a note to the accounts.
3
Where the reasons for which any provision was made in accordance with sub-paragraph (1) or (2) have ceased to apply to any extent, that provision shall be written back to the extent that it is no longer necessary; and any amounts written back in accordance with this sub-paragraph which are not shown in the profit and loss account shall be disclosed (either separately or in aggregate) in a note to the accounts.
Development costs27
1
Notwithstanding that amounts representing “development costs” may be included under Assets item 9 in the balance sheet format, an amount may only be included in a company's balance sheet in respect of development costs in special circumstances.
2
If any amount is included in a company's balance sheet in respect of development costs the following information shall be given in a note to the accounts:
a
the period over which the amount of those costs originally capitalised is being or is to be written off; and
b
the reasons for capitalising the development costs in question.
Goodwill28
1
The application of paragraphs 24 to 26 in relation to goodwill (in any case where goodwill is treated as an asset) is subject to the following provisions of this paragraph.
2
Subject to sub-paragraph (3) the amount of the consideration for any goodwill acquired by a company shall be reduced by provisions for depreciation calculated to write off that amount systematically over a period chosen by the directors of the company.
3
The period chosen shall not exceed the useful economic life of the goodwill in question.
4
In any case where any goodwill acquired by a company is included as an asset in the company's balance sheet the period chosen for writing off the consideration for that goodwill and the reasons for choosing that period shall be disclosed in a note to the accounts.
Intangible and tangible fixed assets29
Assets included in Assets items 9 (Intangible fixed assets) and 10 (Tangible fixed assets) in the balance sheet format shall be valued as fixed assets.
Other fixed assets30
Other assets falling to be included in the balance sheet shall be valued as fixed assets where they are intended for use on a continuing basis in the company's activities.
Financial fixed assets31
1
Debt securities, including fixed income securities, held as financial fixed assets shall be included in the balance sheet at an amount equal to their maturity value plus any premium, or less any discount, on their purchase, subject to the following provisions of this paragraph.
2
The amount included in the balance sheet with respect to such securities purchased at a premium shall be reduced each financial year on a systematic basis so as to write the premium off over the period to the maturity date of the security and the amounts so written off shall be charged to the profit and loss account for the relevant financial years.
3
The amount included in the balance sheet with respect to such securities purchased at a discount shall be increased each financial year on a systematic basis so as to extinguish the discount over the period to the maturity date of the security and the amounts by which the amount is increased shall be credited to the profit and loss account for the relevant years.
4
The notes to the accounts shall disclose the amount of any unamortised premium or discount not extinguished which is included in the balance sheet by virtue of sub-paragraph (1).
5
For the purposes of this paragraph “premium” means any excess of the amount paid for a security over its maturity value and “discount” means any deficit of the amount paid for a security over its maturity value.
Current Assets
32
The amount to be included in respect of loans and advances, debt or other fixed income securities and equity shares or other variable yield securities not held as financial fixed assets shall be their cost, subject to paragraphs 33 and 34.
33
1
If the net realisable value of any asset referred to in paragraph 32 is lower than its cost the amount to be included in respect of that asset shall be the net realisable value.
2
Where the reasons for which any provision for diminution in value was made in accordance with sub-paragraph (1) have ceased to apply to any extent, that provision shall be written back to the extent that it is no longer necessary.
34
1
Subject to paragraph 33, the amount to be included in the balance sheet in respect of transferable securities not held as financial fixed assets may be the higher of their cost or their market value at the balance sheet date.
2
The difference between the cost of any securities included in the balance sheet at a valuation under sub-paragraph (1) and their market value shall be shown (in aggregate) in the notes to the accounts.
Miscellaneous and supplementary provisions
Excess of money owed over value received as an asset item35
1
Where the amount repayable on any debt owed by a company is greater than the value of the consideration received in the transaction giving rise to the debt, the amount of the difference may be treated as an asset.
2
Where any such amount is so treated:
a
it shall be written off by reasonable amounts each year and must be completely written off before repayment of the debt; and
b
if the current amount is not shown as a separate item in the company's balance sheet it must be disclosed in a note to the accounts.
Determination of cost36
1
The cost of an asset that has been acquired by the company shall be determined by adding to the actual price paid any expenses incidental to its acquisition.
2
The cost of an asset constructed by the company shall be determined by adding to the purchase price of the raw materials and consumables used the amount of the costs incurred by the company which are directly attributable to the construction of that asset.
3
In addition, there may be included in the cost of an asset constructed by the company:
a
a reasonable proportion of the costs incurred by the company which are only indirectly attributable to the construction of that asset, but only to the extent that they relate to the period of construction; and
b
interest on capital borrowed to finance the construction of that asset, to the extent that it accrues in respect of the period of construction;
provided, however, in a case within head (b), that the inclusion of the interest in determining the cost of that asset and the amount of the interest so included is disclosed in a note to the accounts.
37
1
Subject to the qualification mentioned below, the cost of any assets which are fungible assets (including investments) may be determined by the application of any of the methods mentioned in sub-paragraph (2) in relation to any such assets of the same class.
The method chosen must be one which appears to the directors to be appropriate in the circumstances of the company.
2
Those methods are:
a
the method known as “first in, first out” (FIFO);
b
the method known as “last in, first out” (LIFO);
c
a weighted average price; and
d
any other method similar to any of the methods mentioned above.
3
Where in the case of any company:
a
the cost of assets falling to be included under any item shown in the company's balance sheet has been determined by the application of any method permitted by this paragraph; and
b
the amount shown in respect of that item differs materially from the relevant alternative amount given below in this paragraph;
the amount of that difference shall be disclosed in a note to the accounts.
4
Subject to sub-paragraph (5), for the purposes of sub-paragraph (3)(b), the relevant alternative amount, in relation to any item shown in a company's balance sheet, is the amount which would have been shown in respect of that item if assets of any class included under that item at an amount determined by any method permitted by this paragraph had instead been included at their replacement cost as at the balance sheet date.
5
The relevant alternative amount may be determined by reference to the most recent actual purchase price before the balance sheet date of assets of any class included under the item in question instead of by reference to their replacement cost as at that date, but only if the former appears to the directors of the company to constitute the more appropriate standard of comparison in the case of assets of that class.
Substitution of original amount where price or cost unknown38
Where there is no record of the purchase price of any asset acquired by a company or of any price, expenses or costs relevant for determining its cost in accordance with paragraph 36, or any such record cannot be obtained without unreasonable expense or delay, its cost shall be taken for the purpose of paragraphs 24 to 34 to be the value ascribed to it in the earliest available record of its value made on or after its acquisition by the company.
ALTERNATIVE ACCOUNTING RULES
Preliminary
39
1
The rules set out in paragraphs 24 to 38 are referred to below in this Schedule as the historical cost accounting rules.
2
Paragraphs 24 to 27 and 31 to 35 are referred to below in this section of this Part as the depreciation rules; and references below in this Schedule to the historical cost accounting rules do not include the depreciation rules as they apply by virtue of paragraph 42.
40
Subject to paragraphs 42 to 44, the amounts to be included in respect of assets of any description mentioned in paragraph 41 may be determined on any basis so mentioned.
Alternative accounting rules
41
1
Intangible fixed assets, other than goodwill, may be included at their current cost.
2
Tangible fixed assets may be included at a market value determined as at the date of their last valuation or at their current cost.
3
Investments of any description falling to be included under Assets items 7 (Participating interests) or 8 (Shares in group undertakings) of the balance sheet format and any other securities held as financial fixed assets may be included either:
a
at a market value determined as at the date of their last valuation; or
b
at a value determined on any basis which appears to the directors to be appropriate in the circumstances of the company;
but in the latter case particulars of the method of valuation adopted and of the reasons for adopting it shall be disclosed in a note to the accounts.
4
Securities of any description not held as financial fixed assets (if not valued in accordance with paragraph 34) may be included at their current cost.
Application of the depreciation rules
42
1
Where the value of any asset of a company is determined in accordance with paragraph 41, that value shall be, or (as the case may require) be the starting point for determining, the amount to be included in respect of that asset in the company's accounts, instead of its cost or any value previously so determined for that asset; and the depreciation rules shall apply accordingly in relation to any such asset with the substitution for any reference to its cost of a reference to the value most recently determined for that asset in accordance with paragraph 41.
2
The amount of any provision for depreciation required in the case of any fixed asset by paragraph 25 or 26 as it applies by virtue of sub-paragraph (1) is referred to in this paragraph as the “adjusted amount”, and the amount of any provision which would be required by that paragraph in the case of that asset according to the historical cost accounting rules is referred to as the “historical cost amount”.
3
Where sub-paragraph (1) applies in the case of any fixed asset the amount of any provision for depreciation in respect of that asset included in any item shown in the profit and loss account in respect of amounts written off assets of the description in question may be the historical cost amount instead of the adjusted amount, provided that the amount of any difference between the two is shown separately in the profit and loss account or in a note to the accounts.
Additional information to be provided in case of departure from historical cost accounting rules
43
1
This paragraph applies where the amounts to be included in respect of assets covered by any items shown in a company's accounts have been determined in accordance with paragraph 41.
2
The items affected and the basis of valuation adopted in determining the amounts of the assets in question in the case of each such item shall be disclosed in a note to the accounts.
3
In the case of each balance sheet item affected either:
a
the comparable amounts determined according to the historical cost accounting rules; or
b
the differences between those amounts and the corresponding amounts actually shown in the balance sheet in respect of that item;
shall be shown separately in the balance sheet or in a note to the accounts.
4
In sub-paragraph (3), references in relation to any item to the comparable amounts determined as there mentioned are references to:
a
the aggregate amount which would be required to be shown in respect of that item if the amounts to be included in respect of all the assets covered by that item were determined according to the historical cost accounting rules; and
b
the aggregate amount of the cumulative provisions for depreciation or diminution in value which would be permitted or required in determining those amounts according to those rules.
Revaluation reserve
44
1
With respect to any determination of the value of an asset of a company in accordance with paragraph 41, the amount of any profit or loss arising from that determination (after allowing, where appropriate, for any provisions for depreciation or diminution in value made otherwise than by reference to the value so determined and any adjustments of any such provisions made in the light of that determination) shall be credited or (as the case may be) debited to a separate reserve ( “the revaluation reserve”).
2
The amount of the revaluation reserve shall be shown in the company's balance sheet under Liabilities item 11 in the balance sheet format, but need not be shown under that name.
3
An amount may be transferred
F932a
from the revaluation reserve—
i
to the profit and loss account, if the amount was previously charged to that account or represents realised profit, or
ii
on capitalisation,
b
to or from the revaluation reserve in respect of the taxation relating to any profit or loss credited or debited to the reserve;
and the revaluation reserve shall be reduced to the extent that the amounts transferred to it are no longer necessary for the purposes of the valuation method used.
4
InF932 sub-paragraph (3)(a)(ii) “capitalisation”, in relation to an amount standing to the credit of the revaluation reserve, means applying it in wholly or partly paying up unissued shares in the company to be allotted to members of the company as fully or partly paid shares.
5
The revaluation reserve shall not be reduced except as mentioned in this paragraph.
6
The treatment for taxation purposes of amounts credited or debited to the revaluation reserve shall be disclosed in a note to the accounts.
FAIR VALUE ACCOUNTING
Inclusion of financial instruments at fair value
44A
1
Subject to sub-paragraphs (2) to (4), financial instruments (including derivatives) may be included at fair value.
2
Sub-paragraph (1) does not apply to financial instruments which constitute liabilities unless—
a
they are held as part of a trading portfolio, or
b
they are derivatives.
3
Sub-paragraph (1) does not apply to—
a
financial instruments (other than derivatives) held to maturity;
b
loans and receivables originated by the company and not held for trading purposes;
c
interests in subsidiary undertakings, associated undertakings and joint ventures;
d
equity instruments issued by the company;
e
contracts for contingent consideration in a business combination;
f
other financial instruments with such special characteristics that the instruments, according to generally accepted accounting principles or practice, should be accounted for differently from other financial instruments.
4
If the fair value of a financial instrument cannot be determined reliably in accordance with paragraph 44B, sub-paragraph (1) does not apply to that financial instrument.
5
In this paragraph—
“associated undertaking” has the meaning given by paragraph 20 of Schedule 4A; and
“joint venture” has the meaning given by paragraph 19 of that Schedule.
Determination of fair value
44B
1
The fair value of a financial instrument is determined in accordance with this paragraph.
2
If a reliable market can readily be identified for the financial instrument, its fair value is determined by reference to its market value.
3
If a reliable market cannot readily be identified for the financial instrument but can be identified for its components or for a similar instrument, its fair value is determined by reference to the market value of its components or of the similar instrument.
4
If neither sub-paragraph (2) nor (3) applies, the fair value of the financial instrument is a value resulting from generally accepted valuation models and techniques.
5
Any valuation models and techniques used for the purposes of sub-paragraph (4) must ensure a reasonable approximation of the market value.
Inclusion of hedged items at fair value
44C
A company may include any assets and liabilities that qualify as hedged items under a fair value hedge accounting system, or identified portions of such assets or liabilities, at the amount required under that system.
Other assets that may be included at fair value
44D
1
This paragraph applies to—
a
investment property, and
b
living animals and plants,
that, under international accounting standards, may be included in accounts at fair value.
2
Such investment property and such living animals and plants may be included at fair value, provided that all such investment property or, as the case may be, all such living animals and plants are so included where their fair value can reliably be determined.
3
In this paragraph, “fair value” means fair value determined in accordance with relevant international accounting standards.
Accounting for changes in value
44E
1
This paragraph applies where a financial instrument is valued in accordance with paragraph 44A or 44C or an asset is valued in accordance with paragraph 44D.
2
Notwithstanding paragraph 19, and subject to sub-paragraphs (3) and (4), a change in the value of the financial instrument or of the investment property or living animal or plant must be included in the profit and loss account.
3
Where—
a
the financial instrument accounted for is a hedging instrument under a hedge accounting system that allows some or all of the change in value not to be shown in the profit and loss account, or
b
the change in value relates to an exchange difference arising on a monetary item that forms part of a company's net investment in a foreign entity,
the amount of the change in value must be credited to or (as the case may be) debited from a separate reserve ( “fair value reserve”).
4
Where the instrument accounted for—
a
is an available for sale financial asset, and
b
is not a derivative,
the change in value may be credited to or (as the case may be) debited from the fair value reserve.
The fair value reserve
44F
1
The fair value reserve must be adjusted to the extent that the amounts shown in it are no longer necessary for the purposes of paragraph 44E(3) or (4).
2
The treatment for taxation purposes of amounts credited to or debited from the fair value reserve shall be disclosed in a note to the accounts.
ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES
45
1
Subject to the following sub-paragraphs, amounts to be included in respect of assets and liabilities denominated in foreign currencies shall be in sterling (or the currency in which the accounts are drawn up) after translation at an appropriate spot rate of exchange prevailing at the balance sheet date.
2
An appropriate rate of exchange prevailing on the date of purchase may however be used for assets held as financial fixed assets and assets to be included under Assets items 9 (Intangible fixed assets) and 10 (Tangible fixed assets) in the balance sheet format, if they are not covered or not specifically covered in either the spot or forward currency markets.
3
An appropriate spot rate of exchange prevailing at the balance sheet date shall be used for translating uncompleted spot exchange transactions.
4
An appropriate forward rate of exchange prevailing at the balance sheet date shall be used for translating uncompleted forward exchange transactions.
5
This paragraph does not apply to any assets or liabilities held, or any transactions entered into, for hedging purposes or to any assets or liabilities which are themselves hedged.
46
1
Subject to sub-paragraph (2), any difference between the amount to be included in respect of an asset or liability under paragraph 45 and the book value, after translation into sterling (or the currency in which the accounts are drawn up) at an appropriate rate, of that asset or liability shall be credited or, as the case may be, debited to the profit and loss account.
2
In the case, however, of assets held as financial fixed assets, of assets to be included under Assets items 9 (Intangible fixed assets) and 10 (Tangible fixed assets) in the balance sheet format and of transactions undertaken to cover such assets, any such difference may be deducted from or credited to any non-distributable reserve available for the purpose.
CHAPTER IIINOTES TO THE ACCOUNTS
Preliminary
47
1
2
F934. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3
F934. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
General
Disclosure of accounting policies48
The accounting policies adopted by the company in determining the amounts to be included in respect of items shown in the balance sheet and in determining the profit or loss of the company shall be stated (including such policies with respect to the depreciation and diminution in value of assets).
49
It shall be stated whether the accounts have been prepared in accordance with applicable accounting standards and particulars of any material departure from those standards and the reasons for it shall be given.
Sums denominated in foreign currencies50
Where any sums originally denominated in foreign currencies have been brought into account under any items shown in the balance sheet format or the profit and loss account formats, the basis on which those sums have been translated into sterling (or the currency in which the accounts are drawn up) shall be stated.
F935Reserves and dividends50A
There must be stated—
a
any amount set aside or proposed to be set aside to, or withdrawn or proposed to be withdrawn from, reserves,
b
the aggregate amount of dividends paid in the financial year (other than those for which a liability existed at the immediately preceding balance sheet date),
c
the aggregate amount of dividends that the company is liable to pay at the balance sheet date, and
d
the aggregate amount of dividends that are proposed before the date of approval of the accounts, and not otherwise disclosed under sub-paragraph (b) or (c).
Information supplementing the balance sheet
Share capital and debentures51
1
The following information shall be given with respect to the company's share capital:
a
the authorised share capital; and
b
where shares of more than one class have been allotted, the number and aggregate nominal value of shares of each class allotted.
2
In the case of any part of the allotted share capital that consists of redeemable shares, the following information shall be given:
a
the earliest and latest dates on which the company has power to redeem those shares;
b
whether those shares must be redeemed in any event or are liable to be redeemed at the option of the company or of the shareholder; and
c
whether any (and, if so, what) premium is payable on redemption.
52
If the company has allotted any shares during the financial year, the following information shall be given:
Sub-para. (a) rep. by SR 1997/314
b
the classes of shares allotted; and
c
as respects each class of shares, the number allotted, their aggregate nominal value and the consideration received by the company for the allotment.
53
1
With respect to any contingent right to the allotment of shares in the company the following particulars shall be given:
a
the number, description and amount of the shares in relation to which the right is exercisable;
b
the period during which it is exercisable; and
c
the price to be paid for the shares allotted.
2
In sub-paragraph (1) “contingent right to the allotment of shares” means any option to subscribe for shares and any other right to require the allotment of shares to any person whether arising on the conversion into shares of securities of any other description or otherwise.
54
1
If the company has issued any debentures during the financial year to which the accounts relate, the following information shall be given:
Head (a) rep. by SR 1997/314
b
the classes of debentures issued; and
c
as respects each class of debentures, the amount issued and the consideration received by the company for the issue.
Sub-para. (2) rep. by SR 1997/314
3
Where any of the company's debentures are held by a nominee of or trustee for the company, the nominal amount of the debentures and the amount at which they are stated in the accounting records kept by the company in accordance with Article 229 shall he stated.
Fixed assets55
1
In respect of any fixed assets of the company included in any assets item in the company's balance sheet the following information shall be given by reference to each such item:
a
the appropriate amounts in respect of those assets included in the item as at the date of the beginning of the financial year and as at the balance sheet date respectively;
b
the effect on any amount included in the item in respect of those assets of:
i
any determination during that year of the value to be ascribed to any of those assets in accordance with paragraph 41;
ii
acquisitions during that year of any fixed assets;
iii
disposals during that year of any fixed assets; and
iv
any transfers of fixed assets of the company to and from the item during that year.
2
The reference in sub-paragraph (1)(a) to the appropriate amounts in respect of any fixed assets (included in an assets item) as at any date there mentioned is a reference to amounts representing the aggregate amounts determined, as at that date, in respect of fixed assets falling to be included under the item on either of the following bases, that is to say:
a
on the basis of cost (determined in accordance with paragraphs 36 and 37); or
b
on any basis permitted by paragraph 41;
(leaving out of account in either case any provisions for depreciation or diminution in value).
3
In addition, in respect of any fixed assets of the company included in any assets item in the company's balance sheet, there shall be stated (by reference to each such item):
a
the cumulative amount of provisions for depreciation or diminution in value of those assets included under the item as at each date mentioned in sub-paragraph (1)(a);
b
the amount of any such provisions made in respect of the financial year;
c
the amount of any adjustments made in respect of any such provisions during that year in consequence of the disposal of any of those assets; and
d
the amount of any other adjustments made in respect of any such provisions during that year.
4
The requirements of this paragraph need not be complied with to the extent that a company takes advantage of the option of setting off charges and income afforded by paragraph 5(3) of this Part.
56
Where any fixed assets of the company (other than listed investments) are included under any item shown in the company's balance sheet at an amount determined in accordance with paragraph 41, the following information shall be given:
a
the years (so far as they are known to the directors) in which the assets were severally valued and the several values; and
b
in the case of assets that have been valued during the financial year, the names of the persons who valued them or particulars of their qualifications for doing so and (whichever is stated) the bases of valuation used by them.
57
In relation to any amount which is included under Assets item 10 in the balance sheet format (Tangible fixed assets) with respect to land and buildings there shall be stated:
a
how much of that amount is ascribable to land of freehold tenure and how much to land of leasehold tenure; and
b
how much of the amount ascribable to land of leasehold tenure is ascribable to land held on long lease and how much to land held on short lease.
58
There shall be disclosed separately the amount of:
a
any participating interests; and
b
any shares in group undertakings that are held in credit institutions.
Information about fair value of assets and liabilities58A
1
This paragraph applies where financial instruments have been valued in accordance with paragraph 44A or 44C.
2
There must be stated—
a
where the fair value of the instruments has been determined in accordance with paragraph 44B(4), the significant assumptions underlying the valuation models and techniques used,
b
for each category of financial instrument, the fair value of the instruments in that category and the changes in value—
i
included in the profit and loss account, and
ii
credited to or (as the case may be) debited from the fair value reserve,
in respect of those instruments, and
c
for each class of derivatives, the extent and nature of the instruments, including significant terms and conditions that may affect the amount, timing and certainty of future cash flows.
3
Where any amount is transferred to or from the fair value reserve during the financial year, there must be stated in tabular form—
a
the amount of the reserve as at the date of the beginning of the financial year and as at the balance sheet date respectively;
b
the amount transferred to or from the reserve during that year; and
c
the source and application respectively of the amounts so transferred.
58B
Where the company has derivatives that it has not included at fair value, there must be stated for each class of such derivatives—
a
the fair value of the derivatives in that class, if such a value can be determined in accordance with paragraph 44B, and
b
the extent and nature of the derivatives.
58C
1
Sub‐paragraph (2) applies if—
a
the company has financial fixed assets that could be included at fair value by virtue of paragraph 44A,
b
the amount at which those assets are included under any item in the company's accounts is in excess of their fair value, and
c
the company has not made provision for diminution in value of those assets in accordance with paragraph 26(1).
2
There must be stated—
a
the amount at which either the individual assets or appropriate groupings of those individual assets are included in the company's accounts,
b
the fair value of those assets or groupings, and
c
the reasons for not making a provision for diminution in value of those assets, including the nature of the evidence that provides the basis for the belief that the amount at which they are stated in the accounts will be recovered.
Information where investment property and living animals and plants included at fair value58D
1
This paragraph applies where the amounts to be included in a company's accounts in respect of investment property or living animals and plants have been determined in accordance with paragraph 44D.
2
The balance sheet items affected and the basis of valuation adopted in determining the amounts of the assets in question in the case of each such item must be disclosed in a note to the accounts.
3
In the case of investment property, for each balance sheet item affected there must be shown, either separately in the balance sheet or in a note to the accounts—
a
the comparable amounts determined according to the historical cost accounting rules; or
b
the differences between those amounts and the corresponding amounts actually shown in the balance sheet in respect of that item.
4
In sub‐paragraph (3), references in relation to any item to the comparable amounts determined in accordance with that sub‐paragraph are references to—
a
the aggregate amount which would be required to be shown in respect of that item if the amounts to be included in respect of all the assets covered by that item were determined according to the historical cost accounting rules; and
b
the aggregate amount of the cumulative provisions for depreciation or diminution in value which would be permitted or required in determining those amounts according to those rules.
Reserves and provisions59
1
Where any amount is transferred:
a
to or from any reserves;
b
to anyF936 provisions for liabilities; or
c
from anyF936 provision for liabilities otherwise than for the purpose for which the provision was established;
and the reserves or provisions are or would but for paragraph 3(3) of this Part be shown as separate items in the company's balance sheet, the information mentioned in sub-paragraph (2) shall be given in respect of the aggregate of reserves or provisions included in the same item.
2
That information is:
a
the amount of the reserves or provisions as at the date of the beginning of the financial year and as at the balance sheet date respectively;
b
any amounts transferred to or from the reserve or provisions during that year; and
c
the source and application respectively of any amounts so transferred.
3
Particulars shall be given of each provision included in Liabilities item 6(c) (Other provisions) in the company's balance sheet in any case where the amount of that provision is material.
Provision for taxation60
The amount of any provision for deferred taxation shall be stated separately from the amount of any provision for other taxation.
Maturity analysis61
1
A company shall disclose separately for each of Assets items 3(b) and 4 and Liabilities items 1(b), 2(b) and 3(b) the aggregate amount of the loans and advances and liabilities included in those items broken down into the following caregories:
a
those repayable in not more than three months
b
those repayable in more than three months but not more than one year
c
those repayable in more than one year but not more than five years
d
those repayable in more than five years
from the balance sheet date.
2
A company shall also disclose the aggregate amounts of all loans and advances falling within Assets item 4 (Loans and advances to customers) which are:
a
repayable on demand; or
b
are for an indeterminate period, being repayable upon short notice.
3
For the purposes of sub-paragraph (1), where a loan or advance or liability is repayable by instalments, each such instalment is to be treated as a separate loan or advance or liability.
Debt and other fixed income securities62
A company shall disclose the amount of debt and fixed income securities included in Assets item 5 (Debt securities [and other fixed income securities]) and the amount of such securities included in Liabilities item 3(a) (Bonds and medium term notes) that (in each case) will become due within one year of the balance sheet date.
Subordinated liabilities63
1
The following information must be disclosed in relation to any borrowing included in Liabilities item 7 (Subordinated liabilities) that exceeds 10 per cent. of the total for that item:
a
its amount;
b
the currency in which it is denominated;
c
the rate of interest and the maturity date (or the fact that it is perpetual);
d
the circumstances in which early repayment may be demanded;
e
the terms of the subordination; and
f
the existence of any provisions whereby it may be converted into capital or some other form of liability and the terms of any such provisions.
2
The general terms of any other borrowings included in Liabilities item 7 shall also be stated.
Fixed cumulative dividends64
If any fixed cumulative dividends on the company's shares are in arrear, there shall be stated:
a
the amount of the arrears; and
b
the period for which the dividends or, if there is more than one class, each class of them are in arrear.
Details of assets charged65
1
There shall be disclosed, in relation to each liabilities and memorandum item of the balance sheet format, the aggregate amount of any assets of the company which have been charged to secure any liability or potential liability included thereunder, the aggregate amount of the liabilities or potential liabilities so secured and an indication of the nature of the security given.
2
Particulars shall also be given of any other charge on the assets of the company to secure the liabilities of any other person, including, where practicable, the amount secured.
Guarantees and other financial commitments66
1
There shall be stated, where practicable:
a
the aggregate amount or estimated amount of contracts for capital expenditure, so far as not provided for;F937. . .
Head (b) rep. by SR 1997/314
2
Particulars shall be given of:
a
any pension commitments included under any provision shown in the company's balance sheet; and
b
any such commitments for which no provision has been made;
and where any such commitment relates wholly or partly to pensions payable to past directors of the company separate particulars shall be given of that commitment so far as it relates to such pensions.
3
Particulars shall also be given of any other financial commitments, including any contingent liabilities, which:
a
have not been provided for;
b
have not been included in the memorandum items in the balance sheet format; and
c
are relevant to assessing the company's state of affairs.
4
Commitments within any of the preceding sub-paragraphs undertaken on behalf of or the benefit of:
a
any parent company or fellow subsidiary undertaking of the company; or
b
any subsidiary undertaking of the company;
shall be stated separately from the other commitments within that sub-paragraph (and commitments within head (a) shall be stated separately from those within head (b)).
5
There shall be disclosed the nature and amount of any contingent liabilities and commitments included in Memorandum items 1 and 2 which are material in relation to the company's activities.
Memorandum items: Group undertakings67
1
With respect to contingent liabilities required to be included under Memorandum item 1 in the balance sheet format, there shall be stated in a note to the accounts the amount of such contingent liabilities incurred on behalf of or for the benefit of:
a
any parent undertaking or fellow subsidiary undertaking; or
b
any subsidiary undertaking
of the company; in addition the amount incurred in respect of the undertakings referred to in head (a) shall be stated separately from the amount incurred in respect of the undertakings referred to in head (b).
