Ordnance Factories and Military Services Act 1984

1 Transfer schemes. U.K.

(1) The Secretary of State may make a scheme which, or schemes each of which, provides for one or more of the following:—

(a) the transfer to a company of any prescribed property, rights or liabilities falling within section 2;

(b) the transfer of any prescribed property, rights or liabilities from a successor company or from different successor companies to a company or to different companies (whether or not it or any of them is a successor company immediately before the coming into force of the scheme);

(c) the transfer of any prescribed property, rights or liabilities from a successor company or from different successor companies to the Secretary of State or, in the case of copyright, to Her Majesty.

(2) A scheme may provide that prescribed securities of any prescribed transferee company shall be issued by the company in consideration of the transfer to the company, that they shall be credited as fully paid up, and that they shall be issued to the Secretary of State or a prescribed company.

(3) A scheme providing for a transfer under subsection (1)(b) or (c) may contain one or both of the following provisions:—

(a) that prescribed consideration shall be furnished for the transfer (whether consideration in cash, or by the issue of securities under a provision made by virtue of subsection (2), or otherwise);

(b) that in consequence of the transfer there shall be a prescribed reduction in the amount to be treated by a prescribed transferor company or transferee company as a reserve which represents its profits available for distribution (within the meaning of Part III of the M1 Companies Act 1980),

except that a scheme providing for a transfer to Her Majesty under subsection (1)(c) shall not contain (as regards that transfer) the provision mentioned in paragraph (a) of this subsection.

(4) A scheme may provide for one or more of the following in relation to any prescribed transferee company:—

(a) that for the purposes of any statutory accounts of the company, the value of any prescribed asset and the amount of any prescribed liability transferred to it under the scheme shall be taken, on the date the asset or liability is so transferred, to be a prescribed value or (as the case may be) a prescribed amount;

(b) that a prescribed amount shall be treated by the company as a reserve which represents its profits available for distribution (within the meaning of Part III of the Companies Act 1980);

(c) that in ascertaining for the purposes of section 56 of the M2 Companies Act 1948 what amount (if any) falls to be treated as a premium received on the issue of shares by the company in pursuance of a provision made by virtue of subsection (2) above, the value of the assets transferred to the company under the scheme shall be taken to be reduced by an amount corresponding to the amount of any reserve for which provision is made as regards the company by virtue of paragraph (b) above.

(5) In making a scheme under subsection (1)(b) or (c) the Secretary of State shall have regard to the object of securing (so far as practicable) that each transferor company and each transferee company will as a result of the scheme be no less able to pay its debts than it would have been if the scheme had not been made.

(6) A scheme may contain such supplementary, incidental, consequential or transitional provisions as may appear to the Secretary of State to be necessary or expedient after consulting the Treasury.

(7) A scheme is ineffective unless—

(a) it is made with the Treasury’s consent, and

(b) before making it, the Secretary of State consults each transferor company and each transferee company.

(8) In this section—

• “prescribed”, in relation to a scheme, means specified or described in or determined in accordance with the scheme;

• “statutory accounts”, in relation to a company, means accounts prepared for the purposes of any provision of the Companies Acts 1948 to 1983;

• “successor company”, in relation to a scheme, means a company in which any property, right or liability has before the making of the scheme vested by virtue of a provision (of another scheme) made under subsection (1);

• “transferee company” and “transferor company”, in relation to a scheme, mean respectively a company to which, and one from which, the scheme provides for a transfer under subsection (1).

Marginal Citations

M1 1980 c. 22.

M2 1948 c. 38.