Companies Act 1985

Act: definitions of "extraordinary resolution", "registrar of companies" and "special resolution" applied (E.W.) (1.12.1991) by Statutory Water Companies Act 1991 (c. 58, SIF 130), ss. 12(8), 17(2)

C40

Act restricted (16.10.1992) by Trade Union and Labour Relations (Consolidation) Act 1992 (c. 52), ss. 10, 302

Act restricted (6.1.1994) by 1993 c. 43, s. 114(1); S.I. 1993/3237, art. 2(2)

C41

Act extended (with modifications) (19.12.1993) by S.I. 1993/3245, reg.3

C42

Act modified (31.10.1994) by 1994 c. 21, s. 15, Sch. 3 para. 2(4)(b) (with s. 40(7)); S.I. 1994/2552, art. 2, Sch. 1

Act modified (31.10.1994) by 1994 c. 21, s. 67(1), Sch. 9 para. 32 (with s. 40(7)); S.I. 1994/2553, art. 2

Act modified (8.11.1995) by 1995 c. 37, s. 6, Sch. 2 para. 1(5)(b)

Act modified (8.11.1995) by 1995 c. 45, s. 17(1), Sch. 5 Pt. I paras. 1, 8(c)

Act modified (27.7.1999) by 1999 c. 20, s. 5(1), Sch. 2 Pt. II (with s. 15)

Act modified (27.7.1999) by 1999 c. 20, s. 6(2)(b) (with s. 15)

Act modified (temp. from 27.7.1999) by 1999 c. 20, s. 16(1)(4)(b) (with s. 15)

Act modified (6.11.2000) by 2000 c. 26, s. 63(7)(b); S.I. 2000/2957, art. 2(1), Sch. 1 (with transitional provisions in arts. 3-8)

Act modified (16.2.2001) by 2000 c. 27, s. 108, Sch. 7 paras. 8, 9; S.I. 2001/1781, art. 2, Sch. (subject to transitional provisions in arts. 3-10)

Act modified (5.10.2004) by Energy Act 2004 (c. 20), ss. 39, 198(2), Sch. 6 para. 2(4)(c) (with s. 38(2)); S.I. 2004/2575, art. 2(1), Sch. 1

C43

Act amended (8.11.1995) by 1995 c. 37, s. 6, Sch. 2 para. 14

C44

Act excluded and modified (31.3.1996) by 1995 c. 20, s. 110(1), Sch. 4 para. 3(3)(7) (which amendment was repealed (1.4.1996) by 1995 c. 40, s. 6(1), Sch. 5)

C45

Act excluded (3.2.1995) by 1994 c. 37, ss. 66(1), 69(2), Sch. 2 para. 6 (with s. 66(2))

Act excluded (31.3.1996) by 1995 c. 20, s. 110(1), Sch. 4 para. 4(3)(5) (which amendment was repealed (1.4.1996) by 1995 c. 40, s. 6(1), Sch. 5)

Act excluded (in part) (E.W.) (17.6.1996) by 1996 c. ii, s. 4(2)

Act excluded (E.W.) (1.10.1996) by 1996 c. 52, s. 7, Sch. 1 Pt. II para. 15(2) (with s. 51(4)); S.I. 1996/2402, art. 3 (subject to transitional provisions and savings in Sch.)

Act excluded (S.) (1.11.2001) by 2001 asp 10, s. 63, Sch. 7 Pt. II para. 12(3); S.S.I. 2001/336, art. 2(1)(3), Sch. Pt. II (subject to transitional provisions and savings in art. 3)

Act excluded (S.) (17.12.2001) by 2001 asp 13, s. 20, Sch. 6 para. 9(5) (with s. 29); S.S.I. 2001/456, art. 2

Act excluded (E.W.N.I.) (1.9.2001) by 2001 c. 17, s. 38, Sch. 6 para. 11(5) (with ss. 27(3), 39, 78); S.I. 2001/2161, art. 3

Act excluded (24.3.2003) by Proceeds of Crime Act 2002 (c. 29), ss. 426(10)(a), 458(1)(3); S.I. 2003/333, art. 2, Sch. 1 (as amended by S.I. 2003/531)

C46

Act extended (6.1.1997) by S.I. 1996/2827, reg. 2(4)

C47

Act applied (with modifications) (1.6.1998) by 1998 c. 11, s. 7(3)(9); S.I. 1998/1120, art. 2

C48

Act: specified provisions applied (with modifications) (6.4.2001) by S.I. 2001/1090, reg. 4(1), Sch. 2 Pt. 1 (as amended (1.10.2009) by S.I. 2009/1804, reg. 85, Sch. 3 para. 13(3)(5) (as amended by S.I. 2009/1833, reg. 2(2)))

C49

Act modified (1.1.2007, 20.1.2007, 6.4.2007, 1.10.2007, 1.11.2007, 15.12.2007, 6.4.2008, 1.10.2008 for certain purposes, otherwise 1.10.2009) by Companies Act 2006 (c. 46), ss. 1168, 1173, 1300; S.I. 2006/3428, arts. 2(2)(f)(g), 3(2)(c)(d) (subject to Sch. 1, and with art. 6, and with transitional provisions and savings in art. 8, Sch. 5) (as amended by S.I. 2007/3495, art. 11, Sch. 5 and S.I. 2008/2860, art. 6); S.I. 2007/1093, arts. 2(2)(g)(h) (with arts. 4, 11(1) and subject to transitional adaptations in Sch. 1) (as amended by S.I. 2008/2194, arts. 2(3)(j)(k)3(2)(d), 4(2)(a), (with saving in art. 12 and with transitional provisions and savings in Sch. 3 and subject to transitional adaptations specified in Sch. 1) (as amended by S.I. 2007/2607, art. 4); S.I. 2007/3495, arts. 3(3)(i)(j), 5(3)(b)(c) (with transitional provisions in arts. 6, 9, Sch. 4 and with savings in arts. 7, 12 and with transitional adaptations in Sch. 1) (as amended by S.I. 2008/1886, Sch. 4 para. 15); S.I. 2008/2860, art. 2(u) (with arts. 5, 7, 8, Sch. 2 (as amended by S.I. 2009/1802, art. 18, Sch., S.I. 2009/1941, art. 13, S.I. 2009/2476, art. 2))

C50

Act: power to apply conferred (20.1.2007 for certain purposes and otherwise 1.10.2009) by Companies Act 2006 (c. 46), ss. 1042, 1300; S.I. 2006/3428, art. 3(3) (subject to art. 5, Sch. 1 and with arts. 6, 8, Sch. 5 (as amended by S.I. 2007/3495, art. 11, Sch. 5)); S.I. 2008/2860, art. 3(p) (with arts. 5, 7, 8, Sch. 2 (as amended by S.I. 2009/1802, art. 18, Sch.))

C51

Act: power to apply (with modifications) conferred (20.1.2007 for specified purposes and 6.4.2007 otherwise) by Companies Act 2006 (c. 46), ss. 1043(2), 1300; S.I. 2006/3428, art. 3(3), (subject to art. 5, Sch. 1 and with arts. 6, 8, Sch. 5 (as amended by S.I. 2007/3495, art. 11, Sch. 5)); S.I. 2007/1093, art. 2(1)(c)

C52

Act excluded (20.1.2007, 6.4.2007, 1.10.2007, 6.4.2008 and 1.10.2008 for certain purposes and otherwise 1.10.2009) by Companies Act 2006 (c. 46), ss. 1129, 1300 (with s. 1133); S.I. 2006/3428, art. 3(2)(b) (subject to art. 5, Sch. 1 and with arts. 6, 8, Sch. 5 (as amended by S.I. 2007/3495, art. 11, Sch. 5)); S.I. 2007/1093, art. 2(2)(c); S.I. 2007/2194, art. 2(1)(l)(3)(h) (with art. 12); S.I. 2007/3495, arts. 3(3)(g), 5(3)(a) (with arts. 7, 12); S.I. 2008/2860, art. 3(s) (with arts. 5, 7, 8, Sch. 2 (as amended by S.I. 2009/1802, art. 18, Sch.))

C53

Act modified (20.1.2007 for certain purposes and otherwise 1.10.2009) by Companies Act 2006 (c. 46), ss. 583, 1300; S.I. 2006/3428, art. 3(3) (subject to art. 5, Sch. 1 and with arts. 6, 8, Sch. 5 (as amended by S.I. 2007/3495, art. 11, Sch. 5)); S.I. 2008/2860, art. 3(k) (with arts. 5, 7, 8, Sch. 2 (as amended by S.I. 2009/1802, art. 18, Sch.))

C54

Act modified (20.1.2007 for certain purposes and otherwise 1.10.2009) by Companies Act 2006 (c. 46), ss. 1081(6), 1300; S.I. 2006/3428, art. 3(3) (subject to art. 5, Sch. 1 and with arts. 6, 8, Sch. 5 (as amended by S.I. 2007/3495, art. 11, Sch. 5)); S.I. 2008/2860, art. 3(r) (with arts. 5, 7, 8, Sch. 2 (as amended by S.I. 2009/1802, art. 18, Sch.))

C55

Act modified (20.1.2007, 6.4.2007, 1.10.2007, 6.4.2008 and 1.10.2008 for certain purposes and otherwise 1.10.2009) by Companies Act 2006 (c. 46), ss. 1125(1), 1300 (with s. 1133); S.I. 2006/3428, art. 3(2)(b) (subject to art. 5, Sch. 1 and with arts. 6, 8, Sch. 5 (as amended by S.I. 2007/3495, art. 11, Sch. 5)); S.I. 2007/1093, art. 2(2)(c); S.I. 2007/2194, art. 2(1)(l)(3)(h) (with art. 12, Sch. 3 para. 48 and subject to Sch. 1); S.I. 2007/3495, arts. 3(3)(g), 5(3)(a) (with arts. 7, 12); S.I. 2008/2860, art. 3(s) (with arts. 5, 7, 8, Sch. 2 (as amended by S.I. 2009/1802, art. 18, Sch.))

C56

Act modified (20.1.2007, 6.4.2007, 1.10.2007, 6.4.2008 and 1.10.2008 for certain purposes and otherwise 1.10.2009) by Companies Act 2006 (c. 46), ss. 1131, 1300 (with s. 1133); S.I. 2006/3428, art. 3(2)(b) (subject to art. 5, Sch. 1 and with arts. 6, 8, Sch. 5 (as amended by S.I. 2007/3495, art. 11, Sch. 5)); S.I. 2007/1093, art. 2(2)(c); S.I. 2007/2194, art. 2(1)(l)(3)(h) (with art. 12); S.I. 2007/3495, arts. 3(3)(g), 5(3)(a) (with arts. 7, 12); S.I. 2008/2860, art. 3(s) (with arts. 5, 7, 8, Sch. 2 (as amended by S.I. 2009/1802, art. 18, Sch.))

C57

Act restricted (20.1.2007 for certain purposes and otherwise 1.10.2009) by Companies Act 2006 (c. 46), ss. 1156(2), 1300; S.I. 2006/3428, art. 3(3) (subject to art. 5, Sch. 1 and with arts. 6, 8, Sch. 5 (as amended by S.I. 2007/3495, art. 11, Sch. 5)); S.I. 2008/2860, art. 3(t) (with arts. 5, 7, 8, Sch. 2 (as amended by S.I. 2009/1802, art. 18, Sch.))

C58

Act modified (6.4.2007, 1.10.2007, 1.11.2007 and 6.4.2008 for certain purposes and otherwise 1.10.2009) by Companies Act 2006 (c. 46), ss. 546, 1300; S.I. 2007/1093, art. 2(2)(a); S.I. 2007/2194, arts. 2(3)(e), 3(2)(b) (with art. 12); S.I. 2007/3495, art. 3(3)(d) (with arts. 7, 12); S.I. 2008/2860, art. 3(k) (with arts. 5, 7, 8, Sch. 2 (as amended by S.I. 2009/1802, art. 18, Sch.))

C59

Act modified (6.4.2007 for certain purposes and otherwise 1.10.2009) by Companies Act 2006 (c. 46), ss. 558, 1300 (with s. 559); S.I. 2007/1093, art. 2(2)(b); S.I. 2008/2860, art. 3(k) (with arts. 5, 7, 8, Sch. 2 (as amended by S.I. 2009/1802, art. 18, Sch.))

C60

Act modified (6.4.2007 for certain purposes and otherwise 1.10.2009) by Companies Act 2006 (c. 46), ss. 1060(3)(4), 1300; S.I. 2006/3428, art. 4(3)(a) (subject to art. 5, Sch. 1 and with arts. 6, 8, Sch. 5 (as amended by S.I. 2007/3495, art. 11, Sch. 5)); S.I. 2008/2860, art. 3(r) (with arts. 5, 7, 8, Sch. 2 (as amended by S.I. 2009/1802, art. 18, Sch.))

C61

Act modified (6.4.2007) by Companies Act 2006 (c. 46) {ss. 1170}, 1300; S.I. 2007/1093, art. 2(1)(d) (with arts. 3, 11(1) and with savings in Sch. 6) (as amended by S.I. 2003/2860, art. 6)

C62

Act modified (6.4.2007) by The Companies Acts (Unregistered Companies) Regulations 2007 (S.I. 2007/318), regs. {4}, {5} (with reg. 6)

C63

Act modified (30.9.2007) by Companies Act 2006 (c. 46) {ss. 1167}, 1300; S.I. 2007/2607, art. 2(1) (with art. 3)

C64

Act modified (1.10.2007) by Companies Act 2006 (c. 46), ss. 288(1), 1300 (with s. 281(4)); S.I. 2007/2194, art. 2(1)(f) (with art. 12, Sch. 3 para. 24 and subject to Sch. 1)

C65

Act modified (1.10.2007 and 6.4.2008 for certain purposes and otherwise 1.10.2009) by Companies Act 2006 (c. 46), ss. 540(1)(4), 1300; S.I. 2007/2194, art. 2(3)(c) (with art. 12); S.I. 2007/3495, art. 3(3)(b) (with arts. 7, 12); S.I. 2008/2860, art. 3(k) (with arts. 5, 7, 8, Sch. 2 (as amended by S.I. 2009/1802, art. 18, Sch.))

C66

Act modified (1.10.2007 and 6.4.2008 for certain purposes and otherwise 1.10.2009) by Companies Act 2006 (c. 46), ss. 545, 1300; S.I. 2007/2194, art. 2(3)(d) (with art. 12); S.I. 2007/3495, art. 3(3)(c) (with arts. 7, 12); S.I. 2008/2860, art. 3(k) (with arts. 5, 7, 8, Sch. 2 (as amended by S.I. 2009/1802, art. 18, Sch.))

C67

Act modified (1.10.2007 and 6.4.2008 for certain purposes and otherwise 1.10.2009) by Companies Act 2006 (c. 46), ss. 548, 1300; S.I. 2007/2194, art. 2(3)(f) (with art. 12); S.I. 2007/3495, art. 3(3)(e) (with arts. 7, 12); S.I. 2008/2860, art. 3(k) (with arts. 5, 7, 8, Sch. 2 (as amended by S.I. 2009/1802, art. 18, Sch.))

C68

Act modified (1.10.2007 and 6.4.2008 for certain purposes and otherwise 1.10.2009) by Companies Act 2006 (c. 46), ss. 629, 1300; S.I. 2007/2194, art. 2(3)(g) (with art. 12); S.I. 2007/3495, art. 3(3)(f) (with arts. 7, 12); S.I. 2008/2860, art. 3(k) (with arts. 5, 7, 8, Sch. 2 (as amended by S.I. 2009/1802, art. 18, Sch.))

C69

Act modified (1.10.2007 and 1.11.2007 for certain purposes and otherwise 1.10.2009) by Companies Act 2006 (c. 46), ss. 1158, 1300; S.I. 2007/2194, arts. 2(3)(i), 3(2)(b) (with art. 12 and subject to Sch. 1); S.I. 2008/2860, art. 3(u) (with arts. 5, 7, 8, Sch. 2 (as amended by S.I. 2009/1802, art. 18, Sch.))

C70

Act applied (30.11.2007 with application as mentioned in rule 3 of the amending S.I.) by The PPP Administration Order Rules 2007 (S.I. 2007/3141), rule 32(5)

C71

Act modified (6.4.2008) by Companies Act 2006 (c. 46), ss. 437(3), 1300; S.I. 2007/3495, art. 3(1)(d) (with arts. 7, 12, Sch. 4 paras. 6-8)

C72

Act modified (6.4.2008) by Companies Act 2006 (c. 46), ss. 738, 1300; S.I. 2007/3495, art. 3(1)(g) (with arts. 7, 12, Sch. 4 paras. 20-23)

C73

Act modified (6.4.2008 for certain purposes and otherwise 1.10.2009) by Companies Act 2006 (c. 46), ss. 1161, 1162, 1171, 1173, 1174, 1300, Schs. 7, 8; S.I. 2007/3495, arts. 3(1)(o)(p)(q) (with arts. 6, 7, 9, 12, Sch. 4, and subject to Sch. 1) (as amended by S.I. 2008/1886, Sch 4 para. 15); S.I. 2008/2860, art. 3(u) (with arts. 5, 7, 8, Sch. 2 (as amended by S.I. 2009/1802, art. 18, Sch.))

C74

Act applied in part (with modifications) by European Economic Interest Grouping Regulations 1989 (S.I. 1989/638), reg. 18, Sch. 4 (as amended (6.4.2008) by The Companies Act 2006 (Consequential Amendments etc) Order 2008 (S.I. 2008/948), arts. 2(2), 3(1), Sch. 1 paras. 163, 164 (with arts. 6, 11, 12))

C75

Act applied in part (with modifications) by European Economic Interest Grouping Regulations (Northern Ireland) 1989 (S.R. 1989/216), reg. 18, Sch. 4 (as amended (6.4.2008) by The Companies Act 2006 (Consequential Amendments etc) Order 2008 (S.I. 2008/948), arts. 2(2), 3(1), Sch. 1 paras. 173, 174 (with arts. 6, 11, 12))

C76

Act modified (21.2.2009) by The Banking Act 2009 (Parts 2 and 3 Consequential Amendments) Order 2009 (S.I. 2009/317), art. 3, Sch.