2
With respect to commitments required to be included under Memorandum item 2 in the balance sheet format, there shall be stated in a note to the accounts the amount of such commitments undertaken on behalf of or for the benefit of:
a
any parent undertaking or fellow subsidiary undertaking; or
b
any subsidiary undertaking
of the company; in addition the amount incurred in respect of the undertakings referred to in head (a) shall be stated separately from the amount incurred in respect of the undertakings referred to in head (b).
Transferable securities68
1
There shall be disclosed for each of Assets items 5 to 8 in the balance sheet format the amount of transferable securities included under those items:
a
that are listed and the amount of those that are unlisted;F938. . .
Head (b) rep. by SR 1997/314
2
In the case of each amount shown in respect of listed securities under sub-paragraph (1)(a), there shall also be disclosed the aggregate market value of those securities, if different from the amount shown.
3
There shall also be disclosed for each of Assets items 5 and 6 the amount of transferable securities included under those items that are held as financial fixed assets and the amount of those that are not so held, together with the criterion used by the directors to distinguish those held as financial fixed assets.
Leasing transactions69
The aggregate amount of all property (other than land) leased by the company to other persons shall be disclosed, broken down so as to show the aggregate amount included in each relevant balance sheet item.
Assets and liabilities denominated in a currency other than sterling (or the currency in which the accounts are drawn up)70
1
The aggregate amount, in sterling (or the currency in which the accounts are drawn up), of all assets denominated in a currency other than sterling (or the currency used), together with the aggregate amount, in sterling (or the currency used), of all liabilities so denominated, is to be disclosed.
2
For the purposes of this paragraph an appropriate rate of exchange prevailing at the balance sheet date shall be used to determine the amounts concerned.
Sundry assets and liabilities71
Where any amount shown under either of the following items is material, particulars shall be given of each type of asset or liability included therein, including an explanation of the nature of the asset or liability and the amount included with respect to assets or liabilities of that type:
a
Assets item 13 (Other assets)
b
Liabilities item 4 (Other liabilities).
Unmatured forward transactions72
1
The following shall be disclosed with respect to unmatured forward transactions outstanding at the balance sheet date:
a
the categories of such transactions, by reference to an appropriate system of classification;
b
whether, in the case of each such category, they have been made, to any material extent, for the purpose of hedging the effects of fluctuations in interest rates, exchange rates and market prices or whether they have been made, to any material extent, for dealing purposes.
2
Transactions falling within sub-paragraph (1) shall include all those in relation to which income or expenditure is to be included in:
a
format 1, item 6 or format 2, items B4 or A3 (Dealing [profits] [losses]),
b
format 1, items 1 or 2, or format 2, items B1 or A1, by virtue of notes (1)(b) and (2)(b) to the profit and loss account formats (forward contacts. spread over the actual duration of the contract and similar in nature to interest).
Miscellaneous matters73
1
Particulars shall be given of any case where the cost of any asset is for the first time determined under paragraph 38.
2
Where any outstanding loans made under the authority of Article 163(4)(b), (bb) or (c) or Article 165 (various cases of financial assistance by a company for purchase of its own shares) are included under any item shown in the company's balance sheet, the aggregate amount of those loans shall be disclsoed for each item in question.
Sub-para. (3) rep. by SR 1997/314
Information supplementing the profit and loss account
Para. 74 rep. by SR 1997/314
Particulars of tax75
Sub-para. (1) rep. by SR 1997/314
2
Particulars shall be given of any special circumstances which affect liability in respect of taxation of profits, income or capital gains for the financial year or liability in respect of taxation of profits, income or capital gains for succeeding financial years.
3
The following amounts shall be stated:
a
the amount of the charge for United Kingdom corporation tax;
b
if that amount would have been greater but for relief from double taxation, the amount which it would have been but for such relief;
c
the amount of the charge for United Kingdom income tax; and
d
the amount of the charge for taxation imposed outside the United Kingdom of profits, income and (so far as charged to revenue) capital gains.
These amounts shall be stated separately in respect of each of the amounts which is shown under the following items in the profit and loss account, that is to say format 1 item 16, format 2 item A10 (Tax on [profit] [loss] on ordinary activities) and format 1 item 21, format 2 item A13 (Tax on extraordinary [profit] [loss]).
Particulars of income76
1
A company shall disclose, with respect to income included in the following items in the profit and loss account formats, the amount of that income attributable to each of the geographical markets in which the company has operated during the financial year:
a
format 1 item 1, format 2 item B1 (Interest receivable);
b
format 1 item 3, format 2 item B2 (Dividend income);
c
format 1 item 4, format 2 item B3 (Fees and commissions receivable);
d
format 1 item 6, format 2 item B4 (Dealing profits); and
e
format 1 item 7, format 2 item B7 (Other operating income).
2
In analysing for the purposes of this paragraph the source of any income, the directors shall have regard to the manner in which the company's activities are organised.
3
For the purposes of this paragraph, markets which do not differ substantially from each other shall be treated as one market.
4
Where in the opinion of the directors the disclosure of any information required by this paragraph would be seriously prejudicial to the interests of the company, that information need not be disclosed, but the fact that any such information has not been disclosed must be stated.
Para. 77 rep. by SR 2004/496
Management and agency services78
A company providing any management and agency services to customers shall disclose that fact, if the scale of such services provided is material in the context of its business as a whole.
Subordinated liabilities79
Any amounts charged to the profit and loss account representing charges incurred during the year with respect to subordinated liabilities shall be disclosed.
Sundry income and charges80
Where any amount to be included in any of the following items is material, particulars shall be given of each individual component of the figure, including an explanation of their nature and amount:
a
in format 1:
i
items 7 and 10 (Other operating income and charges)
ii
items 18 and 19 (Extraordinary income and charges);
b
in format 2:
i
items A6 and B7 (Other operating charges and income)
ii
items A12 and B10 (Extraordinary charges and income).
Miscellaneous matters81
1
Where any amount relating to any preceding financial year is included in any item in the profit and loss account, the effect shall be stated.
2
The effect shall be stated of any transactions that are exceptional by virtue of size or incidence though they fall within the ordinary activities of the company.
CHAPTER IVINTERPRETATION OF PART I
General82
The following definitions apply for the purposes of this Part and its interpretation:
“banking activities” means activities forming part of a deposit-taking business within the meaning of the Banking Act 1987;
“banking transactions” means transactions entered into in the normal course of a deposit-taking business within the meaning of the Banking Act 1987;
“financial fixed assets” means loans and advances and securities held as fixed assets; participating interests and shareholdings in group undertakings shall be regarded as financial fixed assets;
“fungible assets” means assets of any description which are substantially indistinguishable one from another;
F939“Investment property” means land held to earn rent or for capital appreciation;
“lease” includes an agreement for a lease;
“1isted security” means a security listed on a recognised stock exchange, or on any stock exchange of repute outside Northern Ireland and the expression “unlisted security” shall be construed accordingly;
“long lease” means a lease in the case of which the portion of the term for which it was granted remaining unexpired at the end of the financial year is not less than 50 years;
“repayable on demand”, in connection with deposits, loans or advances, means those amounts which can at any time be withdrawn or demanded without notice or for which a maturity or period of notice of not more than 24 hours or one working day has been agreed;
“sale and repurchase transaction” means a transaction which involves the transfer by a credit institution or customer ( “the transferor”) to another credit institution or customer ( “the transferee”) of assets subject to an agreement that the same assets, or (in the case of fungible assets) equivalent assets, will subsequently be transferred back to the transferor at a specified price on a date specified or to be specified by the transferor; but the following shall not be regarded as sale and repurchase transactions: forward exchange transactions, options, transactions involving the issue of debt securities with a commitment to repurchase all or part of the issue before maturity or any similar transactions;
“sale and option to resell transaction” means a transaction which involves the transfer by a credit institution or customer ( “the transferor”) to another credit institution or customer ( “the transferee”) of assets subject to an agreement that the transferee is entitled to require the subsequent transfer of the same assets, or (in the case of fungible assets) equivalent assets, back to the transferor at the purchase price or another price agreed in advance on a date specified or to be specified; and
“short lease” means a lease which is not a long lease.
Financial instruments82A
For the purposes of this Part, references to “derivatives” include commodity‐based contracts that give either contracting party the right to settle in cash or in some other financial instrument, except when such contracts—
a
were entered into for the purpose of, and continue to meet, the company's expected purchase, sale or usage requirements,
b
were designed for such purpose at their inception, and
c
are expected to be settled by delivery of the commodity.
82B
1
The expressions listed in sub‐paragraph (2) have the same meaning in paragraphs 44A to 44F, 58A to 58C and 82A of this Part as they have in Council Directives 78/660/EEC on the annual accounts of certain types of companies and 86/635/EEC on the annual accounts and consolidated accounts of banks and other financial institutions, as amended.
2
Those expressions are “available for sale financial asset”, “business combination”, “commodity‐based contracts”, “derivative”, “equity instrument”, “exchange difference”, “fair value hedge accounting system”, “financial fixed asset”, “financial instrument”, “foreign entity”, “hedge accounting”, “hedge accounting system”, “hedged items”, “hedging instrument”, “held for trading purposes”, “held to maturity”, “monetary item”, “receivables”, “reliable market” and “trading portfolio”.
Loans83
For the purposes of this Part a loan or advance (including a liability comprising a loan or advance) is treated as falling due for repayment, and an instalment of a loan or advance is treated as falling due for payment, on the earliest date on which the lender could require repayment or (as the case may be) payment, if he exercised all options and rights available to him.
Materiality84
For the purposes of this Part amounts which in the particular context of any provision of this Part are not material may be disregarded for the purposes of that provision.
Provisions85
For the purposes of this Part and its interpretation:
a
references in this Part to provisions for depreciation or diminution in value of assets are to any amount written off by way of providing for depreciation or diminution in value of assets;
b
any reference in the profit and loss account formats or the notes thereto set out in Section B of this Part to the depreciation of, or amounts written off, assets of any description is to any provision for depreciation or diminution in value of assets of that description; and
c
references in this Part toF940 provisions for liabilities are to any amount retained as reasonably necessary for the purpose of providing for any liabilityF940 the nature of which is clearly defined and which is either likely to be incurred, or certain to be incurred but uncertain as to amount or as to the date on which it will arise.
Staff costs86
For the purposes of this Part and its interpretation:
a
“social security costs” means any contributions by the company to any state social security or pension scheme, fund or arrangement;
F941b
“pension costs” includes any costs incurred by the company in respect of any pension scheme established for the purpose of providing pensions for persons currently or formerly employed by the company, any sums set aside for the future payment of pensions directly by the company to current or former employees and any pensions paid directly to such persons without having first been set aside; and
c
any amount stated in respect ofF941 the item “social security costs” or in respect of the item “wages and salaries” in the company's profit and loss account shall be determined by reference to payments made or costs incurred in respect of all persons employed by the company during the financial year who are taken into account in determining the relevant annual number for the purposes ofF942 Article 239A(1)(a).
PART IICONSOLIDATED ACCOUNTS
Para. 1 rep. by SR 2004/496
Foreign currency translation5
Any difference between:
a
the amount included in the consolidated accounts for the previous financial year with respect to any undertaking included in the consolidation or the group's interest in any associated undertaking, together with the amount of any transactions undertaken to cover any such interest; and
b
the opening amount for the financial year in respect of those undertakings and in respect of any such transactions
arising as a result of the application of paragraph 45 of Part I may be credited to (where (a) is less than (b)), or deducted from (where (a) is greater than (b)), (as the case may be) consolidated reserves.
6
Any income and expenditure of undertakings included in the consolidation and associated undertakings in a foreign currency may be translated for the purposes of the consolidated accounts at the average rates of exchange prevailing during the financial year.
Information as to undertaking in which shares held as a result of financial assistance operation7
1
The following provisions apply where the parent company of a banking group has a subsidiary undertaking which:
a
is a credit institution of which shares are held as a result of a financial assistance operation with a view to its reorganisation or rescue; and
b
is excluded from consolidation under Article 237(3)(c) (interest held with a view to resale).
2
Information as to the nature and terms of the operations shall be given in a note to the group accounts and there shall be appended to the copy of the group accounts delivered to the registrar in accordance with Article 250 a copy of the undertaking's latest individual accounts and, if it is a parent undertaking, its latest group accounts.
If the accounts appended are required by law to be audited, a copy of the auditors' report shall also be appended.
3
If any document required to be appended is in a language other than English, the directors shall annex a translation of it into English, certified in the prescribed manner to be a correct translation.
4
The above requirements are subject to the following qualifications:
a
an undertaking is not required to prepare for the purposes of this paragraph accounts which would not otherwise be prepared, and if no accounts satisfying the above requirements are prepared none need be appended;
b
the accounts of an undertaking need not be appended if they would not otherwise be required to be published, or made available for public inspection, anywhere in the world, but in that case the reason for not appending the accounts shall be stated in a note to the consolidated accounts.
5
Where a copy of an undertaking's accounts is required to be appended to the copy of the group accounts delivered to the registrar, that fact shall be stated in a note to the group accounts.
6
Paragraphs (2) to (4) of Article 250 (penalties, &c. in case of default) apply in relation to the requirements of this paragraph as regards the delivery of documents to the registrar as they apply in relation to the requirements of paragraph (1) of that Article.
PART IIIADDITIONAL DISCLOSURE: RELATED UNDERTAKINGS
1
1
Where accounts are prepared in accordance with the special provisions of this Schedule relating to banking companies or groups:
a
the information required by paragraphs 8 and 24 of Schedule 5 (information about significant holdings of the company in undertakings other than subsidiary undertakings) need only be given in respect of undertakings (otherwise falling within the class of undertakings in respect of which disclosure is required) in which the company has a significant holding amounting to 20 per cent. or more of the nominal value of the shares in the undertaking; and
b
the information required by paragraph 27 of Schedule 5 (information about significant holdings of the group in undertakings other than subsidiary undertakings) need only be given in respect of undertakings (otherwise falling within the class of undertakings in respect of which disclosure is required) in which the group has a significant holding amounting to 20 per cent. or more of the nominal value of the shares in the undertaking.
In addition any information required by those paragraphs may be omitted if it is not material.
2
Paragraph 13(3) and (4) of Schedule 5 shall apply mutatis mutandis for the purposes of sub-paragraph (1)(a) and paragraph 32(3) and (4) of that Schedule shall apply mutatis mutandis for the purposes of sub-paragraph (1)(b).
PART IVADDITIONAL DISCLOSURE: EMOLUMENTS AND OTHER BENEFITS OF DIRECTORS AND OTHERS
1
The provisions of this Part have effect with respect to the application of Schedule 6 (additional disclosure: emoluments and other benefits of directors and others) to a banking company or the holding company of such a company.
Loans, quasi-loans and other dealings2
Part II of Schedule 6 (loans, quasi-loans and other dealings) does not apply for the purposes of accounts prepared by a banking company, or a company which is the holding company of a banking company, in relation to a transaction or arrangement of a kind mentioned in F943section 197, 198, 200, 201 or 203 of the Companies Act 2006, or an agreement to enter into such a transaction or arrangement, to which that banking company is a party.
Other transactions, arrangements and agreements3
1
Part III of Schedule 6 (other transactions, arrangements and agreements) applies for the purposes of accounts prepared by a banking company, or a company which is the holding company of a banking company, only in relation to a transaction, arrangement or agreement made by that banking company for—
a
a person who was a director of the company preparing the accounts, or who was connected with such a director, or
b
a person who was a chief executive or manager (F944 within the meaning of the Financial Services and Markets Act 2000) of that company or its holding company.
2
References in that Part to officers of the company shall be construed accordingly as including references to such persons.
3
In this paragraph "director" includes a shadow director.
4
For the purposes of that Part as it applies by virtue of this paragraph, a company which a person does not control shall not be treated as connected with him.
5
F945Sections 252 to 255 of, and Schedule 1 to, the Companies Act 2006 apply for the purposes of this paragraph as regards the interpretation of references to a person being connected with a director or controlling a company.
SCHEDULE 9AForm and Content of Accounts of Insurance Companies and Groups
PART 1INDIVIDUAL ACCOUNTS
CHAPTER 1GENERAL RULES AND FORMATS
SECTION A
GENERAL RULES
1
1
Subject to the following provisions of this Part—
a
every balance sheet of a company shall show the items listed in the balance sheet format set out in section B of this Chapter; and
b
every profit and loss account of a company shall show the items listed in the profit and loss account format so set out,
in either case in the order and under the headings and sub-headings given in the format.
2
Sub-paragraph (1) is not to be read as requiring the heading or sub-heading for any item to be distinguished by any letter or number assigned to that item in the format.
2
1
Any item required in accordance with paragraph 1 to be shown in a company's balance sheet or profit and loss account may be shown in greater detail than so required.
2
A company's balance sheet or profit and loss account may include an item representing or covering the amount of any asset or liability, income or expenditure not specifically covered by any of the items listed in the balance sheet or profit and loss account format set out in section B, but the following shall not be treated as assets in any company's balance sheet—
a
preliminary expenses;
b
expenses of and commission on any issue of shares or debentures; and
c
costs of research.
3
Items to which Arabic numbers are assigned in the balance sheet format set out in section B (except for items concerning technical provisions and in reinsurers' share of technical provisions), and items to which lower case letters in parentheses are assigned in the profit and loss account format so set out (except for items within items I.1 and 4 and II.1, 5 and 6) may be combined in a company's accounts for any financial year if either—
a
their individual amounts are not material for the purpose of giving a true and fair view; or
b
the combination facilitates the assessment of the state of affairs or profit or loss of the company for that year;
but in a case within paragraph (b) the individual amounts of any items so combined shall be disclosed in a note to the accounts and any notes required by this Schedule to the items so combined under that paragraph shall, notwithstanding the combination be given.
4
Subject to paragraph 3(3), a heading or sub-heading corresponding to an item listed in the format adopted in preparing a company's balance sheet or profit and loss account shall not be included if there is no amount to be shown for that item in respect of the financial year to which the balance sheet or profit and loss account relates.
3
1
In respect of every item shown in the balance sheet or profit and loss account, there shall be shown or stated the corresponding amount for the financial year immediately preceding that to which the accounts relate.
2
Where the corresponding amount is not comparable with the amount to be shown for the item in question in respect of the financial year to which the balance sheet or profit and loss account relates, the former amount F946may be adjusted and F947particulars of the non-comparability and of any adjustment shall be given in a note to the accounts.
3
Paragraph 2(4) does not apply in any case where an amount can be shown for the item in question in respect of the financial year immediately preceding that to which the balance sheet or profit and loss account relates, and that amount shall be shown under the heading or sub-heading required by paragraph 1 for that item.
4
Subject to the provisions of this Schedule, amounts in respect of items representing assets or income may not be set off against amounts in respect of items representing liabilities or expenditure (as the case may be), or vice versa.
Para. 5 rep. by SR 2004/496
6
F9481
The provisions of this Schedule which relate to long term business shall apply, with necessary modifications,F948 to business which consists of effecting or carrying out relevant contracts of general insurance which—
a
is transacted exclusively or principally according to the technical principles of long term business, and
b
is a significant amount of the business of the company.
F9482
For the purposes of sub‐paragraph (1), a contract of general insurance is a relevant contract if the risk insured against relates to—
a
accident; or
b
sickness.
3
Sub-paragraph (2) must be read with—
a
section 22 of the Financial Services and Markets Act 2000;
b
any relevant order under that section; and
c
Schedule 2 to that Act.
6A
The directors of a company must, in determining how amounts are presented within items in the profit and loss account and balance sheet, have regard to the substance of the reported transaction or arrangement, in accordance with generally accepted accounting principles or practice.
SECTION BTHE REQUIRED FORMATS FOR ACCOUNTS
Preliminary
7
1
References in the Part to the balance sheet format or profit and loss account format are to the balance sheet format or profit and loss account format set out below, and references to the items listed in either of the formats are to those items read together with any of the notes following the formats which apply to any of those items.
2
The requirement imposed by paragraph 1 to show the items listed in either format in the order adopted in the format is subject to any provision in the notes following the format for alternative positions for any particular items.
3
Where in respect of any item to which an Arabic number is assigned in either format, the gross amount and reinsurance amount or reinsurers' share are required to be shown, a sub-total of those amounts shall also be given.
4
Where in respect of any items to which an Arabic number is assigned in the profit and loss account format, separate items are required to be shown, then a separate sub-total of those items shall also be given in addition to any sub-total required by sub-paragraph (3).
8
A number in brackets following any item in either of the formats set out below is a reference to the note of that number in the notes following the format.
9
F9491
In the profit and loss account format set out below—
a
the heading “Technical account—General business” is forF949 business which consists of effecting or carrying out contracts of general insurance; and
b
the heading “Technical account—Long term business” is forF949 business which consists of effecting or carrying out contracts of long term insurance.
F9492
In sub-paragraph (1), references to—
a
contracts of general or long term insurance; and
b
the effecting or carrying out of such contracts,
must be read with section 22 of the Financial Services and Markets Act 2000, any relevant order under that section, and Schedule 2 to that Act.
Balance Sheet Format
ASSETS
A
Called up share capital not paid (1)
B
Intangible assets
1
Development costs
2
Concessions, patents, licences, trade marks and similar rights and assets (2)
3
Goodwill (3)
4
Payments on account
C
Investments
I
Land and buildings (4)
II
Investments in group undertakings and participating interests
1
Shares in group undertakings
2
Debt securities issued by, and loans to, group undertakings
3
Participating interests
4
Debt securities issued by, and loans to, undertakings in which the company has a participating interest
III
Other financial investments
1
Shares and other variable-yield securities and units in unit trusts
2
Debt securities and other fixed income securities (5)
3
Participation in investment pools (6)
4
Loans secured by mortgages (7)
5
Other loans (7)
6
Deposits with credit institutions (8)
7
Other (9)
IV
Deposits with ceding undertakings (10)
D
Assets held to cover linked liabilities (11)
Da
Reinsurers' share of technical provisions (12)
1
Provision for unearned premiums
2
Long-term business provision
3
Claims outstanding
4
Provisions for bonuses and rebates
5
Other technical provisions
6
Technical provisions for unit-linked liabilities
E
Debtors (13)
I
Debtors arising out of direct insurance operations
1
Policy holders
2
Intermediaries
II
Debtors arising out of reinsurance operations
III
Other debtors
IV
Called up share capital not paid (1)
F
Other assets
I
Tangible assets
1
Plant and machinery
2
Fixtures, fittings, tools and equipment
3
Payments on account (other than deposits paid on land and buildings) and assets (other than buildings) in course of construction
II
Stocks
1
Raw materials and consumables
2
Work in progress
3
Finished goods and goods for resale
4
Payments on account
III
Cash at bank and in hand
IV
Own shares (14)
V
Other (15)
G
Repayments and accrued income
I
Accrued interest and rent (16)
II
Deferred acquisition costs (17)
III
Other repayments and accrued income
LIABILITIES
A
Capital and reserves
I
Called up share capital or equivalent funds
II
Share premium account
III
Revaluation reserve
IV
Reserves
1
Capital redemption reserves
2
Reserve for own shares
3
Reserves provided for by the articles of association
4
Other reserves
V
Profit and loss account
B
Subordinated liabilities (18)
Ba
Fund for future appropriations (19)
C
Technical provisions
1
Provision for unearned premiums (20)
a
gross amount
b
reinsurance amount (12)
2
Long-term business provision (20) (21) (26)
a
gross amount
b
reinsurance amount (12)
3
Claims outstanding (22)
a
gross amount
b
reinsurance amount (12)
4
Provision for bonuses and rebates (23)
a
gross amount
b
reinsurance amount (12)
5
Equalisation provision (24)
6
Other technical provisions (25)
a
gross amount
b
reinsurance amount (12)
D
Technical provisions for linked liabilities (26)
a
gross amount
b
reinsurance amount (12)
E
F950Provisions for other risks
1
Provisions for pensions and similar obligations
2
Provisions for taxation
3
Other provisions
F
Deposits received from reinsurers (27)
G
Creditors (28)
I
Creditors arising out of direct insurance operations
II
Creditors arising out of reinsurance operations
III
Debenture loans (29)
IV
Amounts owed to credit institutions
V
Other creditors including taxation and social security
H
Accruals and deferred income
Notes on the Balance Sheet Format
1
Called up share capital not paid
(Assets items A and E.IV)
This item may be shown in either of the positions given in the format.
2
Concessions, patents, licences, trade marks and similar rights and assets
(Assets item B.2)
Amounts in respect of assets shall only be included in a company's balance sheet under this item if either—
- a
the assets were acquired for valuable consideration and are not required to be shown under goodwill; or
- b
the assets in question were created by the company itself.
(Assets item B.3)
Amounts representing goodwill shall only be included to the extent that the goodwill was acquired for valuable consideration.
4
Land and Buildings
(Assets item C.1)
The amount of any land and buildings occupied by the company for its own activities shall be shown separately in the notes to the accounts.
5
Debt securities and other fixed income securities
(Assets item C.III.2)
This item shall comprise transferable debt securities and any other transferable fixed income securities issued by credit institutions, other undertakings or public bodies, in so far as they are not covered by Assets item C.II.2 or C.II.4.
Securities bearing interest rates that vary in accordance with specific factors, for example the interest rate on the inter-bank market or on the Euromarket, shall also be regarded as debt securities and other fixed income securities and so be included under this item.
6
Participation in investment pools
(Assets item C.III.3)
This item shall comprise shares held by the company in joint investments constituted by several undertakings or pension funds, the management of which has been entrusted to one of those undertakings or to one of those pension fuinds.
7
Loans secured by mortgages and other loans
(Assets items C.III.4 and C.III.5)
Loans to policy holders for which the policy is the main security shall be included under “Other loans” and their amount shall be disclosed in the notes to the accounts. Loans secured by mortgage shall be shown as such even where they are also secured by insurance policies. Where the amount of “Other loans” not secured by policies is material, an appropriate breakdown shall be given in the notes to the accounts.
8
Deposits with credit institutions
(Assets item C.III.6)
This item shall comprise sums the withdrawal of which is subject to a time restriction. Sums deposited with no such restriction shall be shown under Assets item F.III even if they bear interest.
9
Other
(Assets item C.III.7)
This item shall comprise those investments which are not covered by Assets items C.III.1 to 6. Where the amount of such investment is significant, they must be disclosed in the notes to the accounts.
10
Deposits with ceding undertakings
(Assets item C.IV)
Where the company accepts reinsurance this item shall comprise amounts, owned by the ceding undertakings and corresponding to guarantees, which are deposited with those ceding undertakings or with third parties or which are retained by those undertakings.
These amounts may not be combined with other amounts owed by the ceding insurer to the reinsurer or set off against amounts owed by the reinsurer to the ceding insurer.
Securities deposited with ceding undertakings or third parties which remain the property of the company shall be entered in the company's accounts as an investment, under the appropriate item.
11
Assets held to cover linked liabilities
(Assets item D)
In respect of long-term business, this item shall comprise investments made pursuant to long-term policies under which the benefits payable to the policy holder are wholly or partly to be determined by reference to the value of, or the income from, property of any description (whether or not specified in the contract) or by reference to fluctuations in, or in an index of, the value of property of any description (whether or not so specified).
This item shall also comprise investments which are held on behalf of the members of a tontine and are intended for distribution among them.
12
Reinsurance amounts
(Assets item Da: Liabilities items C.1(b), 2(b), 3(b), 4(b) and 6(b) and D(b))
The reinsurance amounts may be shown either under Assets item Da or under Liabilities items C.1(b), 2(b), 3(b), 4(b) and 6(b) and D(b).
The reinsurance amounts shall comprise the actual or estimated amounts which, under the contractual reinsurance arrangements, are deducted from the gross amounts of technical provisions.
As regards the provision for unearned premiums, the reinsurance amounts shall be calculated according to the methods referred to in paragraph 44 or in accordance with the terms of the reinsurance policy.
13
Debtors
(Assets item E)
Amounts owned by group undertakings and undertakings in which the company has a participating interest shall be shown separately as sub-items of Assets items E.I, II and III.
14
Own shares
(Assets item F.IV)
The nominal value of the shares shall be shown separately under this item.
15
Other
(Assets item F.V)
This item shall comprise those assets which are not covered by Assets F.I to IV. Where such assets are material they must be disclosed in the notes to the accounts.
16
Accrued interest and rent
(Assets item G.I)
This item shall comprise those items that represent interest and rent that have been earned up to the balance-sheet date but have not yet become receivable.
