Part 17

A company's share capital
Chapter 11

Miscellaneous and supplementary provisions

Public companies: duty of directors to call meeting on serious loss of capital
656
1
Where the net assets of a public company are half or less of its called-up share capital, the directors must call a general meeting of the company to consider whether any, and if so what, steps should be taken to deal with the situation.
2
They must do so not later than 28 days from the earliest day on which that fact is known to a director of the company.
3
The meeting must be convened for a date not later than 56 days from that day.
4
If there is a failure to convene a meeting as required by this section, each of the directors of the company who—
a
knowingly authorises or permits the failure, or
b
after the period during which the meeting should have been convened, knowingly authorises or permits the failure to continue,
commits an offence.
5
A person guilty of an offence under this section is liable—
a
on conviction on indictment, to a fine;
b
on summary conviction, to a fine not exceeding the statutory maximum.
6
Nothing in this section authorises the consideration at a meeting convened in pursuance of subsection (1) of any matter that could not have been considered at that meeting apart from this section.
Pts. 1-39 (except for Pt. 7 and ss. 662-669), 45-47 extended (12.5.2011) by The Companies Act 2006 (Consequential Amendments and Transitional Provisions) Order 2011 (S.I. 2011/1265), art. 5(1), Sch. 1 para. 2
Pts. 1-39 modified (31.12.2020) by Regulation (EC) No. 2157/2001, Art. AAA1(3) (as inserted by The European Public Limited-Liability Company (Amendment etc.) (EU Exit) Regulations 2018 (S.I. 2018/1298), regs. 1, 97 (with regs. 140-145) (as amended by S.I. 2020/523, regs. 1(2), 5(a)-(f)); 2020 c. 1, Sch. 5 para. 1(1))