C77

Act modified (1.10.2009) by Companies Act 2006 (c. 46), ss. 1163, 1166, 1171, 1174, 1300, Sch. 8; S.I. 2008/2860, art. 3(u) (with arts. 5, 7, 8, Sch. 2) (as amended by S.I. 2009/1802 art. 18, S.I. 2009/1941, art. 13, S.I. 2009/2476, art. 2)

C78

Act modified (1.10.2009) by Companies Act 2006 (c. 46), ss. 1(1), 1300; S.I. 2008/2860, art. 3(a) (with arts. 5, 7, 8, Sch. 2 (as amended by S.I. 2009/1802, art. 18, Sch.))

C79

Act restricted (1.10.2009) by Companies Act 2006 (c. 46), ss. 6(2), 1300; S.I. 2008/2860, art. 3(a) (with arts. 5, 7, 8, Sch. 2 (as amended by S.I. 2009/1802, art. 18, Sch.))

C80

Act modified (1.10.2009) by Companies Act 2006 (c. 46), ss. 547, 1300; S.I. 2008/2860, art. 3(k) (with arts. 5, 7, 8, Sch. 2 (as amended by S.I. 2009/1802, art. 18, Sch.))

C81

Act modified (1.10.2009) by Companies Act 2006 (c. 46), ss. 724(5), 1300; S.I. 2008/2860, art. 3(l) (with arts. 5, 7, 8, Sch. 2 (as amended by S.I. 2009/1802, art. 18, Sch.))

C82

Act modified (1.10.2009) by Companies Act 2006 (c. 46), ss. 1044, 1300; S.I. 2008/2860, art. 3(q) (with arts. 5, 7, 8, Sch. 2 (as amended by S.I. 2009/1802, art. 18, Sch.))

C83

Act restricted (1.10.2009) by Companies Act 2006 (c. 46), ss. 1118, 1300; S.I. 2008/2860, art. 3(r) (with arts. 5, 7, 8, Sch. 2 (as amended by S.I. 2009/1802, art. 18, Sch.))

C84

Act modified by Companies Act 2006 (c. 46), ss. 1170A, 1170B (as inserted (1.10.2009) by The Companies Act 2006 (Consequential Amendments, Transitional Provisions and Savings) Order 2009 (S.I. 2009/1941), art. 2(1), {Sch. 1 para. 260(8})

C85

Act extended (1.10.2009) by The Companies Act 2006 (Consequential Amendments, Transitional Provisions and Savings) Order 2009 (S.I. 2009/1941), art. 12(1), Sch. 3 para. 2 (with art. 10)

C86

Act: savings for the effects of 2006 c. 46, Sch. 16 (1.10.2009) by The Overseas Companies Regulations 2009 (S.I. 2009/1801), reg. 80, Sch. 8

C87

Act: savings for the effects of 2006 c. 46, Sch. 16 (1.10.2009) by The Limited Liability Partnerships (Application of Companies Act 2006) Regulations 2009 (S.I. 2009/1804), reg. 83, Sch. 1

C88

Act applied (with modifications) (1.10.2009) by The Unregistered Companies Regulations 2009 (S.I. 2009/2436), regs. 3-5, Sch. 1 para. 21 (with transitional provisions and savings in regs. 7, 9, Sch. 2)

C89

Act applied (with modifications) (1.10.2009) by The Companies (Companies Authorised to Register) Regulations 2009 (S.I. 2009/2437), regs. 18-23 (with transitional provisions and savings in reg. 24)

C90

Act modified (prosp.) by Horserace Betting and Olympic Lottery Act 2004 (c. 25), ss. 5(3)(b), 40

Act modified (prosp.) by Horserace Betting and Olympic Lottery Act 2004 (c. 25), ss. 7, 40

Part I Formation and Registration of Companies; Juridical Status and Membership

Chapter I Company Formation

Memorandum of association

1 Mode of forming incorporated company.

F1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2 Requirements with respect to memorandum.

F2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3 Forms of memorandum.

F3. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3A Statement of company’s objects: general commercial company.

F4. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4 Resolution to alter objects.

F5. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5 Procedure for objecting to alteration.

F6. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6 Provisions supplementing ss. 4, 5.

F7. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Articles of association

7 Articles prescribing regulations for companies.

F8. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8 Tables A, C, D and E.

F9. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8A Table G.

F10. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9 Alteration of articles by special resolution.

F11. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Registration and its consequences

10 Documents to be sent to registrar.

F12. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11 Minimum authorised capital (public companies).

F13. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

12 Duty of registrar.

F14. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

13 Effect of registration.

F15. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

14 Effect of memorandum and articles.

F16. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15 Memorandum and articles of company limited by guarantee.

F17. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

16 Effect of alteration on company’s members.

F18. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

17 Conditions in memorandum which could have been in articles.

F19. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

18 Amendments of memorandum or articles to be registered.

F20. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

19 Copies of memorandum and articles to be given to members.

F21. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

20 Issued copy of memorandum to embody alterations.

F22. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

21. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F23. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

A company’s membership

22 Definition of “member”.

F24. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

23 Membership of holding company.

F25. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

24 Minimum membership for carrying on business.

F26. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Chapter II Company Names

25 Name as stated in memorandum.

F27. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

26 Prohibition on registration of certain names.

F28. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

27 Alternatives of statutory designations.

F29. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

28 Change of name.

F30. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

29 Regulations about names.

1

F31. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2

F31. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3

F31. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4

F32. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5

F31. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6

F31. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

30 Exemption from requirement of “limited” as part of the name.

F33. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

31 Provisions applying to company exempt under s. 30.

F34. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

32 Power to require company to abandon misleading name.

F35. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

33 Prohibition on trading under misleading name.

F36. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

34 Penalty for improper use of “limited” or “cyfyngedig”.

F37. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

34APenalty for improper use of “community interest company” etc.

F38. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Chapter III A Company’s Capacity; Formalities of Carrying on Business

35 A company’s capacity not limited by its memorandum.

F39. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

35A Power of directors to bind the company.

F40. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

35B No duty to enquire as to capacity of company or authority of directors.

F41. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

36 Company contracts: England and Wales.

F42. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

36A Execution of documents: England and Wales.

1

F43. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2

F44. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3

F43. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4

F44. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4A

F44. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5

F44. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6

F44. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7

F44. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8

F44. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

36AAExecution of deeds: England and Wales

F45. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

36B Execution of documents by companies.

F46. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

36C Pre-incorporation contracts, deeds and obligations.

F47. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

37 Bills of exchange and promissory notes.

F48. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

38 Execution of deeds abroad.

F49. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

39 Power of company to have official seal for use abroad.

F50. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

40 Official seal for share certificates, etc.

F51. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

41 Authentication of documents.

F52. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

42 Events affecting a company’s status.

F53. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Part II Re-registration as a means of altering a company’s status

Private company becoming public

43 Re-registration of private company as public.

F54. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

44 Consideration for shares recently allotted to be valued.

F55. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

45 Additional requirements relating to share capital.

F56. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

46 Meaning of “unqualified report” in s. 43(3).

F57. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

47 Certificate of re-registration under s. 43.

F58. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

48 Modification for unlimited company re-registering.

F59. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Limited company becoming unlimited

49 Re-registration of limited company as unlimited.

F60. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

50 Certificate of re-registration under s. 49.

F61. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Unlimited company becoming limited

51 Re-registration of unlimited company as limited.

F62. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

52 Certification of re-registration under s. 51.

F63. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Public company becoming private

53 Re-registration of public company as private.

F64. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

54 Litigated objection to resolution under s. 53.

F65. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

55 Certificate of re-registration under s. 53.

F66. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F71 C101 F72Part III Capital Issues

Annotations:

Amendments (Textual)

F71

Pt. III (ss. 56-79) repealed by Financial Services Act 1986 (c. 60, SIF 69), ss. 211(1), 212(3), Sch. 17 Pt. I (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.)

F72

Ss. 56-79 repealed (prosp.) by Companies Act 2006 (c. 46), ss. 1295, 1300, Sch. 16 and the repeal being partly in force, as to which see individual sections.

Modifications etc. (not altering text)

C101

Pt. III (ss. 56-79): functions transferred from the Secretary of State to the Treasury (7.6.1992) by S.I. 1992/1315, arts. 2(3)(4), 6.

C95Chapter I Issues by Companies Registered, or to be Registered, in Great Britain

Annotations:

Modifications etc. (not altering text)

C95

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.

57 Attempted evasion of s. 56 to be void.

A condition requiring or binding an applicant for shares in or debentures of a company to waive compliance with any requirement of section 56, or purporting to affect him with notice of any contract, document or matter not specifically referred to in the prospectus, is void.

58 Document offering shares etc. for sale deemed a prospectus.

F67. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F6859. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F6960. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

61 Prospectus containing statement by expert.

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

C92b

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 section, the company and every person who is knowingly a party to the issue of the prospectus is liable to a fine.

62 Meaning of “expert”.

F70. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

C9363 Prospectus to be dated.

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

64 Registration requirement applicable in all cases.

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 of companies 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 section 61 from any person as an expert.

2

Where the prospectus is such a document as is referred to in section 58, the signatures required by subsection (1) above 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 subsection if the document is signed on its behalf by two 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.

C943

Every prospectus shall on its face—

a

state that a copy has been delivered for registration as required by this section, and

b

specify, or refer to statements in the prospectus specifying, any documents required by this or the following section 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 section and unless it has endorsed on or attached to it the documents (if any) specified in subsection (3)(b).

5

If a prospectus is issued without a copy of it being delivered to the registrar as required by this section, 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.

65 Additional requirements in case of prospectus issued generally.

1

In the case of a prospectus issued generally (that is to persons who are not existing members or debenture holders of the company), the following provisions apply in addition to those of section 64.

2

The copy of the prospectus delivered to the registrar of companies 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 subsection (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 persons 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 the 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

66 Directors, etc. exempt from liability in certain cases.

1

In the event of non-compliance with or contravention of section 56, a director or other person responsible for the prospectus does not incur any liability by reason of that non-compliance or contravention if—

a

as regards any matter not disclosed, he proves that he was not cognisant of it, or

b

he proves that the non-compliance or contravention arose from an honest mistake of fact on his part, or

c

the non-compliance or 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 section 56 or 57 or this section limits or diminishes any liability which a person may incur under the general law or this Act apart from those provisions.

67 Compensation for subscribers misled by statement in prospectus.

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

The above has effect subject to the two sections next following; and here and in those sections “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.

that, having given his consent under the section 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.

69 Indemnity for innocent director or expert.

1

This section applies where—

It is unlawful for a person to issue, circulate or distribute in Great Britain any prospectus offering for subscription shares in or debentures of a company incorporated or to be incorporated outside Great Britain (whether the company has or has not established, or when formed will or will not establish, a place of business in Great Britain) unless the prospectus complies with the requirements of the next two subsections.

C962

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 Great Britain 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 Great Britain and, if so, the address of its principal office in Great Britain.

C963

Subject to the following provisions, the prospectus must comply—

by subsection (3) of that section, 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.

74 Prospectus containing statement by expert.

1

This section applies in the case of a prospectus offering for subscription shares in or debentures of a company incorporated or to be incorporated outside Great Britain (whether it has or has not established, or when formed will or will not establish, a place of business in Great Britain), 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 Great Britain such a prospectus if—

a

the expert has not given, or has before 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

C97b

there does not appear in the prospectus a statement that he has given and has not withdrawn his consent as above mentioned.

3

For purposes of this section, 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.

C9875 Restrictions on allotment to be secured in prospectus.

1

It is unlawful for a person to issue, circulate or distribute in Great Britain a prospectus offering for subscription shares in or debentures of a company incorporated or to be incorporated outside Great Britain (whether the company has or has not established, or when formed will or will not establish, a place of business in Great Britain), 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 sections 82, 86 and 87 (restrictions on allotment), so far as applicable.

76 Stock exchange certificate exempting from compliance with Sch. 3.

1

The following 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 Great Britain (whether the company has or has not established, or when formed will or will not establish, a place of business in Great Britain), and

b

application is made to a prescribed stock exchange for permission for those shares or debentures to be listed on that stock exchange.

“Issued generally” means issued to persons who are not existing members or debenture holders of the company.

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 persons to whom the offer is to be made, compliance with Schedule 3 would be unduly burdensome.

3

If a certificate is given under subsection (2), and if the proposals above mentioned 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, section 72 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.

77 Registration of oversea prospectus before issue.

1

It is unlawful for a person to issue, circulate or distribute in Great Britain a prospectus offering for subscription shares in or debentures of a company incorporated or to be incorporated outside Great Britain (whether the company has or has not established, or when formed will or will not establish, a place of business in Great Britain), unless before the issue, circulation or distribution the requirements of this section 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 of companies.

C993

The prospectus must state on the face of it that a copy has been so delivered to the registrar of companies; 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 section 74;

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 the 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 section 76 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 application under that section 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 subsections (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 a 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 subsection (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.

78 Consequences (criminal and civil) of non-compliance with ss. 72-77.

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 sections 72 to 77 is liable to a fine.

2

Sections 67, 68 and 69 extend to every prospectus offering for subscription shares in or debentures of a company incorporated or to be incorporated outside Great Britain (whether the company has or has not established, or when formed will or will not establish, a place of business in Great Britain), substituting for any reference to section 61 a reference to section 74.

3

In the event of non-compliance with or contravention of any of the requirements of section 72(2) as regards the particulars to be contained in the prospectus, or section 72(3) as regards compliance with Schedule 3, a director or other person responsible for the prospectus incurs no liability by reason of the non-compliance or contravention if—

a

as regards any matter not disclosed, he proves that he was not cognisant of it, or

b

he proves that the non-compliance or contravention arose from an honest mistake of fact on his part, or

c

the non-compliance or contravention was in respect of matters which, in the opinion of the court dealing with the case, were immaterial or were 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 section 72 or 73 or this section, limits or diminishes any liability which a person may incur under the general law or this Act, apart from those provisions.

79 Supplementary.

1

Where a document by which the shares or debentures of a company incorporated outside Great Britain are offered for sale to the public would, if the company had been a company incorporated under this Act, have been deemed by virtue of section 58 to be a prospectus issued by the company, that document is deemed, for the purposes of this Chapter, a prospectus so issued.

C1002

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 Act, in relation to a company incorporated under this Act.

Part IV Allotment of Shares and Debentures

General provisions as to allotment

80 Authority of company required for certain allotments.

F73. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

80A Election by private company as to duration of authority.

F74. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

81 Restriction on public offers by private company.

F75. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

82 Application for, and allotment of, shares and debentures.

F76. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

83 No allotment unless minimum subscription received.

F77. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

84 Allotment where issue not fully subscribed.

F78. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

85 Effect of irregular allotment.

F79. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

86. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F80. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

87. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F81. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

88 Return as to allotments, etc.

F82. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Pre-emption rights

89 Offers to shareholders to be on pre-emptive basis.

F83. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

90 Communication of pre-emption offers to shareholders.

F84. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

91 Exclusion of ss. 89, 90 by private company.

F85. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

92 Consequences of contravening ss. 89, 90.

F86. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

93 Saving for other restrictions as to offers.

F87. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

94 Definitions for ss. 89-96.

F88. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

95 Disapplication of pre-emption rights.

F89. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

96 Saving for company’s pre-emption procedure operative before 1982.

F90. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Commissions and discounts

97 Power of company to pay commissions.

F91. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

98 Apart from s. 97, commissions and discounts barred.

F92. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Amount to be paid for shares; the means of payment

99 General rules as to payment for shares on allotment.

F93. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

100 Prohibition on allotment of shares at a discount.

F94. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

101 Shares to be allotted as at least one-quarter paid-up.

F95. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

102 Restriction on payment by long-term undertaking.

F96. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

103 Non-cash consideration to be valued before allotment.

F97. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

104 Transfer to public company of non-cash asset in initial period.

F98. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

105 Agreements contravening s. 104.

F99. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

106 Shares issued to subscribers of memorandum.

F100. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

107 Meaning of “the appropriate rate”.

F101. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Valuation provisions

108 Valuation and report (s. 103).

F102. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

109 Valuation and report (s. 104).

F103. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

110 Entitlement of valuer to full disclosure.

F104. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

111 Matters to be communicated to registrar.

F105. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other matters arising out of allotment &c.

111A Right to damages, &c. not affected.

F106. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

112 Liability of subsequent holders of shares allotted.

F107. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

113 Relief in respect of certain liabilities under ss. 99 ff.

F108. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

114 Penalty for contravention.

F109. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

115 Undertakings to do work, etc.

F110. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

116 Application of ss. 99 ff to special cases.

F111. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Part V Share Capital, its Increase, Maintenance and Reduction

Chapter I General Provisions about Share Capital

117 Public company share capital requirements.

F112. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

118 The authorised minimum.

F113. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

119 Provision for different amounts to be paid on shares.

F114. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

120 Reserve liability of limited company.

F115. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

121 Alteration of share capital (limited companies).

F116. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

122 Notice to registrar of alteration.

F117. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

123 Notice to registrar of increased share capital.

F118. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

124 Reserve capital of unlimited company.

F119. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Chapter II Class Rights

125 Variation of class rights.

1

F120. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2

F120. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3

F120. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4

F120. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5

F120. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6

F121. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7

F120. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8

F120. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

126 Saving for court’s powers under other provisions.

F122. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

127 Shareholders’ right to object to variation.

F123. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

128Registration of particulars of special rights.

F124. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

129 Registration of newly created class rights.

F125. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F126 F126Chapter III Share Premiums

Annotations:

Amendments (Textual)

F126

Ss. 126-182 repealed (1.10.2009) by Companies Act 2006 (c. 46), ss. 1295, 1300, Sch. 16; S.I. 2008/2860, art. 4, Sch. 1 (with arts. 5, 7, 8, Sch. 2 (as amended by S.I. 2009/1802, art. 18, Sch.))