17
Deferred acquisition costs
(Assets item G.II)
This item shall comprise the costs of acquiring insurance policies which are incurred during a financial year but relate to a subsequent financial year ( “deferred acquisition costs”), except in so far as—
- a
allowance has been made in the computation of the long term business provision made under paragraph 46 and shown under Liabilities item C2 or D in the balance sheet, for—
- i
the explicit recognition of such costs, or
- ii
the implicit recognition of such costs by virtue of the anticipation of future income from which such costs may prudently be expected to be recovered, or
- i
- b
allowance has been made for such costs in respect of general business policies by a deduction from the provision for unearned premiums made under paragraph 44 and shown under Liabilities item C.I in the balance sheet.
Deferred acquisition costs arising in general business shall be distinguished from those arising in long term business.
In the case of general business, the amount of any deferred acquisition costs shall be established on a basis compatible with that used for unearned premiums.
There shall be disclosed in the notes to the accounts—
- a
how the deferral of acquisition costs has been treated (unless otherwise expressly stated in the accounts), and
- b
where such costs are included as a deduction from the provisions at Liabilities item C.I, the amount of such deduction, or
- c
where the actuarial method used in the calculation of the provisions at Liabilities item C.2 or D has made allowance for the explicit recognition of such costs, the amount of the costs so recognised.
18
Subordinated liabilities
(Liabilities item B)
This item shall comprise all liabilities in respect of which there is a contractual obligation that, in the event of winding up or of bankruptcy, they are to be repaid only after the claims of all other creditors have been met (whether or not they are represented by certificates).
19
Fund for future appropriations
(Liabilities item Ba)
This item shall comprise all funds the allocation of which either to policy holders or to shareholders has not been determined by the end of the financial year.
Transfers to and from this item shall be shown in item II.12a in the profit and loss account.
20
Provision for unearned premiums
(Liabilities item C.1)
In the case of long-term business the provision for unearned premiums may be included in Liabilities item C.2 rather than in this item.
The provision for unearned premiums shall comprise the amount representing that part of gross premiums written which is estimated to be earned in the following financial year or to subsequent financial years.
21
Long term business provision
(Liabilities item C.2)
This items shall comprise the actuarially estimated value of the company's liabilities (excluding technical provisions included in Liabilities item D), including bonuses already declared and after deducting the actuarial value of future premiums.
This item shall also comprise claims incurred but not reported, plus the estimated costs of settling such claims.
22
Claims outstanding
(Liabilities item C.3)
This item shall comprise the total estimated ultimate cost to the company of settling all claims arising from events which have occurred up to the end of the financial year (including, in the case of general business, claims incurred but not reported) less amounts already paid in respect of such claims.
23
Provision for bonuses and rebates
(Liabilities item C.4)
This item shall comprise amounts intended for policy holders or contract beneficiaries by way of bonuses and rebates as defined in Note (5) on the profit and loss account format to the extent that such amounts have not been credited to policy holders or contract beneficiaries or included in Liabilities item Ba or in Liabilities item C.2.
24
Equalisation provision
(Liabilities item C.5)
This item shall compriseF951 the amount of any equalisation reserve maintained in respect of general business by the company, in accordance with rules made by the Financial Services Authority under Part X of the Financial Services and Markets Act 2000
This item shallF952 also comprise any amounts which, in accordance with Council Directive 87/343/EEC, are required to be set aside by a company to equalise fluctuations in loss ratios in future years or to provide for special risks.
A company which otherwise constitutes reserves to equalise fluctuations in loss ratios in future years or to provide for special risks shall disclose that fact in the notes to the accounts.
25
Other technical provisions
(Liabilities item C.6)
This item shall comprise, inter alia, the provision for unexpired risks as defined in paragraph 81. Where the amount of the provision for unexpired risks is significant, it shall be disclosed separately either in the balance sheet or in the notes to the accounts.
26
Technical provisions for linked liabilities
(Liabilities item D)
This item shall comprise technical provisions constituted to cover liabilities relating to investment in the context of long-term policies under which the benefits payable to policy holders are wholly or partly to be determined by reference to the value of, or the income from, property of any description (whether or not specified in the contract) or by reference to fluctuations in, or in an index of, the value of property of any description (whether or not so specified).
Any additional technical provisions constituted to cover death risks, operating expenses or other risks (such as benefits payable at the maturity date or guaranteed surrender values) shall be included under Liabilities item C.2.
This item shall also comprise technical provisions representing the obligations of a tontine's organiser in relation to its members.
27
Deposits received from reinsurers
(Liabilities item F)
Where the company cedes reinsurance, this item shall comprise amounts deposited by or withheld from other insurance undertakings under reinsurance contracts. These amounts may not be merged with other amounts owed to or by those other undertakings.
Where the company cedes reinsurance and has received as a deposit securities which have been transferred to its ownership, this item shall comprise the amount owed by the company by virtue of the deposit.
28
Creditors
(Liabilities item G)
Amounts owed to group undertakings and undertakings in which the company has a participating interest shall be shown separately as sub-items.
29
Debenture loans
(Liabilities item G.III)
The amount of any convertible loans shall be shown separately.
Special Rules for Balance Sheet Format
Additional items10
1
Every balance sheet of a company which carries on long term business shall show separately as an additional item the aggregate of any amounts included in Liabilities item A (capital and reserves) which are required not to be treated as realised profits under Article 276.
2
A company which carries on long term business shall show separately, in the balance sheet or in the notes to the accounts, the total amount of assets representing the long term fund valued in accordance with the provisions of this Schedule.
Managed funds11
1
For the purposes of this paragraph “managed funds” are funds of a group pension fund—
F953a
the management of which constitutes long term insurance business, and
b
which the company administers in its own name but on behalf of others, and
c
to which it has legal title.
2
The company shall, in any case where assets and liabilities arising in respect of managed funds fall to be treated as assets and liabilities of the company, adopt the following accounting treatment: assets and liabilities representing managed funds are to be included in the company's balance sheet, with notes to the accounts disclosing the total amount included with respect to such assets and liabilities in the balance sheet and showing the amount included under each relevant balance sheet item in respect of such assets or (as the case may be) liabilities.
Deferred acquisition costs12
The costs of acquiring insurance policies which are incurred during a financial year but which relate to a subsequent financial year shall be deferred in a manner specified in Note (17) on the balance sheet format.
Profit and loss account format
I
Technical account—General business
1
Earned premiums, net of reinsurance
a
gross premiums written (1)
b
outward reinsurance premiums (2)
c
change in the gross provision for unearned premiums
d
change in the provision for unearned premiums, reinsurers' share
2
Allocated investment return transferred from the non-technical account (item III.6) (10)
2a
Investment income (8) (10)
a
income from participating interests, with a separate indication of that derived from group undertakings
b
income from other investments, with a separate indication of that derived from group undertakings
aa
income from land and buildings
bb
income from other investments
c
value re-adjustments on investments
d
gains on the realisation of investments
3
Other technical income, net of reinsurance
4
Claims incurred, net of reinsurance (4)
a
claims paid
aa
gross amount
bb
reinsurers' share
b
change in the provision for claims
aa
gross amount
bb
reinsurers' share
5
Changes in other technical provisions, net of reinsurance, not shown under other headings
6
Bonuses and rebates, net of reinsurance (5)
7
Net operating expenses
a
acquisition costs (6)
b
change in deferred acquisition costs
c
administrative expenses (7)
d
reinsurance commissions and profit participation
8
Other technical charges, net of reinsurance
8a
Investment expenses and charges (8)
a
investment management expenses, including interest
b
value adjustments on investments
c
losses on the realisation of investments
9
Change in the equalisation provision
10
Sub-total (balance on the technical account for general business) (item III.1)
II
Technical account—long term business
1
Earned premiums, net of reinsurance
a
gross premiums written (1)
b
outward reinsurance premiums (2)
c
change in the provision for unearned premiums, net of reinsurance (3)
2
Investment income (8) (10)
a
income from participating interests, with a separate indication of that derived from group undertakings
b
income from other investments, with a separate indication of that derived from group undertakings
aa
income from land and buildings
bb
income from other investments
c
value re-adjustments on investments
d
gains on the realisation of investments
3
Unrealised gains on investments (9)
4
Other technical income, net of reinsurance
5
Claims incurred, net of reinsurance (4)
a
claims paid
aa
gross amount
bb
reinsurers' share
b
change in the provision for claims
aa
gross amount
bb
reinsurers' share
6
Change in other technical provisions, net of reinsurance, not shown under other headings
a
long-term business provision, net of reinsurance (3)
aa
gross amount
bb
reinsurers' share
b
other technical provisions, net of reinsurance
7
Bonuses and rebates, net of reinsurance (5)
8
Net operating expenses
a
acquisition costs (6)
b
change in deferred acquisition costs
c
administrative expenses (7)
d
reinsurance commissions and profit participation
9
Investment expenses and charges (8)
a
investment management expenses, including interest
b
value adjustments on investments
c
losses on the realisation of investments
10
Unrealised losses on investment (9)
11
Other technical charges, net of reinsurance
11a
Tax attributable to the long-term business
12
Allocated investment return transferred to the non-technical account (item III.4)
12a
Transfers to or from the fund for future appropriations
13
Sub-total (balance on the technical account—long term business) (item III.2)
III
Non-technical account
1
Balance on the general business technical account—(item I.10)
2
Balance on the long-term business technical account—(item II.13)
F9542a
Tax credit attributable to balance on the long term business technical account
3
Investment income (8)
a
income from participating interests, with a separate indication of that derived from group undertakings
b
income from other investments, with a separate indication of that derived from group undertakings
aa
income from land and buildings
bb
income from other investments
c
value re-adjustments on investments
d
gains on the realisation of investments
3a
Unrealised gains on investments (9)
4
Allocated investment return transferred from the long-term business technical account (item II.12) (10)
5
Investment expenses and charges (8)
a
investment management expenses, including interest
b
value adjustments on investments
c
losses on the realisation of investments
5a
Unrealised losses on investments (9)
6
Allocated investment return transferred to the general business technical account (item I.2) (10)
7
Other income
8
Other charges, including value adjustments
8a
Profit or loss on ordinary activities before tax
9
Tax on profit or loss on ordinary activities
10
Profit or loss on ordinary activities after tax
11
Extraordinary income
12
Extraordinary charges
13
Extraordinary profit or loss
14
Tax on extraordinary profit or loss
15
Other taxes not shown under the preceding items
16
Profit or loss for the financial year
Notes on the profit and loss account format
1
Gross Premiums Written
(General business technical account: item I.1(a)
Long-term business technical account: item II.1(a))
This item shall comprise all amounts due during the financial year in respect of insurance contacts entered into regardless of the fact that such amounts may relate in whole or in part to a later financial year, and shall include inter alia—
i
premiums yet to be determined, where the premium calculation can be done only at the end of the year;
ii
single premiums, including annuity premiums, and, in long-term business, single premiums resulting from bonus and rebate provisions in so far as they must be considered as premiums under the terms of the contract;
iii
additional premiums in the case of half-yearly, quarterly or monthly payments and additional payments from policy holders for expenses borne by the company;
iv
in the case of co-insurance, the company's portion of total premiums;
v
reinsurance premiums due from ceding and retroceding insurance undertakings, including portfolio entries,
after deduction of cancellations and portfolio withdrawals credited to ceding and retroceding insurance undertakings.
The above amounts shall not include the amounts of taxes or duties levied with premiums.
2
Outward reinsurance premiums
(General business technical account: item I.1(b)
Long-term business technical account: item II.1.(b))
This item shall comprise all premiums paid or payable in respect of outward reinsurance contacts entered into by the company. Portfolio entries payable on the conclusion or amendment of outward insurance contracts shall be added; portfolio withdrawals receivable must be deducted.
3
Change in the provision for unearned premiums, net of reinsurance
(Long-term business technical account: items II.1(c) and II.6(a))
In the case of long-term business, the change in unearned premiums may be included either in item II.1(c) or in item II.6(a) of the long-term business technical account.
4
Claims incurred, net of reinsurance
(General business technical account: item I.4)
Long-term business technical account: item II.5)
This item shall comprise all payments made in respect of the financial year with the addition of the provision for claims (but after deducting the provision for claims for the preceding financial year).
These amounts shall include annuities, surrenders, entries and withdrawals of loss provisions to and from ceding insurance undertakings and reinsurers and external and internal claims management costs and charges for claims incurred but not reported such as are referred to in paragraphs 47(2) and 49.
Sums recoverable on the basis of subrogation and salvage (within the meaning of paragraph 47) shall be deducted.
Where the difference between—
a
the loss provision made at the beginning of the year for outstanding claims incurred in previous years, and
b
the payments made during the year on account of claims incurred in previous years and the loss provision shown at the end of the year for such outstanding claims,
is material, it shall be shown in the notes to the accounts, broken down by category and amount.
5
Bonuses and rebates, net of reinsurance
(General business technical account: item I.6
Long-term business technical account: item II.7)
Bonuses shall comprise all amounts chargeable for the financial year which are paid or payable to policy holders and other insured parties or provided for their benefit, including amounts used to increase technical provisions or applied to the reduction of future premiums, to the extent that such amounts represent an allocation of surplus or profit arising on business as a whole or a section of business, after deduction of amounts provided in previous years which are no longer required.
Rebates shall comprise such amounts to the extent that they represent a partial refund of premiums resulting from the experience of individual contracts.
Where material, the amount charged for bonuses and that charged for rebates shall be disclosed separately in the notes to the accounts.
6
Acquisition costs
(General business technical account: item I.7(a)
Long-term business technical account: item II.8(a))
This item shall comprise the costs arising from the conclusion of insurance contracts. They shall cover both direct costs, such as acquisition commissions or the cost of drawing up the insurance document or including the insurance contract in the portfolio, and indirect costs, such as advertising costs or the administrative expenses connected with the processing of proposals and the issuing of policies.
In the case of long-term business, policy renewal commissions shall be included under item II.8(c) in the long term business technical account.
7
Administrative expenses
(General business technical account: item I.7(c)
Long-term business technical account; item II.8(c))
This item shall include the costs arising from premium collection, portfolio administration, handling of bonuses and rebates, and inward and outward reinsurance. They shall in particular include staff costs and depreciation provisions in respect of office furniture and equipment in so far as these need not be shown under acquisition costs, claims incurred or investment charges.
Item II
shall also include policy renewal commissions.
8
Investment income, expenses and charges
(General business technical account: items I.2a and 8a
Long-term business technical account: items II.2 and 9
Non-technical account: items III.3 and 5)
Investment income, expenses and charges shall, to the extent that they arise in the long-term fund, be disclosed in the long-term business technical account. Other investment income, expenses and charges shall either be disclosed in the non-technical account or attributed between the appropriate technical and non-technical accounts. Where the company makes such an attribution it shall disclose the basis for it in the notes to the accounts.
9
Unrealised gains and losses on investments
(Long-term business technical account: items II.3 and 10
Non-technical account: items III.3a and 5a)
In the case of investments attributed to the long-term fund, the difference between the valuation of the investments and their purchase price or, if they have previously been valued, their valuation as at the last balance sheet date, may be disclosed (in whole or in part) in item II.3 or II.10 (as the case may be) of the long-term business technical account, and the in the case of investments shown as assets under Assets item D (assets held to cover linked liabilities) shall be so disclosed.
In the case of other investments, the difference between the valuation of the investments and their purchase price or, if they have previously been valued, their valuation as at the last balance sheet date, may be disclosed (in whole or in part) in item III.3a or III.5a (as the case may require) of the non-technical account.
10
Allocated investment return
(General business technical account: items I.2 and 2a
Long-term business technical account: item II.2
Non-technical account: items III.4 and 6)
The allocated return may be transferred from one part of the profit and loss account to another.
Where part of the investment return is transferred to the general gusiness technical account, the transfer from the non-technical account shall be deducted from item III.6 and added to item I.2.
Where part of the investment return disclosed in the long term business technical account is transferred to the non-technical account, the transfer to the non-technical account shall be deducted from item II.12 and added to item III.4.
The reasons for such transfers (which may consist of a reference to any relevant statutory requirement) and the bases on which they are made shall be disclosed in the notes to the accounts.
CHAPTER IIACCOUNTING PRINCIPALS AND RULES
SECTION AACCOUNTING PRINICPLES
Preliminary
13
Subject to paragraph 19, the amounts to be included in respect of all items shown in a company's accounts shall be determined in accordance with the principles set out in paragraphs 14 to 18.
Accounting principles
14
The company shall be presumed to be carrying on business as a going concern.
15
Accounting policies shall be applied consistently within the same accounts and from one financial year to the next.
16
The amount of any item shall be determined on a prudent basis, and in particular—
a
subject to note (9) on the profit and loss account format, only profits realised at the balance sheet date shall be included in the profit and loss account; and
b
all liabilitiesF955. . . which have arisenF955. . . in respect of the financial year to which the accounts relate or a previous financial year shall be taken into account, including those which only become apparent between the balance sheet date and the date on which it is signed on behalf of the board of directors in pursuance of Article 241.
17
All income and charges relating to the financial year to which the accounts relate shall be taken into account, without regard to the date of receipt or payment.
18
In determining the aggregate amount of any item the amount of each individual asset or liability that falls to be taken into account shall be determined separately.
Departure from accounting principles
19
If it appears to the directors of a company that there are special reasons for departing from any of the principles stated above in preparing the company's accounts in respect of any financial year they may do so, but particulars of the departure, the reasons for it and its effects shall be given in a note to the accounts.
Valuation
19A
1
The amounts to be included in respect of assets of any description mentioned in paragraph 22 (valuation of assets: general) are determined either—
a
in accordance with that paragraph and paragraph 24 (but subject to paragraphs 27 to 29); or
b
so far as applicable to an asset of that description, in accordance with section BA (valuation at fair value).
2
The amounts to be included in respect of assets of any description mentioned in paragraph 23 (alternative valuation of fixed-income securities) may be determined—
a
in accordance with that paragraph (but subject to paragraphs 27 to 29); or
b
so far as applicable to an asset of that description, in accordance with section BA.
3
The amounts to be included in respect of assets which—
a
are not assets of a description mentioned in paragraph 22 or 23, but
b
are assets of a description to which section BA is applicable,
may be determined in accordance with that section.
4
Subject to sub-paragraphs (1) to (3), the amounts to be included in respect of all items shown in a company's accounts are determined in accordance with section C.
SECTION BCURRENT VALUE ACCOUNTING RULES
Para. 20 rep. by SR 2004/496
Para. 21 rep. by SR 1997/314
Valuation of assets: general
22
1
Subject to paragraph 24, investments falling to be included under Assets item C (investments) shall be included at their current value calculated in accordance with paragraphs 25 and 26.
2
Investments falling to be included under Assets item D (assets held to cover linked liabilities) shall be shown at their current value calculated in accordance with paragraphs 25 and 26.
23
1
Intangible assets other than goodwill may be shown at their current cost.
2
Assets falling to be included under Assets items F.I (tangible assets) and F.IV (own shares) in the balance sheet format may be shown at their current value calculated in accordance with paragraphs 25 and 26 or at their current cost.
3
Assets falling to be included under Assets item F.II (stocks) may be shown at current cost.
Alternative valuation of fixed-income securities
24
1
This paragraph applies to debt securities and other fixed-income securities shown as assets under Assets items C.II (investments in group undertakings and participating interests) and C.III (other financial investments).
2
Securities to which this paragraph applies may either be valued in accordance with paragraph 22 or the amortised value may be shown in the balance sheet, in which case the provisions of this paragraph apply.
3
Subject to sub-paragraph (4), where the purchase price of securities to which this paragraph applies exceeds the amount repayable at maturity, the amount of the difference—
a
shall be charged to the profit and loss account, and
b
shall be shown separately in the balance sheet or in the notes to the accounts.
4
The amount of the difference referred to in sub-paragraph (3) may be written off in instalments so that it is completely written off when the securities are repaid, in which case there shall be shown separately in the balance sheet or in the notes to the accounts the difference between the purchase price (less the aggregate amount written off) and the amount repayable at maturity.
5
Where the purchase price of securities to which this paragraph applies is less than the amount repayable at maturity, the amount of the difference shall be released to income in instalments over the period remaining until repayment, in which case there shall be shown separately in the balance sheet or in the notes to the accounts the difference between the purchase price (plus the aggregate amount released to income) and the amount repayable at maturity.
6
Both the purchase price and the current value of securities valued in accordance with this paragraph shall be disclosed in the notes to the accounts.
7
Where securities to which this paragraph applies which are not valued in accordance with paragraph 22 are sold before maturity, and the proceeds are used to purchase other securities to which this paragraph applies, the difference between the proceeds of sale and their book value may be spread uniformly over the period remaining until the maturity of the original investment.
Meaning of “ current value ”
25
1
Subject to sub-paragraph (5), in the case of investments other than land and buildings, current value shall mean market value determined in accordance with this paragraph.
2
In the case of listed investments, market value shall mean the value on the balance sheet date or, when the balance sheet date is not a stock exchange trading day, on the last stock exchange trading day before that date.
3
Where a market exists for unlisted investments, market value shall mean the average price at which such investments were traded on the balance sheet date or, when the balance sheet date is not a trading day, on the last trading day before that date.
4
Where, on the date on which the accounts are drawn up, listed or unlisted investments have been sold or are to be sold within the short-term, the market value shall be reduced by the actual or estimated realisation costs.
5
Except where the equity method of accounting is applied, all investments other than those referred to in sub-paragraphs (2) and (3) shall be valued on a basis which has prudent regard to the likely realisable value.
26
1
In the case of land and buildings, current value shall mean the market value on the date of valuation, where relevant reduced as provided in sub-paragraphs (4) and (5).
2
Market value shall mean the price at which land and buildings could be sold under private contact between a willing seller and an arm's length buyer on the date of valuation, it being assumed that the property is publicly exposed to the market, that market conditions permit orderly disposal and that a normal period, having regard to the nature of the property, is available for the negotiation of the sale.
3
The market value shall be determined through the separate valuation of each land and buildings item, carried out at least every five years in accordance with generally recognised methods of valuation.
4
Where the value of any land and buildings item has diminished since the preceding valuation under sub-paragraph (3), an appropriate value adjustment shall be made.
5
The lower value arrived at under sub-paragraph (4) shall not be increased in subsequent balance sheets unless such increase results from a new determination of market value arrived at in accordance with sub-paragraphs (2) and (3).
6
Where, on the date on which the accounts are drawn up, land and buildings have been sold or are to be sold within the short-term, the value arrived at in accordance with sub-paragraphs (2) and (4) shall be reduced by the actual or estimated realisation costs.
7
Where it is impossible to determine the market value of a land and buildings item, the value arrived at on the basis of the principle of purchase price or production cost shall be deemed to be its current value.
Application of the depreciation rules
27
1
Where
a
the value of any asset of a company is determined in accordance with paragraph 22 or 23, and
b
in the case of a determination under paragraph 22, the asset falls to be included under Assets item C.I,
that value shall be, or (as the case may require) be the starting point for determining, the amount to be included in respect of that asset in the company's accounts, instead of its cost or any value previously so determined for that asset; and paragraphs 31 to 25 and 37 shall apply accordingly in relation to any such asset with the substitution for any reference to its cost of a reference to the value most recently determined for that asset in accordance with paragraph 22 or 23 (as the case may be).
2
The amount of any provision for depreciation required in the case of any asset by paragraph 32 or 33 as it applies by virtue of sub-paragraph (1) is referred to in this paragraph as the “adjusted amount”, and the amount of any provision which would be required by that paragraph in the case of that asset according to the historical cost accounting rules is referred to as the “historical cost amount”.
3
Where sub-paragraph (1) applies in the case of any asset the amount of any provision for depreciation in respect of that asset included in any item shown in the profit and loss account in respect of amounts written off assets of the description in question may be the historical cost amount instead of the adjusted amount, provided that the amount of any difference between the two is shown separately in the profit and loss account or in a note to the accounts.
Additional information to be provided
28
1
This paragraph applies where the amounts to be included in respect of assets covered by any items shown in a company's accounts have been determined in accordance with paragraph 22 or 23.
2
The items affected and the basis of valuation adopted in determining the amounts of the assets in question in the case of each such item shall be disclosed in a note to the accounts.
3
The purchase price of investments valued in accordance with paragraph 22 shall be disclosed in the notes to the accounts.
4
In the case of each balance sheet item valued in accordance with paragraph 23 either—
a
the comparable amounts determined according to the historical cost accounting rules (without any provision for depreciation or diminution in value); or
b
the differences between those amounts and the corresponding amounts actually shown in the balance sheet in respect of that item,
shall be shown separately in the balance sheet or in a note to the accounts.
5
In sub-paragraph (4), references in relation to any item to the comparable amounts determined as there mentioned are references to—
a
the aggregate amount which would be required to be shown in respect of that item if the amounts to be included in respect of all the assets covered by that item were determined according to the historical cost accounting rules; and
b
the aggregate amount of the cumulative provisions for depreciation or diminution in value which would be permitted or required in determining those amounts according to those rules.
Revaluation reserve
29
1
Subject to sub-paragraph (7), with respect to any determination of the value of an asset of a company in accordance with paragraph 22 or 23, the amount of any profit or loss arising from that determination (after allowing, where appropriate, for any provisions for depreciation or diminution in value made otherwise than by reference to the value so determined and any adjustments of any such provisions made in the light of that determination) shall be credited or (as the case may be) debited to a separate reserve ( “the revaluation reserve”).
2
The amount of the revaluation reserve shall be shown in the company's balance sheet under Liabilities item A.III, but need not be shown under the name “revaluation reserve”.
3
An amount may be transferred
F956a
from the revaluation reserve—
i
to the profit and loss account, if the amount was previously charged to that account or represents realised profit, or
ii
on capitalisation,
b
to or from the revaluation reserve in respect of the taxation relating to any profit or loss credited or debited to the reserve;
and the revaluation reserve shall be reduced to the extent that the amounts transferred to it are no longer necessary for the purposes of the valuation method used.
4
InF956 sub-paragraph (3)(a)(ii) “capitalisation”, in relation to an amount standing to the credit of the revaluation reserve, means applying it in wholly or partly paying up unissued shares in the company to be allotted to members of the company as fully or partly paid shares.
5
The revaluation reserve shall not be reduced except as mentioned in this paragraph.
6
The treatment for taxation purposes of amounts credited or debited to the revaluation reserve shall be disclosed in a note to the accounts.
7
This paragraph does not apply to the difference between the valuation of investments and their purchase price or previous valuation shown in the long-term business technical account or the non-technical account in accordance with note (9) on the profit and loss account format.
SECTION BAVALUATION AT FAIR VALUE
Inclusion of financial instruments at fair value
29A
1
Subject to sub-paragraphs (2) to (4), financial instruments (including derivatives) may be included at fair value.
2
Sub-paragraph (1) does not apply to financial instruments which constitute liabilities unless—
a
they are held as part of a trading portfolio, or
b
they are derivatives.
3
Except where they fall to be included under Assets item D (assets held to cover linked liabilities), sub‐paragraph (1) does not apply to—
a
financial instruments (other than derivatives) held to maturity;
b
loans and receivables originated by the company and not held for trading purposes;
c
interests in subsidiary undertakings, associated undertakings and joint ventures;
d
equity instruments issued by the company;
e
contracts for contingent consideration in a business combination;
f
other financial instruments with such special characteristics that the instruments, according to generally accepted accounting principles or practice, should be accounted for differently from other financial instruments.
4
If the fair value of a financial instrument cannot be determined reliably in accordance with paragraph 29B, sub‐paragraph (1) does not apply to that financial instrument.
5
In this paragraph—
“associated undertaking” has the meaning given by paragraph 20 of Schedule 4A; and
“joint venture” has the meaning given by paragraph 19 of that Schedule.
Determination of fair value
29B
1
The fair value of a financial instrument is determined in accordance with this paragraph.
2
If a reliable market can readily be identified for the financial instrument, its fair value is determined by reference to its market value.
3
If a reliable market cannot readily be identified for the financial instrument but can be identified for its components or for a similar instrument, its fair value is determined by reference to the market value of its components or of the similar instrument.
4
If neither sub‐paragraph (2) nor (3) applies, the fair value of the financial instrument is a value resulting from generally accepted valuation models and techniques.
5
Any valuation models and techniques used for the purposes of sub‐paragraph (4) must ensure a reasonable approximation of the market value.
Inclusion of hedged items at fair value
29C
A company may include any assets and liabilities that qualify as hedged items under a fair value hedge accounting system, or identified portions of such assets or liabilities, at the amount required under that system.
Other assets that may be included at fair value
29D
1
This paragraph applies to—
a
investment property, and
b
living animals and plants,
that, under international accounting standards, may be included in accounts at fair value.
2
Such investment property and such living animals and plants may be included at fair value, provided that all such investment property or, as the case may be, all such living animals and plants are so included where their fair value can reliably be determined.
