Explanatory Notes

Companies Act 2006

2006 CHAPTER 46

8 November 2006

Commentary

Part 17: a Company’s Share Capital

Chapter 11: Miscellaneous and Supplementary Provisions
Section 656: Public companies: duty of directors to call meeting on serious loss of capital

976.Section 656 restates section 142(1) and (3) of the 1985 Act. It sets out the procedure that must be followed where the net assets of a public company fall below half (or less) of the company’s called up share capital. Subsection (4) imposes liability on any director who knowingly authorised or permitted a failure to call a meeting as required by this section.