C183130 Application of share premiums.

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 is 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 of debentures of the company.

3

Subject to this, the provisions of this Act 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

Sections 131 and 132 below give relief from the requirements of this section, and in those sections references to the issuing company are to the company issuing shares as above mentioned.

131 Merger relief.

1

With the exception made by F741section 132(8) (group reconstruction) this section 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, section 130 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 subsection (2) extends to any shares in the issuing company allotted on those terms in pursuance of the arrangement.

4

Subject to the next subsection, the issuing company is to be regarded for purposes of this section as having secured at least a 90 per cent. equity holding in another company in pursuance of such an arrangement as is mentioned in subsection (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 capital F743(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 section does not apply unless the requirements of subsection (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 purposes of this section as held by the issuing company.

7

In relation to a company and its shares and capital, the following definitions apply for purposes of this section—

a

“equity shares” means shares comprised in the company’s equity share capital; and

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 F744section 899 of the Companies Act 2006 (court sanction for compromise or arrangement with creditors or members) or F742section 110 of the Insolvency Act (liquidator accepting shares etc. as consideration for sale of company property)).

8

The relief allowed by this section does not apply if the issue of shares took place before 4th February 1981.

132 Relief in respect of group reconstructions.

1

This section 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 section 130 to transfer any amount in excess of the minimum premium value to the share premium account.

3

In subsection (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 subsection (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 subsection (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 section does not apply (subject to the next subsection) if the issue of shares took place before the date of the coming into force of the M4Companies (Share Premium Account) Regulations 1984 (which were made on 21st December 1984).

7

To the extent that the relief allowed by this section would have been allowed by section 38 of the M5Companies Act 1981 as originally enacted (the text of which section is set out in Schedule 25 to this Act), the relief applies where the issue of shares took place before the date of the coming into force of those Regulations, but not if the issue took place before 4th February 1981.

8

Section 131 does not apply in a case falling within this section.

133 Provisions supplementing ss. 131, 132.

1

An amount corresponding to one representing the premiums or part of the premiums on shares issued by a company which by virtue of section 131 or 132 of this Act, or section 12 of the Consequential Provisions Act, 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.

C1842

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 reference in section 132 to the company transferring the shares is to be construed accordingly.

C1843

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 sections 131 to 133 “company”, except in references to the issuing company, includes any body corporate.

134 Provision for extending or restricting relief from s. 130. C185

1

The Secretary of State may by regulations in a statutory instrument make such provision as appears to him to be appropriate—

a

for relieving companies from the requirements of section 130 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

Regulations under this section may make different provision for different cases or classes of case and may contain such incidental and supplementary provisions as the Secretary of State thinks fit.

3

No such regulations shall be made unless a draft of the instrument containing them has been laid before Parliament and approved by a resolution of each House.

F127 F127Chapter IV Reduction of Share Capital

Annotations:

Amendments (Textual)

F127

Ss. 126-182 repealed (1.10.2009) by Companies Act 2006 (c. 46), ss. 1295, 1300, Sch. 16; S.I. 2008/2860, art. 4, Sch. 1 (with arts. 5, 7, 8, Sch. 2 (as amended by S.I. 2009/1802, art. 18, Sch.))

135 Special resolution for reduction of share capital.

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 subsection (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 section is in this Act referred to as “a resolution for reducing share capital”.

136 Application to court for order of confirmation.

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, the next three subsections have effect, but subject throughout to subsection (6).

3

Every creditor of the company who F745—

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 companyF746, and

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

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.

138 Registration of order and minute of reduction.

1

The registrar of companies, 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 a 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 section 139).

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 the registration of the order and minute; and the certificate—

a

may be either signed by the registrar, or authenticated by his official seal;

b

is conclusive evidence that all the requirements of this Act 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 purposes of section 20.

139 Public company reducing capital below authorised minimum.

1

This section 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 of companies shall not register the order under section 138 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 section 53; 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 section in respect of re-registration and of matters precedent and incidental thereto have been complied with, and that the company is a private company.

140 Liability of members on reduced shares.

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 the following two subsections 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 of F747section 123 of the Insolvency Act) 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 subsection (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 section affects the rights of the contributories among themselves.

141 Penalty for concealing name of creditor, etc.

If an officer of the company—

a

wilfully conceals the name of a creditor entitled to object to the reduction of capital; or

b

wilfully misrepresents the nature or amount of the debt or claim of any creditor; or

c

aids, abets or is privy to any such concealment or misrepresentation as is mentioned above,

he is guilty of an offence and liable to a fine.

F128 F128Chapter V Maintenance of Capital

Annotations:

Amendments (Textual)

F128

Ss. 126-182 repealed (1.10.2009) by Companies Act 2006 (c. 46), ss. 1295, 1300, Sch. 16; S.I. 2008/2860, art. 4, Sch. 1 (with arts. 5, 7, 8, Sch. 2 (as amended by S.I. 2009/1802, art. 18, Sch.))

142 Duty of directors on serious loss of capital.

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

If there is a failure to convene an extraordinary general meeting as required by subsection (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.

3

Nothing in this section authorises the consideration, at a meeting convened in pursuance of subsection (1), of any matter which could not have been considered at that meeting apart from this section.

143 General rule against company acquiring own shares.

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 section, 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; and F748, subject to subsection (2A), the purported acquisition is void.

F7492A

Where a company purchases qualifying shares out of distributable profits under section 162, any contravention by the company of any provision of section 162B(1) or (2) shall not render the acquisition void under subsection (2) above.

3

A company limited by shares may acquire any of its own fully paid shares otherwise than for valuable consideration; and subsection (1) does not apply in relation to—

a

the redemption or purchase of shares in accordance with Chapter VII of this Part,

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 section 5 (alteration of objects), section 54 (litigated objection to resolution for company to be re-registered as private) or F750section 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 articles, for failure to pay any sum payable in respect of the shares.

144 Aquisition of shares by company’s nominee.

C1861

Subject to section 145, where shares are issued to a nominee of a company mentioned in section 143(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 section, 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 section 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,

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 subsection (1)(b) or (c);

b

one year in the case of shares acquired as mentioned in subsection (1)(d).

4

The company and, in a case within subsection (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.

147 Matters arising out of compliance with s. 146(2). C188

1

The directors may take such steps as are requisite to enable the company to carry out its obligations under section 146(2) without complying with sections 135 and 136 (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.F752Chapter 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 section 146(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 of companies 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 section 146, 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 sections 146 to 148 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.

148 Further provisions supplementing ss. 146, 147. C189

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 section 143(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 section 146(1)(c), or

d

are acquired by any person in the circumstances mentioned in section 146(1)(d),

the company is re-registered as a public company, sections 146 and 147, and also section 149, 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 the following subsection.

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 to this Act has effect for the interpretation of the reference in subsection (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 are not then available for distribution.

C190149 Sanctions for non-compliance.

1

If a public company required by section 146(2) 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 subsection, F753Chapter 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 section; but, subject to this, the company continues to be treated for the purpose of this Act as a public company until it is so re-registered.

2

If a company when required to do so by section 146(2) (including that subsection as applied by section 148(1)) fails to cancel any shares in accordance with paragraph (a) of that subsection or to make an application for re-registration in accordance with paragraph (b) of it, 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.

150 Charges of public companies on own shares. C191

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 subsections, is void.

This is subject to section 6 of the Consequential Provisions Act (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 (in Scotland, hiring) 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 section 680 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 subsection does not apply in the case of such a company as is referred to in section 6(3) of the Consequential Provisions Act (old public company remaining such after 22nd March 1982, not having applied to be re-registered as public company).

F129 F129Chapter VI Financial Assistance by a Company for Acquisition of its Own Shares

Annotations:

Amendments (Textual)

F129

Ss. 126-182 repealed (1.10.2009) by Companies Act 2006 (c. 46), ss. 1295, 1300, Sch. 16; S.I. 2008/2860, art. 4, Sch. 1 (with arts. 5, 7, 8, Sch. 2 (as amended by S.I. 2009/1802, art. 18, Sch.))

Provisions applying to both public and private companies

151 Financial assistance generally prohibited.

F754. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

152 Definitions for this Chapter.

F755. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

153 Transactions not prohibited by s. 151.

F756. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

154 Special restriction for public companies.

1

In the case of a public company, section 153(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 liability F757the 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

155 Relaxation of s. 151 for private companies.

F758. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

156 Statutory declaration under s. 155.

F759. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

157 Special resolution under s. 155.

F760. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

158 Time for giving financial assistance under s. 155.

F761. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F130 F130Chapter VII Redeemable Shares; Purchase by a Company of its Own Shares

Annotations:

Amendments (Textual)

F130

Ss. 126-182 repealed (1.10.2009) by Companies Act 2006 (c. 46), ss. 1295, 1300, Sch. 16; S.I. 2008/2860, art. 4, Sch. 1 (with arts. 5, 7, 8, Sch. 2 (as amended by S.I. 2009/1802, art. 18, Sch.))

Redemption and purchase generally

159 Power to issue redeemable shares.

161F765. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

162 Power of company to purchase own shares.

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).

F7662

Sections 159 and 160 apply to the purchase by a company under this section of its own shares as they apply to the redemption of redeemable shares.

This is subject to subsections (2A) and (2B).

2A

The terms and manner of a purchase under this section need not be determined by the articles as required by section 160(3).

2B

Where a company makes a purchase of qualifying shares out of distributable profits under this section, section 162A applies to the shares purchased; and accordingly section 160(4) does not apply to those shares.

3

A company may not under this section purchase its shares if as a result of the purchase there would no longer be any member of the company holding shares other than redeemable shares F767or shares held as treasury shares .

F7684

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 F769,

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 F770which appears on the list drawn up by that 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 in paragraph (a) “the official list” has the meaning given in section 103(1) of the Financial Services and Markets Act 2000.

162ATreasury shares

1

Where qualifying shares are purchased by a company out of distributable profits in accordance with section 162, the company may—

a

hold the shares (or any of them), or

b

deal with any of them, at any time, in accordance with section 162D.

2

Where shares are held under subsection (1)(a) then, for the purposes of section 352, the company must be entered in the register as the member holding those shares.

3

In this Act, 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 section applies, and

b

have been held by the company continuously since they were so purchased.

162B Treasury shares: maximum holdings

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 subsection (1) or (2) is contravened by a company, the company must dispose of or cancel the excess shares, in accordance with section 162D, 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.

162CTreasury shares: voting and other rights

1

This section 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 subsection (2) applies include any right to attend or vote at meetings (including F782meetings 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 section 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 Act as if they were purchased by the company at the time they were allotted, in circumstances in which section 162A(1) applied.

162DTreasury shares: disposal and cancellation

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 subsection (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 F783section 979 of the Companies Act 2006(right of offeror to buy out minority shareholders) that a person desires to acquire any of the shares, the company must not, under subsection (1), sell or transfer the shares to which the notice relates except to that person.

4

If under subsection (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 subsection (1) without complying with sections 135 and 136 (resolution to reduce issued share capital; application to court for approval).

162ETreasury shares: mandatory cancellation

1

If shares held as treasury shares cease to be qualifying shares, the company must forthwith cancel the shares in accordance with section 162D.

2

For the purposes of subsection (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 section “regulated market” means a market which F784appears 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 .

162FTreasury shares: proceeds of sale

1

Where shares held as treasury shares are sold, the proceeds of sale shall be dealt with in accordance with this section.

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 F785Part 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 8 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 subsection (4), be treated as being nil.

162GTreasury shares: penalty for contravention

If a company contravenes any provision of sections 162A to 162F every officer of it who is in default is liable to a fine.

163 Definitions of “off-market” and “market” purchase.

1

A purchase by a company of its own shares is “off-market” if the shares either—

a

are purchased otherwise than on F771a recognised investment exchange, or

b

are purchased on F771a recognised investment exchange but are not subject to a marketing arrangement on F772that investment exchange.

2

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 subsections (3) to (6) above 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 subsection (6).

165 Authority for contingent purchase contract.

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 subsections (3) to (7) of section 164 apply to the contract and its terms.

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.

F7767

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 section.

167 Assignment or release of company’s right to purchase own shares.

1B

Where a company has purchased its own shares in circumstances in which section 162A 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 subsection (1A)) deliver to the registrar of companies 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 subsection (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, F779any return under subsection (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 return F780under either subsection (1) or (1B) to the registrar; and in such a case the amount required to be stated under subsection (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 section 164 or 165, or a contract for a purchase authorised under section 166, 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.

C1945

Every copy and memorandum so required to be kept shall F777 . . . 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 section, 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 subsection (4), or if an inspection required under subsection (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 subsection (5) of a copy or memorandum, the court may by order compel an immediate inspection of it.

9

The obligation of a company under subsection (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.

169ADisclosure by company of cancellation or disposal of treasury shares

1

Subsection (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 section 169(1B) in relation to the shares, and

b

the shares have—

i

been cancelled in accordance with section 162D(1), or

ii

been sold or transferred for the purposes of or pursuant to an employees' share scheme under section 162D(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 of companies 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.

4 170 The capital redemption reserve.

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 section 160(4) on cancellation of the shares redeemed or purchased F781, or in accordance with section 162D(4) on cancellation of shares held as treasury shares, shall be transferred to a reserve, called “the capital redemption reserve”.

2

Of 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 subsection (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 section 171.

4

The provisions of this Act 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.

Redemption or purchase of own shares out of capital (private companies only)

171 Power of private companies to redeem or purchase own shares out of capital.

1

Subject to the following provisions of this Chapter, a private company limited by shares or limited by guarantee and having a share capital may, if so authorised by its articles, make a payment in respect of the redemption or purchase under section 160 or (as the case may be) section 162, of its own shares otherwise than out of its distributable profits or the proceeds of a fresh issue of shares.

2

References below in this Chapter to payment out of capital are (subject to subsection (6)) to any payment so made, whether or not it would be regarded apart from this section as a payment out of capital.

3

The payment which may (if authorised in accordance with the following provisions of this Chapter) be made by a company out of capital in respect of the redemption or purchase of its own shares is such an amount as, taken together with—

a

any available profits of the company, and

b

the proceeds of any fresh issue of shares made for the purposes of the redemption or purchase,

is equal to the price of redemption or purchase; and the payment permissible under this subsection is referred to below in this Chapter as the permissible capital payment for the shares.

4

Subject to subsection (6), if the permissible capital payment for shares redeemed or purchased is less than their nominal amount, the amount of the difference shall be transferred to the company’s capital redemption reserve.

5

Subject to subsection (6), if the permissible capital payment is greater than the nominal amount of the shares redeemed or purchased—

a

the amount of any capital redemption reserve, share premium account or fully paid share capital of the company, and

b

any amount representing unrealised profits of the company for the time being standing to the credit of F786any revaluation reserve maintained by the company in accordance with regulations made under section 396 of the Companies Act 2006,

may be reduced by a sum not exceeding (or by sums not in the aggregate exceeding) the amount by which the permissible capital payment exceeds the nominal amount of the shares.

6

Where the proceeds of a fresh issue are applied by a company in making any redemption or purchase of its own shares in addition to a payment out of capital under this section, the references in subsections (4) and (5) to the permissible capital payment are to be read as referring to the aggregate of that payment and those proceeds.

172 Availability of profits for purposes of s. 171.

1

The reference in section 171(3)(a) to available profits of the company is to the company’s profits which are available for distribution (within the meaning of F791Part 23 of the Companies Act 2006); but the question whether a company has any profits so available and the amount of any such profits are to be determined for purposes of that section in accordance with the following subsections, instead of F792Chapter 2 of that Part.

2

Subject to the next subsection, that question is to be determined by reference to F787the following items as stated in the relevant accounts for determining the permissible capital payments for shares—

a

profits, losses, assets and liabilities,

b

F788 the following provisions–

i

in the case of Companies Act individual accounts, provisions of any of the kinds mentioned in paragraphs 88 and 89 of Schedule 4 (depreciation, diminution in value of assets, retentions to meet liabilities, etc.F789, and

ii

in the case of IAS individual accounts, provisions of any kind), and

c

share capital and reserves (including undistributable reserves),

F790. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3

The relevant accounts for this purpose are such accounts, prepared as at any date within the period for determining the amount of the permissible capital payment, as are necessary to enable a reasonable judgment to be made as to the amounts of any of the items mentioned in subsection (2)(a) to (c) above.

4

For purposes of determining the amount of the permissible capital payment for shares, the amount of the company’s available profits (if any) determined in accordance with subsections (2) and (3) is treated as reduced by the amount of any distributions lawfully made by the company after the date of the relevant accounts and before the end of the period for determining the amount of that payment.

5

The reference in subsection (4) to distributions lawfully made by the company includes—

a

financial assistance lawfully given out of distributable profits in a case falling within section 154 F793. . . ,

b

any payment lawfully made by the company in respect of the purchase by it of any shares in the company (except a payment lawfully made otherwise than out of distributable profits), and

c

a payment of any description specified in section 168(1) lawfully made by the company.

6

References in this section to the period for determining the amount of the permissible capital payment for shares are to the period of 3 months ending with the date on which the statutory declaration of the directors purporting to specify the amount of that payment is made in accordance with subsection (3) of the section next following.

173 Conditions for payment out of capital.

1

Subject to any order of the court under section 177, a payment out of capital by a private company for the redemption or purchase of its own shares is now lawful unless the requirements of this and the next two sections are satisfied.

2

The payment out of capital must be approved by a special resolution of the company.

3

The company’s directors must make a statutory declaration specifying the amount of the permissible capital payment for the shares in question and stating that, having made full inquiry into the affairs and prospects of the company, they have formed the opinion—

a

as regards its initial situation immediately following the date on which the payment out of capital is proposed to be made, that there will be no grounds on which the company could then be found unable to pay its debts, and

b

as regards its prospects for the year immediately following that date, that, having regard to their intentions with respect to the management of the company’s business during that year and to the amount and character of the financial resources which will in their view be available to the company during that year, the company will be able to continue to carry on business as a going concern (and will accordingly be able to pay its debts as they fall due) throughout that year.