3
In this paragraph, “fair value” means fair value determined in accordance with relevant international accounting standards.
Accounting for changes in value
29E
1
This paragraph applies where a financial instrument is valued in accordance with paragraph 29A or 29C or an asset is valued in accordance with paragraph 29D.
2
Notwithstanding paragraph 16, and subject to sub‐paragraphs (3) and (4), a change in the value of the financial instrument or of the investment property or living animal or plant must be included in the profit and loss account.
3
Where—
a
the financial instrument accounted for is a hedging instrument under a hedge accounting system that allows some or all of the change in value not to be shown in the profit and loss account, or
b
the change in value relates to an exchange difference arising on a monetary item that forms part of a company's net investment in a foreign entity,
the amount of the change in value must be credited to or (as the case may be) debited from a separate reserve ( “the fair value reserve”).
4
Where the instrument accounted for—
a
is an available for sale financial asset, and
b
is not a derivative,
the change in value may be credited to or (as the case may be) debited from the fair value reserve.
The fair value reserve
29F
1
The fair value reserve must be adjusted to the extent that the amounts shown in it are no longer necessary for the purposes of paragraph 29E(3) or (4).
2
The treatment for taxation purposes of amounts credited to or debited from the fair value reserve shall be disclosed in a note to the accounts.
SECTION CHISTORICAL COST ACCOUNTING RULES
Para. 30 rep. by SR 2004/496
Valuation of assets
General rules31
Subject to any provision for depreciation or diminution in value made in accordance with paragraph 32 or 33, the amount to be included in respect of any asset in the balance sheet format shall be its cost.
32
In the case of any asset included under Assets item B (intangible assets), C.I. (land and buildings), F.I. (tangible assets) or F.II (stocks) which has a limited useful economic life, the amount of—
a
its cost; or
b
where it is estimated that any such asset will have a residual value at the end of the period of its useful economic life, its cost less that estimated residual value,
shall be reduced by provisions for depreciation calculated to write off that amount systematically over the period of the asset's useful economic life.
33
1
This paragraph applies to any asset included under Assets item B (intangible assets), C (Investments), F.I (tangible assets) or F.IV (own shares).
2
Where an asset to which this paragraph applies has diminished in value, provisions for diminution in value may be made in respect of it and the amount to be included in respect of it may be reduced accordingly; and any such provisions which are not shown in the profit and loss account shall be disclosed (either separately or in aggregate) in a note to the accounts.
3
Provisions for diminution in value shall be made in respect of any asset to which this paragraph applies if the reduction in its value is expected to be permanent (whether its useful economic life is limited or not), and the amount to be included in respect of it shall be reduced accordingly; and any such provisions which are not shown in the profit and loss account shall be disclosed (either separately or in aggregate) in a note to the accounts.
4
Where the reasons for which any provision was made in accordance with sub-paragraph (1) or (2) have ceased to apply to any extent, that provision shall be written back to the extent that it is no longer necessary; and any amounts written back in accordance with this sub-paragraph which are not shown in the profit and loss account shall be disclosed (either separately or in aggregate) in a note to the accounts.
34
1
This paragraph applies to assets included under Assets items E.I, II and III (debtors) and F.III (cash at bank and in hand) in the balance sheet.
2
If the net realisable value of an asset to which this paragraph applies is lower than its cost the amount to be included in respect of that asset shall be the net realisable value.
3
Where the reasons for which any provision for diminution in value was made in accordance with sub-paragraph (2) have ceased to apply to any extent, that provision shall be written back to the extent that it is no longer necessary.
Development costs35
1
Notwithstanding that amounts representing “development costs” may be included under Assets item B (intangible assets) in the balance sheet format, an amount may only be included in a company's balance sheet in respect of development costs in special circumstances.
2
If any amount is included in a company's balance sheet in respect of development costs the following information shall be given in a note to the accounts—
a
the period over which the amount of those costs originally capitalised is being or is to be written off; and
b
the reasons for capitalising the development costs in question.
Goodwill36
1
The application of paragraphs 31 to 33 in relation to goodwill (in any case where goodwill is treated as an asset) is subject to the following provisions of this paragraph.
2
Subject to sub-paragraph (3), the amount of the consideration for any goodwill acquired by a company shall be reduced by provisions for depreciation calculated to write off that amount systematically over a period chosen by the directors of the company.
3
The period chosen shall not exceed the useful economic life of the goodwill in question.
4
In any case where any goodwill acquired by a company is included as an asset in the company's balance sheet the period chosen for writing off the consideration for that goodwill and the reasons for choosing that period shall be disclosed in a note to the accounts.
Miscellaneous and supplemental
Excess of money owed over value received as an asset item37
1
Where the amount repayable on any debt owned by a company is greater than the value of the consideration received in the transaction giving rise to the debt, the amount of the difference may be treated as an asset.
2
Where any such amount is so treated—
a
it shall be written off by reasonable amounts each year and must be completely written off before repayment of the debt; and
b
if the current amount is not shown as a separate item in the company's balance sheet it must be disclosed in a note to the accounts.
Assets included at a fixed amount38
1
Subject to sub-paragraph (2), assets which fall to be included under Assets item F.I (tangible assets) in the balance sheet format may be included at a fixed quantity and value.
2
Sub-paragraph (1) applies to assets of a kind which are constantly being replaced, where—
a
their overall value is not material to assessing the company's state of affairs; and
b
their quantity, value and composition are not subject to material variation.
Determination of cost39
1
The cost of an asset that has been acquired by the company shall be determined by adding to the actual price paid any expenses incidental to its acquisition.
2
The cost of an asset constructed by the company shall be determined by adding to the purchase price of the raw materials and consumables used the amount of the costs incurred by the company which are directly attributable to the construction of that asset.
3
In addition, there may be included in the cost of an asset constructed by the company—
a
a reasonable proportion of the costs incurred by the company which are only indirectly attributable to the construction of that asset, but only to the extent that they relate to the period of construction; and
b
interest on capital borrowed to finance the construction of that asset, to the extent that it accrues in respect of the period of construction;
provided, however, in a case within sub-paragraph (b), that the inclusion of the interest in determining the cost of that asset and the amount of the interest so included is disclosed in a note to the accounts.
40
1
Subject to the qualification mentioned below, the cost of any assets which are fungible assets may be determined by the application of any of the methods mentioned in sub-paragraph (2) in relation to any such assets of the same class.
The method chosen must be one which appears to the directors to be appropriate in the circumstances of the company.
2
Those methods are—
a
the method known as “first in, first out” (FIFO);
b
the method known as “last in, first out” (LIFO);
c
a weighted average price; and
d
any other method similar to any of the methods mentioned above.
3
Where in the case of any company—
a
the cost of assets falling to be included under any item shown in the company's balance sheet has been determined by the application of any method permitted by this paragraph; and
b
the amount shown in respect of that differs materially from the relevant alternative amount given below in this paragraph;
the amount of that difference shall be disclosed in a note to the accounts.
4
Subject to sub-paragraph (5), for the purposes of sub-paragraph (3)(b), the relevant alternative amount, in relation to any item shown in a company's balance sheet, is the amount which would have been shown in respect of that item if assets of any class included under that item at an amount determined by any method permitted by this paragraph had instead been included at their replacement cost as at the balance sheet date.
5
The relevant alternative amount may be determined by reference to the most recent actual purchase price before the balance sheet date of assets of any class included under the item in question instead of by reference to their replacement cost as at that date, but only if the former appears to the directors of the company to constitute the more appropriate standard of comparison in the case of assets of that class.
Substitution of original amount where price or cost unknown41
Where there is no record of the purchase price of any asset acquired by a company or of any price, expenses or costs relevant for determining its costs in accordance with paragraph 39, or any such record cannot be obtained without unreasonable expense or delay, its costs shall be taken for the purposes of paragraphs 31 to 36 to be the value ascribed to it in the earliest available record of its value made on or after its acquisition by the company.
SECTION DRULES FOR DETERMINING PROVISIONS
Preliminary42
Provisions which are to be shown in a company's accounts shall be determined in accordance with paragraphs 43 to 53.
Technical provisions43
The amount of technical provisions must at all times be sufficient to cover any liabilities arising out of insurance contracts as far as can reasonably be foreseen.
Provision for unearned premiums44
1
The provision for unearned premiums shall in principle be computed separately for each insurance contract, save that statistical methods (and in particular proportional and flat rate methods) may be used where they may be expected to give approximately the same results as individual calculations.
2
Where the pattern of risk varies over the life of a contract, this shall be taken into account in the calculation methods.
Provision for unexpired risks45
The provision for unexpired risks (as defined in paragraph 81) shall be computed on the basis of claims and administrative expense likely to arise after the end of the financial year from contracts concluded before that date, in so far as their estimated value exceeds the provision for unearned premiums and any premiums receivable under those contracts.
Long term business provision46
1
The long-term business provision shall in principal be computed separately for each long-term contract, save that statistical or mathematical methods may be used where they may be expected to give approximately the same results as individual calculations.
2
A summary of the principal assumptions in making the provision under sub-paragraph (1) shall be given in the notes to the accounts.
3
The computation shall be made annually by a Fellow of the Institute or Faculty of Actuaries on the basis of recognised actuarial methods, with due regard to the actuarial principles laid down in Council Directive 92/96/EEC.
Provisions for claims outstanding
General business47
1
A provision shall in principle be computed separately for each claim on the basis of the costs still expected to arise, save that statistical methods may be used if they result in an adequate provision having regard to the nature of the risks.
2
This provision shall also allow for claims incurred but not reported by the balance sheet date, the amount of the allowance being determined having regard to past experience as to the number and magnitude of claims reported after previous balance sheet dates.
3
All claims settlement costs (whether direct or indirect) shall be included in the calculation of the provision.
4
Recoverable amounts arising out of subrogation or salvage shall be estimated on a prudent basis and either deducted from the provision for claims outstanding (in which case if the amounts are material they shall be shown in the notes to the accounts) or shown as assets.
5
In sub-paragraph (4), “subrogation” means the acquisition of the rights of policy holders with respect to third parties, and “salvage” means the acquisition of the legal ownership of insured property.
6
Where benefits resulting from a claim must be paid in the form of annuity, the amounts to be set aside for that purpose shall be calculated by recognised actuarial methods, and paragraph 48 shall not apply to such calculations.
7
Implicit discounting or deductions, whether resulting from the placing of a current value on a provision for an outstanding claim which is expected to be settled later at a higher figure or otherwise effected, is prohibited.
48
1
Explicit discounting or deductions to take account of investment income is permitted, subject to the following conditions—
a
the expected average interval between the date for the settlement of claims being discounted and the accounting date shall be at least four years;
b
the discounting or deductions shall be effected on a recognised prudential basis;
c
when calculating the total cost of settling claims, the company shall take account of all factors that could cause increases in that cost;
d
the company shall have adequate date at its disposal to construct a reliable model of the rate of claims settlements;
e
the rate of interest used for the calculation of present values shall not exceed a rate prudently estimated to be earned by assets of the company which are appropriate in magnitude and nature to cover the provisions for claims being discounted during the period necessary for the payment of such claims, and shall not exceed either—
i
a rate justified by the performance of such assets over the preceding five years, or
ii
a rate justified by the performance of such assets during the year preceding the balance sheet date.
2
When discounting or effecting deductions, the company shall, in the notes to the accounts, disclose—
a
the total amount of provisions before discounting or deductions,
b
the categories of claims which are discounted or from which deductions have been made,
c
for each category of claims, the methods used, in particular the rates used for the estimates referred to in sub-paragraph (1)(d) and (e), and the criteria adopted for estimating the period that will elapse before the claims are settled.
Long term business49
The amount of the provision for claims shall be equal to the sums due to beneficiaries, plus the costs of settling claims.
Equalisation reservesF95750
F957The amount of any equalisation reserve maintained in respect of general business, in accordance with rules made by the Financial Services Authority under Part X of the Financial Services and Markets Act 2000, shall be determined in accordance with such rules.
Accounting on a non-annual basis51
1
Either of the methods described in paragraphs 52 and 53 may be applied where, because of the nature of the class or type of insurance in question, information about premiums receivable or claims payable (or both) for the underwriting years is insufficient when the accounts are drawn up for reliable estimates to be made.
2
The use of either of the methods referred to in sub-paragraph (1) shall be disclosed in the notes to the accounts together with the reasons for adopting it.
3
Where one of the methods referred to in sub-paragraph (1) is adopted, it shall be applied systematically in successive years unless circumstances justify a change.
4
In the event of a change in the method applied, the effect on the assets, liabilities, financial position and profit or loss shall be stated in the notes to the accounts.
5
For the purposes of this paragraph and paragraph 52, “underwriting year” means the financial year in which the insurance contracts in the class or type of insurance in question commenced.
52
1
The excess of the premiums written over the claims and expenses paid in respect of contracts commencing in the underwriting year shall form a technical provision included in the technical provision for claims outstanding shown in the balance sheet under Liabilities item C.3.
2
The provision may also be computed on the basis of a given percentage of the premiums written where such a method is appropriate for the type of risk insured.
3
If necessary, the amount of this technical provision shall be increased to make it sufficient to meet present and future obligations.
4
The technical provision constituted under this paragraph shall be replaced by a provision for claims outstanding estimated in accordance with paragraph 47 as soon as sufficient information has been gathered and not later than the end of the third year following the underwriting year.
5
The length of time that elapses before a provision for claims outstanding is constituted in accordance with sub-paragraph (4) shall be disclosed in the notes to the accounts.
53
1
The figures shown in the technical account or in certain items within it shall relate to a year which wholly or partly precedes the financial year (but by no more than 12 months).
2
The amounts of the technical provisions shown in the accounts shall if necessary be increased to make then sufficient to meet present and future obligations.
3
The length of time by which the earlier year to which the figures relate precedes the financial year and the magnitude of the transactions concerned shall be disclosed in the notes to the accounts.
CHAPTER IIINOTES TO THE ACCOUNTS
Preliminary
54
1
Any information required in the case of any company by the following provisions of this Part shall (if not given in the company's accounts) be given by way of a note to those accounts.
2
F958. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3
F958. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
General
Disclosure of accounting policies55
The accounting policies adopted by the company in determining the amounts to be included in respect of items shown in the balance sheet and in determining the profit or loss of the company shall be stated (including such accounting policies with respect to the depreciation and diminution in value of assets).
56
It shall be stated whether the accounts have been prepared in accordance with applicable accounting standards and particulars of any material departure from those standards and the reasons for it shall be given.
Sums denominated in foreign currencies57
Where any sums originally denominated in foreign currencies have been brought into account under any items shown in the balance sheet or profit and loss account format, the basis on which those sums have been translated into sterling (or the currency in which the accounts are drawn up) shall be stated.
Reserves and dividends
57A
There must be stated—
a
any amount set aside or proposed to be set aside to, or withdrawn or proposed to be withdrawn from, reserves,
b
the aggregate amount of dividends paid in the financial year (other than those for which a liability existed at the immediately preceding balance sheet date),
c
the aggregate amount of dividends that the company is liable to pay at the balance sheet date, and
d
the aggregate amount of dividends that are proposed before the date of approval of the accounts, and not otherwise disclosed under sub‐paragraph (b) or (c).
Information supplementing the balance sheet
Share capital and debentures58
1
The following information shall be given with respect to the company's share capital—
a
the authorised share capital; and
b
where shares of more than one class have been allotted, the number and aggregate nominal value of shares of each class allotted.
2
In the case of any part of the allotted share capital that consists of redeemable shares, the following information shall be given—
a
the earliest and latest dates on which the company has power to redeem those shares;
b
whether those shares must be redeemed in any event or are liable to be redeemed at the option of the company or of the shareholder; and
c
whether any (and, if so, what) premium is payable on redemption.
59
If the company has allotted any shares during the financial year, the following information shall be given—
Sub-para. (a) rep. by SR 1997/314
b
the classes of shares allotted; and
c
as respects each class of shares, the number allotted, their aggregate nominal value and the consideration received by the company for the allotment.
60
1
With respect to any contingent right to the allotment of shares in the company the following particulars shall be given—
a
the number, description and amount of the shares in relation to which the right is exercisable;
b
the period during which it is exercisable; and
c
the price to be paid for the shares allotted.
2
In sub-paragraph (1) “contingent right to the allotment of shares” means any option to subscribe for shares and any other right to require the allotment of shares to any person whether arising on the conversion into shares of securities of any other description or otherwise.
61
1
If the company has issued any debentures during the financial year to which the accounts relate, the following information shall be given—
Head (a) rep. by SR 1997/314
b
the classes of debentures issued; and
c
as respects each class of debentures, the amount issued and the consideration received by the company for the issue.
Sub-para. (2) rep. by SR 1997/314
3
where any of the company's debentures are held by a nominee of or trustee for the company, the nominal amount of the debentures and the amount at which they are stated in the accounting records kept by the company in accordance with Article 229 shall be stated.
Assets62
1
In respect of any assets of the company included in Assets items B (intangible assets), C.I (land and buildings) and C.II (investments in group undertakings and participating interests) in the company's balance sheet the following information shall be given by reference to each such item—
a
the appropriate amounts in respect of those assets included in the item as at the date of the beginning of the financial year and as at the balance sheet date respectively;
b
the effect on any amount included in Assets item B in respect of those assets of—
i
any determination during that year of the value to be ascribed to any of those assets in accordance with paragraph 23;
ii
acquisitions during that year of any assets;
iii
disposals during that year of any assets; and
iv
any transfers of assets of the company to and from the item during that year.
2
The reference in sub-paragraph (1)(a) to the appropriate amounts in respect of any assets (included in an assets item) as at any date there mentioned is a reference to amounts representing the aggregate amounts determined, as at that date, in respect of assets falling to be included under the item on either of the following bases, that is to say—
a
on the basis of cost (determined in accordance with paragraphs 39 and 40); or
b
on any basis permitted by paragraph 22 or 23,
(leaving out of account in either case any provisions for depreciation or diminution in value).
3
In addition, in respect of any assets of the company included in any assets item in the company's balance sheet, there shall be stated (by reference to each such item)—
a
the cumulative amount of provisions for depreciation or diminution in value of those assets included under the item as at each date mentioned in sub-paragraph (1)(a);
b
the amount of any such provisions made in respect of the financial year;
c
the amount of any adjustments made in respect of any such provisions during that year in consequence of the disposal of any of those assets; and
d
the amount of any other adjustments made in respect of any such provisions during that year.
63
Where any assets of the company (other than listed investments) are included under any item shown in the company's balance sheet at an amount determined on any basis mentioned in paragraph 22 or 23, the following information shall be given—
a
the years (so far as they are known to the directors) in which the assets were severally valued and the several values; and
b
in the case of assets that have been valued during the financial year, the names of the persons who valued them or particulars of their qualifications for doing so and (whichever is stated) the bases of valuation used by them.
64
In relation to any amount which is included under Assets item C.I (land and buildings) there shall be stated—
a
how much of that amount is ascribable to land of freehold tenure and how much to land of leasehold tenure; and
b
how much of the amount ascribable to land of leasehold tenure is ascribable to land held on long lease and how much to land held on short lease.
Investments65
In respect of the amount of each item which is shown in the company's balance sheet under Assets item C (investments) there shall be stated—
a
how much of that amount is ascribable to listed investments;F959. . .
Sub-para. (b) rep. by SR 1997/314
Information about fair value of assets and liabilities65A
1
This paragraph applies where financial instruments have been valued in accordance with paragraph 29A or 29C.
2
The items affected and the basis of valuation adopted in determining the amounts of the financial instruments must be disclosed.
3
The purchase price of the financial instruments must be disclosed.
4
There must be stated—
a
where the fair value of the instruments has been determined in accordance with paragraph 29B(4), the significant assumptions underlying the valuation models and techniques used,
b
for each category of financial instrument, the fair value of the instruments in that category and the changes in value—
i
included in the profit and loss account, or
ii
credited to or (as the case may be) debited from the fair value reserve,
in respect of those instruments, and
c
for each class of derivatives, the extent and nature of the instruments, including significant terms and conditions that may affect the amount, timing and certainty of future cash flows.
5
Where any amount is transferred to or from the fair value reserve during the financial year, there must be stated in tabular form—
a
the amount of the reserve as at the date of the beginning of the financial year and as at the balance sheet date respectively;
b
the amount transferred to or from the reserve during that year; and
c
the source and application respectively of the amounts so transferred.
65B
Where the company has derivatives that it has not included at fair value, there must be stated for each class of such derivatives—
a
the fair value of the derivatives in that class, if such a value can be determined in accordance with paragraph 29B, and
b
the extent and nature of the derivatives.
65C
1
Sub-paragraph (2) applies if—
a
the company has financial fixed assets that could be included at fair value by virtue of paragraph 29A,
b
the amount at which those assets are included under any item in the company's accounts is in excess of their fair value, and
c
the company has not made provision for diminution in value of those assets in accordance with paragraph 33(2).
2
There must be stated—
a
the amount at which either the individual assets or appropriate groupings of those individual assets are included in the company's accounts,
b
the fair value of those assets or groupings, and
c
the reasons for not making a provision for diminution in value of those assets, including the nature of the evidence that provides the basis for the belief that the amount at which they are stated in the accounts will be recovered.
Information where investment property and living animals and plants included at fair value65D
1
This paragraph applies where the amounts to be included in a company's accounts in respect of investment property or living animals and plants have been determined in accordance with paragraph 29D.
2
The balance sheet items affected and the basis of valuation adopted in determining the amounts of the assets in question in the case of each such item must be disclosed in a note to the accounts.
3
In the case of investment property, for each balance sheet item affected there must be shown, either separately in the balance sheet or in a note to the accounts—
a
the comparable amounts determined according to the historical cost accounting rules; or
b
the differences between those amounts and the corresponding amounts actually shown in the balance sheet in respect of that item.
4
In sub‐paragraph (3), references in relation to any item to the comparable amounts determined in accordance with that sub‐paragraph are references to—
a
the aggregate amount which would be required to be shown in respect of that item if the amounts to be included in respect of all the assets covered by that item were determined according to the historical cost accounting rules; and
b
the aggregate amount of the cumulative provisions or depreciation or diminution in value which would be permitted or required in determining those amounts according to those rules.
Reserves and provisions66
1
Where any amount is transferred—
a
to or from any reserves;
b
to anyF960 provisions for other risks; or
c
from anyF960 provisions for other risks otherwise than for the purpose for which the provision was established;
and the reserves or provisions are or would but for paragraph 2(3) be shown as separate items in the company's balance sheet, the information mentioned in the following sub-paragraph shall be given in respect of the aggregate of reserves or provisions included in the same item.
2
That information is—
a
the amount of the reserves or provisions as at the date of the beginning of the financial year and as at the balance sheet date respectively;
b
any amounts transferred to or from the reserves or provisions during that year; and
c
the source and application respectively of any amounts so transferred.
3
Particulars shall be given of each provision included in Liabilities item E.3 (other provisions) in the company's balance sheet in any case where the amount of that provision is material.
Provision for taxation67
The amount of any provision for deferred taxation shall be stated separately from the amount of any provision for other taxation.
Details of indebtedness68
F9611
In respect of each item shown under “creditors” in the company's balance sheet there shall be stated the aggregate of the following amounts, that is to say—
a
the amount of any debts included under that item which are payable or repayable otherwise than by instalments and fall due for payment or repayment after the end of the period of five years beginning with the day next following the end of the financial year; and
F962b
in the case of any debts so included which are payable or repayable by instalments, the amount of any instalments which fall due for payment after the end of that period.
2
Subject to sub-paragraph (3), in relation to each debt falling to be taken into account under sub-paragraph (1), the terms of payment or repayment and the rate of any interest payable on the debt shall be stated.
3
If the number of debts is such that, in the opinion of the directors, compliance with sub-paragraph (2) would result in a statement of excessive length, it shall be sufficient to give a general indication of the terms of payment or repayment and the rates of any interest payable on the debts.
4
In respect of each item shown under “creditors” in the company's balance sheet there shall be stated—
a
the aggregate amount of any debts included under that item in respect of which any security has been given by the company; and
b
an indication of the nature of the securities so given.
5
References in this paragraph to an item shown under “creditors” in the company's balance sheet include references, where amounts falling due to creditors within one year and after more than one year are distinguished in the balance sheet—
a
in a case within sub-paragraph (1), to an item shown under the latter of those categories; and
b
in a case within sub-paragraph (4), to an item shown under either of those categories;
and references to items shown under “creditors” include references to items which would but for paragraph 2(3)(b) be shown under that heading.
69
If any fixed cumulative dividends on the company's shares are in arrears, there shall be stated—
a
the amount of the arrears; and
b
the period for which the dividends or, if there is more than one class, each class of them are in arrears.
Guarantees and other financial commitments70
1
Particulars shall be given of any charge on the assets of the company to secure the liabilities of any other person, including, where practicable, the amount secured.
2
The following information shall be given with respect to any other contingent liability not provided for (other than a contingent liability arising out of an insurance contract)—
a
the amount or estimated amount of that liability;
b
its legal nature;
c
whether any valuable security has been provided by the company in connection with that liability and if so, what.
3
There shall be stated, where practicable—
a
the aggregate amount or estimated amount of contracts for capital expenditure, so far as not provided for;F963. . .
Head (b) rep. by SR 1997/314
4
Particulars shall be given of—
a
any pension commitments included under any provision shown in the company's balance sheet; and
b
any such commitments for which no provision has been made;
and where any such commitment relates wholly or partly to pensions payable to past directors of the company separate particulars shal be given of that commitment so far as it relates to such pensions.
5
Particulars shall also be given of any other financial commitments, other than commitments arising out of insurance contracts, which—
a
have not been provided for; and
b
are relevant to assessing the company's state of affairs.
6
Commitments within any of the preceding sub-paragraphs undertaken on behalf of or for the benefit of—
a
any parent undertaking or fellow subsidiary undertaking, or
b
any subsidiary undertaking of the company,
shall be stated separately from the other commitments within that sub-paragraph, and commitments within paragraph (a) shall also be stated separately from those within paragraph (b).
Para. 71 rep. by SR 1997/314
Miscellaneous matters72
1
Particulars shall be given of any case where the cost of any asset is for the first time determined under paragraph 41.
2
Where any outstanding loans made under the authority of Article 163(4)(b), (bb) or (c) or Article 165 (various cases of financial assistance by a company for purchase of its own shares) are included under any item shown in the company's balance sheet, the aggregate amount of those loans shall be disclosed for each item in question.
Sub-para. (3) rep. by SR 1997/314
Information supplementing the profit and loss account
Separate statement of certain items of income and expenditure73
1
Subject to the following provisions of this paragraph, each of the amounts mentioned below shall be stated.
2
The amount of the interest on or any similar charges in respect of—
a
bank loans and overdrafts,F964. . . ; and
b
loans of any other kind made to the company.
This sub-paragraph does not apply to interest or charges on loans to the company from group undertakings, but, with that exception, it applies to interest or charges on all loans, whether made on the security of debentures or not.
Sub-paras. (3)-(5) rep. by SR 1997/314
Particulars of tax74
Sub-paras. (1) rep. by SR 1997/314
2
Particulars shall be given of any special circumstances which affect liability in respect of taxation of profits, income or capital gains for the financial year or liability in respect of taxation of profits, income or capital gains for succeeding financial years.
3
The following amounts shall be stated—
a
the amount of the charge for United Kingdom corporation tax;
b
if that amount would have been greater but for relief from double taxation, the amount which it would have been but for such relief;
c
the amount of the charge for United Kingdom income tax; and
d
the amount of the charge for taxation imposed outside the United Kingdom of profits, income and (so far as charged to revenue) capital gains.
Those amounts shall be stated separately in respect of each of the amounts which is shown under the following items in the profit and loss account, that is to say item III.9 (tax on profit or loss on ordinary activities) and item III.14 (tax on extraordinary profit or loss).
Particulars of business75
1
As regards general business a company shall disclose—
a
gross premiums written,
b
gross premiums earned,
c
gross claims incurred,
d
gross operating expenses, and
e
the reinsurance balance.
2
The amounts required to be disclosed by sub-paragraph (1) shall be broken down between direct insurance and reinsurance acceptances, if reinsurance acceptances amount to 10 per cent. or more of gross premiums written.
3
Subject to sub-paragraph (4), the amounts required to be disclosed by sub-paragraphs (1) and (2) with respect to direct insurance shall be further broken down into the following groups of classes—
a
accident and health.
b
motor (third party liability),
c
motor (other classes),
d
marine, aviation and transport,
e
fire and other damage to property,
f
third-party liability,
g
credit and suretyship,
h
legal expenses,
i
assistance, and
j
miscellaneous,
where the amount of the gross premiums written in direct insurance for each such group exceeds 10 million ECUs.
