Part 18

Acquisition by limited company of its own shares
Chapter 5

Redemption or purchase by private company out of capital

Objection to payment by members or creditors

Application to court to cancel resolution
721
1
Where a private company passes a special resolution approving a payment out of capital for the redemption or purchase of any of its shares—
a
any member of the company (other than one who consented to or voted in favour of the resolution), and
b
any creditor of the company,
may apply to the court for the cancellation of the resolution.
2
The application—
a
must be made within five weeks after the passing of the resolution, and
b
may be made on behalf of the persons entitled to make it by such one or more of their number as they may appoint in writing for the purpose.
3
On an application under this section the court may if it thinks fit—
a
adjourn the proceedings in order that an arrangement may be made to the satisfaction of the court—
i
for the purchase of the interests of dissentient members, or
ii
for the protection of dissentient creditors, and
b
give such directions and make such orders as it thinks expedient for facilitating or carrying into effect any such arrangement.
4
Subject to that, the court must make an order either cancelling or confirming the resolution, and may do so on such terms and conditions as it thinks fit.
5
If the court confirms the resolution, it may by order alter or extend any date or period of time specified—
a
in the resolution, or
b
in any provision of this Chapter applying to the redemption or purchase to which the resolution relates.
6
The court’s order may, if the court thinks fit—
a
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
b
make any alteration in the company’s articles that may be required in consequence of that provision.
7
The court’s order may, if the court thinks fit, require the company not to make any, or any specified, amendments of its articles without the leave of the court.