4

In forming their opinion for purposes of subsection (3)(a), the directors shall take into account the same liabilities (including prospective and contingent liabilities) as would be relevant under F794section 122 of the Insolvency Act (winding up by the court) to the question whether a company is unable to pay its debts.

5

The directors’ statutory declaration must be in the prescribed form and contain such information with respect to the nature of the company’s business as may be prescribed, and must in addition have annexed to it a report addressed to the directors by the company’s auditors stating that—

a

they have inquired into the company’s state of affairs; and

b

the amount specified in the declaration as the permissible capital payment for the shares in question is in their view properly determined in accordance with sections 171 and 172; and

c

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 subsection (3) is unreasonable in all the circumstances.

6

A director who makes a declaration under this section without having reasonable grounds for the opinion expressed in the declaration is liable to imprisonment or a fine, or both.

174 Procedure for special resolution under s. 173.

1

The resolution required by section 173 must be passed on, or within the week immediately following, the date on which the directors make the statutory declaration required by that section; and the payment out of capital must be made no earlier than 5 nor more than 7 weeks after the date of the resolution.

2

The resolution is ineffective 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.

3

For purposes of subsection (2), a member who holds such shares is to be regarded as exercising the voting rights carried by them in voting on the resolution 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; and notwithstanding anything in a company’s articles, any member of the company may demand a poll on that question.

4

The resolution is ineffective unless the statutory declaration and auditors’ report required by the section are available for inspection by members of the company at the meeting at which the resolution is passed.

5

For purposes of this section a vote and a demand for a poll by a person as proxy for a member are the same (respectively) as a vote and demand by the member.

175 Publicity for proposed payment out of capital.

1

Within the week immediately following the date of the resolution for payment out of capital the company must cause to be published in the Gazette a notice—

a

stating that the company has approved a payment out of capital for the purpose of acquiring its own shares by redemption or purchase or both (as the case may be);

b

specifying the amount of the permissible capital payment for the shares in question and the date of the resolution under section 173;

c

stating that the statutory declaration of the directors and the auditors’ report required by that section are available for inspection at the company’s registered office; and

d

stating that any creditor of the company may at any time within the 5 weeks immediately following the date of the resolution for payment out of capital apply to the court under section 176 for an order prohibiting the payment.

2

Within the week immediately following the date of the resolution the company must also either cause a notice to the same effect as that required by subsection (1) to be published in an appropriate national newspaper or give notice in writing to that effect to each of its creditors.

3

“An appropriate national newspaper” means a newspaper circulating throughout England and Wales (in the case of a company registered in England and Wales), and a newspaper circulating throughout Scotland (in the case of a company registered in Scotland).

4

References below in this section to the first notice date are to the day on which the company first publishes the notice required by subsection (1) or first publishes or gives the notice required by subsection (2) (whichever is the earlier).

5

Not later than the first notice date the company must deliver to the registrar of companies a copy of the statutory declaration of the directors and of the auditors’ report required by section 173.

C1956

The statutory declaration and auditors’ report—

a

shall be kept at the company’s registered office throughout the period beginning with the first notice date and ending 5 weeks after the date of the resolution for payment out of capital, and

b

shall F795 . . . be open to the inspection of any member or creditor of the company without charge.

7

If an inspection required under subsection (6) 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 refusal of an inspection required under subsection (6) of a declaration or report, the court may by order compel an immediate inspection of that declaration or report.

176 Objections by company’s members or creditors.

1

Where a private company passes a special resolution approving for purposes of this Chapter any 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 within 5 weeks of the date on which the resolution was passed apply to the court for cancellation of the resolution.

2

The application 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

If an application is made, the company shall—

a

forthwith give notice in the prescribed form of that fact to the registrar of companies; and

b

within 15 days from the making of any order of the court on the hearing of the application, or such longer period as the court may by order direct, deliver an office copy of the order to the registrar.

4

A company which fails to comply with subsection (3), and any officer of it who is in default, is liable to a fine and for continued contravention, to a daily default fine.

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.

7

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F796

may make different provision for different cases or classes of case, and

c

may contain such further consequential provisions, and such incidental and supplementary provisions, as the Secretary of State thinks fit.

4

No regulations shall be made under this section unless a draft of the instrument containing them has been laid before Parliament and approved by resolution of each House.

180 Transitional cases arising under this Chapter; and savings.

1

Any preference shares issued by a company before 15th June 1982 which could but for the repeal by the M6Companies Act 1981 of section 58 of the M7Companies Act 1948 (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 sections 159 and 160 apply by virtue of this section, any premium payable on redemption may, notwithstanding the repeal by the 1981 Act of any provision of the 1948 Act, 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 15th June 1982 by a company for the purposes of section 58 of the Act of 1948 is to be known as the company’s capital redemption reserve and be treated as if it had been established for the purposes of section 170 of this Act; and accordingly, a reference in any enactment 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.

181 Definitions for Chapter VII.

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 F797section 829 of the Companies Act 2006) equal in value to the payment, and

b

“permissible capital payment” means the payment permitted by section 171;

and references to payment out of capital are to be construed in accordance with section 171.

Chapter VIII Miscellaneous Provisions about Shares and Debentures

Debentures

190 Register of debenture holders.

F139. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

191 Right to inspect register.

F140. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

192 Liability of trustees of debentures.

F141. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

193 Perpetual debentures.

F142. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

194 Power to re-issue redeemed debentures.

F143. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

195 Contract to subscribe for debentures.

F144. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

196 Payment of debts out of assets subject to floating charge (England and Wales).

F145. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

197 Debentures to bearer (Scotland).

F146. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Part VI Disclosure of Interests in Shares

Individual and group acquisitions

198 Obligation of disclosure: the cases in which it may arise and “the relevant time”.

F147. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

199 Interests to be disclosed.

F148. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

200“Percentage level” in relation to notifiable interests.

F149. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F150201. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

202 Particulars to be contained in notification.

F151. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

203 Notification of family and corporate interests.

F152. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

204 Agreement to acquire interests in a particular company.

F153. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

205 Obligation of disclosure arising under s. 204.

F154. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

206 Obligation of persons acting together to keep each other informed.

F155. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

207 Interests in shares by attribution.

F156. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

208 Interests in shares which are to be notified.

F157. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

209 Interests to be disregarded.

F158. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

210 Other provisions about notification under this Part.

F159. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

210A Power to make further provision by regulations.

F160. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Supplementary

220 Definitions for Part VI.

F170. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

C102 C103 C104 C105 C106 C107 C108 C109Part VII Accounts and Audit

Annotations:

Modifications etc. (not altering text)

C102

Pt. VII (ss. 221–262) applied with modifications by S.I. 1985/680, regs. 4–6, Sch.

C103

Part VII (ss. 221-262) continued by S.I. 1990/355, arts. 6, 7, Sch. 2 para. 13(1)(a)

C104

Part VII (ss. 221-262) amended by S.I. 1990/355, arts. 6, 7, Sch. 2 para. 1(2)(5)

C105

Part VII (ss. 221-262) extended by S.I. 1990/355, arts. 6, 7, Sch. 2 para. 1(3)(5)

C106

Part VII (ss. 221-262) modified by S.I. 1990/355, arts. 6, 7, Sch. 2 paras. 1(4)(5), 3(2)(3)

C107

Part VII (ss. 221-262) excluded by S.I. 1990/355, arts. 6, 7, Sch. 2 para. 3(1)(3)

C108

Part VII (ss. 221-262) restricted by S.I. 1990/355, arts. 6, 7, Sch. 2 para. 13(1)(b)

Pt. VII (ss. 221-262) applied (with modifications) (21.7.1993) by S.I. 1993/1820, reg. 4, Sch. paras.1, 2 (as amended (1.10.2005) by S.I. 2005/1987, reg. 3)

Pt. VII (ss. 221-262) applied (with modifications) (6.4.2001) by S.I. 2001/1090, reg. 3, Sch. 1 (as amended (4.3.2004) by S.I. 2004/355, art. 8, (1.10.2005) by S.I. 2005/1989, reg. 2, Sch. 1 and (12.1.2006) by S.I. 2005/3442, reg. 2(2)(b), Sch. 2 para. 3(1))

C109

Pt. 7 (ss. 221-262) modified (1.8.2007) by The European Grouping of Territorial Cooperation Regulations 2007 (S.I. 2007/1949), regs. 6, 7, Sch. Pt. 1

Chapter I Provisions Applying to Companies Generally

Accounting records

221 Duty to keep accounting records.

F171. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

222 Where and for how long records to be kept.

F172. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

A company’s financial year and accounting reference periods

223 A company’s financial year.

F173. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

224 Accounting reference periods and accounting reference date.

F174. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

225 Alteration of accounting reference date.

F175. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Annual accounts

226 Duty to prepare individual accounts.

F176. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

226ACompanies Act individual accounts

F177. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

226BIAS individual accounts

F178. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

227 Duty to prepare group accounts.

F179. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

227ACompanies Act group accounts

F180. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

227BIAS group accounts

F181. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

227CConsistency of accounts

F182. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

228 Exemption for parent companies included in accounts of larger group.

F183. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

228AExemption for parent companies included in non-EEA group accounts

F184. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

229 Subsidiary undertakings included in the consolidation.

F185. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

230 Treatment of individual profit and loss account where group accounts prepared.

F186. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

231 Disclosure required in notes to accounts:related undertakings.

F187. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

231ADisclosure required in notes to annual accounts: particulars of staff

F188. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

232 Disclosure required in notes to accounts: emoluments and other benefits of directors and others.

F189. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Approval and signing of accounts

233 Approval and signing of accounts

F190. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F196Directors' report

Annotations:

Amendments (Textual)

F196

Cross-heading and ss. 234, 234ZZA, 234ZZB substituted for s. 234 and preceding cross-heading (22.3.2005) by The Companies Act 1985 (Operating and Financial Review and Directors' Report etc.) Regulations 2005 (S.I. 2005/1011), reg. 2

234 Duty to prepare directors' report.

F191. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

234ZZADirectors' report: general requirements

F192. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

234ZZBDirectors' report: business review

F193. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

234ZAStatement as to disclosure of information to auditors

F194. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

234A Approval and signing of directors’ report.

F195. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F199. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Annotations:

Amendments (Textual)

F199

Heading before s. 234AA omitted (12.1.2006) by virtue of The Companies Act 1985 (Operating and Financial Review) (Repeal) Regulations 2005 (S.I. 2005/3442), reg. 2(2)(a), Sch. 1 para. 2

234AADuty to prepare operating and financial review

F197. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

234ABApproval and signing of operating and financial review

F198. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Quoted companies: directors’ remuneration report

234BDuty to prepare directors’ remuneration report

F200. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

234CApproval and signing of directors’ remuneration report

F201. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Auditors’ report

235 Auditors’ report.

F202. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

236 Signature of auditors’ report.

F203. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

237 Duties of auditors.

F204. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Publication of accounts and reports

238 Persons entitled to receive copies of accounts and reports.

F205. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

238AF209Time allowed for sending out copies of accounts and reports

F206. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

239 Rights to demand copies of accounts and reports.

F207. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

240 Requirements in connection with publication of accounts.

F208. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Laying and delivering of accounts and reports

241 Accounts and reports to be laid before company in general meeting.

F798. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

241AMembers’ approval of directors’ remuneration report

F210. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

242 Accounts and reports to be delivered to the registrar.

F211. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

242A Civil penalty for failure to deliver accounts.

F212. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

242B Delivery and publication of accounts in ECUs

F213. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

243 Accounts of subsidiary undertakings to be appended in certain cases.

F214. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

244 Period allowed for laying and delivering accounts and reports.

F215. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Revision of defective accounts and reports

245 Voluntary revision of annual accounts or directors’ report.

F216. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

245A Secretary of State’s notice in respect of annual accounts.

F217. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

245B Application to court in respect of defective accounts.

F218. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

245C Other persons authorised to apply to court.

F219. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

245DDisclosure of information held by Inland Revenue to persons authorised to apply to court

F220. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

245ERestrictions on use and further disclosure of information disclosed under section 245D

F221. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

245FPower of authorised persons to require documents, information and explanations

F222. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

245GRestrictions on further disclosure of information obtained under section 245F

F223. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Chapter IIExemptions, Exceptions and Special Provisions

Small and medium-sized companies and groups

246 Special provisions for small companies

F224. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

246A Special provisions for medium-sized companies

F225. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

247 Qualification of company as small or medium-sized.

F226. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

247A Cases in which special provisions do not apply

F227. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

247B Special auditors’ report

F228. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

248 Exemption for small and medium-sized groups.

F229. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

248A Group accounts prepared by small company

F230. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

249 Qualification of group as small or medium-sized.

F231. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F238 Exemptions from audit for certain categories of small company

Annotations:

Amendments (Textual)

F238

Ss. 249A-249E and preceding cross-heading inserted (11.8.1994) by S.I. 1994/1935, reg. 2

249A Exemptions from audit

F232. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

249AA Dormant companies

F233. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

249B Cases where exemptions not available

F234. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

249C The report required for the purposes of section 249A(2).

F235. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

249D The reporting accountant

F236. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

249E Effect of exemptions

F237. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Dormant companies

250. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F239. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Listed public companies

251F240Summary financial statement

F241. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Private companies

252 Election to dispense with laying of accounts and reports before general meeting.

F242. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

253 Right of shareholder to require laying of accounts.

F243. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Unlimited companies

254 Exemption from requirement to deliver accounts and reports.

F244. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Banking and insurance companies and groups

255 Special provisions for banking and insurance companies.

F245. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

255A Special provisions for banking and insurance groups.

F246. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

255B Modification of disclosure requirements in relation to banking company or group.

F247. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

255C. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F248. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

255D Power to apply provisions to banking partnerships.

F249. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Welsh private companies

255E Delivery of accounting documents in Welsh only.

F250. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Chapter III Supplementary Provisions

Accounting standards

256 Accounting standards.

F251. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

256AReporting standards

F252. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Power to alter accounting requirements

257 Power of Secretary of State to alter accounting requirements.

F253. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Parent and subsidiary undertakings

258 Parent and subsidiary undertakings.

F254. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other interpretation provisions

259 Meaning of “undertaking” and related expressions.

F255. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

260 Participating interests.

F256. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

261 Notes to the accounts.

F257. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

262 Minor definitions.

F258. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

262AIndex of defined expressions.

F259. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Part VIII Distribution of Profits and Assets

Limits of company’s power of distribution

263 Certain distributions prohibited.

F260. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

264 Restriction on distribution of assets.

F261. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

265 Other distributions by investment companies.

F262. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

266 Meaning of “investment company”.

F263. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

267 Extension of ss. 265, 266 to other companies.

F264. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

268 Realised profits of insurance company with long term business.

F265. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

269 Treatment of development costs.

F266. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Relevant accounts

270 Distribution to be justified by reference to company’s accounts.

F267. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

271 Requirements for last annual accounts.

F268. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

272 Requirements for interim accounts.

F269. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

273 Requirements for initial accounts.

F270. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

274 Method of applying s. 270 to successive distributions.

F271. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

275 Treatment of assets in the relevant accounts.

F272. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

276 Distributions in kind.

F273. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Supplementary

277 Consequences of unlawful distribution.

F274. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

278 Saving for provision in articles operative before Act of 1980.

F275. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

279 Distributions by banking or insurance companies.

F276. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

280 Definitions for Part VIII.

F277. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

281 Saving for other restraints on distribution.

F278. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Part IX A Company’s Management; Directors and Secretaries; their Qualifications, Duties and Responsibilities

Officers and registered office

282 Directors.

F279. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

283 Secretary.

F280. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

284 Acts done by person in dual capacity.

F281. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

285 Validity of acts of directors.

F282. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

286 Qualifications of company secretaries.

F283. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

287 Registered office.

F284. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

288 Register of directors and secretaries.

F285. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

288A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F286. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

289 Particulars of directors to be registered under s. 288.

F287. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

290 Particulars of secretaries to be registered under s. 288.

F288. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Provisions governing appointment of directors

291 Share qualification of directors.

F289. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

292 Appointment of directors to be voted on individually.

F290. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

293 Age limit for directors.

F291. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

294 Duty of director to disclose his age.

F292. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Disqualification

F293295–299. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F294300. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F295301. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Removal of directors

303 Resolution to remove director.

F296. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

304 Director’s right to protest removal.

F297. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Other provisions about directors and officers

305 Directors’ names on company correspondence, etc.

F298. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

306 Limited company may have directors with unlimited liability.

F299. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

307 Special resolution making liability of directors unlimited.

F300. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

308 Assignment of office by directors.

F301. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

309 Directors to have regard to interests of employees.

F302. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

309AProvisions protecting directors from liability

F303. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

309BQualifying third party indemnity provisions

F304. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

309CDisclosure of qualifying third party indemnity provisions

F305. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

310 Provisions protecting auditors from liability.

F306. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Part X Enforcement of Fair Dealing by Directors

Restrictions on directors taking financial advantage

311 Prohibition on tax-free payments to directors.

F307. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

312 Payment to director for loss of office etc.

F308. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

313 Company approval for property transfer.

F309. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

314 Director’s duty of disclosure on takeover, etc.

F310. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

315 Consequences of non-compliance with s. 314.

F311. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

316 Provisions supplementing ss. 312 to 315.

F312. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

317 Directors to disclose interest in contracts.

F313. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

318 Directors’ service contracts to be open to inspection.

F314. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

319 Director’s contract of employment for more than 5 years.

F315. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

320 Substantial property transactions involving directors, etc.

F316. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

321 Exceptions from s. 320.

F317. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

322 Liabilities arising from contravention of s. 320.

F318. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

322A Invalidity of certain transactions involving directors, etc.