4
The company shall in any event disclose the amounts relating to the three largest groups of classes in its business.
76
1
As regards long term business, the company shall disclose—
a
gross premiums written, and
b
the reinsurance balance.
2
Subject to sub-paragraph (3) below—
a
gross premiums written shall be broken down between those written by way of direct insurance and those written by way of reinsurance; and
b
gross premiums written by way of direct insurance shall be broken down—
i
between individual premiums and premiums under group contracts;
ii
between periodic premiums and single premiums; and
iii
between premiums from non-participating contracts, premiums from participating contracts and premiums from contract where the investment risk is borne by policy holders.
3
Disclosure of any amount referred to in sub-paragraph (2)(a) or (2)(b)(i), (ii) or (iii) shall not be required if it does not exceed 10 per cent of the gross premiums written or (as the case may be) of the gross premiums written by way of direct insurance.
77
1
Subject to sub-paragraph (2) there shall be disclosed as regards both general and long term business the total gross direct insurance premiums resulting from contracts concluded by the company—
a
in the member State of its head office,
b
in the other member States, and
c
in other countries.
2
Disclosure of any amount referred to in sub-paragraph (1) shall not be required if it does not exceed 5 per cent of total gross premiums.
Commissions78
There shall be disclosed the total amount of commissions for direct insurance business accounted for in the financial year, including acquisition, renewal, collection and portfolio management commissions.
Para. 79 rep. by SR 2004/496
Miscellaneous matters80
1
Where any amount relating to any preceding financial year is included in any item in the profit and loss account, the effect shall be stated.
2
Particulars shall be given of any extraordinary income or charges arising in the financial year.
3
The effect shall be stated of any transactions that are exceptional by virtue of size or incidence though they fall within the ordinary activities of the company.
CHAPTER IVINTERPRETATION OF PART I
General81
1
The following definitions apply for the purposes of this Part and its Interpretation—
Definition rep. by SI 2001/3649
“fungible assets” means assets of any description which are substantially indistinguishable one from another;
F965“general business” means business which consists of effecting or carrying out contracts of general insurance;
F966“investment property” means land held to earn rent or for capital appreciation;
“lease” includes an agreement for a lease;
“listed investment” means an investment listed on a recognised stock exchange, or on any stock exchange of repute outside Northern Ireland and the expression “unlisted investment” shall be construed accordingly;
“long lease” means a lease in the case of which the portion of the term for which it was granted remaining unexpired at the end of the financial year is not less than 50 years;
F965“long term business” means business which consists of effecting or carrying out contracts of long term insurance;
“long term fund” means the fund or funds maintained by a company in respect of its long-term businessF965 in accordance with rules made by the Financial Services Authority under Part X of the Financial Services and Markets Act 2000;
F965“policy holder” has the meaning given in any relevant order under section 424(2) of the Financial Services and Markets Act 2000;
“provision for unexpired risks” means the amount set aside in addition to unearned premiums in respect of risks to be borne by the company after the end of the financial year, in order to provide for all claims and expenses in connection with insurance contracts in force in excess of the related unearned premiums and any premiums receivable on those contracts;
“short lease” means a lease which is not a long lease.
2
In this Part of this schedule the “ECU” means the unit of account of that name defined in Council Regulation (EEC) No. 3180/78 as amended.
The exchange rates as between the ECU and the currencies of the member States to be applied for each financial year shall be the rates applicable on the last day of the preceding October for which rates for the currencies of all the member States were published in the Official Journal of the communities.
Financial instruments81A
For the purposes of this Part, references to “derivatives” include commodity‐based contracts that give either contracting party the right to settle in cash or some other financial instrument, except when such contracts—
a
were entered into for the purpose of, and continue to meet, the company's expected purchase, sale or usage requirements,
b
were designated for such purpose at their inception, and
c
are expected to be settled by delivery of the commodity.
81B
1
The expressions listed in sub‐paragraph (2) have the same meaning in section BA of Chapter II and paragraphs 65A to 65C and 81A as they have in Council Directives 78/660/EEC on the annual accounts of certain types of companies and 91/674/EEC on the annual accounts and consolidated accounts of insurance undertakings, as amended.
2
Those expressions are “available for sale financial asset”, “business combination”, “commodity‐based contracts”, “derivatives”, “equity instrument”, “exchange difference”, “fair value hedge accounting system”, “financial fixed asset”, “financial instrument”, “foreign entity”, “hedge accounting”, “hedge accounting system”, “hedge items”, “hedging instrument”, “held for trading purposes”, “held to maturity”, “monetary item”, “receivables”, “reliable market” and “trading portfolio”.
Loans82
For the purposes of this Part a loan or advance (including a liability comprising a loan or advance) is treated as falling due for repayment, and an instalment of a loan or advance is treated as falling due for payment, on the earliest date on which the lender could require repayment or (as the case may be) payment, if he exercised all options and rights available to him.
Materiality83
For the purposes of this Part amounts which in the particular context of any provision of this Part are not material may be disregarded for the purposes of that provision.
Provisions84
For the purposes of this Part and its interpretation—
a
references in the Part to provisions for depreciation or diminution in value of assets are to any amount written off by way of providing for depreciation or diminution in value of assets;
b
any reference in the profit and loss account format or the notes thereto set out in Section B of this Part to the depreciation of, or amounts written off, assets of any description is to any provision for depreciation or diminution in value of assets of that description; and
c
references in this Part toF967 provisions for other risksF968. . . are to any amount retained as reasonably necessary for the purpose of providing for any liabilityF967 the nature of which is clearly defined and which is either likely to be incurred, or certain to be incurred but uncertain as to amount or as to the date on which it will arise.
Staff costs85
For the purposes of this Part and its interpretation—
a
“social security costs” means any contributions by the company to any state social security or pension scheme, fund or arrangement;
F969b
“pension costs” includes any costs incurred by the company in respect of any pension scheme established for the purpose of providing pensions for persons currently or formerly employed by the company, any sums set aside for the future payment of pensions directly by the company to current or former employees and any pensions paid directly to such persons without having first been set aside; and
c
any amount stated in respect ofF969 the item “social security costs” or in respect of the item “wages and salaries” in the company's profit and loss account shall be determined by reference to payments made or costs incurred in respect of all persons employed by the company during the financial year who are taken into account in determining the relevant annual number for the purposes ofF970 Article 239A(1)(a).
PART IICONSOLIDATED ACCOUNTS
Schedule 4A to apply Part I of this Schedule with modifications1
1
In its application to insurance groups, Schedule 4A shall have effect with the following modifications.
2
In paragraph 1—
a
for the reference in sub-paragraph (1) to the provisions of Schedule 4 there shall be substituted a reference to the provisions of Part I of this Schedule modified as mentioned in paragraph 2;
Head (b) rep. by SR 1997/436
c
sub-paragraph (3) shall be omitted.
3
In paragraph 2(2)(a), for the words “three months” there shall be substituted the words “
six months &
”
.
4
In paragraph 3, after sub-paragraph (1) there shall be inserted the following sub-paragraphs—
1A
Sub-paragraph (1) shall not apply to those liabilities items the valuation of which by the undertakings included in a consolidation is based on the application of provisions applying only to insurance undertakings, nor to those assets items changes in the values of which also affect or establish policy holders' rights.
1B
Where sub-paragraph (1A) applies, that fact shall be disclosed in the notes on the consolidated accounts.
5
For sub-paragraph (4) of paragraph 6 there shall be substituted the following sub-paragraphs—
4
Sub-paragraphs (1) and (2) need not be complied with—
a
where a transaction has been concluded according to normal market conditions and a policy holder has rights in respect of that transaction, or
b
if the amounts concerned are not material for the purpose of giving a true and fair view.
5
Where advantage is taken of sub-paragraph (4)(a) that fact shall be disclosed in the notes to the accounts, and where the transaction in question has a material effect on the assets, liabilities, financial position and profit or loss of all the undertakings included in the consolidation that fact shall also be so disclosed.
6
In paragraph 17—
a
in sub-paragraph (1), for the reference to Schedule 4 there shall be substituted a reference to Part I of this Schedule;
b
in sub-paragraph (2), paragraph (a) and, in paragraph (b), the words “in Format 2” shall be omitted;
c
in sub-paragraph (3), for paragraphs (a) to (d) there shall be substituted the words “
between items 10 and 11 in section III
”
;
d
in sub-paragraph (4), for paragraphs (a) to (d) there shall be substituted the words “
between items 14 and 15 in section III
”
; and
e
for sub-paragraph (5) there shall be substituted the following sub-paragraph—
5
Paragraph 2(3) of Part I of Schedule 9A (power to combine items) shall not apply in relation to the additional items required by the foregoing provisions of this paragraph.
7
In paragraph 18, for the reference to paragraphs 17 to 19 and 21 of Schedule 4 there shall be substituted a reference to paragraphs 31 to 33 and 36 of Part I of this Schedule.
8
In paragraph 21—
a
in sub-paragraph (1), for the reference to Schedule 4 there shall be substituted a reference to Part I of this Schedule; and
b
for sub-paragraphs (2) and (3) there shall be substituted the following sub-paragraphs—
2
In the Balance Sheet Format, Asset item C.II.3 (participating interests) shall be replaced by two items,
“ Interests in associated undertakings ”and“ Other participating interests ”.3
In the Profit and Loss Account Format, items II.2(a) and III.3(a) (income from participating interests, with a separate indication of that derived from group undertakings) shall each be replaced by the following items—
a
“ Income from participating interests other than associated undertakings, with a separate indication of that derived from group undertakings ”, which shall be shown as items II.2(a) and III.3(a), andb
“ income from associated undertakings ”, which shall be shown as items II.2(aa) and III.3(aa).
9
In paragraph 22(1), for the reference to paragraphs 17 to 19 and 21 of Schedule 4 there shall be substituted a reference to paragraphs 31 to 33 and 36 of Part I of this Schedule.
Modifications of Part I of this Schedule for purposes of paragraph 12
1
For the purposes of paragraph 1, Part I of this Schedule shall be modified as follows.
2
The information required by paragraph 10 need not be given.
3
In the case of general business, investment income, expenses and charges may be disclosed in the non-technical account rather than in the technical account.
4
In the case of subsidiary undertakings which are not authorised to carry on long-term business in Northern Ireland, notes (8) and (9) to the profit and loss account format shall have effect as if references to investment income, expenses and charges arising in the long-term fund or to investments attributed to the long-term fund were references to investment income, expenses and charges or (as the case may be) investment relating to long term business.
5
In the case of subsidiary undertakings which do not have a head office in Northern Ireland, the computation required by paragraph 46 shall be made annually by an actuary or other specialist in the field on the basis of recognised actuarial methods.
6
The information required by paragraphs 75 to 78 need not be shown.
Schedule 10 rep. by SR 1994/428
SCHEDULE 10APARENT AND SUBSIDIARY UNDERTAKINGS: SUPPLEMENTARY PROVISIONS
Introduction
1
The provisions of this Schedule explain expressions used in Article 266 (parent and subsidiary undertakings) and otherwise supplement that Article.
Voting rights in an undertaking
2
1
In Article 266(2)(a) and (d) the references to the voting rights in an undertaking are to the rights conferred on shareholders in respect of their shares or, in the case of an undertaking not having a share capital, on members, to vote at general meetings of the undertaking on all, or substantially all, matters.
2
In relation to an undertaking which does not have general meetings at which matters are decided by the exercise of voting rights, the references to holding a majority of the voting rights in the undertaking shall be construed as references to having the right under the constitution of the undertaking to direct the overall policy of the undertaking or to alter the terms of its constitution.
Right to appoint or remove a majority of the directors
3
1
In Article 266(2)(b) the reference to the right to appoint or remove a majority of the board of directors is to the right to appoint or remove directors holding a majority of the voting rights at meetings of the board on all, or substantially all, matters.
2
An undertaking shall be treated as having the right to appoint to a directorship if—
a
a person's appointment to it follows necessarily from his appointment as director of the undertaking, or
b
the directorship is held by the undertaking itself.
3
A right to appoint or remove which is exercisable only with the consent or concurrence of another person shall be left out of account unless no other person has a right to appoint or, as the case may be, remove in relation to that directorship.
Right to exercise dominant influence
4
1
For the purposes of Article 266(2)(c) an undertaking shall not be regarded as having the right to exercise a dominant influence over another undertaking unless it has a right to give directions with respect to the operating and financial policies of that other undertaking which its directors are obliged to comply with whether or not they are for the benefit of that other undertaking.
2
A “control contract” means a contract in writing conferring such a right which—
a
is of a kind authorised by the memorandum or articles of the undertaking in relation to which the right is exercisable, and
b
is permitted by the law under which that undertaking is established.
3
This paragraph shall not be read as affecting the construction of the expression “actually exercises a dominant influence” in Article 266(4)(a).
Rights exercisable only in certain circumstances or temporarily incapable of exercise
5
1
Rights which are exercisable only in certain circumstances shall be taken into account only—
a
when the circumstances have arisen, and for so long as they continue to obtain, or
b
when the circumstances are within the control of the person having the rights.
2
Rights which are normally exercisable but are temporarily incapable of exercise shall continue to be taken into account.
Rights held by one person on behalf of another
6
Rights held by a person in a fiduciary capacity shall be treated as not held by him.
7
1
Rights held by a person as nominee for another shall be treated as held by the other.
2
Rights shall be regarded as held as nominee for another if they are exercisable only on his instructions or with his consent or concurrence.
Rights attributed to parent undertaking
9
1
Rights shall be treated as held by a parent undertaking if they are held by any of its subsidiary undertakings.
2
Nothing in paragraph 7 or 8 shall be construed as requiring rights held by a parent undertaking to be treated as held by any of its subsidiary undertakings.
3
For the purposes of paragraph 8 rights shall be treated as being exercisable in accordance with the instructions or in the interests of an undertaking if they are exercisable in accordance with the instructions of or, as the case may be, in the interests of any group undertaking.
Disregard of certain rights
10
The voting rights in an undertaking shall be reduced by any rights held by the undertaking itself.
Supplementary
11
References in any provision of paragraphs 6 to 10 to rights held by a person include rights falling to be treated as held by him by virtue of any other provision of those paragraphs but not rights which by virtue of any such provision are to be treated as not held by him.
SCHEDULE 11
F9711
Paragraphs 2 to 6 apply where a company has prepared accounts in accordance with the special provisions of Part VIII relating to banking companies and paragraph 7 to 13 apply where a company has prepared accounts in accordance with the special provisions of Part VIII relating to insurance companies.
F972Modifications where accounts prepared in accordance with special provisions for banking companies
SR 1992/258
2
Article 272(2) shall apply as if the reference to paragraph 88 of Schedule 4 therein was a reference to paragraph 85(c) of Part I of Schedule 9.
3
Article 277 shall apply as if:
a
there were substituted for the words “are shown as an asset” in paragraph (1) the words “are included as an asset”; and
b
the reference to paragraph 20 of Schedule 4 in paragraph (2)(b) was to paragraph 27 of Part I of Schedule 9.
4
Articles 278(2) and 283 shall apply as if the references therein to paragraphs 87 and 88 of Schedule 4 were to paragraph 85 of Part I of Schedule 9.
5
Articles 280 and 281 shall apply as if in Article 280(3) there were substituted, for the references toF973 Articles 234,234A and 234B and Schedule 4, references to Article 263 and Part I of Schedule 9.
6
Article 284 shall apply as if the references to paragraphs 12(a) and 34(3)(a) of Schedule 4 were to paragraphs 19(a) and 44(3)(a) of Schedule 9.
F974Modifications where accounts prepared in accordance with special provisions for insurance companies
SR 1994/428
7
Article 272(2) shall apply as if for the words in parentheses there were substituted “(“liabilities” to include any provision for other risks and charges within paragraph 84(c) of Part I of Schedule 9A and any amount included under Liabilities items Ba (fund for future appropriations), C (technical provisions) and D (technical provisions for linked liabilities) in a balance sheet drawn up in accordance with the balance sheet format set out in section B of Part I of Schedule 9A).”
.
8
Article 277 shall apply as if the reference to paragraph 20 of Schedule 4 in paragraph (2)(b) were a reference to paragraph 35 of Part I of Schedule 9A.
9
F975In the case of Companies Order accounts, Articles 278(2) and 283 shall apply as if the reference to provisions of any of the kinds mentioned in paragraphs 87 and 88 of Schedule 4 were a reference to provisions of any of the kinds mentioned in paragraph 84 of Part I of Schedule 9A and to any amount included under Liabilities items Ba (fund for future appropriations), C (technical provisions) and D (technical provisions for linked liabilities) in a balance sheet drawn up in accordance with the balance sheet format set out in section B of Part I of Schedule 9A.
10
Articles 280 and 281 shall apply as if the references in Article 280(3) toF976 Articles 234, 234A and 234B and Schedule 4 were references to Article 263 and Part I of Schedule 9A.
11
Article 284 shall apply as if the references to paragraphs 12(a) and 34(3)(a) of Schedule 4 were references to paragraphs 16(a) and 29(3)(a) of Part I of Schedule 9A.
Schedule 12 rep. by 1989 NI 18
SCHEDULE 13PROVISIONS SUPPLEMENTING AND INTERPRETING ARTICLES 332 TO 336
F979F979PART IRULES FOR INTERPRETATION OF THOSE ARTICLES AND ALSO ARTICLE 354(4) AND (5)
Sch. 13 Pt. 1 repealed (1.10.2007) by Companies Act 2006 (c. 46), ss. 1284(2), 1295, 1300(2), Sch. 16; S.I. 2007/2194, arts. 1(3)(a), 8, Sch. 2 Pt. 2 (with art. 12)
1
1
A reference to an interest in shares or debentures is to be read as including any interest of any kind whatsoever in shares or debentures.
2
Accordingly, there are to be disregarded any restraints or restrictions to which the exercise of any right attached to the interest is or may be subject.
2
Where the property is held on trust and any interest in shares or debentures is comprised in the property, any beneficiary of the trust who (apart from this paragraph) does not have an interest in the shares or debentures is to be taken as having such an interest; but this paragraph is without prejudice to the following provisions of this Part.
3
1
A person is taken to have an interest in shares or debentures if—
a
he enters into a contract for their purchase by him (whether for cash or other consideration), or
b
not being the registered holder, he is entitled to exercise any right conferred by the holding of the shares or debentures, or is entitled to control the exercise of any such right.
2
For the purposes of sub-paragraph (1)(b), a person is taken to be entitled to exercise or control the exercise of a right conferred by the holding of shares or debentures if he—
a
has a right (whether subject to conditions or not) the exercise of which would make him so entitled, or
b
is under obligation (whether or not so subject) the fulfilment of which would make him so entitled, or
3
A person is not by virtue of sub-paragraph (1)(b) taken to be interested in shares or debentures by reason only that he—
a
has been appointed a proxy to vote at a specified meeting of a company or of any class of its members and at any adjournment of that meeting, or
b
has been appointed by a corporation to act as it representative at any meeting of a company or of any class of its members.
4
A person is taken to be interested in shares or debentures if a body corporate is interested in them and—
a
that body corporate or its directors are accustomed to act in accordance with his directions or instructions, or
b
he is entitled to exercise or control the exercise of one-third or more of the voting power at general meetings of that body corporate.
As this paragraph applies for the purposes of Article 354(4) and (5), “
more than one-half
”
is substituted for “one-third or more””.
5
Where a person is entitled to exercise or control the exercise of one-third or more of the voting power at general meetings of a body corporate, and that body corporate is entitled to exercise or control the exercise of any of the voting power at general meetings of another body corporate (“the effective voting power”), the, for the purposes of paragraph 4(b), the effective voting power is taken to be exercisable by that person.
As this paragraph applies for the purposes of Article 354(4) and(5), “
more than one-half
”
is substituted for “one-third or more”.
6
1
A person is taken to have an interest in shares or debentures if, otherwise than by virtue of having an interest under a trust—
a
he has a right to call for delivery of the shares or debentures to himself or to his order, or
b
he has a right to acquire an interest in shares or debentures or is under an obligation to take an interest in shares or debentures;
whether in any case the right or obligation is conditional or absolute.
2
Rights or obligations to subscribed for shares or debentures are not to be taken, for the purposes of sub-paragraph (1), to be rights to acquire, or obligations to take, an interest in shares or debentures.
This is without prejudice to paragraph 1.
7
Persons having a joint interest are deemed each of them to have that interest.
8
It is immaterial that shares or debentures in which a person has an interest are unindentifiable.
9
So long as a person is entitled to receive, during the lifetime of himself or another, income from trust property comprising shares or debentures, an interest in the shares or debentures in reversion or remainder or (as regards Scotland) in fee, are to be disregarded.
10
A person is to be treated as uninterested in shares or debentures if, and so long as, he holds them under the law in force in any part of the United Kingdom as a bare trustee or as a custodian trustee, or under the law in force in Scotland, as a simple trustee.
11
F9771
There is to be disregarded an interest of a person subsisting by virtue of—
b
a scheme made under section 25 of the [1964 c. 33 (N.I.)] Charities Act (Northern Ireland) 1964, section 22 of the [1960 c. 58] Charities Act 1960, section 11 of the [1961 c. 62] Trustee Investments Act 1961 or section 1 of the [1965 c. 2] Administration of Justice Act.
F9772
“Unit trust scheme”” and "authorised unit trust scheme" have the meaning given in section 237 of the Financial Services and Markets Act 2000.
12
Delivery to a person's order of shares or debentures in fulfilment of a contract for the purchase of them by him or in satisfaction of a right of his call for their delivery, or failure to deliver shares or debentures in accordance with the terms of such a contract or on which such a right falls to be satisfied, is deemed to constitute an event in consequence of the occurrence of which he ceases to be interested in them, and so is the lapse of a person's right to call for delivery of shares or debentures.
F980F980PART IIPERIODS WITHIN WHICH OBLIGATIONS IMPOSED BY ARTICLE 332 MUST BE FULFILLED
Sch. 13 Pts. 2-4 repealed (6.4.2007) by Companies Act 2006 (c. 46), ss. 1284(2), 1295, 1300(2), Sch. 16; S.I. 2006/3428, arts. 4(2)(a), 7(c), Sch. 4 Pt. 2 (subject to art. 5, Sch. 1 and with arts. 6, 8, Sch. 5)
13
1
An obligation imposed on a person by Article 332(1) to notify an interest must, if he knows of the existence of the interest on the day on which he becomes a director, be fulfilled before the expiration of the period of 5 days beginning with the day following that day.
2
Otherwise, the obligation must be fulfilled before the expiration of the period of 5 days beginning with the day following that on which the existence of the interest comes to his knowledge.
14
1
An obligation imposed on a person by Article 332(2) to notify the occurrence of an event must, if at the time at which the event occurs he knows of its occurrence and of the fact that its occurrence gives rise to the obligation, be fulfilled before the expiration of the period of 5 days beginning with the day following that on which the event occurs.
2
Otherwise, the obligation must be fulfilled before the expiration of the period of 5 days beginning with the day following that on which the fact that the occurrence of the event gives rise to the obligation comes to his knowledge.
15
In reckoning, for the purposes of paragraphs 13 and 14, any period of 5 days, a day that is a Saturday or Sunday or a bank holiday is to be disregarded.
F981F981PART IIICIRCUMSTANCES IN WHICH OBLIGATION IMPOSED BY ARTICLE 332 IS NOT DISCHARGED
Sch. 13 Pts. 2-4 repealed (6.4.2007) by Companies Act 2006 (c. 46), ss. 1284(2), 1295, 1300(2), Sch. 16; S.I. 2006/3428, arts. 4(2)(a), 7(c), Sch. 4 Pt. 2 (subject to art. 5, Sch. 1 and with arts. 6, 8, Sch. 5)
16
1
Where an event of whose occurrence a director is, by virtue of Article 332(2)(a), under obligation to notify a company consists of his entering into a contract for the purchase by him of shares or debentures, the obligation is not discharged in the absence of inclusion in the notice of a statement of the price to be paid by him under the contract.
2
An obligation imposed on a director by Article 332(2)(b) is not discharged in the absence of inclusion in the notice of the price to be received by him under the contract.
17
1
An obligation imposed on a director by virtue of Article 332(2)(c) to notify a company is not discharged in the absence of inclusion in the notice of a statement of the consideration for the assignment (or, if it be the case that there is no consideration, that fact).
2
Where an event of whose occurrence a director is, by virtue of Article 332(2)(d), under obligation to notify a company consists in his assigning a right, the obligation is not discharged in the absence of inclusion in the notice of a similar statement.
18
1
Where an event of whose occurrence a director is, by virtue of Article 332(2)(d), under obligation to notify a company consists in the grant to him of a right to subscribe for shares or debentures, the obligation is not discharged in the absence of inclusion in the notice of a statement of—
a
the date on which the right was granted,
b
the period during which or the time at which the right is exercisable,
c
the consideration for the grant (or, if it be the case that there is no consideration, that fact), and
d
the price to be paid for the shares or debentures.
2
Where an event of whose occurrence a director is, by virtue of Article 332(2)(d), under obligation to notify a company consists in the exercise of a right granted to him to subscribe for shares or debentures, the obligation is not discharged in the absence of inclusion in the notice of a statement of—
a
the number of shares or amount of debentures in respect of which the right was exercised, and
b
if it be the case that they were registered in his name, that fact, and, if not, the name or names of the person or persons in whose name or names they were registered, together (if they were registered in the names of 2 persons or more) with the number or amount registered in the name of each of them.
19
In this Part, a reference to price paid or received includes any consideration other than money.
F984F984PART IVPROVISIONS WITH RESPECT TO REGISTER OF DIRECTORS' INTERESTS TO BE KEPT UNDER ARTICLE 333
Sch. 13 Pts. 2-4 repealed (6.4.2007) by Companies Act 2006 (c. 46), ss. 1284(2), 1295, 1300(2), Sch. 16; S.I. 2006/3428, arts. 4(2)(a), 7(c), Sch. 4 Pt. 2 (subject to art. 5, Sch. 1 and with arts. 6, 8, Sch. 5)
20
The register must be so made up that the entries in it against the several names inscribed appear in chronological order.
21
An obligation imposed by Article 333(2) to (4) must be fulfilled before the expiration of the period of 3 days beginning with the day after than on which the obligation arises; but in reckoning that period, a day which is a Saturday or Sunday or a bank holiday is to be disregarded.
22
The nature and extent of an interest recorded in the register of a director in any shares or debentures shall, if he so requires, be recorded in the register.
23
The company is not, by virtue of anything done for the urposes of Article 333 or this Part, affected with notice of, or put upon enquiry as to, the rights of any person in relation to any shares or debentures.
24
The register shall—
a
if the company's register of members is kept at its registered office, be kept there;
b
if the company's register of members is not so kept, be kept at the company's registered office or at the place where its register of members is kept;
25
1
Any member of the company or other person may require a copy of the register, or of any part of it, on payment ofF983 such fee as may be prescribed.
2
The company shall cause any copy so required by a person to be sent to him within the period of 10 days beginning with the day after that on which the requirement is received by the company.
26
The company shall send notice in the prescribed form to the registrar of the place where the register is kept and of any change in that place, save in a case in which it has at all times been kept at its registered office.
27
Unless the register is in such a form as to constitute in itself an index, the company shall keep an index of the names inscribed in it, which shall—
a
in respect of each name, contain a sufficient indication to enable the information inscribed against it to be readily found; and
b
be kept at the same place as the register;
and the company shall, within 14 days after the date on which a name is inscribed in the register, make any necessary alteration in the index.
28
The register shall be produced at the commencement of the company's annual general meeting and remain open and accessible during the continuance of the meeting to any person attending the meeting.
SCHEDULE 14EXTERNAL BRANCH REGISTERS
PART ICOUNTRIES AND TERRITORIES IN WHICH EXTERNAL BRANCH REGISTER MAY BE KEPT
Great Britain
Any part of Her Majesty's dominions outside the United Kingdom, the Channel Islands or the Isle of Man
Bangladesh
Cyprus
Dominica
The Gambia
Ghana
Guyana
The Hong Kong Special Administrative Region of the People's Republic of China
India
Kenya
Kiribati
Lesotho
Malawi
Malaysia
Malta
Nigeria
Pakistan
Republic of Ireland
Seychelles
Sierra Leone
Singapore
South Africa
Sri Lanka
Swaziland
Trinidad and Tobago
Uganda
Zimbabwe
PART IIGENERAL PROVISIONS WITH RESPECT TO EXTERNAL BRANCH REGISTERS
1
1
A company keeping an external branch register shall give to the registrar notice in the prescribed form of the situation of the office where any external branch register is kept and of any change in its situation, and if it is discontinued of its discontinuance.
2
Any such notice shall be given within 14 days of the opening of the office or of the change or discontinuance, as the case may be.