F319. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

322BContracts with sole members who are directors

F320. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Restrictions on a company’s power to make loans, etc., to directors and persons connected with them

330 General restriction on loans etc. to directors and persons connected with them.

F330. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

331 Definitions for ss. 330 ff.

F331. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

332 Short-term quasi-loans.

F332. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

333 Inter-company loans in same group.

F333. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

334 Loans of small amounts.

F334. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

335 Minor and business transactions.

F335. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

336 Transactions at behest of holding company.

F336. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

337 Funding of director’s expenditure on duty to company.

F337. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

337AFunding of director’s expenditure on defending proceedings

F338. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

338 Loan or quasi-loan by money-lending company.

F339. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

339“Relevant amounts” for purposes of ss. 334 ff.

F340. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

340“Value” of transactions and arrangements.

F341. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

341 Civil remedies for breach of s. 330.

F342. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

342 Criminal penalties for breach of s. 330.

F343. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

343 Record of transactions not disclosed in company accounts.

F344. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

344 Exceptions from s. 343.

F345. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Supplementary

345 Power to increase financial limits.

F346. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

346“Connected persons”, etc.

F347. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

347 Transactions under foreign law.

F348. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

C110Part XA Control of political donations

Annotations:

Modifications etc. (not altering text)

C110

Pt. XA (ss. 347A-347K) applied (16.2.2001) by S.I. 1985/680, Sch. (as inserted (16.2.2001) by S.I. 2001/86, reg. 2)

347A Introductory provisions.

F349. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

347B Exemptions.

F350. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

347C Prohibition on donations and political expenditure by companies.

F351. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

347D Special rules for subsidiaries.

F352. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

347E Special rule for parent company of non-GB subsidiary undertaking.

F353. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

347F Remedies for breach of prohibitions on company donations etc.

F354. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

347G Remedy for unauthorised donation or expenditure by non-GB subsidiary.

F355. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

347H Exemption of directors from liability in respect of unauthorised donation or expenditure.

F356. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

347I Enforcement of directors’ liabilities by shareholder action.

F357. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

347J Costs of shareholder action.

F358. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

347K Information for purposes of shareholder action.

F359. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Part XI Company administration and procedure

Chapter I Company Identification

348 Company name to appear outside place of business.

F360. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

349 Company’s name to appear in its correspondence, etc.

F361. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

350 Company seal.

F362. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

351 Particulars in correspondence, etc.

F363. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Chapter II Register of Members

352 Obligation to keep and enter up register.

F364. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

352AStatement that company has only one member

F365. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

353 Location of register.

F366. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

354 Index of members.

F367. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

355 Entries in register in relation to share warrants.

F368. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

356 Inspection of register and index.

F369. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

357 Non-compliance with ss. 353, 354, 356; agent’s default.

F370. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

358 Power to close register.

F371. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

359 Power of court to rectify register.

F372. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

360 Trusts not to be entered on register in England and Wales.

F373. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

361 Register to be evidence.

F374. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

362 Overseas branch registers.

F375. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F376 F376 Chapter III Annual Return

Annotations:

Amendments (Textual)

F376

Ss. 357-365 repealed (1.10.2009) by Companies Act 2006 (c. 46), ss. 1295, 1300, Sch. 16; S.I. 2008/2860, art. 4, Sch. 1 (with arts. 5, 7, 8, Sch. 2 (as amended by S.I. 2009/1802, art. 18, Sch.))

C198 C199363 Duty to deliver annual returns. C197

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 to 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 subsection (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 subsection (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 section to a return being delivered “in accordance with this Chapter” are—

a

in relation to a return made F799on or after 1st October 1990, to a return with respect to which all the requirements of subsection (2) are complied with;

b

in relation to a return made before F8001st October 1990, 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.

C201 C202364F801 Contents of annual return: general. C200

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 F805(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, F802. . .

F802ii

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F803f

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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;

F804i

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F806j

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 section.

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.

F807 C203364A Contents of annual return: particulars of share capital F808. . . .

1

The annual return of a company having a share capital shall contain the following information with respect to its share capital F809. . . .

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

F810. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5

F810. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6

F810. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7

F810. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Those particulars shall be included in the company’s next annual return after they are received.

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.

364BContents of annual return: information about shareholders: non-traded companies

1

The annual return of a company that was a non-traded company throughout the return period must also contain the following information.

2

The return must 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 must have annexed to it an index sufficient to enable the name of any person in the list to be easily found.

3

The return must 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 subsections (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

Subsections (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 must be included in the company's next annual return after they are received.

364CContents of annual return: information about shareholders: traded companies

1

The annual return of a company that was a traded company at any time during the return period must also contain the following information.

2

The return must 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 must have annexed to it an index sufficient to enable the name of any person in the list to be easily found.

3

The return must 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 subsections (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 364DContents of annual return: information about shareholders: supplementary

1

In sections 364, 364B and 364C—

“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 F812; 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 must give information in relation to that stock corresponding to that required by section 364B or 364C (as the case may be) in relation to shares of the company, stating the amount of stock instead of the number of shares.

C205365F811 Supplementary provisions: regulations and interpretation. C204

1

The Secretary of State 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 sections 364 and 364A.

2

Regulations under this section shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliamant.

3

For the purposes of this Chapter, except section 363(2)(c) (signature of annual return), a shadow director shall be deemed to be a director.

Chapter IV Meetings and Resolutions

Meetings

366 Annual general meeting.

F377. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

366A Election by private company to dispense with annual general meetings.

F378. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

367 Secretary of State’s power to call meeting in default.

F379. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

368 Extraordinary general meeting on members’ requisition.

F380. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

369 Length of notice for calling meetings.

F381. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

370 General provisions as to meetings and votes.

F382. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

370AQuorum at meetings of the sole member

F383. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

371 Power of court to order meeting.

F384. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

372 Proxies.

F385. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

373 Right to demand a poll.

F386. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

374 Voting on a poll.

F387. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

375 Representation of corporations at meetings.

F388. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Resolutions

376 Circulation of members’ resolutions.

F389. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

377 In certain cases, compliance with s. 376 not required.

F390. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

378 Extraordinary and special resolutions.

F391. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

379 Resolution requiring special notice.

F392. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

379A Elective resolution of private company.

F393. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

380 Registration, etc. of resolutions and agreements.

F394. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

381 Resolution passed at adjourned meeting.

F395. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Written resolutions of private companies

381A Written resolutions of private companies.

F396. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

381B Duty to notify auditors of proposed written resolution

F397. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

381C Written resolutions: supplementary provisions.

F398. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Records of proceedings

382 Minutes of meetings.

F399. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

382A Recording of written resolutions.

F400. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

382BRecording of decisions by the sole member

F401. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

383 Inspection of minute books.

F402. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F406 Appointment of auditors

Annotations:

Amendments (Textual)

F406

New ss. 384–388A inserted (subject to the savings and transitional provisions in S.I. 1990/355, arts. 4, 10, Sch. 4) by Companies Act 1989 (c. 40, SIF 27), ss. 118, 119(1), 213(2), (as part of the text inserted to replace Chapter V as mentioned in s. 118 of the 1989 Act)

384 Duty to appoint auditors.

F813. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

385 Appointment at general meeting at which accounts laid.

F814. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

385A Appointment by private company which is not obliged to lay accounts.

F403. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

386 Election by private company to dispense with annual appointment.

F404. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

387 Appointment by Secretary of State in default of appointment by company.

F815. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

388 Filling of casual vacancies.

F816. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

388A Certain companies exempt from obligation to appoint auditors

F817. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F405389. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Rights of auditors

389A Rights to information.

F407. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

389BOffences relating to the provision of information to auditors

F408. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

390 Right to attend company meetings, &c.

F409. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Remuneration of auditors

390A Remuneration of auditors.

F410. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

390B Disclosure of services provided by auditors or associates and related remuneration

F411. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Removal, resignation, &c. of auditors

391 Removal of auditors.

F412. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

391A Rights of auditors who are removed or not re-appointed.

F413. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

392 Resignation of auditors.

F414. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

392A Rights of resigning auditors.

F415. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

393 Termination of appointment of auditors not appointed annually.

F416. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

394 Statement by person ceasing to hold office as auditor.

F417. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

394A Offences of failing to comply with s. 394.

F418. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

C111 C112Part XII Registration of Charges

Annotations:

Modifications etc. (not altering text)

C111

Pt. XII (ss. 395 - 424) extended (with modifications) by S.I. 1989/638, regs. 18, 21, Sch. 4 para. 4

C112

Pt. XII (ss. 395-424) excluded (21.2.2009) by Banking Act 2009 (c. 1), ss. {252(2)(a)}, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 11

F419 F419Chapter I Registration of Charges (England and Wales)

Annotations:

Amendments (Textual)

F419

Ss. 395-424 repealed (1.10.2009) by Companies Act 2006 (c. 46), ss. 1295, 1300, Sch. 16; S.I. 2008/2860, art. 4, Sch. 1 (with arts. 5, 7, 8, Sch. 2 (as amended by S.I. 2009/1802, art. 18, Sch.))

C206 X2 C207395 Certain charges void if not registered.

1

Subject to the provisions of this Chapter, a charge created by a company registered in England and Wales and being a charge to which this section applies is, so far as any security on the company’s property or undertaking is conferred by the charge, void against the liquidator F818or administratorand 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 of companies for registration in the manner required by this Chapter within 21 days after the date of the charge’s creation.

2

Subsection (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 section, the money secured by it immediately becomes payable.

C208 X3396 Charges which have to be registered.

1

Section 395 applies to the following charges—

a

a charge for the purpose of securing any issue of debentures,

b

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 the land,

e

a charge on book debts of the company,

f

a floating charge on the company’s undertaking or property,

g

a charge on calls made but not paid,

h

a charge on a ship or aircraft, or any share in a ship,

C209j

a charge on goodwill, F819or 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 purposes of section 395, 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 purposes of this section deemed to be an interest in land.

F8203A

The following are 'intellectual property’ for the purposes of this section—

C210a

any patent, trade mark, F821. . . registered design, copyright or design right;

b

any licence under or in respect of any such right.

4

In this Chapter, “charge” includes mortgage.

C211 X4397 Formalities of registration (debentures).

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 purposes of section 395 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

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) for the debenture holders,

together with the deed containing the charge or, if there is no such deed, one of the debentures of the series:

Provided that there shall be sent to the registrar of companies, 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 section 395 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 subsection (2), treated as the issue of the debentures at a discount.

C212 X5398 Verification of charge on property outside United Kingdom.

1

4

If default is made in complying with this section, 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.

C215 X8401 Register of charges to be kept by registrar of companies.

1

The registrar of companies shall keep, with respect to each company, a register in the prescribed form of all the charges requiring registration under this Chapter; and 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 section 397(1),

b

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.

2

The registrar shall give a certificate of the registration of any charge registered in pursuance of this Chapter, stating the amount secured by the charge.

The certificate—

a

shall be either signed by the registrar, or authenticated by his official seal, and

b

is conclusive evidence that the requirements of this Chapter as to registration have been satisfied.

3

The register kept in pursuance of this section shall be open to inspection by any person.

C216 X9 C217402 Endorsement of certificate on debentures.

1

The company shall cause a copy of every certificate of registration given under section 401 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 section 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.

C218 X10403 Entries of satisfaction and release.

1

F822Subject to subsection (1A), the registrar of companies, 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 given 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).

F8231A

The registrar of companies may make any such entry as is mentioned in subsection (1) where, instead of receiving such a statutory declaration as is mentioned in that subsection, 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 paragraph (a) or (b) of that subsection,

b

contains a description of the charge,

c

states the date of creation of the charge and the date of its registration under this Chapter,

d

states the name and address of the chargee or, in the case of a debenture, trustee, and

e

3

A notice under this section shall be in the prescribed form.

4

If a person makes default in complying with the requirements of this section, he is liable to a fine and, for continued contravention, to a daily default fine.

X13 C221406 Companies to keep copies of instruments creating charges.

1

Every company shall cause a copy of every instrument creating a charge requiring registration under this Chapter to be kept at its registered office.

2

In the case of a series of uniform debentures, a copy of one debenture of the series is sufficient.

X14 C222407 Company’s register of charges.

1

Every limited company shall keep at its registered office 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 it.

3

If an officer of the company knowingly and wilfully authorises or permits the omission of an entry required to be made in pursuance of this section, he is liable to a fine.

X15 C223408 Right to inspect instruments which create charges, etc.

1

The copies of instruments creating any charge requiring registration under this Chapter with the registrar of companies, and the register of charges kept in pursuance of section 407, shall be open during business hours (but subject to such reasonable restrictions as the company in general meeting may impose, so that not less than 2 hours in each day be 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 prescribe.

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 in relation to a company registered in England and Wales, the court may by order compel an immediate inspection of the copies or register.

X16409 Charges on property in England and Wales created by oversea company.

1

This Chapter extends to charges on property in England and Wales which are created, and to charges on property in England and Wales which is acquired, by a company (whether a company within the meaning of this Act or not) incorporated outside Great Britain which has an established place of business in England and Wales.

2

In relation to such a company, sections 406 and 407 apply with the substitution, for the reference to the company’s registered office, of a reference to its principal place of business in England and Wales.

F420 F420Chapter II Registration of Charges (Scotland)

Annotations:

Amendments (Textual)

F420

Ss. 395-424 repealed (1.10.2009) by Companies Act 2006 (c. 46), ss. 1295, 1300, Sch. 16; S.I. 2008/2860, art. 4, Sch. 1 (with arts. 5, 7, 8, Sch. 2 (as amended by S.I. 2009/1802, art. 18, Sch.))

X17 C225 C224410 Charges void unless registered.

1

The following provisions of this Chapter have effect for the purpose of securing the registration in Scotland of charges created by companies.

2

Every charge created by a company, being a charge to which this section applies, is, so far as any security on the company’s property or any part of it is conferred by the charge, void against the liquidator F825or administrator and any creditor of the company unless 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 is created or evidenced, are delivered to or received by the registrar of companies for registration in the manner required by this Chapter within 21 days after the date of the creation of the charge.

3

Subsection (2) 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 section the money secured by it immediately becomes payable.

4

This section applies to the following charges—

a

a charge on land wherever situated, or any interest in such land (not including a charge for any rent ~~F826, ground annual~~ or other periodical sum payable in respect of the land, but including a charge created by a heritable security within the meaning of section 9(8) of the M8Conveyancing and Feudal Reform (Scotland) Act 1970),

b

a security over the uncalled share capital of the company,

C226c

a security over incorporeal moveable property of any of the following categories—

i

the book debts of the company,

ii

calls made but not paid,

iii

goodwill,

iv

a patent or a licence under a patent,

C227v

a trademark,

vi

a copyright or a licence under a copyright,

F827vii

a registered design or a licence in respect of such a design,

viii

a design right or a licence under a design right,

d

a security over a ship or aircraft or any share in a ship, and

e

a floating charge.

5

In this Chapter “company” (except in section 424) means an incorporated company registered in Scotland; “registrar of companies” means the registrar or other officer performing under this Act the duty of registration of companies in Scotland; and references to the date of creation of a charge are—

a

in the case of a floating charge, the date on which the instrument creating the floating charge was executed by the company creating the charge, and

b

in any other case, the date on which the right of the person entitled to the benefit of the charge was constituted as a real right.

X18 C228411 Charges on property outside United Kingdom.

1

In the case of a charge created out of the United Kingdom comprising property situated outside the United Kingdom, the period of 21 days after the date on which the copy of the instrument creating it could (in due course of post, and if despatched with due diligence) have been received in the United Kingdom is substituted for the period of 21 days after the date of the creation of the charge as the time within which, under section 410(2), the particulars and copy are to be delivered to the registrar.

2

Where a charge is created in the United Kingdom but comprises property outside the United Kingdom, the copy of the instrument creating or purporting to create the charge may be sent for registration under section 410 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.

X19 C229412 Negotiable instrument to secure book debts.

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 purposes of section 410, to be treated as a charge on those book debts.

X20 C230413 Charges associated with debentures.

1

The holding of debentures entitling the holder to a charge on land is not, for the purposes of section 410, deemed to be an interest in land.

2

Where a series of debentures containing, or giving by reference to any other 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 sufficient for purposes of section 410 if there are delivered to or received by the registrar of companies 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,

b

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,

c

a general description of the property charged,

d

the names of the trustees (if any) for the debenture holders, and

e

in the case of a floating charge, a statement of any provisions of the charge and of any instrument relating to it which prohibit or restrict or regulate the power of the company to grant further securities ranking in priority to, or pari passu with, the floating charge, or which vary or otherwise regulate the order of ranking of the floating charge in relation to subsisting securities,

together with a copy of the deed containing the charge or, if there is no such deed, of one of the debentures of the series:

Provided that, where more than one issue is made of debentures in the series, there shall be sent to the registrar of companies 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.

3

Where any commission, allowance or discount has been paid or made, either directly or indirectly, by a company to any person in consideration of his subscribing or agreeing to subscribe, whether absolutely or conditionally, for any debentures of the company, or procuring or agreeing to procure subscriptions (whether absolute or conditional) for any such debentures, the particulars required to be sent for registration under section 410 include particulars as to the amount or rate per cent. of the commission, discount or allowance so paid or made; but any omission to do this does not affect the validity of the debentures issued.

The deposit of any debentures as security for any debt of the company is not, for purposes of this subsection, treated as the issue of the debentures at a discount.

X21 C231414 Charge by way of ex facie absolute disposition, etc.

1

For the avoidance of doubt, it is hereby declared that, in the case of a charge created by way of an ex facie absolute disposition or assignation qualified by a back letter or other agreement, or by a standard security qualified by an agreement, compliance with section 410(2) does not of itself render the charge unavailable as security for indebtedness incurred after the date of compliance.

2

Where the amount secured by a charge so created is purported to be increased by a further back letter or agreement, a further charge is held to have been created by the ex facie absolute disposition or assignation or (as the case may be) by the standard security, as qualified by the further back letter or agreement; and the provisions of this Chapter apply to the further charge as if—

a

references in this Chapter (other than in this section) to the charge were references to the further charge, and

b

references to the date of the creation of the charge were references to the date on which the further back letter or agreement was executed.

X22 C232415 Company’s duty to register charges created by it.

1

It is a company’s duty to send to the registrar of companies for registration the particulars of every charge created by the company and of the issues of debentures of a series requiring registration under sections 410 to 414; but registration of any such charge may be effected on the application of any person interested in it.

2

3

If a company makes default in sending to the registrar for registration the particulars of any charge created by the company or of the issues of debentures of a series requiring registration as above mentioned, 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.

X23 C233416 Duty to register charges existing on property acquired.

1

Where a company acquires any property which is subject to a charge of any 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 Chapter, 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 of companies for registration in the manner required by this Chapter within 21 days after the date on which the transaction was settled.

2

If, however, the property is situated and the charge was created outside Great Britain, 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 the United Kingdom are substituted for 21 days after the settlement of the transaction as the time within which the particulars and the copy of the instrument are to be delivered to the registrar.

3

If default is made in complying with this section, 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.

X24 C234417 Register of charges to be kept by registrar of companies.

1

The registrar of companies shall keep, with respect to each company, a register in the prescribed form of all the charges requiring registration under this Chapter, and shall enter in the register with respect to such charges the particulars specified below.

2

In the case of a charge to the benefit of which the holders of a series of debentures are entitled, there shall be entered in the register the particulars specified in section 413(2).

3

In the case of any other charge, there shall be entered—

a

if it is a charge created by the company, the date of its creation, and if it was a charge existing on property acquired by the company, the date of the acquisition of the property,

b

the amount secured by the charge,

c

short particulars of the property charged,

d

the persons entitled to the charge, and

e

in the case of a floating charge, a statement of any of the provisions of the charge and of any instrument relating to it which prohibit or restrict or regulate the company’s power to grant further securities ranking in priority to, or pari passu with, the floating charge, or which vary or otherwise regulate the order of ranking of the floating charge in relation to subsisting securities.

4

The register kept in pursuance of this section shall be open to inspection by any person.

X25 C235418 Certificate of registration to be issued.

1

The registrar of companies shall give a certificate of the registration of any charge registered in pursuance of this Chapter.

2

c

states the date of creation of the charge and the date of its registration under this Chapter,

d

states the name and address of the chargee or, in the case of a debenture, trustee, and

e

where paragraph (b) of subsection (1) applies, contains short particulars of the property which has been released from the charge, or which has ceased to form part of the company’s property (as the case may be).

F8291B

Where the statement under subsection (1A) concerns the satisfaction of a floating charge, then there shall be delivered to the registrar a further statement which—

a

is made by the creditor entitled to the benefit of the floating charge or a person authorised to act on his behalf;

b

is incorporated into, or logically associated with, the electronic communication containing the statement; and

c

certifies that the particulars contained in the statement are correct.

2

Where the registrar enters a memorandum of satisfaction in whole, he shall, if required, furnish the company with a copy of the memorandum.

3

Without prejudice to the registrar’s duty under this section to require to be satisfied as above mentioned, he shall not be so satisfied unless—

a

the creditor entitled to the benefit of the floating charge, or a person authorised to do so on his behalf, certifies as correct the particulars submitted to the registrar with respect to the entry on the register of a memorandum under this section, or

b

the court, on being satisfied that such certification cannot readily be obtained, directs him accordingly.

4

Nothing in this section requires the company to submit particulars with respect to the entry in the register of a memorandum of satisfaction where the company, having created a floating charge over all or any part of its property, disposes of part of the property subject to the floating charge.

5

A memorandum or certification required for the purposes of this section shall be in such form as may be prescribed.

F8305A

Any person who makes a false statement under subsection (1A) or (1B) which he knows to be false or does not believe to be true is liable to imprisonment or a fine, or both.

X27 C237420 Rectification of register.

The court, on being satisfied that the omission to register a charge within the time required by this Act 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 it is on other grounds just and equitable to grant relief, may, on the application of the company or any 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.

X28 C238421 Copies of instruments creating charges to be kept by company.

1

Every company shall cause a copy of every instrument creating a charge requiring registration under this Chapter to be kept at the company’s registered office.

2

In the case of a series of uniform debentures, a copy of one debenture of the series is sufficient.

X29 C239422 Company’s register of charges.

1

Every company shall keep at its registered office a register of charges and enter in it all charges specifically affecting property of the company, and all floating charges on any property of the company.

2

There shall be given in each case 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 it.

3

If an officer of the company knowingly and wilfully authorises or permits the omission of an entry required to be made in pursuance of this section, he is liable to a fine.

X30 C240423 Right to inspect copies of instruments, and company’s register.

1

The copies of instruments creating charges requiring registration under this Chapter with the registrar of companies, and the register of charges kept in pursuance of section 422, shall be open during business hours (but subject to such reasonable restrictions as the company in general meeting may impose, so that not less than 2 hours in each day be allowed for inspection) to the inspection of any creditor or member of the company without fee.

2

The register of charges shall 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 prescribe.

3

If inspection of the copies or 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 in relation to a company, the court may by order compel an immediate inspection of the copies or register.

X31424 Extension of Chapter II.

1

This Chapter extends to charges on property in Scotland which are created, and to charges on property in Scotland which is acquired, by a company incorporated outside Great Britain which has a place of business in Scotland.

2

In relation to such a company, sections 421 and 422 apply with the substitution, for the reference to the company’s registered office, of a reference to its principal place of business in Scotland.

C113 C114 C115 C116 C117Part XIII Arrangements and Reconstructions

Annotations:

Modifications etc. (not altering text)

C113

Pt. XIII (ss. 425–430) power to modify conferred (E.W.) by Water Act 1989 (c. 15, SIF 130), s. 190(1), Sch. 25 para. 71(2) (with ss. 58(7), 101(1), 141(6), 160(1)(2)(4), 163, 189(4)–(10), 193(1), Sch. 26 paras. 3(1)(2), 17, 40(4), 57(6), 58)

C114

Part XIII modified by S.I. 1989/1461, reg. 2

C115

Part XIII (ss. 425-430) modified (E.W.) (1.12.1991) by Statutory Water Companies Act 1991 (c. 58, SIF 130), ss. 9(1), 17(2)

C116

C117

Part XIII modified by S.I. 1989/1461, reg. 2

425 Power of company to compromise with creditors and members.

F421. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

426 Information as to compromise to be circulated.

F422. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

427 Provisions for facilitating company reconstruction or amalgamation.

F423. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

427A Application of ss. 425–427 to mergers and divisions of public companies.

F424. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

C118 F434 C119Part XIIIA Takeover Offers

Annotations:

Amendments (Textual)

F434

Ss. 428–430F substituted for ss. 428–430 by Financial Services Act 1986 (c. 60, SIF 69), s. 172, Sch. 12

Modifications etc. (not altering text)

C118

Pt. 13A excluded (20.5.2006) by The Takeovers Directive (Interim Implementation) Regulations 2006 (S.I. 2006/1183), reg. 30

C119

Pt. XIIIA (ss. 428-430F) modified (12.2.1992) by S.I. 1992/225, reg. 121, Sch. 8 para. 9(3).

428 Takeover offers.

F425. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

429 Right of offeror to buy out minority shareholders.

F426. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

430 Effect of notice under s. 429.

F427. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

430A Right of minority shareholder to be bought out by offeror.

F428. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

430B Effect of requirement under s. 430A.

F429. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

430C Applications to the court.

F430. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

430D Joint offers.

F431. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

430E Associates.

F432. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

430F Convertible securities.

F433. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Part XIVInvestigation of Companies and Their Affairs; Requisition of Documents

Appointment and functions of inspectors

C120431 Investigation of a company on its own application or that of its members.

1

The Secretary of State may appoint one or more competent inspectors to investigate the affairs of a company and to F435report the result of their investigations to him .

2

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 issued, F436(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 Secretary of State may require for the purpose of showing that the applicant or applicants have good reason for requiring the investigation.

4

The Secretary of State may, before appointing inspectors, require the applicant or applicants to give security, to an amount not exceeding £5,000, or such other sum as he may by order specify, for payment of the costs of the investigation.

An order under this subsection shall be made by statutory instrument subject to annulment in pursuance of a resolution of either House of Parliament.

C121432 Other company investigations.

C1221

The Secretary of State shall appoint one or more competent inspectors to investigate the affairs of a company and F437report the result of their investigations to him, if the court by order declares that its affairs out to be so investigated.

C1222

The Secretary of State may make such an appointment if it appears to him 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.

F4382A

Inspectors may be appointed under subsection (2) on terms that any report they may make is not for publication; and in such a case, the provisions of section 437(3) (availability and publication of inspectors’ reports) do not apply.

3

Subsections (1) and (2) are without prejudice to the powers of the Secretary of State under section 431; and the power conferred by subsection (2) is exercisable with respect to a body corporate notwithstanding that it is in course of being voluntarily wound up.

4

The reference in subsection (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.

C123433 Inspectors’ powers during investigation.

1

If inspectors appointed under section 431 or 432 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 above.

F4392

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

C124 C125 C126434 Production of documents and evidence to inspectors.

1

When inspectors are appointed under section 431 or 432, 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 section 433(1)—

fails to comply with section 434(1)(a) or (c),

b

refuses to comply with a requirement under section 434(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 enquire 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.

C131 C132437 Inspectors’ reports.

1

The inspectors may, and if so directed by the Secretary of State shall, make interim reports to the Secretary of State, and on the conclusion of their investigation shall make a final report to him.

F448. . .

F4491A

Any persons who have been appointed under section 431 or 432 may at any time and, if the Secretary of State directs them to do so, shall inform him of any matters coming to their knowledge as a result of their investigations.

1B

F450. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1C

F450. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2

If the inspectors were appointed under section 432 in pursuance of an order of the court, the Secretary of State shall furnish a copy of any report of theirs to the court.

F4512A

If the company is registered under the Companies Act 2006 in Northern Ireland, the Secretary of State must send a copy of any interim or final report by the inspectors to the Department of Enterprise, Trade and Investment in Northern Ireland.

3

In any case the Secretary of State may, if he 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 to the Secretary of State 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.

438 Power to bring civil proceedings on company’s behalf.

F452. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

C133 C134439 Expenses of investigating a company’s affairs.

F4531

The expenses of an investigation under any of the powers conferred by this Part shall be defrayed in the first instance by the Secretary of State, but he may recover those expenses from the persons liable in accordance with this section.

There shall be treated as expenses of the investigation, in particular, such reasonable sums as the Secretary of State 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 F454. . . may in the same proceedings be ordered to pay those expenses to such extent as may be specified in the order.

3

F455. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4

A body corporate dealt with by F456an inspectors’ report, where the inspectors were appointed otherwise than of the Secretary of State’s own motion, is liable except where it was the applicant for the investigation, and except so far as the Secretary of State otherwise directs.

F4575

Where inspectors were appointed—

a

under section 431, or

b

on an application under section 442(3),

the applicant or applicants for the investigation is or are liable to such extent (if any) as the Secretary of State may direct.

6

The report of inspectors appointed otherwise than of the Secretary of State’s own motion may, if they think fit, and shall if the Secretary of State 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 subsection (4) or (5) of this section.

7

F458. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8

Any liability to repay the Secretary of State imposed by F459subsection (2) above is (subject to satisfaction of his right to repayment) a liability also to indemnify all persons against liability under subsections (4) and (5)F460. . . .

9

A person liable under any one of those subsections is entitled to contribution from any other person liable under the same subsection, according to the amount of their respective liabilities under it.

10

Expenses to be defrayed by the Secretary of State under this section shall, so far as not recovered under it, be paid out of money provided by Parliament.

F461440 Power of Secretary of State to present winding-up petition.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

C135 C136441 Inspectors’ report to be evidence.

1

A copy of any report of inspectors appointed under F462this Part, certified by the Secretary of State 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 report F463and, in proceedings on an application under F464section 8 of the Company Directors Disqualification Act 1986F465or Article 11 of the Company Directors Disqualification (Northern Ireland) Order 2002, as evidence of any fact stated therein.

2

A document purporting to be such a certificate as is mentioned above 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 Secretary of State

442 Power to investigate company ownership.

1

Where it appears to the Secretary of State that there is good reason to do so, he 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

F466. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F4673

If an application for investigation under this section with respect to particular shares or debentures of a company is made to the Secretary of State 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 section 431(2)(a) or (b), then, subject to the following provisions, the Secretary of State shall appoint inspectors to conduct the investigation applied for.

3A

The Secretary of State shall not appoint inspectors if he 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 Secretary of State is satisfied that it is unreasonable for it to be investigated.

3B

An order under this subsection shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

3C

If on an application under subsection (3) it appears to the Secretary of State that the powers conferred by section 444 are sufficient for the purposes of investigating the matters which inspectors would be appointed to investigate, he may instead conduct the investigation under that section.

4

Subject to the terms of their appointment, the inspectors’ powers extend to the investigation of any circumstances suggesting the existance 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.

443 Provisions applicable on investigation under s. 442.

1

For purposes of an investigation under section 442, sections 433(1), 434, 436 and 437 apply with the necessary modifications of references to the affairs of the company or to those of any other body corporate, subject however to the following subsections.

2

Those sections 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 the other body corporate (as the case may be).

3

If the Secretary of State is of opinion that there is good reason for not divulging any part of a report made by virtue of section 442 and this section, he may under section 437 disclose the report with the omission of that part; and he may cause to be kept by the registrar of companies a copy of the report with that part omitted or, in the case of any other such report, a copy of the whole report.

F4684

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

444 Power to obtain information as to those interested in shares, etc.

1

If it appears to the Secretary of State 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, he may require any person whom he 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 Secretary of State.

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 section, 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, F469commits an offence .

F4704

A person guilty of an offence under this section is liable—

a

on conviction on indictment, to imprisonment for a term not exceeding two years or a fine (or both);

b

on summary conviction—

i

in England and Wales, to imprisonment for a term not exceeding twelve months or to a fine not exceeding the statutory maximum (or both) and, for continued contravention, a daily default fine not exceeding one-fiftieth of the statutory maximum;

ii

in Scotland or Northern Ireland, to imprisonment for a term not exceeding six months, or to a fine not exceeding the statutory maximum (or both) and, for continued contravention, a daily default fine not exceeding one-fiftieth of the statutory maximum.

445 Power to impose restrictions on shares and debentures.

1

If in connection with an investigation under either section 442 or 444 it appears to the Secretary of State that there is difficulty in finding out the relevant facts about any shares (whether issued or to be issued), he may by order direct that the shares shall until further order be subject to the restrictions of Part XV of this Act.

F4711A

If the Secretary of State is satisfied that an order under subsection (1) may unfairly affect the rights of third parties in respect of shares then the Secretary of State, for the purpose of protecting such rights and subject to such terms as he thinks fit, may direct that such acts by such persons or descriptions of persons and for such purposes as may be set out in the order, shall not constitute a breach of the restrictions of Part XV of this Act.

2

This section, and Part XV in its application to orders under it, apply in relation to debentures as in relation to shares F472save that subsection (1A) shall not so apply.

446 Investigation of share dealings.

F473. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F520Powers of Secretary of State to give directions to inspectors

Annotations:

Amendments (Textual)

F520

Ss. 446A, 446B and preceding cross-heading inserted (1.10.2007) by Companies Act 2006 (c. 46), ss. 1035(1), 1300; S.I. 2007/2194, art. 2(1)(k) (with art. 12, Sch. 3 para. 48)

“specified” means specified in a direction under this section.

C320446BDirection to terminate investigation

1

The Secretary of State may direct an inspector to take no further steps in his investigation.

2

The Secretary of State may give a direction under this section to an inspector appointed under section 432(1) or 442(3) only on the grounds that it appears to him that—

a

matters have come to light in the course of the inspector's investigation which suggest that a criminal offence has been committed, and

b

those matters have been referred to the appropriate prosecuting authority.

3

Where the Secretary of State gives a direction under this section, any direction already given to the inspector under section 437(1) to produce an interim report, and any direction given to him under section 446A(3) in relation to such a report, shall cease to have effect.

4

Where the Secretary of State gives a direction under this section, the inspector shall not make a final report to the Secretary of State unless—

a

the direction was made on the grounds mentioned in subsection (2) and the Secretary of State directs the inspector to make a final report to him, or

b

the inspector was appointed under section 432(1) (appointment in pursuance of order of the court).

5

An inspector shall comply with any direction given to him under this section.

6

In this section, a reference to an inspector's investigation includes any investigation he undertakes, or could undertake, under section 433(1) (power to investigate affairs of holding company or subsidiary).

F521Resignation, removal and replacement of inspectors

Annotations:

Amendments (Textual)

F521

Ss. 446C, 446D and preceding cross-heading inserted (1.10.2007) by Companies Act 2006 (c. 46), ss. 1036, 1300; S.I. 2007/2194, art. 2(1)(k) (with art. 12, Sch. 3 para. 48)

C322446CResignation and revocation of appointment

1

An inspector may resign by notice in writing to the Secretary of State.

2

The Secretary of State may revoke the appointment of an inspector by notice in writing to the inspector.

C319446DAppointment of replacement inspectors

1

Where—

a

an inspector resigns,

b

an inspector's appointment is revoked, or

c

an inspector dies,

the Secretary of State may appoint one or more competent inspectors to continue the investigation.

2

An appointment under subsection (1) shall be treated for the purposes of this Part (apart from this section) as an appointment under the provision of this Part under which the former inspector was appointed.

3

The Secretary of State must exercise his power under subsection (1) so as to secure that at least one inspector continues the investigation.

4

Subsection (3) does not apply if—

a

the Secretary of State could give any replacement inspector a direction under section 446B (termination of investigation), and

b

such a direction would (under subsection (4) of that section) result in a final report not being made.

5

In this section, references to an investigation include any investigation the former inspector conducted under section 433(1) (power to investigate affairs of holding company or subsidiary).

F522Power to obtain information from former inspectors etc

Annotations:

Amendments (Textual)

F522

S. 446E and preceding cross-heading inserted (1.10.2007) by Companies Act 2006 (c. 46), ss. 1037(1), 1300; S.I. 2007/2194, art. 2(1)(k) (with art. 12, Sch. 3 para. 48)

C323446EObtaining information from former inspectors etc

447AF515Information provided: evidence

1

A statement made by a person in compliance with a requirement under section 447 may be used in evidence against him.