3
If default is made in complying with this paragraph, the company and every officer of it who is in default is liable to a fine and, for continued contravention, to a daily default fine.
2
1
An external branch register is deemed to be part of the company's register of members ( “the principal register”).
2
It shall be kept in the same manner in which the principal register is required to be kept, except that the advertisement before closing the register shall be inserted in some newspaper circulating in the district where the external branch register is kept.
3
1
The company shall—
a
transmit to its registered office a copy of every entry in its external branch register as soon as may be after the entry is made, and
b
cause to be kept at the place where the company's principal register is kept a duplicate of its external branch register duly entered up from time to time.
Every such duplicate is deemed for all purposes of this Order to be part of the principal register.
2
If default is made in complying with sub-paragraph (1), the company and every officer of it who is in default is liable to a fine and, for continued contravention, to a daily default fine.
3
Where, by virtue of Article 361(1)(b), the principal register is kept at the office of some person other than the company, and by reason of any default of his the company fails to comply with sub-paragraph (1)(b), he is liable to the same penalty as if he were an officer of the company who was in default.
4
Subject to the above provisions with respect to the duplicate register, the shares registered in an external branch register shall be distinguished form those registered in the principal register; and no transaction with respect to any shares registered in an external branch register shall, during the continuance of that registration, be registered in any other register.
5
A company may discontinue to keep an external branch register, and thereupon all entries in that register shall be transferred to some other external branch register kept by the company in the same country or territory, or to the principal register.
6
Subject to the provisions of this Order, any company may, by its articles, make such provisions as it thinks fit respecting the keeping of external branch registers.
7
An instrument of transfer of a share register in an external branch register (other than such a register kept in Great Britain) is deemed a transfer of property situated outside the United KingdomF985 and, unless executed in a part of the United Kingdom, is exempt from stamp duty chargeable in Northern Ireland.
F986Schedule 15 rep. by 1990 NI 10
SCHEDULE 15AWRITTEN RESOLUTIONS OF PRIVATE COMPANIES
PART IEXCEPTIONS
1
Article 389A does not apply to—
a
a resolution under Article 311 removing a director before the expiration of his period of office, or
b
a resolution under Article 339 removing an auditor before the expiration of his term of office.
PART IIADAPTATION OF PROCEDURAL REQUIREMENTS
Introductory
2
1
In this Part (which adapts certain requirements of this Order in relation to proceedings under Article 389A)—
a
a “written resolution” means a resolution agreed to, or proposed to be agreed to, in accordance with that Article, and
b
a “relevant member” means a member by whom, or on whose behalf, the resolution is required to be signed in accordance with that Article.
2
A written resolution is not effective if any of the requirements of this Part is not complied with.
Article 105 (disapplication of pre-emption rights)
3
1
The following adaptations have effect in relation to a written resolution under Article 105(2) (disapplication of pre-emption rights), or renewing a resolution under that provision.
2
So much of Article 105(5) as requires the circulation of a written statement by the directors with a notice of meeting does not apply, but such a statement must be supplied to each relevant member at or before the time at which the resolution is supplied to him for signature.
3
Article 105(6) (offences) applies in relation to the inclusion in any such statement of matter which is misleading, false or deceptive in a material particular.
Article 183 (approval for payment out of capital)
6
1
The following adaptations have effect in relation to a written resolution giving approval under Article 183(2) (redemption or purchase of company's own shares out of capital).
2
Article 184(2) (resolution ineffective if passed by exercise of voting rights by member holding shares to which the resolution relates) does not apply; but for the purposes of Article 389A(1) a member holding shares to which the resolution relates shall not be regarded as a member who would be entitled to attend and vote.
3
Article 184(4) (documents to be available at meeting) does not apply, but the documents referred to in that provision must be supplied to each relevant member at or before the time at which the resolution is supplied to him for signature.
Article 327 (approval of director's service contract)
7
In relation to a written resolution approving any such term as is mentioned in Article 327(1) (director's contract of employment for more than five years), Article 327(5) (documents to be available at company's registered office and at meeting) does not apply, but the documents referred to in that provision must be supplied to each relevant member at or before the time at which the resolution is supplied to him for signature.
Article 345 (funding of director's expenditure in performing his duties)
8
In relation to a written resolution giving approval under Article 345(3)(a) (funding a director's expenditure in performing his duties), the requirement of that provision that certain matters be disclosed at the meeting at which the resolution is passed does not apply, but those matters must be disclosed to each relevant member at or before the time at which the resolution is supplied to him for signature.
F990 SCHEDULE 15B
SR 1987/442
Meeting of transferee company1
Subject to paragraphs 10(1), 12(4) and 14(2), the court shall not sanction a compromise or arrangement under Article 418(2) unless a majority in number representing three-fourths in value of each class of members of every pre-existing transferee company concerned in the scheme, present and voting either in person or by proxy at a meeting, agree to the scheme.
Draft terms of merger2
1
The court shall not sanction the compromise or arrangement under Article 418(2) unless—
a
a draft of the proposed terms of the scheme (from here on referred to as the “draft terms”) has been drawn up and adopted by the directors of all the transferor and pre-existing transferee companies concerned in the scheme,
b
subject to paragraph 11(3), in the case of each of those companies the directors have delivered a copy of the draft terms to the registrar and the registrar has published in the Gazette notice of receipt by him of a copy of the draft terms from that company, and
c
subject to paragraphs 10 to 14, that notice was so published at least one month before the date of any meeting of that company summoned under Article 418(1) or for the purposes of paragraph 1.
2
Subject to paragraph 12(2), the draft terms shall give particulars of at least the following matters—
a
in respect of each transferor company and transferee company concerned in the scheme, its name, the address of its registered office and whether it is a company limited by shares or a company limited by guarantee and having a share capital;
b
the number of shares in any transferee company to be allotted to members of any transferor company for a given number of their shares (from here on referred to as the “share exchange ratio”) and the amount of any cash payment;
c
the terms relating to the allotment of shares in any transferee company;
d
the date from which the holding of shares in a transferee company will entitle the holders to participate in profits, and any special conditions affecting that entitlement;
e
the date from which the transactions of any transferor company are to be treated for accounting purposes as being those of any transferee company;
f
any rights or restrictions attaching to shares or other securities in any transferee company to be allotted under the scheme to the holders of shares to which any special rights or restrictions attach, or of other securities, in any transferor company, or the measures proposed concerning them;
g
any amount of benefit paid or given or intended to be paid or given to any of the experts referred to in paragraph 5 or to any director of a transferor company or pre-existing transferee company, and the consideration for the payment of benefit.
3
Where the scheme is a Case 3 Scheme the draft terms shall also—
a
give particulars of the property and liabilities to be transferred (to the extent these are known to the transferor company) and their allocation among the transferee companies;
b
make provision for the allocation among and transfer to the transferee companies of any other property and liabilities which the transferor company has or may subsequently acquire; and
c
specify the allocation to members of the transferor company of shares in the transferee companies and the criteria upon which that allocation is based.
Documents and information to be made available3
Subject to paragraphs 10 to 14, the court shall not sanction the compromise or arrangement under Article 418(2) unless—
a
in the case of each transferor company and each pre-existing transferee company the directors have drawn up and adopted a report complying with paragraph 4 (from here on referred to as a “directors' report”);
b
where the scheme is a Case 3 Scheme, the directors of the transferor company have reported to every meeting of the members or any class of members of that company summoned under Article 418(1), and to the directors of each transferee company, any material changes in the property and liabilities of the transferor company between the date when the draft terms were adopted and the date of the meeting in question;
c
where the directors of a transferor company have reported to the directors of a transferee company such a change as is mentioned in head (b), the latter have reported that change to every meeting of the members or any class of members of that transferee company summoned for the purposes of paragraph 1, or have sent a report of that change to every member who would have been entitled to receive notice of such a meeting;
d
a report complying with paragraph 5 has been drawn up on behalf of each transferor company and pre-existing transferee company (from here on referred to as an “expert's report”);
e
the members of any transferor company or transferee company were able to inspect at the registered office of that company copies of the documents listed in paragraph 6(1) in relation to every transferor company and pre-existing transferee company concerned in the scheme during a period beginning one month before, and ending on, the date of the first meeting of the members or any class of members of the first-mentioned transferor company or transferee company summoned either under Article 418(1) or for the purposes of paragraph 1 and those members were able to obtain copies of those documents or any part of them on request during that period free of charge; and
f
the memorandum and articles of association of any transferee company which is not a pre-existing transferee company, or a draft thereof, have been approved by ordinary resolution of every transferor company concerned in the scheme.
Directors' report4
1
The directors' report shall consist of—
a
the statement required by Article 419, and
b
insofar as that statement does not contain the following matters, a further starement—
i
setting out the legal and economic grounds for the draft terms, and in particular for the share exchange ratio, and, where the scheme is a Case 3 Scheme, for the criteria upon which the allocation to the members of the transferor company of shares in the transferee companies was based, and
ii
specifying any special valuation difficulties.
2
Where the scheme is a Case 3 Scheme the directors' report shall also state whether a report has been made to the transferee company under Article 113 (non-cash consideration to be valued before allotment) and, if so, whether that report has been delivered to the registrar.
Expert's report5
1
Except where a joint expert is appointed under sub-paragraph (2), an expert's report shall consist of a separate written report on the draft terms to the members of one transferor company or pre-existing transferee company concerned in the scheme drawn up by a separate expert appointed on behalf of that company.
2
The court may, on the joint application of all the transferor companies and pre-existing transferee companies concerned in the scheme, approve the appointment of a joint expert to draw up a single report on behalf of all those companies.
3
An expert shall be independent of any of the companies concerned in the scheme, that is to say a person qualified at the time of the report to be appointed, or to continue to be, an auditor of those companies.
4
However, where it appears to an expert that a valuation is reasonably necessary to enable him to draw up the report, and it appears to him to be reasonable for that valuation, or part of it, to be made (or for him to accept such a valuation) by another person who—
a
appears to him to have the requisite knowledge and experience to make the valuation or that part of it; and
b
in not an officer or servant of any of the companies concerned in the scheme or any other body corporate which is one of those companies' subsidiary or holding company or a subsidiary of one of those companies' holding company or a partner or employee of such an officer or servant,
he may arrange for or accept such a valuation, together with a report which will enable him to make his own report under this paragraph.
5
The reference in sub-paragraph (4) to an officer or servant does not include an auditor.
6
Where any valuation is made by a person other than the expert himself, the latter's report shall state that fact and shall also—
a
state the former's name and what knowledge and experience he has to carry out the valuation, and
b
describe so much of the undertaking, property and liabilities as were valued by the other person, and the method used to value them, and specify the date of the valuation.
7
An expert's report shall—
a
indicate the method or methods used to arrive at the share exchange ratio proposed;
b
give an opinion as to whether the method or methods used are reasonable in all the circumstances of the case, indicate the values arrived at using each such method and (if there is more than one method) give an opinion on the relative importance attributed to such methods in arriving at the value decided on;
c
describe any special valuation difficulties which have arisen;
d
state whether in the expert's opinion the share exchange ratio is reasonable; and
e
in the case of a valuation made by a person other than himself, state that it appeared to himself reasonable to arrange for it to be so made or to accept a valuation so made.
8
Each expert has the right of access to all such documents of all the transferor companies and pre-existing transferee companies concerned in the scheme, and the right to require from the companies' officers all such information, as he thinks necessary, for the purpose of making his report.
Inspection of documents6
1
The documents referred to in paragraph 3(e) are, in relation to any company,—
a
the draft terms;
b
the directors' reportF987 referred to in paragraph 4;
c
the expert's report;
F987d
the company's annual accounts, together with the relevant directors' report and auditors' report, for the last 3 financial years ending on or before the relevant date; and
e
if the last of those financial years ended more than 6 months before the relevant date, an accounting statement in the form described in the following provisions.
F987In heads (d) and (e) “the relevant date” means one month before the first meeting of the company summoned under Article 418(1) or for the purposes of paragraph 1.
F9872
The accounting statement shall consist of—
a
a balance sheet dealing with the state of the affairs of the company as at a date not more than 3 months before the draft terms were adopted by the directors, and
b
where the company would be required to prepare group accounts if that date were the last day of a financial year, a consolidated balance sheet dealing with the state of affairs of the company and its subsidiary undertakings as at that date.
3
The requirements of this Order as to balance sheets forming part of a company's annual accounts, and the matters to be included in notes thereto, apply to any balance sheet required for the accounting statement, with such modifications as are necessary by reason of its being prepared otherwise than as at the last day of a financial year.
4
Any balance sheet required for the accounting statement shall be approved by the board of directors and signed on behalf of the board by a director of the company.
5
In relation to a company within the meaning of section 735 of the Companies Act 1985, the references in this paragraph to the requirements of this Order shall be construed as references to the corresponding requirements of that Act.
Transferor company holding its own shares7
The court shall not sanction under Article 418(2) a compromise or arrangement under which any shares in a transferee company are to be allotted to a transferor company or its nominee in respect of shares in that transferor company held by it or its nominee.
Securities other than shares to which special rights are attached8
1
Where any security of a transferor company to which special rights are attached is held by a person other than as a member or creditor of the company, the court shall not sanction a compromise or arrangement under Article 418(2), unless under the scheme that person is to receive rights in a transferee company of equivalent value.
2
Sub-paragraph (1) shall not apply in the case of any such security where —
a
the holder has agreed otherwise; or
b
the holder is, or under the scheme is to be, entitled to have the security purchased by a transferee company involved in the scheme on terms which the court considers reasonable.
Date and consequences of the compromise or arrangement9
1
The following provisions of this paragraph shall apply where the court sanctions a compromise or arrangement.
2
The court shall in the order sanctioning the compromise or arrangement or in a subsequent order under Article 420 fix a date on which the transfer or transfers to the transferee company or transferee companies of the undertaking, property and liabilities of the transferor company shall take place; and any such order which provides for the dissolution of the transferor company shall fix the same date for the dissolution.
3
If it is necessary for the transferor company to take any steps to ensure that the undertaking, property and liabilities are fully transferred, the court shall fix a date, not later than six months after the date fixed under sub-paragraph (2), by which such steps must be taken and for that purpose may postpone the dissolution of the transferor company until that date.
4
The court may postpone or further postpone the date fixed under sub-paragraph (3) if it is satisfied that the steps there mentioned cannot by completed by the date (or latest date) fixed under that sub-paragraph.
Exceptions10
1
The court may sanction a compromise or arrangement under Article 418(2) notwithstanding that—
a
any meeting otherwise required by paragraph 1 has not been summoned by a pre-existing transferee company ( “the relevant company”), and
b
paragraphs 2(1)(c) and 3(e) have not been complied with in respect of that company,
if the court is satisfied that the conditions specified in sub-paragraph (2) have been complied with.
2
Subject to paragraphs 11(3) and 12(3), the conditions mentioned in sub-paragraph (1) are—
a
that the publication of notice of receipt of the draft terms by the registrar referred to in paragraph 2(1)(b) took place in respect of the relevant company at least one month before the date of any meeting of members of any transferor company concerned in the scheme summoned under Article 418(1);
b
that the members of the relevant company were able to inspect at the registered office of that company the documents listed in paragraph 6(1) in relation to every transferor company and transferee company concerned in the scheme during a period ( “the relevant period”) beginning one month before, and ending on, the date of any such meeting, and that they were able to obtain copies of those documents or any part of them on request during that period free of charge; and
c
that one or more members of the relevant company, who together held not less than 5 per cent. of the paid-up capital of that company which carried the right to vote at general meetings of the companyF988 (excluding any shares in the company held as treasury shares) would have been able during the relevant period to require that a meeting of each class of members be called for the purpose of deciding whether or not to agree to the scheme but that no such requisition had been made.
11
1
The following sub-paragraphs apply where the scheme is a Case 3 Scheme.
2
Heads (a) to (d) of paragraph 3 shall not apply and head (e) of that paragraph shall not apply as regards the documents listed in paragraph 6(1)(b), (c) and (e), if all members holding shares in, and all persons holding other securities of, any of the transferor companies and pre-existing transferee companies concerned in the scheme on the date of the application to the court under Article 418(1), being shares or securities which as at that date carry the right to vote in general meetings of the company, so agree.
3
The court may by order direct in respect of any transferor company or pre-existing transferee company that the requirements relating to—
a
delivering copies of the draft terms and publication of notice of receipt of the draft terms under paragraph 2(1)(b) and (c), or
b
inspection under paragraph 3(e),
shall not apply, and may by order direct that paragraph 10 shall apply to any pre-existing transferee company with the omission of sub-paragraphs (2)(a) and (b) of that paragraph.
4
The court shall not make any order under sub-paragraph (3) unless it is satisfied that the following conditions will be fulfilled—
a
that the members of the company will have received or will have been able to obtain free of charge copies of the documents listed in paragraph 6(1) in time to examine them before the date of the first meeting of the members or any class of members of the company summoned under Article 418(1) or for the purposes of paragraph 1;
b
in the case of a pre-existing transferee company, where in the circumstances described in paragraph 10 no meeting is held, that the members of that company will have received or will have been able to obtain free of charge copies of those documents in time to require a meeting under paragraph 10(2)(c);
c
that the creditors of the company will have received or will have been able to obtain free of charge copies of the draft terms in time to examine them before the date of the meeting of the members or any class of members of the company, or, in the circumstances referred to in head (b), at the same time as the members of the company; and
d
that no prejudice would be caused to the members or creditors of any transferor company or transferee company concerned in the scheme by making the order in question.
Transferee company or companies holding shares in the transferor company12
1
Where the scheme is a Case 1 Scheme and in the case of every transferor company concerned—
a
the shares in that company, and
b
such securities of that company (other than shares) as carry the right to vote at general meetings of that company,
are all held by or on behalf of the transferee company, Article 420A and this Schedule shall apply subject to sub-paragraphs (2) to (5).
2
The draft terms need not give particulars of the matters mentioned in paragraph 2(2)(b), (c) or (d).
3
Article 419 and heads (a) and (d) of paragraph 3 shall not apply, and head (e) of that paragraph shall not apply as regards the documents listed in paragraph 6(1)(b) and (c).
4
The court may sanction the compromise or arrangement under Article 418(2) notwithstanding that —
a
any meeting otherwise required by Article 418 or paragraph 1 has not been summoned by any company concerned in the scheme, and
b
paragraphs 2(1)(c) and 3(e) have not been complied with in respect of that company,
if it is satisfied that the conditions specified in sub-paragraph (5) have been complied with.
5
The conditions mentioned in sub-paragraph (4) are—
a
that the publication of notice of receipt of the draft terms by the registrar referred to in paragraph 2(1)(b) took place in respect of every transferor company and transferee company concerned in the scheme at least one month before the date of the order under Article 418(2) ( “the relevant date”);
b
that the members of the transferee company were able to inspect at the registered office of that company copies of the documents listed in paragraph 6(1)(a). (d) and (e) in relation to every transferor company or transferee company concerned in the scheme during a period ( “the relevant period”) beginning one month before, and ending on, the relevant date and that they were able to obtain copies of those documents or any part of them on request during that period free of charge; and
c
that one or more members of the transferee company who together held not less than 5 per cent. of the paid-up capital of the company which carried the right to vote at general meetings of the companyF989 (excluding any shares in the company held as treasury shares) would have been able during the relevant period to require that a meeting of each class of members be called for the purpose of deciding whether or not to agree to the scheme but that no such requisition had been made.
13
1
Where the scheme is a Case 3 Scheme and—
a
the shares in the transferor company, and
b
such securities of that company (other than shares) as carry the right to vote at general meetings of that company,
are all held by or on behalf of one or more transferee companies, Article 420A and this Schedule shall apply subject to sub-paragraphs (2) and (3).
2
The court may sanction a compromise or arrangement under Article 418(2) notwithstanding that—
a
any meeting otherwise required by Article 418 has not been summoned by the transferor company, and
b
paragraphs 2(1)(c) and 3(b) and (e) have not been complied with in respect of that company,
if it is satisfied that the conditions specified in sub-paragraph (3) have been complied with.
3
The conditions referred to in sub-paragraph (2) are—
a
the conditions set out in paragraph 12(5)(a) and (c);
b
that the members of the transferor company and every transferee company concerned in the scheme were able to inspect at the registered office of the company of which they were members copies of the documents listed in paragraph 6(1) in relation to every such company during a period beginning one month before, and ending on, the date of the order under Article 418(2) ( “the relevant date”), and that they were able to obtain copies of those documents or any part of them on request during that period free of charge; and
c
that the directors of the transferor company have sent to every member who would have been entitled to receive a notice of the meeting (had it been called), and to the directors of each transferee company, a report of any material changes in the property and liabilities of the transferor company between the date when the draft terms were adopted and a date one month before the relevant date.
14
1
Where the scheme is a Case 1 Scheme and in the case of every transferor company concerned 90 per cent. or more (but not all) of—
a
the shares in that company, and
b
such securities of that company (other than shares) as carry the right to vote at general meetings of that company,
are held by or on behalf of the transferee company, Article 420A and this Schedule shall apply subject to sub-paragraphs (2) and (3).
2
The court may sanction a compromise or arrangement under Article 418(2) notwithstanding that—
a
any meeting otherwise required by paragraph 1 has not been summoned by the transferee company, and
b
paragrahs 2(1)(c) and 3(e) have not been complied with in respect of that company,
if the court is satisfied that the conditions specified in sub-paragraph (3) have been complied with.
3
The conditions referred to in sub-paragraph (2) are the same conditions as those specified in paragraph 10(2), save that for this purpose the condition contained in paragraphs 10(2)(b) shall be treated as referring only to the documents listed in paragraph 6(1)(a), (d) and (e).
Liability of transferee companies for the default of another15
1
Where the scheme is a Case 3 Scheme, each transferee company shall be jointly and severally liable, subject to sub-paragraph (2), for any liability transferred to any other transferee company under the scheme to the extent that that other company has made default in satisfying that liability, but so that no transferee company shall be so liable for an amount greater than the amount arrived at by calculating the value at the time of the transfer of the property transferred to it under the scheme less the amount at that date of the liabilities so transferred.
2
If a majority in number representing three-fourths in value of the creditors or any class of creditors of the transferor company present and voting either in person or by proxy at a meeting summoned under Article 418(1) so agree, sub-paragraph (1) shall not apply in respect of the liabilities of the creditors or that class of creditors.
Schs. 15C, 15D prosp. insertion by 2005 NI 17, Sch. 2 para. 19 (which is amended for Sch. 15D (6.4.2008) by S.I. 2008/948, Sch. 1 para. 149(1), (26.5.2008) by S.I. 2008/1277, Sch. 2 para. 79, Sch. 4 Pt. 2; and Schs. 15C, 15D repealed (1.10.2009) by Companies Act 2006 (c. 46), s. 1295, Sch. 16; S.I. 2008/2860, art. 4, Sch. 1 Pt. 2)
Schedules 16‐19 rep. by 1989 NI 19
SCHEDULE 20EFFECT OF REGISTRATION UNDER ARTICLE 629
Interpretation
1
In this Schedule—
“registration” means registration in pursuance of Article 629, and
“instrument” includes deed of settlement, contract of copartnery and letters patent.
Vesting of property
2
All property belonging to or vested in the company at the date of its registration passes to and vests in the company on registration for all the estate and interest of the company in the property.
Existing liabilities
3
Registration does not affect the company's rights or liabilities in respect of any debt or obligation incurred, or contract entered into by, to, with, or on behalf of, the company before registration.
Pending actions at law
4
1
All actions and other legal proceedings which at the time of the company's registration are pending by or against the company, or the public officer or any member of it, may be continued in the same manner as if the registration had not taken place.
2
However, execution shall not issue against the effects of any individual member of the company on any judgement, decree or order obtained in such an action or proceeding; but in the event of the company's property and effects being insufficient to satisfy the judgement, decree or order, an order may be obtained for winding up the company.
The company's constitution
5
1
All provisions contained in any statutory provision or other instrument constituting or regulating the company are deemed to be conditions and regulations of the company, in the same manner and with the same incidents as if so much of them as would, if the company had been formed under this Order, have been required to be inserted in the memorandum, were contained in a registered memorandum, and the residue were contained in registered articles.
2
The provisions brought in under this paragraph include, in the case of a company registered as a company limited by guarantee, those of the resolution declaring the amount of the guarantee; and they include also the statement under Article 630(5)(a), and any statement under Article 633(2).
6
1
All the provisions of this Order apply to the company, and to its members, contributories and creditors, in the same manner in all respects as if it had been formed under this Order, subject as follows.
2
Table A does not apply unless adopted by special resolution.
3
Provisions relating to the numbering of shares to not apply to any joint stock company whose shares are not numbered.
4
Subject to the provisions of this Schedule, the company does not have power—
a
to alter any provision contained in a statutory provision relating to the company,
b
without the sanction of the Department, to alter any provision contained in letters patent relating to the company.
5
The company does not have power to alter any provision contained in a royal charter or letters patent with respect to the company's objects.
F9916
Where by virtue of sub-paragraph (4) or (5) a company does not have power to alter a provision, it does not have power to ratify acts of the directors in contravention of the provision.
Capital structure
7
Provisions of this Order with respect to—
a
the registration of an unlimited company as limited,
b
the powers of an unlimited company on registration as a limited company to increase the nominal amount of its share capital and to provide that a portion of its share capital shall not be capable of being called up except in the event of winding up, and
c
the power of a limited company to determine that a portion of its share capital shall not be capable of being called up except in that event,
apply, notwithstanding any provisions contained in a statutory provision, royal charter or other instrument constituting or regulating the company.
Supplementary
8
Nothing in paragraphs 5 to 7 authorises a company to alter any such provisions contained in an instrument constituting or regulating the company as would, if the company had originally been formed under this Order, have been required to be contained in the memorandum and are not authorised to be altered by this Order.
9
F992None of the provisions of this Order, and none of the provisions of the Companies Act 2006 (except section 996(2)), derogates from any power of altering the company's constitution or regulations which may, by virtue of any statutory provision or other instrument constituting or regulating it, be vested in the company.
F993SCHEDULE 20ABranch Registration under the Eleventh Company Law Directive (89/666/EEC)
SR 1993/198
Duty to Register1
1
A company shall, within one month of having opened a branch in Northern Ireland, deliver to the registrar for registration a return in the prescribed form containing—
a
such particulars about the company as are specified in paragraph 2,
b
such particulars about the branch as are specified in paragraph 3, and
c
if the company is one to which Article 648AA applies, such particulars in relation to the registration of documents under Schedule 20D as are specified in paragraph 4.
2
The return shall, except where sub-paragraph (3) applies, be accompanied by the documents specified in paragraph 5 and, if the company is one to which Part I of Schedule 20D applies, the documents specified in paragraph 6.
3
This sub-paragraph applies where—
a
at the time the return is delivered, the company has another branch in the United Kingdom,
b
the return contains a statement to the effect that the documents specified in paragraph 5, and, if the company is one to which Part I of Schedule 20D applies, paragraph 6, are included in the material registered in respect of the other branch, and
c
the return states where the other branch is registered and what is its registered number.
4
In sub-paragraph (1), the reference to having opened a branch in Northern Ireland includes a reference to a branch having become situated there on ceasing to be situated elsewhere.
5
If at the date on which the company opens the branch in Northern Ireland the company is subject to any proceedings referred to in Article 6520(1) (winding up) or 652P(1) (insolvency proceedings etc), the company shall deliver a return under Article 6520(1) or (as the case maybe) 652P(1) within one month of that date.
If on or before that date a person has been appointed to be liquidator of the company and continues in that office at that date, Article 6520(3) and (4) (liquidator to make return within 14 days of appointment) shall have effect as if it required a return to be made under that Article within one month of the date of the branch being opened.
Particulars required2
1
The particulars referred to in paragraph 1(1)(a) are—
a
the corporate name of the company,
b
its legal form,
c
if it is registered in the country of its incorporation, the identity of the register in which it is registered and the number with which it is so registered,
d
a list of its directors and secretary, containing—
i
with respect to each director, the particulars specified in sub-paragraph (3), and
ii
with respect to the secretary (or where there are joint secretaries, with respect to each of them) the particulars specified in sub-paragraph (4),
e
the extent of the powers of the directors to represent the company in dealings with third parties and in legal proceedings, together with a statement as to whether they may act alone or must act jointly and, if jointly, the name of any other person concerned, and
f
whether the company is an institution to which Article 648A (or the equivalent provision in Great Britain) applies.
2
In the case of a company which is not incorporated in a Member State, those particulars also include—
a
the law under which the company is incorporated.
b
(in the case of a company to which either paragraphs 2 and 3 of Part I of Schedule 20C or Schedule 20D applies) the period for which the company is required by the law under which it is incorporated to prepare accounts, together with the period allowed for the preparation and public disclosure of accounts for such a period, and
c
unless disclosed by the documents specified in paragraph 5—
i
the address of its principal place of business in its country of incorporation,
ii
its objects, and
iii
the amount of its issued share capital.