2

But in criminal proceedings in which the person is charged with a relevant offence—

a

no evidence relating to the statement may be adduced by or on behalf of the prosecution, 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.

3

A relevant offence is any offence other than the following—

a

an offence under section 451,

b

an offence under section 5 of the Perjury Act 1911 (false statement made otherwise than on oath), or

c

an offence under section 44(2) of the Criminal Law (Consolidation) (Scotland) Act 1995 (false statement made otherwise than on oath)F476, or

d

an offence under Article 10 of the Perjury (Northern Ireland) Order 1979 (false statements made otherwise than on oath).

For the purposes of sections 449 and 451A (provision for security of information) documents obtained under this section 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 the application of this section to Scotland for the references to a justice of the peace substitute references to a justice of the peace or a sheriff, and for the references to information on oath substitute references to evidence on oath.

10

In this section “document” includes information recorded in any form.

448AF516Protection in relation to certain disclosures: information provided to Secretary of State

1

A person who makes a relevant disclosure is not liable by reason only of that disclosure in any proceedings relating to a breach of an obligation of confidence.

2

A relevant disclosure is a disclosure which satisfies each of the following conditions—

a

it is made to the Secretary of State otherwise than in compliance with a requirement under this Part;

b

it is of a kind that the person making the disclosure could be required to make in pursuance of this Part;

c

the person who makes the disclosure does so in good faith and in the reasonable belief that the disclosure is capable of assisting the Secretary of State for the purposes of the exercise of his functions under this Part;

d

the information disclosed is not more than is reasonably necessary for the purpose of assisting the Secretary of State for the purposes of the exercise of those functions;

e

the disclosure is not one falling within subsection (3) or (4).

3

A disclosure falls within this subsection if the disclosure is prohibited by virtue of any enactment F480whenever passed or made.

4

A disclosure falls within this subsection if—

a

it is made by a person carrying on the business of banking or by a lawyer, and

b

it involves the disclosure of information in respect of which he owes an obligation of confidence in that capacity.

F4815

In this section “enactment” has the meaning given by section 1293 of the Companies Act 2006.

Any information which may by virtue of this section be disclosed to a person specified in Schedule 15C may be disclosed to any officer or employee of the person.

9

This section does not prohibit the disclosure of information if the information is or has been available to the public from any other source.

10

For the purposes of this section, information obtained by an investigator in consequence of the exercise of his powers under section 453A includes information obtained by a person accompanying the investigator in pursuance of subsection (4) of that section in consequence of that person’s accompanying the investigator.

11

Nothing in this section authorises the making of a disclosure in contravention of the Data Protection Act 1998.

C148 C149 C150450 Punishment for destroying, mutilating, etc. company documents.

F488 C1511

An officer of a company. . . who—

a

destroys, mutilates or falsifies, or is privy to the destruction, mutilation or falsification of a document affecting, or relating to the F489company’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 of F490the company or to defeat the law.

F4911A

Subsection (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 above mentioned 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.

F4923

A person guilty of an offence under this section is liable—

a

on conviction on indictment, to imprisonment for a term not exceeding seven years or a fine (or both);

b

on summary conviction—

i

in England and Wales, to imprisonment for a term not exceeding twelve months or to a fine not exceeding the statutory maximum (or both);

ii

in Scotland or Northern Ireland, to imprisonment for a term not exceeding six months, or to a fine not exceeding the statutory maximum (or both).

4

F493. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F4945

In this section “document” includes information recorded in any form.

C152 C153 C154451F495 Punishment for furnishing false information.

1

A person commits an offence if in purported compliance with a requirement under section 447 to provide information—

a

he provides information which he knows to be false in a material particular;

b

he recklessly provides information which is false in a material particular.

F4962

A person guilty of an offence under this section is liable—

a

on conviction on indictment, to imprisonment for a term not exceeding two years or a fine (or both);

b

on summary conviction—

i

in England and Wales, to imprisonment for a term not exceeding twelve months or to a fine not exceeding the statutory maximum (or both);

ii

in Scotland or Northern Ireland, to imprisonment for a term not exceeding six months, or to a fine not exceeding the statutory maximum (or both).

3

F497. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

section 447 of this Act; 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 subsection (3) be disclosed to any person may be disclosed to any officer or servant of that person.

5

The Secretary of State may, if he thinks fit, disclose any information obtained under section 444 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 Secretary of State to be affected by matters covered by the investigation.

F5026

For the purposes of this section, information obtained by an inspector in consequence of the exercise of his powers under section 453A includes information obtained by a person accompanying the inspector in pursuance of subsection (4) of that section in consequence of that person’s accompanying the inspector.

7

The reference to an inspector in subsection (2)(b) above includes a reference to a person accompanying an inspector in pursuance of section 453A(4).

the disclosure by him of information relating to those affairs,

unless one of the conditions in subsection (4) is met.

4

The conditions are—

a

the Secretary of State thinks it is necessary to do so for the purpose of investigating the affairs of the person carrying on the business of banking;

b

the customer is a person on whom a requirement has been imposed under section 447;

c

the customer is a person on whom a requirement to produce information or documents has been imposed by an investigator appointed by the Secretary of State in pursuance of section 171 or 173 of the Financial Services and Markets Act 2000 (powers of persons appointed under section 167 or as a result of section 168(2) to conduct an investigation).

5

Despite subsections (1) and (2) a person who is a lawyer may be compelled to disclose the name and address of his client.

453 Investigation of F507overseas companies.

F5081

The provisions of this Part apply to bodies corporate incorporated outside F509the United Kingdom which are carrying on business in F509the United Kingdom, or have at any time carried on business there, as they apply to companies under this Act; but subject to the following exceptions, adaptations and modifications.

1A

The following provisions do not apply to such bodies—

a

section 431 (investigation on application of company or its members),

b

F510. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

c

sections 442 to 445 (investigation of company ownership and power to obtain information as to those interested in shares, &c.), F511. . .

d

F511. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1B

The other provisions of this Part apply to such bodies subject to such adaptations and modifications as may be specified by regulations made by the Secretary of State.

2

Regulations under this section shall be made by statutory instrument subject to annulment in pursuance of a resolution of either House of Parliament.

An investigator is a person authorised for the purposes of section 447.

453BPower to enter and remain on premises: procedural

1

This section applies for the purposes of section 453A.

2

The requirements of subsection (3) must be complied with at the time an inspector or investigator seeks to enter relevant premises under section 453A(2)(a).

3

The requirements are—

a

the inspector or investigator must produce evidence of his identity and evidence of his appointment or authorisation (as the case may be);

b

any person accompanying the inspector or investigator must produce evidence of his identity.

4

The inspector or investigator must, as soon as practicable after obtaining entry, give to an appropriate recipient a written statement containing such information as to—

a

the powers of the investigator or inspector (as the case may be) under section 453A;

b

453CF518Failure to comply with certain requirements

1

This section applies if a person fails to comply with a requirement imposed by an inspector, the Secretary of State or an investigator in pursuance of either of the following provisions—

a

section 447;

b

section 453A.

2

The inspector, Secretary of State or investigator (as the case may be) may certify the fact in writing to the court.

3

If, after hearing—

a

any witnesses who may be produced against or on behalf of the alleged offender;

b

any statement which may be offered in defence,

the court is satisfied that the offender failed without reasonable excuse to comply with the requirement, it may deal with him as if he had been guilty of contempt of the court.

453DF519Offences by bodies corporate

Where an offence under any of sections 448, 449 to 451 and 453A 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 XV Orders Imposing Restrictions on Shares (F545Section 445)

Annotations:

Amendments (Textual)

F545

Words in Pt. 15 heading substituted (1.10.2007) by The Companies Act 2006 (Commencement No. 3, Consequential Amendments, Transitional Provisions and Savings) Order 2007 (S.I. 2007/2194), art. 10(1), Sch. 4 para. 11(2) (with art. 12)

E3454 Consequence of order imposing restrictions.

1

So long as any shares are directed to be subject to the restrictions of this Part F523then, subject to any directions made in relation to an order F524pursuant to section 445(1A) or 456(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 subsection (1)(a), any agreement to transfer the shares or, in the case of unissued shares, the right to be issued with them is void (except F525such agreement or right as may be made or exercised under the terms of directions made by the Secretary of State or the court under F526section 445(1A) or 456(1A) oran agreement to F527transfer the shares on the making of an order under section 456(3)(b) below).

3

Where shares are subject to the restrictions of subsection (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 (except F528such agreement or right as may be made or exercised under the terms of directions made by the Secretary of State or the court under F529section 445(1A) or 456(1A) oran agreement to transfer any such right on the F527transfer of the shares on the making of an order under section 456(3)(b) below).

F537. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

E5456 Relaxation and removal of restrictions.

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.

F5381A

Where the court is satisfied that an order subjecting the shares tothe restrictions of this Part unfairly affects the rights of third parties in respect of shares then the court, for the purpose of protecting such rights and subject to such terms as it thinks fit and in addition to any order it may make under subsection (1), may direct on an application made under that subsection that such acts by such persons or descriptions of persons and for such purposes, as may be set out in the order, shall not constitute a breach of the restrictions of Part XV of this Act. Subsection (3) does not apply to an order made under this subsection.

2

If the order applying the restrictions was made by the Secretary of State, or he has refused to make an order disapplying them, the application may be made by any person aggrieved; F539. . . .

3

Subject as follows, an order of the court or the Secretary of State 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 Secretary of State 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

b

the shares are to be F540transferred for valuable consideration and the court (in any case) or the Secretary of State (if the order was made under section F541. . . 445) approves the F540transfer.

4

F542Without prejudice to the power of the court to give directions under subsection (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 subsection may be made by the Secretary of State F543. . . , or by the company.

5

Where an order has been made under subsection (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 subsection may be made—

a

by the Secretary of State F544. . . , 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 Secretary of State 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 subsection (4) of this section,

may continue the restrictions mentioned in paragraphs (c) and (d) of section 454(1), either in whole or in part, so far as they relate to any right acquired or offer made before the transfer.

7

Subsection (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 subsection (6).

E6457 Further provisions on sale by court order of restricted shares.

1

Where shares are sold in pursuance of an order of the court under section 456(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 subsection (1) the court shall (subject as provided below) 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 section 456(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 XVI Fraudulent Trading by a Company

458 Punishment for fraudulent trading.

F546. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Part XVII Protection of Company’s Members against Unfair Prejudice

459 Order on application of company member.

F547. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

460 Order on application of Secretary of State.

F548. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

461 Provisions as to petitions and orders under this Part.

F549. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

C171Part XVIII Floating Charges and Receivers (Scotland)

Annotations:

Modifications etc. (not altering text)

C171

Pt. XVIII (ss. 462–487) extended (with modifications) by S.I. 1989/638, regs. 18, 21, Sch. 4 para. 13

C168Chapter I Floating Charges

Annotations:

Modifications etc. (not altering text)

C168

Chap. I (ss. 462–466) extended by Industrial and Provident Societies Act 1967 (c.48, SIF 55), s. 3, as substituted by Companies Consolidation (Consequential Provisions) Act 1985 (c. 9, SIF 27), ss. 21, 26(2)

C161462 Power of incorporated company to create floating charge.

1

It is competent under the law of Scotland for an incorporated company (whether a company within the meaning of this Act or not), for the purpose of securing any debt or other obligation (including a cautionary obligation) incurred or to be incurred by, or binding upon, the company or any other person, to create in favour of the creditor in the debt or obligation a charge, in this Part referred to as a floating charge, over all or any part of the property (including uncalled capital) which may from time to time be comprised in its property and undertaking.

2

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F550

4

References in this Part to the instrument by which a floating charge was created are, in the case of a floating charge created by words in a bond or other written acknowledgment, references to the bond or, as the case may be, the other written acknowledgment.

5

Subject to this Act, a floating charge has effect in accordance with this Part F551and Part III of the Insolvency Act 1986 in relation to any heritable property in Scotland to which it relates, notwithstanding that the instrument creating it is not recorded in the Register of Sasines or, as appropriate, registered in accordance with the M1Land Registration (Scotland) Act 1979.

C162463 Effect of floating charge on winding up.

1

F552Where a company goes into liquidation within the meaning of section 247(2) of the Insolvency Act 1986, a floating charge created by the company attaches to the property then comprised in the company’s property and undertaking or, as the case may be, in part of that property and undertaking, but does so subject to the rights of any person who—

a

has effectually executed diligence on the property or any part of it; or

b

holds a fixed security over the property or any part of it ranking in priority to the floating charge; or

c

holds over the property or any part of it another floating charge so ranking.

2

The provisions of F553Part IV of the Insolvency Act (except section 185) have effect in relation to a floating charge, subject to subsection (1), as if the charge were a fixed security over the property to which it has attached in respect of the principal of the debt or obligation to which it relates and any interest due or to become due thereon.

F5543

Nothing in this section derogates from the provisions of sections 53(7) and 54(6) of the Insolvency Act (attachment of floating charge on appointment of receiver), or prejudices the operation of sections 175 and 176 of that Act (payment of preferential debts in winding up).

4

F555. . . interest accrues, in respect of a floating charge which after 16th November 1972 attaches to the property of the company, until payment of the sum due under the charge is made.

any expenses or outlays which may reasonably be incurred by the holder F560;and

e

(in the case of a floating charge to secure a contingent liability other than a liability arising under any further advances made from time to time) the maximum sum to which that contingent liability is capable of amounting whether or not it is contractually limited.

6

This section is subject to F561Part XII and toF562sections 175 and 176 of the Insolvency Act.

465 Continued effect of certain charges validated by Act of 1972.

1

Any floating charge which—

a

purported to subsist as a floating charge on 17th November 1972, and

b

if it had been created on or after that date, would have been validly created by virtue of the M2Companies (Floating Charges and Receivers) (Scotland) Act 1972,

is deemed to have subsisted as a valid floating charge as from the date of its creation.

2

Any provision which—

a

is contained in an instrument creating a floating charge or in any ancillary document executed prior to, and still subsisting at, the commencement of that Act,

b

relates to the ranking of charges, and

c

if it had been made after the commencement of that Act, would have been a valid provision,

is deemed to have been a valid provision as from the date of its making.

F569467–485. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Chapter III General

C169486 Interpretation for Part XVIII generally.

1

In this Part, unless the context otherwise requires, the following expressions have the following meanings respectively assigned to them, that is to say—

“ancillary document” means—

a

a document which relates to the floating charge and which was executed by the debtor or creditor in the charge before the registration of the charge in accordance with Chapter II or Part XII; or

b

an instrument of alteration such as is mentioned in section 466 in this Part;

“company”, . . . F570, means an incorporated company (whether a company within the meaning of this Act or not);
“fixed security”, in relation to any property of a company, means any security, other than a floating charge or a charge having the nature of a floating charge, which on the winding up of the company in Scotland would be treated as an effective security over that property, and (without prejudice to that generality) includes a security over that property, being a heritable security within the meaning of section 9(8) of the M3Conveyancing and Feudal Reform (Scotland) Act 1970;
F570. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F570. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F570. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F570. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
“Register of Sasines” means the appropriate division of the General Register of Sasines.

C170487 Extent of Part XVIII.

This Part extends to Scotland only.

Part XIX Receivers and Managers (England and Wales)

F571488–500. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

C172Part XX Winding Up of Companies Registered Under this Act or the Former Companies Acts

Annotations:

Modifications etc. (not altering text)

C172

Pt. 20 modified (24.3.2003) by Proceeds of Crime Act 2002 (c. 29), ss. {426(10)(b)}, 458(1)(3); S.I. 2003/333,{art. 2}, Sch. (as amended by S.I. 2003/531)

F573Chapters I–V. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Annotations:

Amendments (Textual)

F573

Ss. 488–650 repealed by Insolvency Act 1986 (c. 45, SIF 66), s. 438, Sch. 12

F572501–650. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F574 F574Chapter VI Matters Arising Subsequent to Winding Up

Annotations:

Amendments (Textual)

F574

Ss. 651-706 repealed (1.10.2009) by Companies Act 2006 (c. 46), ss. 1295, 1300, Sch. 16; S.I. 2008/2860, art. 4, Sch. 1 (with arts. 5, 7, 8, Sch. 2 (as amended by S.I. 2009/1802, art. 18, Sch.))

C241651 Power of court to declare dissolution of company void.

C2421

Where a company has been dissolved, the court may . . . F831, 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 of companies 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.

F8324

Subject to the following provisions, an application under this section 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 1(2)(c) of the Law Reform (Miscellaneous Provisions) Act 1934 (funeral expenses)), or

b

for damages under the Fatal Accidents Act 1976 or the Damages (Scotland) Act 1976,

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 enactment as to the time within which proceedings must be brought.

6

Nothing in subsection (5) affects the power of the court on making an order under this section 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 enactment.

7

In subsection (5)(a) “personal injuries” includes any disease and any impairment of a person’s physical or mental condition.

C243 C244652 Registrar may strike defunct company off register.

1

If the registrar of companies 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.

2

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 post a registered 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 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 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 Gazette and send to the company or the liquidator (if any) a like notice as is provided in subsection (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 Gazette; and on the publication of that notice in the Gazette the company is dissolved.

6

However—

a

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, and

b

nothing in subsection (5) 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 section may be addressed to him at his last known place of business; and a letter or notice to be sent under this section 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 known to the registrar of companies, 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.

C257652AF842 Registrar may strike private company off register on application.

1

On application by a private company, the registrar of companies may strike the company’s name off the register.

2

An application by a company under this section shall—

a

be made on its behalf by its directors or by a majority of them,

b

be in the prescribed form, and

c

contain the prescribed information.

3

The registrar shall not strike a company off under this section until after the expiration of 3 months from the publication by him in the Gazette of a notice—

a

stating that he may exercise his power under this section 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 section, he shall publish notice of that fact in the Gazette.

5

On the publication in the Gazette of a notice under subsection (4), the company to which the notice relates is dissolved.