3
The particulars referred to in sub-paragraph (1)(d)(i) are—
a
in the case of an individual—
i
his name,
ii
any former name,
iii
his usual residential address,
iv
his nationality,
v
his business occupation (if any),
vi
particulars of any other directorships held by him, and
vii
his date of birth;
b
in the case of a corporation or Scottish firm, its corporate or firm name and registered or principal office.
4
The particulars referred to in sub-paragraph (1)(d)(ii) are—
a
in the case of an individual, his name, any former name and his usual residential address;
b
in the case of a corporation or Scottish firm, its corporate or firm name and registered or principal office.
Where all the partners in a firm are joint secretaries of the company, the name and principal office of the firm may be stated instead of the particulars required by head (a).
5
In sub-paragraphs 3(a) and 4(a)—
a
“name” means a person's forename and surname, except that in the case of a peer, or an individual usually known by a title, the title may be stated instead of his forename and surname, or in addition to either or both of them; and
b
the reference to a former name does not include—
i
in the case of a peer, or an individual normally known by a title, the name by which he was known previous to the adoption of or succession to the title;
ii
in the case of any person, a former name which was changed or disused before he attained the age of 18 years or which has been changed or disused for 20 years or more;
iii
in the case of a married woman, the name by which she was known previous to the marriage.
6
Where—
a
at the time a return is delivered under paragraph 1(1) the company has another branch in Northern Ireland; and
b
the company has delivered the particulars required by sub-paragraphs (1)(b) to (f) and (2) to (5) to the registrar with respect to that branch (or to the extent it is required to do so by virtue of Schedule 20B to this Order) and has no outstanding obligation to make a return to the registrar in respect of that branch under paragraph 7 in relation to any alteration to those particulars,
the company may adopt the particulars so delivered as particulars which the registrar is to treat as having been filed by the return by referring in the return to the fact that the particulars have been filed in respect of that other branch and giving the number with which the other branch is registered.
3
The particulars referred to in paragraph 1(1)(b) are—
a
the address of the branch,
b
the date on which it was opened,
c
the business carried on at it,
d
if different from the name of the company, the name in which that business is carried on,
e
a list of the names and addresses of all persons resident in Northern Ireland authorised to accept on the company's behalf service of process in respect of the business of the branch and of any notices required to be served on the company in respect of the business of the branch,
f
a list of the names and usual residential addresses of all persons authorised to represent the company as permanent representatives of the company for the business of the branch,
g
the extent of the authority of any person falling within sub-paragraph (f), including whether that person is authorised to act alone or jointly, and
h
if a person falling within sub-paragraph (f) is not authorised to act alone, the name of any person with whom he is authorised to act.
4
The particulars referred to in paragraph 1(1)(c) are—
a
whether it is intended to register documents under paragraph 2(2) or, as the case may be, 10(1) of Schedule 20D in respect of the branch or in respect of some other branch in the United Kingdom, and
b
if it is, where that other branch is registered and what is its registered number.
Documents required5
The first documents referred to in paragraph 1(2) are—
a
a certified copy of the charter, statutes or memorandum and articles of the company (or other instrument constituting or defining the company's constitution), and
b
if any of the documents mentioned in sub-paragraph (a) is not written in the English language, a translation of it into English certified in the prescribed manner to be a correct translation.
6
1
The second documents referred to in paragraph 1(2) are—
a
copies of the latest accounting documents prepared in relation to a financial period of the company to have been publicly disclosed in accordance with the law of the country in which it is incorporated before the end of the period allowed for compliance with paragraph 1 in respect of the branch or, if earlier, the date on which the company complies with paragraph 1 in respect of the branch, and
b
if any of the documents mentioned in head (a) is not written in the English language, a translation of it into English certified in the prescribed manner to be a correct translation.
2
In sub-paragraph (1)(a) “financial period” and “accounting documents” shall be construed in accordance with paragraph 6 of Schedule 20D.
Alterations7
1
If, after a company has delivered a return under paragraph (1), any alteration is made in—
a
its charter, statutes or memorandum and articles (or other instrument constituting or defining its constitution), or
b
any of the particulars referred to in paragraph 1(1),
the company shall, within the time specified in sub-paragraph (2), deliver to the registrar for registration a return in the prescribed form containing the prescribed particulars of the alteration.
In the case of an alteration to any of the documents referred to in head (a), the return shall be accompanied by a certified copy of the document as altered, together with, if the document is not written in the English language, a translation of it into English certified in the prescribed manner to be a correct translation.
2
The time for the delivery of the return required by sub-paragraph (1) is—
a
in the case of an alteration in any of the particulars specified in paragraph 3, 21 days after the alteration is made; or
b
in the case of any other alteration, 21 days after the date on which notice of the alteration in question could have been received in Northern Ireland in due course of post (if despatched with due diligence).
3
Where—
a
a company has more than one branch in Northern Ireland, and
b
an alteration relates to more than one of those branches,
sub-paragraph (1) shall have effect to require the company to deliver a return in respect of each of the branches to which the alteration relates.
4
For the purposes of sub-paragraph (3)—
a
an alteration in any of the particulars specified in paragraph 2 shall be treated as relating to every branch of the company (though where the company has more than one branch in Northern Ireland a return in respect of an alteration in any of those particulars which gives the branch numbers of two or more such branches shall be treated as a return in respect of each branch whose number is given), but
b
an alteration in the company's charter or memorandum and articles (or other instrument constituting or defining its constitution) shall only be treated as relating to a branch if the document altered is included in the material registered in respect of it.
8
1
Sub-paragraph (2) applies where—
a
a company's return under paragraph 1(1) includes a statement to the effect mentioned in paragraph 1(3)(b), and
b
the statement ceases to be true so far as concerns the documents specified in paragraph 5.
2
The company shall, within the time specified in sub-paragraph (3), deliver to the registrar for registration in respect of the branch to which the return relates—
a
the documents specified in paragraph 5, or
b
a return in the prescribed form—
i
containing a statement to the effect that those documents are included in the material which is registered in respect of another branch of the company in the United Kingdom, and
ii
stating where the other branch is registered and what is its registered number.
3
The time for complying with sub-paragraph (2) is 21 days after the date on which notice of the fact that the statement in the earlier return has ceased to be true could have been received in Northern Ireland in due course of post (if despatched with due diligence).
4
Sub-paragraph (2) shall also apply where, after a company has made a return under sub-paragraph (2)(b), the statement to the effect mentioned in sub-paragraph (2)(b)(i) ceases to be true.
5
For the purposes of sub-paragraph (2)(b), where the company has more than one branch in Northern Ireland a return which gives the branch numbers of two or more such branches shall be treated as a return in respect of each branch whose number is given.
F994SCHEDULE 20BChange in Registration Regime: Transitional Provisions
SR 1993/198
1
1
This paragraph applies where a company which becomes a company to which Article 640A applies was, immediately before becoming such a company (referred to in this paragraph as the relevant time), a company to which Article 641 applies.
2
The company need not include the particulars specified in paragraph 2(1)(d) of Schedule 20A in the first return to be delivered under paragraph 1(1) of that Schedule to the registrar if at the relevant time—
a
it had an established place of business in Northern Ireland,
b
it had complied with its obligations under Article 641(1)(b)(i), and
c
it had no outstanding obligation to make a return to the registrar under paragraph (1) of Article 642, so far as concerns any alteration of the kind mentioned in paragraph (1)(b) of that Article,
and if it states in the return that the particulars have been previously filed in respect of a place of business of the company, giving the company's registered number.
3
The company shall not be required to deliver the documents mentioned in paragraph 5 of Schedule 20A with the first return to be delivered under paragraph 1(1) of that Schedule to the registrar if at the relevant time—
a
it had an established place of business in Northern Ireland,
b
it had delivered the documents mentioned in Article 641(1)(a) to the registrar, and
c
it had no outstanding obligation to make a return to the registrar under paragraph (1) of Article 642 so far as concerns any alteration in any of the documents mentioned in sub-paragraph (a) of that paragraph,
and if it states in the return that the documents have been previously filed in respect of a place of business of the company, giving the company's registered number.
2
1
This paragraph applies where a company which becomes a company to which Article 641 applies was, immediately before becoming such a company (referred to in this paragraph as the relevant time), a company to which Article 640A applies.
2
The company shall not be required to deliver the documents mentioned in Article 641(1)(a) to the registrar if at the relevant time—
a
it had a branch in Northern Ireland,
b
the documents mentioned in paragraph 5 of Schedule 20A were included in the material registered in respect of the branch, and
c
it had no outstanding obligation to make a return to the registrar under paragraph 7 of that Schedule, so far as concerns any alteration in any of the documents mentioned in sub-paragraph (1)(a) of that paragraph,
and if it states in the return that the documents have previously been filed in respect of a branch of the company, giving the branch's registered number.
3
The company need not include the particulars mentioned in Article 641(1)(b)(i) in the return to be delivered under Article 641(1)(b) to the registrar if at the relevant time—
a
it had a branch in Northern Ireland,
b
it had complied with its obligations under paragraph 1(1)(a) of Schedule 20A in respect of the branch, so far as the particulars required by paragraph 2(1)(d) of that Schedule are concerned, and
c
it had no outstanding obligation to make a return to the registrar under paragraph 7 of that Schedule, so far as concerns any alteration in any of the particulars required by paragraph 2(1)(d) of that Schedule,
and if it states in the return that the particulars have been previously filed in respect of a branch of the company, giving the branch's registered number.
4
Where sub-paragraph (3) applies, the reference in Article 642(1)(b) to the list of the directors and secretary shall be construed as a reference to the list contained in the return under paragraph 1(1) of Schedule 20A with any alterations in respect of which a return under paragraph 7(1) of that Schedule has been made.
F995SCHEDULE 20CDelivery of Reports and Accounts: Credit and Financial Institutions to which The Bank Branches Directive (89/117/EEC) applies
SR 1993/198
PART IINSTITUTIONS REQUIRED TO PREPARE ACCOUNTS UNDER PARENT LAW
Scope of Part1
1
This Part applies to any institution to which Article 648A applies which is required by its parent law to prepare and have audited accounts for its financial periods and whose only or principal branch within the United Kingdom is in Northern Ireland.
2
In this Part, “branch” has the meaning given by Article 648A.
Duty to deliver copies in Northern Ireland2
1
An institution to which this Part applies shall, within one month of becoming such an institution, deliver to the registrar for registration—
a
copies of the latest accounting documents of the institution prepared in accordance with its parent law to have been disclosed before the end of the period allowed for compliance with this paragraph or, if earlier, the date of compliance with it, and
b
if any of the documents mentioned in head (a) is not written in the English language, a translation of it into English certified in the prescribed manner to be a correct translation.
2
Where an institution to which this Part applies had, immediately prior to becoming such an institution, a branch in Great Britain which was its only or principal branch within the United Kingdom it may, instead of delivering the documents mentioned in sub-paragraph (1)(a), deliver a notice that it has become an institution to which this Part applies, provided that those documents have been delivered pursuant to the Companies Act 1985—
a
to the registrar for England and Wales if the institution's only or principal branch within the United Kingdom was in England and Wales; or
b
to the registrar for Scotland if the institution's only or principal branch within the United Kingdom was in Scotland.
3
1
An institution to which this Part applies shall deliver to the registrar for registration—
a
copies of all the accounting documents of the institution prepared in accordance with its parent law which are disclosed on or after the end of the period allowed for compliance with paragraph 2(1) or, if earlier, the date on which it complies with that paragraph, and
b
if any of the documents mentioned in head (a) is not written in the English language, a translation of it into English, certified in the prescribed manner to be a correct translation.
2
The period allowed for delivery, in relation to a document required to be delivered under this paragraph, is 3 months from the date on which the document is first disclosed.
4
Where an institution's parent law permits it to discharge an obligation with respect to the disclosure of accounting documents by disclosing documents in a modified form, it may discharge its obligation under paragraph 2 or 3 by delivering copies of documents modified as permitted by that law.
5
1
Neither paragraph 2 nor paragraph 3 shall require an institution to deliver documents to the registrar if at the end of the period allowed for compliance with that paragraph—
a
it is not required by its parent law to register them,
b
they are made available for inspection at each branch of the institution in Northern Ireland, and
c
copies of them are available on request at a cost not exceeding the cost of supplying them.
2
Where by virtue of sub-paragraph (1) an institution is not required to deliver documents under paragraph 2 or 3 and any of the conditions specified in that sub-paragraph ceases to be met, the institution shall deliver the documents to the registrar for registration within 7 days of the condition ceasing to be met.
Penalty for non-compliance6
1
If an institution fails to comply with paragraph 2, 3 or 5(2) before the end of the period allowed for compliance, the institution and every person who immediately before the end of that period was a director of the institution, or in the case of an institution which does not have directors, a person occupying an equivalent office, is guilty of an offence and liable to a fine and, for continued contravention, to a daily default fine.
2
It is a defence for a person charged with an offence under this paragraph to prove that he took all reasonable steps for securing compliance with paragraph 2, 3 or 5(2), as the case may be.
Interpretation7
1
In this Part—
“financial period”, in relation to an institution means a period for which the institution is required or permitted by its parent law to prepare accounts;
“parent law”, in relation to an institution, means the law of the country in which the institution has its head office;
and references to disclosure are to public disclosure, except where an institution is not required under its parent law, any statutory provision (within the meaning of section 1(f) of the Interpretation Act (Northern Ireland) 1954) having effect for Northern Ireland or its constitution to disclose publicly its accounts, in which case such references are to the disclosure of the accounts to the persons for whose information they have been prepared.
2
For the purposes of this Part, the following are accounting documents in relation to a financial period of an institution—
a
the accounts of the institution of the period, including, if it has one or more subsidiaries, any consolidated accounts of the group,
b
any annual report of the directors (or, in the case of an institution which does not have directors, the persons occupying equivalent offices) for the period,
c
the report of the auditors on the accounts mentioned in head (a), and
d
any report of the auditors on the report mentioned in head (b).
PART IIINSTITUTIONS NOT REQUIRED TO PREPARE ACCOUNTS UNDER PARENT LAW
Scope of Part
8
1
This part applies to any institution to which Article 648A applies which—
a
is incorporated, and
b
is not required by the law of the country in which it has its head office to prepare and have audited accounts.
2
In this Part, “branch” has the meaning given by Article 648A.
Preparation of accounts and reports
9
An institution to which this Part applies shall in respect of each financial year of the institution prepare the like accounts and directors' report, and cause to be prepared such an auditors' report, as would be required if the institution were a company to which Article 649 applied.
10
F996Sections 390 to 392 of the Companies Act 2006 (financial year and accounting reference periods) apply to an institution to which this Part applies subject to the following modifications—
a
for the references to the incorporation of the company there shall be substituted references to the institution becoming an institution to which this Part applies; and
b
F997section 392(3) shall be omitted.
Duty to deliver accounts and reports
11
1
An institution to which this Part applies shall in respect of each financial year of the institution deliver to the registrar copies of the accounts and reports prepared in accordance with paragraph 9.
2
If any document comprised in those accounts or reports is in a language other than English, the institution shall annex to the copy delivered a translation of it into English, certified in the prescribed manner to be a correct translation.
Time for delivery
12
1
The period allowed for delivering accounts and reports under paragraph 11 is 13 months after the end of the relevant accounting reference period, subject to the following provisions of this paragraph.
2
If the relevant accounting reference period is the institution's first and is a period of more than 12 months, the period allowed is 13 months from the first anniversary of the institution becoming an institution to which this Part applies.
3
If the relevant accounting reference period is treated as shortened by virtue of a notice given by the institution under F998section 392 of the Companies Act 2006, the period allowed is that applicable in accordance with the above provisions or three months from the date of the notice under that Article, whichever last expires.
4
If for any special reason the Department thinks fit it may, on an application made before the expiry of the period otherwise allowed, by notice in writing to an institution to which this Part applies extend that period by such further period as may be specified in the notice.
5
In this paragraph “the relevant accounting reference period” means the accounting reference period by reference to which the financial year for the accounts in question was determined.
Penalty for non-compliance
13
1
If the requirements of paragraph 11 are not complied with before the end of the period allowed for delivering accounts and reports, or if the accounts and reports delivered do not comply with the requirements of this Order, the institution and every person who immediately before the end of that period was a director of the institution, or, in the case of an institution which does not have directors, a person occupying an equivalent office, is guilty of an offence and liable to a fine and, for continued contravention, to a daily default fine.
2
It is a defence for a person charged with such an offence to prove that he took all reasonable steps for securing that the requirements in question would be complied with.
3
It is not a defence in relation to a failure to deliver copies to the registrar to prove that the documents in question were not in fact prepared as required by this Schedule.
F999SCHEDULE 20DDelivery of Reports and Accounts: Companies to which the Eleventh Company Law Directive applies
SR 1993/198
PART ICOMPANIES REQUIRED TO MAKE DISCLOSURE UNDER PARENT LAW
Scope of Part1
This Part applies to any company to which Article 648AA applies which is required by its parent law to prepare, have audited and disclose accounts.
Duty to deliver copies in Northern Ireland2
1
This paragraph applies in respect of each branch which a company to which this part applies has in Northern Ireland.
2
The Company shall deliver to the registrar for registration in respect of the branch copies of all the accounting documents prepared in relation to a financial period of the company which are disclosed in accordance with its parent law on or after the end of the period allowed for compliance in respect of the branch with paragraph 1 of Schedule 20A or, if earlier, the date on which the company complies with that paragraph in respect of the branch.
3
Where the company's parent law permits it to discharge its obligation with respect to the disclosure of accounting documents by disclosing documents in a modified form, it may discharge its obligation under sub-paragraph (2) by delivering copies of documents modified as permitted by that law.
4
If any document, a copy of which is delivered under sub-paragraph (2), is in a language other than English, the company shall annex to the copy delivered a translation of it into English, certified in the prescribed manner to be a correct translation.
3
Paragraph 2 shall not require documents to be delivered in respect of a branch if—
a
before the end of the period allowed for compliance with that paragraph, they are delivered in respect of another branch in the United Kingdom, and
b
the particulars registered under Schedule 20A in respect of the branch indicate an intention that they are to be registered in respect of that other branch and include the details of that other branch mentioned in paragraph 4(b) of that Schedule.
Time for delivery4
The period allowed for delivery, in relation to a document required to be delivered under paragraph 2, is 3 months from the date on which the document is first disclosed in accordance with the company's parent law.
Penalty for non-compliance5
1
If a company fails to comply with paragraph 2 before the end of the period allowed for compliance, it, and every person who immediately before the end of that period was a director of it, is guilty of an offence and liable to a fine and, for continued contravention, to a daily default fine.
2
It is a defence for a person charged with an offence under this paragraph to prove that he took all reasonable steps for securing compliance with paragraph 2.
Interpretation6
1
In this Part—
“financial period”, in relation to a company, means a period for which the company is required or permitted by its parent law to prepare accounts;
“parent law”, in relation to a company, means the law of the country in which the company is incorporated;
and references to disclosure are to public disclosure.
2
For the purposes of this Part, the following are accounting documents in relation to a financial period of a company—
a
the accounts of the company for the period, including, if it has one or more subsidiaries, any consolidated accounts of the group,
b
any annual report of the directors for the period,
c
the report of the auditors on the accounts mentioned in head (a), and
d
any report of the auditors on the report mentioned in head (b).
PART IICOMPANIES NOT REQUIRED TO MAKE DISCLOSURE UNDER PARENT LAW
Scope of Part7
This Part applies to any company to which Article 648AA applies which is not required by the law of the country in which it is incorporated to prepare, have audited and to disclose publicly accounts.
Preparation of accounts and reports8
A company to which this Part applies shall in respect of each financial year of the company prepare the like accounts and directors' report, and cause to be prepared such an auditors' report as would be required if the company were a company to which Article 649 applied.
9
F1000Sections 390 to 392 of the Companies Act 2006 (financial year and accounting reference periods) apply to a company to which this Part applies subject to the following modifications—
a
for the references to the incorporation of the company there shall be substituted references to the company becoming a company to which this Part applies, and
b
F1001section 392(3) (restriction on frequency with which current accounting reference period may be extended) shall be omitted.
Duty to delivery accounts and reports10
1
A company to which this Part applies shall in respect of each financial year of the company deliver to the registrar copies of the accounts and reports prepared in accordance with paragraph 8.
2
If any document comprised in those accounts or reports is in a language other than English, the company shall annex to the copy delivered a translation of it into English, certified in the prescribed manner to be a correct translation.
3
A company required to deliver documents under this paragraph in respect of a financial year shall deliver them in respect of each branch which it has in Northern Ireland at the end of that year.
4
Sub-paragraph (3) is without prejudice to Article 645A.
11
Paragraph 10 shall not require documents to be delivered in respect of a branch if—
a
before the end of the period allowed for compliance with that paragraph, they are delivered in respect of another branch in the United Kingdom, and
b
the particulars registered under paragraph 1 of Schedule 20A in respect of the branch indicate an intention that they are to be registered in respect of that other branch and include the details of that other branch mentioned in paragraph 4(b) of that Schedule.
Time for delivery12
1
The period allowed for delivery accounts and reports under paragraph 10 is 13 months after the end of the relevant accounting reference period, subject to the following provisions of this paragraph.
2
If the relevant accounting reference period is the company's first and is a period of more than 12 months, the period allowed is 13 months from the first anniversary of the company's becoming a company to which this Part applies.
3
If the relevant accounting reference period is treated as shortened by virtue of a notice given by the company under F1002section 392 of the Companies Act 2006, the period allowed is that applicable in accordance with the above provisions or three months from the date of the notice under that Article, whichever last expires.
4
If for any special reason the Department thinks fit it may, on an application made before the expiry of the period otherwise allowed, by notice in writing to a company to which this Part applies extend that period by such further period as may be specified in the notice.
5
In this paragraph “the relevant accounting reference period” means the accounting reference period by reference to which the financial year for the accounts in question was determined.
Penalty for non-compliance13
1
If the requirements of paragraph 10 are not complied with before the end of the period allowed for delivering accounts and reports, or if the accounts and reports delivered do not comply with the requirements of this Order, the company and every person who immediately before the end of that period was a director of the company is guilty of an offence and liable to a fine and, for continued contravention, to a daily default fine.
2
It is a defence for a person charged with such an offence to prove that he took all reasonable steps for securing that the requirements in question would be complied with.
3
It is not a defence in relation to a failure to deliver copies to the registrar to prove that the documents in question were not in fact prepared as required by this Order.
SCHEDULE 21PROVISIONS OF THIS ORDER APPLYING TO UNREGISTERED COMPANIES
SR 1992/258
SR 1994/428
prosp. insertion by 1990 NI 10
Provisions of this Order applied | Subject matter | Limitation and exceptions (if any) |
|---|---|---|
Part I | Interpretation. | To apply so far as requisite for the interpretation of other provisions applied by Article 667 and this Schedule. |
In Part II | ||
Article 29.................... | Statutory and other amendments of memorandum and articles to beF1003 recorded. | Subject to Article 667(3) |
F1004Articles 45 to 45B.................... | Company's capacity; power of directors to bind it. | Subject to Article 667(3) |
F1004. . . | F1004. . . | F1004. . . |
F1004Article 46.................... | F1004Company contracts. | F1004Subject to Article 667(3). |
F1004Article 46A.................... | F1004Execution of documents. | F1004Subject to Article 667(3). |
F1004Article 46B.................... | F1004Pre-incorporation contracts and deeds. | F1004Subject to Article 667(3). |
Article 50.................... | Official seal for share certificates, etc. | Subject to Article 667(3) |
Article 52.................... | Events affecting a company's status to be officially notified. | Subject to Article 667(3) |
F1005. . . | F1005. . . | F1005. . . |
In Part VI— | ||
Article 195(4).................... | Exemption from duty to prepare certificates where shares, etc. issued toF1005 clearing house or nominee. | Subject to Article 667(3) |
Article 196.................... | Certificate as evidence of title. | Subject to Article 667(3) |
Part VIII, with— | ||
F1006Schedules 4 to 9 | Accounts and audit. | Subject to Article 667(3) |
Accounts and audit. | Subject to Article 667(3) | |
F1008Schedules 10 and 10A.................... | Accounts and audit. | Subject to Article 667(3) |
Part X— | ||
Article 295.................... | Registered office. | Subject to Article 667(3) |
Articles 296 to 298.................... | Register of directors and secretaries. | Subject to Article 667(3) |
F1004Article 330A.................... | F1004Invalidity of certain transactions involving directors, etc. | F1004Subject to Article 667(3). |
In Part XI, Articles 351 to 355.................... | Register to be kept of certain transactions not disclosed in accounts; other related matters. | F1003Subject to Article 667(3) |
In Part XII— | ||
Article 359(1), (2) andF1003 (3)(a).................... | Particulars of company to be given in correspondence. | Subject to Article 667(3) |
Articles 371F1004. . . to 373 | Annual return. | Subject to Article 667(3) |
Articles 392 toF1004 401B | Appointment,F1008. . . etc. of auditors. | Subject to Article 667(3) |
F1004Investigation of companies and their affairs; requisition of documents. | — | |
Part XVI.................... | Effect of order imposing restrictions on shares. | To apply so far as relates to orders under Article 438. |
F1004Part XVII.................... | F1004Fraudulent trading by a company. | — |
In Part XXIV | ||
F1004Articles 655 to 659A, 662 and 664A.................... | Miscellaneous provisions about registration. | |
Article 660 | Public notice by registrar with respect to certain documents. | Subject to Article 667(3) |
Article 669.................... | Companies to publish periodical statement. | Subject to Article 667(3) |
Article 670.................... | Production and insepection of company's books. | To apply so far only as these provisions have effect in relation to provisions applying by virtue of the foregoing provisions of this Schedule. |
Article 671.................... | Form of company registers, etc. | To apply so far only as these provisions have effect in relation to provisions applying by virtue of the foregoing provisions of this Schedule. |
Article 672.................... | Use of computers for company records. | To apply so far only as these provisions have effect in relation to provisions applying by virtue of the foregoing provisions of this Schedule. |
F1004Article 672A | F1004Rights of inspection and related matters. | F1004To apply only so far as this provision has effect in relation to provisions applying by virtue of the foregoing provisions of this Schedule. |
Article 673.................... | Service of documents. | To apply so far only as these provisions have effect in relation to provisions applying by virtue of the foregoing provisions of this Schedule. |
Article 678 with Schedule 23.................... | Punishment of offences; meaning of “officer in default”. | To apply so far only as these provisions have effect in relation to provisions applying by virtue of the foregoing provisions of this Schedule. |
Article 679.................... | Summary proceedings. | To apply so far only as these provisions have effect in relation to provisions applying by virtue of the foregoing provisions of this Schedule. |
Article 680(3).................... | Prosecution by public authorities. | To apply so far only as these provisions have effect in relation to provisions applying by virtue of the foregoing provisions of this Schedule. |
SCHEDULE 22
*The share capital of the company is , divided into shares of each.
The number of shares issued is
Calls to the amount of | pounds per share have been made, | |
under which the sum of | pounds has been received. |
The liabilities of the company on 1st January ( or July) were—
Debts owing to sundry persons by the company.
On judgment,
£
On specialty,
£
On notes or bills,
£
On simple contracts,
£
On estimated liabilities,
£
The assets of the company on that day were—
Government securities [ stating them]
Bills of exchange and promissory notes,
£
Cash at the bankers,
£
Other securities,
£
*If the company has no share capital the portion of the statement relating to capital and shares must be omitted.
SCHEDULE 23 F1010PUNISHMENT OF OFFENCES UNDER THIS ORDER
mod. by SR 2004/307
SR 2003/3
Sch. 23: entry inserted (6.4.2007) by Companies Act 2006 (Commencement No. 2, Consequential Amendments, Transitional Provisions and Savings) Order 2007 (S.I. 2007/1093), art. 6(2), Sch. 4 para. 55 (with art. 11(1))
Sch. 23: entries repealed (6.4.2008) by Companies Act 2006 (c. 46.), ss. 1284(2), 1295, 1300(2), {Sch. 16}; S.I. 2007/3495, art. 8(a), Sch. 2 Pt. 2 (with arts. 7, 12)
SR 2004/275
Sch. 23: entries repealed (1.10.2007) by Companies Act 2006 (c. 46), ss. 1284(2), 1295, 1300(2), Sch. 16; S.I. 2007/2194, arts. 1(3)(a), 8, Sch. 2 Pt. 2 (with art. 12)
Sch. 23: entry omitted (31.3.2006) by virtue of Companies (1986 Order) (Operating and Financial Review) (Repeal) Regulations (Northern Ireland) 2006 (S.R. 2006/94), reg. 2(2), Sch. para. 16 and said entry repealed (6.4.2008) by Companies Act 2006 (c. 46), ss. 1284(2), 1295, 1300(2), Sch. 16; S.I. 2007/3495, art. 8(a), Sch. 2 Pt. 2 (with arts. 7, 12)
Sch. 23: entry omitted (31.3.2006) by virtue of Companies (1986 Order) (Operating and Financial Review) (Repeal) Regulations (Northern Ireland) 2006 (S.R. 2006/94), reg. 2(2), Sch. para. 16
Sch. 23: entry omitted (31.3.2006) by virtue of Companies (1986 Order) (Operating and Financial Review) (Repeal) Regulations (Northern Ireland) 2006 (S.R. 2006/94), reg. 2(2), Sch. para. 16 and said entry repealed (6.4.2008) by Companies Act 2006 (c. 46), ss. 1284(2), 1295, 1300(2), Sch. 16; S.I. 2007/3495, art. 8(a), Sch. 2 Pt. 2 (with arts. 7, 12)
Sch. 23: the entry relating to art. 249(2) repealed (1.10.2007 for certain purposes and otherwise prosp.) by Companies Act 2006 (c. 46), ss. 1284(2), 1295, 1300(2), Sch. 16; S.I. 2007/2194, arts. 1(3)(a), 8, Sch. 2 Pt. 2 (with art. 12)
Sch. 23: the entry relating to arts. 249(2) and 250(2) repealed (1.10.2007 for certain purposes for art. 249(2) and otherwise 6.4.2008) by Companies Act 2006 (c. 46), ss. 1284(2), 1295, 1300(2), Sch. 16; S.I. 2007/2194, arts. 1(3)(a), 8, Sch. 2 Pt. 2 (with art. 12); S.I. 2007/3495, art. 8(a), Sch. 2 Pt. 2 (with arts. 7, 12)
Sch. 23: the entries relating to articles specified in Sch. 2 Pt. 2 of the commencing S.I. repealed (1.10.2007) by Companies Act 2006 (c. 46), ss. 1284(2), 1295, 1300(2), Sch. 16; S.I. 2007/2194, arts. 1(3)(a), 8, Sch. 2 Pt. 2 (with art. 12)
Sch. 23: the entries relating to articles specified in Sch. 3 Pt. 2 of the commencing S.I. repealed (1.10.2008) by Companies Act 2006 (c. 46), ss. 1284(2), 1295, 1300(2), Sch. 16; S.I. 2007/3495, art. 8(b), Sch. 3 Pt. 2 (with arts. 7, 12)
Sch. 23: entry inserted (1.1.2007) by Companies (Registrar, Languages and Trading Disclosures) Regulations 2006 (S.I. 2006/3429), reg. 6(2), Sch. 2 para. 4(b)
SR 1992/405
Sch. 23: the entry relating to art. 395(2) repealed (1.10.2007 with application to private companies otherwise 6.4.2008) by Companies Act 2006 (c. 46), ss. 1284(2), 1295, 1300(2), Sch. 16; S.I. 2007/2194, arts. 1(3)(a), 8, Sch. 2 Pt. 2 (with art. 12); S.I. 2007/3495, art. 8(a), Sch. 2 Pt. 2 (with arts. 7, 12)
Sch. 23: the entries relating to articles specified in Sch. 2 Pt. 2 of the commencing S.I. repealed (1.10.2007) by Companies Act 2006 (c. 46), ss. 1284(2), 1295, 1300(2), Sch. 16; S.I. 2007/2194, arts. 1(3)(a), 8, Sch. 2 Pt. 2 (with art. 12)
SR 1993/198
Article creating offence | General nature of offence | Mode of Prosecution | Punishment | Daily default fine (where applicable) |
|---|---|---|---|---|
17(3) | Company failing to deliver to registrar notice or other document, following alteration of its objects. | Summary. | One-fifth of the statutory maximum. | One-fiftieth of the statutory maximum. |
F101123(5) | F1011Person making false statement under Article 23(4) which he knows to be false or does not believe to be true |
| F10112 years or a fine; or both 12 months or the statutory maximum; or both | |
29(3) | Company failing to notify registrar of change in memorandum or articles. | Summary. | One-fifth of the statutory maximum. | One-fiftieth of the statutory maximum. |
30(2) | Company failing to send to one of its members a copy of the memorandum or articles, when so required by the member. | Summary. | One-fifth of the statutory maximum. | |
31(2) | Where company's memorandum altered, company issuing copy of its memorandum without the alteration. | Summary. | One-fifth of the statutory maximum for each occasion on which copies are so issued after the date of the alteration. | |
38(5) | Company failing to change name on direction of Department. | Summary. | One-fifth of the statutory maximum. | One-fiftieth of the statutory maximum. |
F101140(5C) | F1011Person making false statement under Article 40(5A) which he knows to be false or does not believe to be true |
| F10112 years or a fine; or both 12 months or the statutory maximum; or both | |
41(5) | Company altering its memorandum or articles, so ceasing to be exempt from having limited" as part of its name. | Summary. | The statutory maximum. | One-tenth of the statutory maximum. |
41(6) | Company failing to change name, on Department's direction, so as to have limited" at the end. | Summary. | One-fifth of the statutory maximum. | One-fiftieth of the statutory maximum. |
42(4) | Company failing to comply with Department's direction to change its name, on grounds that the name is misleading. | Summary. | One-fifth of the statutory maximum. | One-fiftieth of the statutory maximum. |
43 | Trading under misleading name (use of public limited company") when not so entitled; purporting to be a private company. | Summary. | One-fifth of the statutory maximum. | One-fiftieth of the statutory maximum. |
44 | Trading or carrying on business with improper use of limited". | Summary. | One-fifth of the statutory maximum. | One-fiftieth of the statutory maximum. |
F102144A | Trading with improper use of “community interest company” etc. | Summary | Level 3 on the standard scale | One-tenth of level 3 on the standard scale |
F101153(3B) | F1011Person making false statement under Article 53(3A) which he knows to be false or does not believe to be true |
| F10112 years or a fine; or both 12 months or the statutory maximum; or both | |
F101159(8B) | F1011Person making false statement under Article 59(8A) which he knows to be false or does not believe to be true |
| F10112 years or a fine; or both 12 months or the statutory maximum; or both | |
64(10) | Public Company failing to give notice, or office copy of court order, to registrar, concerning application to re-register as private company. | Summary. | One-fifth of the statutory maximum. | One fiftieth of the statutory maximum. |
F1012. . . | F1012. . . | F1012. . . | F1012. . . | F1012. . . |
90(9) | Directors exercising company's power of allotment without the authority required by Article 90(1). |
| A fine. The statutory maximum. | |
F1012. . . | F1012. . . | F1012. . . | F1012. . . | F1012. . . |
98(5) | Officer of company failing to deliver return of allotments, etc. to registrar. |
| A fine. The statutory maximum. | One-tenth of the statutory maximum. |
105(6) | Knowingly or recklessly authorising or permitting misleading, false or deceptive material in statement by directors under Article 105(5). |
| 2 years or a fine; or both. 6 months or the statutory maximum; or both. | |
F1012. . . | F1012. . . | F1012. . . | F1012. . . | F1012. . . |
120(2) | Making misleading, false or deceptive statement in connection with valuation under Article 113 or 114. |
| 2 years or a fine; or both. 6 months or the statutory maximum; or both. | |
121(3) | Officer of company failing to deliver copy of asset valuation report to registrar. |
| A fine. The statutory maximum. | One-tenth of the statutory maximum. |
121(4) | Company failing to deliver to registrar copy of resolution under Article 114(4), with respect to transfer of an asset as consideration for allotment. | Summary. | One-fifth of the statutory maximum. | One-fiftieth of the statutory maximum. |
124 | Contravention of any of the provisions of Articles 109 to 114 and 116. |
| A fine. The statutory maximum. | |
F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | |
F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | |
132(2) | Company failing to give notice to registrar of re-organisation of share capital. | Summary. | One-fifth of the statutory maximum. | One-fiftieth of the statutory maximum. |
133(4) | Company failing to give notice to registrar of increase of share capital. | Summary. | One-fifth of the statutory maximum. | One-fiftieth of the statutory maximum. |
137(5) | Company failing to forward to registrar office copy of court order, when application made to cancel resolution varying shareholders' rights. | Summary. | One-fifth of the statutory maximum. | One-fiftieth of the statutory maximum. |
138(5) | Company failing to send to registrar statement of notice required by Article 138 (particulars of shares carrying special rights). | Summary. | One-fifth of the statutory maximum. | One-fiftieth of the statutory maximum. |
139(4) | Company failing to deliver to registrar statement or notice required by Article 139 (registration of newly created class rights). | Summary. | One-fifth of the statutory maximum. | One-fiftieth of the statutory maximum. |
151 | Officer of company concealing name of creditor entitled to object to reduction of capital, wilfully misrepresenting nature or amount of debt or claim, etc. |
| A fine. The statutory maximum. | |
152(3) | Director authorising or permitting non-compliance with Article 152 (requirement to convene company meeting to consider serious loss of capital). |
| A fine. The statutory maximum. | |
153(2) | Company acquiring its own shares in breach of Article 153. |
| In the case of the company, a fine. |
|
|
|
| In the case of an officer of the company who is in default, 2 years or a fine; or both. |
|
|
|
| In the case of the company, the statutory maximum. |
|
|
|
| In the case of an officer of the company who is in default, 6 months or the statutory maximum; or both. |
|
159(2) | Company failing to cancel its own shares, acquired by itself, as required by Article 156(2); or failing to apply for re-registration as private company, as so required in the case there mentioned. | Summary. | One-fifth of the statutory maximum. | One-fiftieth of the statutory maximum. |
161(3) | Company giving financial assistance towards acquisition of its own shares. |
| Where the company is convicted, a fine. |
|
|
|
| Where an officer is convicted, 2 years or a fine; or both. |
|
|
|
| Where the company is convicted, the statutory maximum. |
|
|
|
| Where an officer of the company is convicted, 6 months or the statutory maximum; or both. |
|
166(6) | Company failing to register statutory declaration under Article 165. | Summary. | The statutory maximum. | One-fiftieth of the statutory maximum. |
166(7) | Director making statutory declaration under Article 165 without having reasonable grounds for opinion expressed in it. |
| 2 years, or a fine; or both. 6 months or the statutory maximum; or both. | |
F1013172G | F1013Contravention of any provision of Articles 172A to 172F (dealings by company in treasury shares, etc.) |
| F1013A fine The statutory maximum | |
179(6) | Default by company's officer in delivering to registrar the return required by Article 179 (disclosure by company of purchase of own shares). |
| A fine. The statutory maximum. | One-tenth of the statutory maximum. |
179(7) | Company failing to keep copy of contract, etc. at registered office; refusal of inspection to person demanding it. | Summary. | One-fifth of the statutory maximum. | One-fiftieth of the statutory maximum. |
F1013179A(4) | F1013Default by company's officer in delivering to registrar the return required by Article 179A (disclosure by company of cancellation or disposal of treasury shares) |
| F1013A fine The statutory maximum | F1013One-tenth of the statutory maximum. |
183(6) | Director making statutory declaration under Article 183 without having reasonable grounds for the opinion expressed in the declaration. |
| 2 years or a fine; or both. 6 months or the statutory maximum; or both. | |
185(6) | Refusal of inspection of statutory declaration and auditors' report under Article 183, etc. | Summary. | One-fifth of the statutory maximum. | One-fiftieth of the statutory maximum. |
186(4) | Company failing to give notice to registrar of application to court under Article 186, or to register court order. | Summary. | One-fifth of the statutory maximum. | One-fiftieth of the statutory maximum. |
F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
F1022. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1022. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1022. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1022. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | |
F1022. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1022. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1022. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1022. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1022. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
F1022. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1022. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1022. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1022. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | |
F1022. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1022. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1022. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1022. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | |
F1022. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1022. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1022. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1022. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | |
F1022. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1022. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1022. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1022. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1022. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
F1022. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1022. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1022. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1022. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1022. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
F1022. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1022. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1022. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1022. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1022. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | |
F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | |
F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | |
F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | |
F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | |
F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | |
F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | |
F1028. . . | F1028. . . | F1019. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1019. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | |
F1029. . . | F1029. . . | F1029. . . | F1029. . . | |
F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | |
F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | |
F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | |
F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | |
F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | |
F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | |
F1023. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1023. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1030. . . | F1030. . . | F1030. . . |
F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | |
F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | |
F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
F1031. . . | F1031. . . | F1031. . . | F1031. . . | F1031. . . |
F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | |
F1031. . . | F1031. . . | F1031. . . | F1031. . . | F1031. . . |
296(4) | Default in complying with Article 296 (keeping register of directors and secretaries, refusal of inspection). | Summary. | The statutory maximum. | One-tenth of the statutory maximum. |
299(5) | Acting as director of a company without having the requisite share qualification. | Summary. | One-fifth of the statutory maximum. | One-fiftieth of the statutory maximum. |
302(4) | Director failing to give notice of his attaining retirement age; acting as director under appointment invalid due to his attaining it. | Summary. | One-fifth of the statutory maximum. | One-fiftieth of the statutory maximum. |
F1014. . . | F1014. . . | F1014. . . | F1014. . . | F1014. . . |
313(3) | Company default in complying with Article 313 (directors' names to appear on company correspondence, etc.). | Summary. | One-fifth of the statutory maximum. | |
314(4) | Failure to state that liability of proposed director is unlimited; failure to give notice of that fact to person accepting office. |
| A fine. The statutory maximum. | |
F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | |
F1033. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1033. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1033. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1033. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | |
F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | |
F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | |
F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | |
F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | |
F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | |
F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | |
F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | |
F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | |
F1033. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1033. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1033. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1033. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1033. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
F1033. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1033. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1033. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1033. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | |
F1033. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1033. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1033. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1033. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | |
F1033. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1033. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1033. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1033. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | |
358(1) | Company failing to have its name engraved on company seal. | Summary. | One-fifth of the statutory maximum. | |
358(2) | Officer of company, etc. using company seal without name engraved on it. | Summary. | One-fifth of the statutory maximum. | |
F1033. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1033. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1033. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1033. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | |
F1033. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1033. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1033. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1033. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | |
F1020359(3)(ba) | Officer or agent of company causing appearance of website not complying with article 359(1) or (2) | Summary | Level 3 on the standard scale | |
360(5) | Company default in complying with Article 360 (requirement to keep register of members and their particulars). | Summary. | One-fifth of the statutory maximum. | One-fiftieth of the statutory maximum. |
F1025360A(3) | F1025Company default in complying with Article 360A (statement that company has only one member). | F1025Summary. | F1025A fine of £100. | F1025£10. |
361(4) | Company failing to send notice to registrar as to place where register of members is kept. | Summary. | One-fifth of the statutory maximum. | One-fiftieth of the statutory maximum. |
362(4) | Company failing to keep index of members. | Summary. | One-fifth of the statutory maximum. | One-fiftieth of the statutory maximum. |
F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | |
F1015371(3) | F1015Company failing to deliver annual return in due time. | Summary. | The statutory maximum. | One-tenth of the statutory maximum. |
F1015. . . | F1015. . . | F1015. . . | F1015. . . | F1015. . . |
F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | |
F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | |
F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | |
F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | |
F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | |
388(5) | Company failing to comply with Article 388 (copies of certain resolutions, etc. to be sent to registrar). | Summary. | One-fifth of the statutory maximum. | One-fiftieth of the statutory maximum. |
388(6) | Company failing to include copy of resolution to which Article 388 applies in its articles; failing to forward copy to member on request. | Summary. | One-fifth of the statutory maximum for each occasion on which copies are issued or, as the case may be, requested. | |
F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | |
F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | |
F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | |
F1015. . . | F1015. . . | F1015. . . | F1015. . . | F1015. . . |
F1032. . . | F1032. . . | F1032. . . | F1032. . . | F1032. . . |
F1015. . . | F1015. . . | F1015. . . | F1015. . . | F1015. . . |
F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | |
F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | |
F1015397A(4) | F1015Parent company failing to obtain from subsidiary undertaking information for purposes of audit. | F1015Summary. | F1015One-fifth of the statutory maximum. | |
F1015. . . | F1015. . . | F1015. . . | F1015. . . | F1015. . . |
F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
F1015. . . | F1015. . . | F1015. . . | F1015. . . | F1015. . . |
F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | |
F1015. . . | F1015. . . | F1015. . . | F1015. . . | F1015. . . |
F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | |
F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
406(3) | Company failing to send to registrar particulars of charge created by it, or of issue of debentures which requires registration. |
| A fine. The statutory maximum. | One-tenth of the statutory maximum. |
407(4) | Company failing to send to registrar particulars of charge on property acquired. |
| A fine. The statutory maximum. | One-tenth of the statutory maximum. |
410(3) | Authorising or permitting delivery of debenture or certificate of debenture stock, without endorsement on it of certificate of registration of charge. | Summary. | One-fifth of the statutory maximum. | |
F1011411(3) | F1011Person making false statement under Article 411(1A) which he knows to be false or does not believe to be true |
| F10112 years or a fine; or both 12 months or the statutory maximum; or both | |
413(4) | Failure to give notice to registrar of appointment of receiver or manager, or of his ceasing to act. | Summary. | One-fifth of the statutory maximum. | One-fiftieth of the statutory maximum. |
415(3) | Authorising or permitting omission from company's register of charges. |
| A fine. The statutory maximum. | |
416(3) | Officer of company refusing inspection of charging instrument or of register of charges. | Summary. | One-fifth of the statutory maximum. | One-fiftieth of the statutory maximum. |
F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | |
F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | |
F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | |
F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
F1026. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1026. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1026. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1026. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1026. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
F1026. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1026. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1026. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1026. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1026. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
437(3) | Failure to give Department, when required to do so, information about interests in shares, etc.; giving false information. |
| 2 years or a fine; or both. 6 months or the statutory maximum; or both. | |
440(6) | Failure to comply with requirement to produceF1015 documents imposed by Department under Article 440. |
| A fine. The statutory maximum. | |
F1015441(7) | F1015Obstructing the exercise of any rights conferred by a warrant or failing to comply with a requirement imposed under paragraph (3)(d). |
| A fine. The statutory maximum. | |
442(2) | Wrongful disclosure of information or document obtained under Article 440 or 441. |
| 2 years or a fine; or both. 6 months or the statutory maximum; or both. | |
443 | Destroying or mutilating company documents; falsifying such documents or making false entries; parting with such documents or altering them or making omissions. |
| 7 years or a fine; or both. 6 months or the statutory maximum; or both. | |
444 | Making false statement or explanation in purported compliance with Article 440. |
| 2 years or a fine; or both. 6 months or the statutory maximum; or both. | |
448(1) | Exercising a right to dispose of, or vote in respect of, shares which are subject to restrictions under Part XVI; failing to give notice in respect of shares so subject; entering into agreement void under Article 447(2) or (3). |
| A fine. The statutory maximum. | |
448(2) | Issuing shares in contravention of restrictions of Part XVI. |
| A fine. The statutory maximum. | |
F1026. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1026. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1026. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1026. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | |
F1026. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1026. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1026. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1026. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1026. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
F1016. . . | F1016. . . | F1016. . . | F1016. . . | F1016. . . |
602(3) | Person obtaining court order to declare company's dissolution void, the failing to send to registrar office copy of the order. | Summary. | One-fifth of the statutory maximum. | One-fiftieth of the statutory maximum. |
F1017603E(1) | F1017Person breaching or failing to perform duty imposed by Article 603B or 603C. |
| F1017A fine. The statutory maximum. | |
F1017603E(2) | F1017Person failing to perform duty imposed by Article 603B(6) or 603C(2) with intent to conceal the making of application under Article 603A. |
| F10177 years or a fine; or both. 6 months or the statutory maximum; or both. | |
F1017603F(1) | F1017Person furnishing false or misleading information in connection with application under Article 603A. |
| F1017A fine. The statutory maximum. | |
F1017603F(2) | F1017 Person making false application under Article 603A. |
| F1017A fine. The statutory maximum. | |
F1011634(7) | F1011Person making false statement under Article 634(4A) which he knows to be false or does not believe to be true |
| F10112 years or a fine; or both 12 months or the statutory maximum; or both | |
F1011635(4) | F1011Person making false statement under Article 635(2A) which he knows to be false or does not believe to be true |
| F10112 years or a fine; or both 12 months or the statutory maximum; or both | |
F1011641(5) | F1011Person making false statement under section 641(3A) which he knows to be false or does not believe to be true |
| F10112 years or a fine; or both 12 months or the statutory maximum; or both | |
647(1) | Part XXIII company failing to comply with any of Articles 641 to 643 or 646. | Summary. | For an offence which is not a continuing offence, one-fifth of the statutory maximum. For an offence which is a continuing offence, one-fifth of the statutory maximum. | One-fiftieth of the statutory maximum |
647(2) | Part XXIII company contravening Article 644(6) (carrying on business under its corporate name after Department's direction). |
| A fine. The statutory maximum. | One-tenth of the statutory maximum. |
F1018647(3) | F1018Part XXIII company failing to comply with Article 645A or Schedule 20A. | F1018Summary. | F1018For an offence which is not a continuing offence, a fine of £400. | F1018£40. |
652(1) | Part XXIII company failing to comply withF1031 requirements as to accounts and reports. |
| A fine. The statutory maximum. | One-tenth of the statutory maximum. |
F1018652Q(1) | F1018Company failing to register winding up or commencement of insolvency proceedings etc. |
| F1018A fine. A fine of £2,000. | F1018£100. |
F1018652Q(2) | F1018Liquidator failing to register appointment, termination of winding up or striking-off of company. |
| F1018A fine. A fine of £2,000. | F1018£100. |
F1016. . . | F1016. . . | F1016. . . | F1016. . . | F1016. . . |
F1026. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1026. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1026. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1026. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . | F1026. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |
671(3) | Company failing to comply with Article 671(2), as regards the manner of keeping registers, minute books and accounting records. | Summary. | One-fifth of the statutory maximum. | One-fiftieth of the statutory maximum. |
Sch. 14, Part II para. 1(3) | Company failing to give notice of location of external branch register, etc. | Summary. | One-fifth of the statutory maximum. | One-fiftieth of the statutory maximum. |
Sch. 14, Part II para. 4(2) | Company failing to transmit to its registered office in Northern Ireland copies of entries in external branch register, or to keep a duplicate of that register. | Summary. | One-fifth of the statutory maximum. | One-fiftieth of the statutory maximum. |
F1018Sch. 20C, Part I para. 6. | F1018Credit or financial institution failing to deliver accounting documents. |
| F1018A fine. A fine of £2,000. | F1018£100. |
F1018Sch. 20C, Part II para. 13. | F1018Credit or financial institution failing to deliver accounts and reports. |
| F1018A fine. A fine of £2,000. | F1018£100. |
F1018Sch. 20D, Part I para. 5. | F1018Company failing to deliver accounting documents. |
| F1018A fine. A fine of £2,000. | F1018£100. |
F1018Sch. 20D, Part II para. 13. | F1018Company failing to deliver accounts and reports. |
| F1018A fine. A fine of £2,000. | F1018£100. |
SCHEDULE 24ARTICLE 39 OF THE ORDER OF 1982, AS ORIGINALLY ENACTED
Relief from section 56 in respect of group reconstructions39
1
This Article applies where the issuing company—
a
is a wholly-owned subsidiary of another company ( “the holding company”); and
b
allots shares to the holding company or to another wholly-owned subsidiary of the holding company in consideration for the transfer to it of shares in another subsidiary (whether wholly-owned or not) of the holding company.
2
Where the shares in the issuing company allotted in consideration for the transfer are issued at a premium, the issuing company shall not be required by section 56 of the principal Act to transfer any amount in excess of the minimum premium value to the share premium account.
3
In paragraph (2) “the minimum premium value” means the amount (if any) by which the base value of the shares transferred exceeds the aggregate nominal value of the shares allotted in consideration for the transfer.
4
For the purposes of paragraph (3), the base value of the shares transferred shall be taken as—
a
the cost of those shares to the company transferring them; or
b
the amount at which those shares are stated in that company's accounting records immediately before the transfer;
whichever is the less.
5
Article 38 shall not apply in any case to which this Article applies.
Order revoked (1.1.2007 for the revocation of arts. 39(4), 52, 656A(1), 658, 660, 20.1.2007 for the revocation of arts. 206-228, 246(4A)-(4E), 247(2A)(2B), 259(2A)-(2E), 261(2A), 270 and 270A (for specified purposes), 374A(3A)(6), 377(5)-(11), 380(2A)(2B)(6A), 387A(2B)-(2F)(6), 6.4.2007 for the revocation of arts. 51, 301, 302, 319, 331-337, 351, 352, 432(2)(8) (for specified purposes), 432(3)(7), 446(2)(b), 669, 677, Sch. 13 Pts. 2-4, Sch. 22, 6.4.2007 for the revocation of arts. 2 (for specified purposes), 421-423F, Sch. 7 paras. 2, 2A, 2B, 1.10.2007 for the revocation of arts. 9, 135(6), 242(1) (for specified purposes), 242ZZB, 249 (for specified purposes), 254(4)(a) (for specified purposes), 254A(2A), 260, 261, 290, 293, 300, 311, 312, 317, 318 (for specified purposes), 320-324, 326-330, 330B, 338-355, 364, 365 (for specified purposes), 374-387, 387A91)(b)-(e), 388(1)(4)(a)(c)-(m), 389-391, 392 and 393 (for specified purposes), 393A, 394, 395-396A (for specified purposes), 401, 451-454, Sch. 13 Pt. 1, Sch. 15A, Sch. 23 (for specified purposes), 6.4.2008 for the revocation of art. 2 (for specified purposes), 10A-10C, 46A(2)(4)-(6), 46A93) (for specified purposes), 68, 91, 127, 128, 192(1)(b), 193-205, 229-242ZZA, 242ZA-259, 262-289, 291, 292, 294, 318, 360(6)(7), 388(4)(b), 392, 393, 395-396A, 397A-400A, 401A, 401B, 418-420A, 680-680B, Schs. 4-11, 15B, 23 (for specified purposes), 1.10.2008 for the revocation of arts. 161-163 and 165-168 (for specified purposes), 313, 325, 356, 357, 359, 675, Sch. 23 (for specified purposes) and 1.10.2009 in so far as not already in force) by Companies Act 2006 (c. 46), ss. 1284(2), 1300(2), Sch. 16; S.I. 2006/3428, art. 2(2)(h), 3(2)(e), 4(2), 7(a)(b)(c), Sch. 1 Pt. 2, Sch. 3 Pt. 2, Sch. 4 Pt. 2 (with arts. 6, 8(2), Sch. 1 paras. 7, 8, 15, Sch. 5 Pt. 2 (which transitional provisions in Sch. 1 are revoked (1.10.2009) by S.I. 2008/2860, arts. 1(2), 6(1)(a) (with arts. 5, 8, Sch. 2)); S.I. 2007/1093, art. 5, Sch. 2 Pt. 2 (with arts. 4, 11(1), Sch. 6 paras. 1, 5); S.I. 2007/2194, arts. 2(4), 8, Sch. 2 Pt. 2 (with arts. 7, 12(2), Sch. 3) (as amended: (30.9.2007) by S.I. 2007/2607, arts. 1, 4(2)(3); (31.12.2007) by S.I. 2007/3495, arts. 2(6)(a), 11, Sch. 5 para. 2(6); and (14.1.2008) by S.I. 2007/3495, arts. 2(6)(b), 11, Sch. 5 para. 2(2)(7) (as itself amended (6.4.2008) by S.I. 2008/674, arts. 2(3), 5, Sch. 3 para. 7)); S.I. 2007/3495, art. 5(2), 8(a)(b), Sch. 2 Pt. 2, Sch. 3 Pt. 2 (with arts. 7, 9, 12, Sch. 4) (as amended (6.4.2008) by S.I. 2008/674, arts. 2(3), 5, Sch. 3 para. 6); S.I. 2008/2860, art. 3(z), 4, Sch. 2 Pt. 2 (with arts. 7, 8, 63(5), Sch. 2 paras. 1, 114 (which transitional provisions in Sch. 2 are amended (1.10.2009) by S.I. 2009/2476, arts. 1(3), 2(3)(4) and by S.I. 2009/1802, arts. 1, 18, Sch.)) (as amended (1.10.2009) by S.I. 2009/1941, arts. 1(2), 13); and with further savings and transitional provisions (1.10.2009) in S.I. 2009/1801, reg. 1(2), Sch. 8 and S.I. 2009/1804, reg. 2(3), Schs. 1, 2