6

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 section affects the power of the court to wind up a company the name of which has been struck off the register.

a person of a description specified for the purposes of this paragraph by regulations made by the Secretary of State.

7

Subsection (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 subsection (6) shall cease to apply if the application is withdrawn before the end of the period for giving the copy application.

9

The Secretary of State may by order amend subsection (1) for the purpose of altering the period in relation to which the doing of the things mentioned in paragraphs (a) to (d) of that subsection is relevant.

C260 F845652C Directors’ duties following application under section 652A.

1

Subsection (2) applies in relation to any time after the day on which a company makes an application under section 652A and before the day on which the application is finally dealt with or withdrawn.

2

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

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 paragraph by regulations made by the Secretary of State,

shall secure that a copy of the application is given to that person within 7 days from that day.

3

The duty imposed by subsection (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

Subsection (5) applies where, at any time on or after the day on which a company makes an application under section 652A 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 section 652A, or

iv

engages in any other activity, except one to which subsection (6) applies;

b

an application is made to the court under section 425 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 I of the M11 Insolvency Act 1986;

F846d

an application to the court for an administration order in respect of the company is made under paragraph 12 of Schedule B1 to that Act;

da

an administrator is appointed in respect of the company under paragraph 14 or 22 of that Schedule;

db

a copy of notice of intention to appoint an administrator of the company under paragraph 14 or 22 of that Schedule is filed with the court;

e

there arise any of the circumstances in which, under section 84(1) of that Act, the company may be voluntarily wound up;

f

a petition is presented for the winding up of the company by the court under Part IV of that Act;

g

a receiver or manager of the company’s property is appointed; or

h

a judicial factor is appointed to administer the company’s estate.

5

A person who, at the end of a day on which an event mentioned in any of paragraphs (a) to (h) of subsection (4) occurs, is a director of the company shall secure that the company’s application is withdrawn forthwith.

6

This subsection applies to any activity which is—

a

necessary or expedient for the purpose of making, or proceeding with, an application under section 652A,

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

specified by the Secretary of State by order for the purposes of this subsection.

7

For the purposes of subsection (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.

In sections 652B and 652C, “disposal” includes part disposal.

8

In sections 652B and 652C and this section, “creditor” includes a contingent or prospective creditor.

C262 F848652E Sections 652B and 652C: enforcement.

1

A person who breaches or fails to perform a duty imposed on him by section 652B or 652C is guilty of an offence and liable to a fine.

2

A person who fails to perform a duty imposed on him by section 652B(6) or 652C(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 subsection (1) consisting of breach of a duty imposed by section 652B(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 subsection (1) consisting of failure to perform the duty imposed by section 652B(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 subsection (1) consisting of failure to perform a duty imposed by section 652C(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 section 652A, or

b

that he took all reasonable steps to perform the duty.

C263 F849652F Other offences connected with section 652A.

1

Where a company makes an application under section 652A, any person who, in connection with the application, knowingly or recklessly furnishes any information to the registrar of companies 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 of companies which purports to be an application under section 652A, but which is not, is guilty of an offence and liable to a fine.

C245653 Objection to striking off by person aggrieved.

1

F833Subsection (2) applies if a company or any member or creditor of it feels aggrieved by the company having been struck off the register F834under section 652.

C2462

The court, on an application by the company or the member or creditor made before the expiration of 20 years from publication in the Gazette of notice under section 652, 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.

F8352A

Subsections (2B) and (2D) apply if a company has been struck off the register under section 652A.

F8352B

The court, on an application by a notifiable person made before the expiration of 20 years from publication in the Gazette of notice under section 652A(4), may, if satisfied—

a

that any duty under section 652B or 652C with respect to the giving to that person of a copy of the company’s application under section 652A was not performed,

b

that the making of the company’s application under section 652A involved a breach of duty under section 652B(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.

F8352C

In subsection (2B), “notifiable person” means a person to whom a copy of the company’s application under section 652A was required to be given under section 652B or 652C.

F8352D

The court, on an application by the Secretary of State made before the expiration of 20 years from publication in the Gazette of notice under section 652A(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 of F836an order under subsection (2), (2B) or (2D) being delivered to the registrar of companies for registration the company F837to 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.

C248 C249654 Property of dissolved company to be bona vacantia. C247

1

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, or to the Duchy of Lancaster or to the Duke of Cornwall for the time being (as the case may be), and

b

vest and may be dealt with in the same manner as other bona vacantia accruing to the Crown, to the Duchy of Lancaster or to the Duke of Cornwall.

2

Except as provided by the section next following, the above has effect subject and without prejudice to any order made by the court under section 651 or 653.

C251655 Effect on s. 654 of company’s revival after dissolution. C250

1

The person in whom any property or right is vested by section 654 may dispose of, or of an interest in, that property or right notwithstanding that an order may be made under section 651 or 653.

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 or, as the case may be, the Duke of Cornwall 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

Where a liability accrues under subsection (2) in respect of any property or right which, before the order under section 651 or 653 was made, had accrued as bona vacantia to the Duchy of Lancaster, the Attorney General of the Duchy shall represent Her Majesty in any proceedings arising in connection with that liability.

4

Where a liability accrues under subsection (2) in respect of any property or right which, before the order under section 651 or 653 was made, had accrued as bona vacantia to the Duchy of Cornwall, such persons as the Duke of Cornwall (or other possessor for the time being of the Duchy) may appoint shall represent the Duke (or other possessor) in any proceedings arising out of that liability.

5

This section applies in relation to the disposition of any property, right or interest on or after 22nd December 1981, whether the company concerned was dissolved before, on or after that day.

C253656 Crown disclaimer of property vesting as bona vacantia. C252

1

Where property vests in the Crown under section 654, the Crown’s title to it under that section may be disclaimed by a notice signed by the Crown representative, that is to say the Treasury Solicitor, or, in relation to property in Scotland, the Queen’s and Lord Treasurer’s Remembrancer

2

The right to execute a notice of disclaimer under this section 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 section is of no effect unless it is executed—

a

within 12 months of the date on which the vesting of the property under section 654 came to the notice of the Crown representative, or

b

if an application in writing is made to the Crown representative 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 which would have had jurisdiction to wind up the company if it had not been dissolved.

4

A statement in a notice of disclaimer of any property under this section that the vesting of it came to the notice of the Crown representative on a specified date, or that no such application as above mentioned 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 section shall be delivered to the registrar of companies and retained and registered by him; and copies of it shall be published in the Gazette and sent to any persons who have given the Crown representative notice that they claim to be interested in the property.

6

This section applies to property vested in the Duchy of Lancaster or the Duke of Cornwall under section 654 as if for references to the Crown and the Crown representative there were respectively substituted references to the Duchy of Lancaster and to the Solicitor to that Duchy, or to the Duke of Cornwall and to the Solicitor to the Duchy of Cornwall, as the case may be.

C255657 Effect of Crown disclaimer under s. 656. C254

1

Where notice of disclaimer is executed under section 656 as respects any property, that property is deemed not to have vested in the Crown under section 654.

F8382

As regards property in England and Wales F839section 178(4) and sections 179 to 182 of the Insolvency Act shall apply as if the property had been disclaimed by the liquidator under the said section 91 immediately before the dissolution of the company.

3

As regards property in Scotland, the following 4 subsections apply.

4

The Crown’s disclaimer operates to determine, as from the date of the disclaimer, the rights, interests and liabilities of the company, and the property of the company, in or in respect of the property disclaimed; but it does not (except so far as is necessary for the purpose of releasing the company and its property from liability) affect the rights or liabilities of any other person.

5

The court may, on application by a person who either claims an interest in disclaimed property or is under a liability not discharged by this Act in respect of disclaimed property, and on hearing such persons as it thinks fit, make an order for the vesting of the property in or its delivery to any persons entitled to it, or to whom it may seem just that the property should be delivered by way of compensation for such liability, or a trustee for him, and on such terms as the court thinks just.

6

On such a vesting order being made, the property comprised in it vests accordingly in the person named in that behalf in the order, without conveyance or assignation for that purpose.

7

Part II of Schedule 20 has effect for the protection of third parties where the property disclaimed is held under a lease.

C256658 Liability for rentcharge on company’s land after dissolution.

F8401

F841Section 180 of the Insolvency Act shall apply to land in England and Wales which by operation of law vests subject to a rentcharge in the Crown or any other person on the dissolution of a company as it applies to land so vesting on a disclaimer under that section.

2

In this section “company” includes any body corporate.

Chapter VII Miscellaneous Provisions About Winding Up

F575659–662. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F576663. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F577664. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

C173Part XXI

Annotations:

Modifications etc. (not altering text)

C173

Pt. 21 modified (24.3.2003) by Proceeds of Crime Act 2002 (c. 29), ss. {426(10)(b)}, 458(1)(3); S.I. 2003/333,{art. 2}, Sch. (as amended by S.I. 2003/531)

F578665–674. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Part XXII Bodies Corporate Subject, or Becoming Subject, to this Act (Otherwise than by Original Formation Under Part I)

F579 F579Chapter I Companies Formed or Registered under Former Companies Acts

Annotations:

Amendments (Textual)

F579

Ss. 651-706 repealed (1.10.2009) by Companies Act 2006 (c. 46), ss. 1295, 1300, Sch. 16; S.I. 2008/2860, art. 4, Sch. 1 (with arts. 5, 7, 8, Sch. 2 (as amended by S.I. 2009/1802, art. 18, Sch.))

675 Companies formed and registered under former Companies Acts.

1

In its application to existing companies, this Act 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 I of this Act as a company limited by shares,

b

679 Northern Ireland and Irish companies.

Nothing in sections 675 to 678 applies to companies registered in Northern Ireland or the Republic of Ireland.

F580 F580 Chapter II Companies not Formed under Companies Legislation, but Authorised to Register

Annotations:

Amendments (Textual)

F580

Ss. 651-706 repealed (1.10.2009) by Companies Act 2006 (c. 46), ss. 1295, 1300, Sch. 16; S.I. 2008/2860, art. 4, Sch. 1 (with arts. 5, 7, 8, Sch. 2 (as amended by S.I. 2009/1802, art. 18, Sch.))

680 Companies capable of being registered under this Chapter.

1

With the exceptions and subject to the provisions contained in this section and the next—

a

any company consisting of two 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 Act), in pursuance of any Act of Parliament (other than this Act), or of letters patent, or being otherwise duly constituted according to law, and consisting of two or more members,

may at any time, on making application in the prescribed form, register under this Act as an unlimited company, or as a company limited by shares, or as a company limited by guarantee; and the registration is not invalid by reason that it has taken place with a view to the company’s being wound up.

F8501A

A company shall not be prevented from registering under this Act as a private company limited by shares or by guarantee solely because it has only one member.

2

A company registered in any part of the United Kingdom under the M22Companies Act 1862 the M23 Companies (Consolidation) Act 1908the M24Companies Act 1929 or the M25Companies Act 1948 shall not register under this section.

3

A company having the liability of its members limited by Act of Parliament or letters patent, and not being a joint stock company, shall not register under this section.

4

A company having the liability of its members limited by Act of Parliament or letters patent shall not register in pursuance of this section 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 section as a company limited by shares.

C264681 Procedural requirements for registration.

1

A company shall not register under section 680 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 Act of Parliament or letters patent is about to register as a limited company, the majority required to assent as required by subsection (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 section 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 section 680) 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 section 680, it shall deliver to the registrar of companies—

a

a statement that the registered office of the company is to be situated in England and Wales, or in Wales, or in Scotland (as the case may be).

b

a statement specifying the intended situation of the company’s registered office after registration, and

c

in an appropriate case, if the company wishes to be registered with the Welsh equivalent of “public limited company” or, as the case may be, “limited” as the last words or word of its name, a statement to that effect.

6

Any statement delivered to the registrar under subsection (5) shall be made in the prescribed form.

682 Change of name on registration.

1

Where the name of a company seeking registration under section 680 is a name by which it is precluded from registration by section 26 of this Act, either because it falls within subsection (1) of that section or, if it falls within subsection (2), because the Secretary of State would not approve the company’s 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 section requires the like assent of the company’s members as is required by section 681 for registration.

683 Definition of “joint stock company”.

1

For 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 Act is deemed a company limited by shares.

684 Requirements for registration by joint stock companies.

1

Before the registration under section 680 of a joint stock company, there shall be delivered to the registrar of companies 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 list F851(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 Act of Parliament, royal charter, letters patent, deed or 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 of companies 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.

685 Registration of joint stock company as public company.

1

A joint stock company applying to be registered under section 680 as a company limited by shares may, subject to—

a

satisfying the conditions set out in section 44(2)(a) and (b) (where applicable) and section 45(2) to (4) as applied by this section, and

b

complying with subsection (4) below,

apply to be so registered as a public company.

2

Sections 44 and 45 apply for this purpose as in the case of a private company applying to be re-registered under section 43, but as if a reference to the special resolution required by section 43 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”, or its or their equivalent in Welsh (“cwmni”, “a’r cwmni”), 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 of companies together with the following documents (as well as those required by section 684), 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 section 44(2)(b) as applied by this section, and

e

F852subject to subsection (4A),a statutory declaration in the prescribed form by a director or secretary of the company—

i

that the conditions set out in section 44(2)(a) and (b) (where applicable) and section 45(2) to (4) have been satisfied, and

ii

that, between the balance sheet date referred to in paragraph (b) of this subsection 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.

F8534A

In place of the statutory declaration referred to in paragraph (e) of subsection (4), there may be delivered to the registrar of companies using electronic communications a statement made by a director or secretary of the company as to the matters set out in sub-paragraphs (i) and (ii) of that paragraph.

5

The registrar may accept a declaration under subsection (4)(e) F854or statement under subsection (4A) as sufficient evidence that the conditions referred to in that paragraph have been satisfied.

6

In this section—

“accountant with the appropriate qualifications” means F855a person who would be eligible for appointment as the company’s auditor, if it were a company registered under this Act,
“relevant balance sheet” means a balance sheet prepared as at a date not more that 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 given by F857section 831(4) of the Companies Act 2006;

and section 46 applies (with necessary modifications) for the interpretation of the reference in subsection (4)(c) above to an unqualified report by the accountant.

F8566A

Any person who makes a false statement under subsection (4A) which he knows to be false or does not believe to be true is liable to imprisonment or a fine, or both.

686 Other requirements for registration.

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 of companies—

a

a statement in the prescribed form specifying the name with which the company is proposed to be registered,

F858b

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 Act of Parliament, 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.

F8591A

689 Effect of registration.

Schedule 21 to this Act 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.

690 Power to substitute memorandum and articles for deed of settlement.

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 sections 4 to 6 of this Act 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 of companies 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 I 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 section may be made either with or without alteration of the company’s objects.

4

In this section “deed of settlement” includes any contract of copartnery or other instrument constituting or regulating the company, not being an Act of Parliament, a royal charter or letters patent.

Part XXIII Oversea Companies

F581 F581Chapter I Registration, Etc.

Annotations:

Amendments (Textual)

F581

Ss. 651-706 repealed (1.10.2009) by Companies Act 2006 (c. 46), ss. 1295, 1300, Sch. 16; S.I. 2008/2860, art. 4, Sch. 1 (with arts. 5, 7, 8, Sch. 2 (as amended by S.I. 2009/1802, art. 18, Sch.) and with savings for Pt. 23 Chapter 1 (ss. 690A-699) in The Overseas Companies Regulations 2009 (S.I. 2009/1801, reg. 80, Sch. 8 para. 2)

690AF892 Branch registration under the Eleventh Company Law Directive (89/666/EEC).

1

This section applies to any limited company which—

a

is incorporated outside the United Kingdom and Gibraltar, and

b

has a branch in Great Britain.

2

Schedule 21A to this Act (Branch registration under the Eleventh Company Law Directive (89/666/EEC)) shall have effect in relation to any company to which this section applies.

F893690B Scope of sections 691 and 692.

Sections 691 and 692 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.

C265691 Documents to be delivered to registrar.

1

When a company incorporated outside Great Britain establishes a place of business in Great Britain, it shall within one month of doing so deliver to the registrar of companies 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 F867(subject to subsection (5)). the particulars specified in the next subsection,

ii

a list of the names and addresses of some one or more persons resident in Great Britain 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 paragraph (a) of this subsection, and

iv

F863subject to subsection (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 sub-paragraph (ii)), stating the date on which the company’s place of business in Great Britain was established.

F8642

The list referred to in subsection (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 subsection (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 paragraph (a).

F8653A

In place of the statutory declaration referred to in sub-paragraph (iv) of paragraph (b) of subsection (1), there may be delivered to the registrar of companies 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 Great Britain was established.

4

In subsections (2)(a) and (3)(a) above—

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.

F8664A

Any person who makes a false statement under subsection (3A) which he knows to be false or does not believe to be true is liable to imprisonment or a fine, or both.

F8685

Where a confidentiality order made under section 723B is in force in respect of a director or secretary required to be specified in the list under subsection (1)(b)(i)—

with that return the company shall deliver to the registrar a return in the prescribed form containing the usual residential address of that director or secretary.

1B

If a confidentiality order under section 723B is made in respect of an existing director or secretary of an oversea company, the company shall within the time specified below deliver to the registrar of companies for registration a return in the prescribed form containing the address for the time being notified to it by the director or secretary under regulations made under sections 723B to 723F.

1C

If while a confidentiality order made under section 723B is in force in respect of a director or secretary of an oversea company there is an alteration in his usual residential address, the company shall within the time specified below deliver to the registrar of companies for registration a return in the prescribed form containing the new address.

2

If any change is made in the corporate name of an oversea company, the company shall, within the time specified below, deliver to the registrar of companies for registration a return containing the prescribed particulars of the change.

3

The time for delivery of the returns required by subsections (1) F870, (1B), (1C) and (2) is—

ceases to have a branch in Northern Ireland, and

b

both immediately before and immediately after ceasing to do so, has a place of business, but not a branch, in Great Britain,

it shall be treated for the purposes of section 691 as having established the place of business on the date when it ceased to have a branch in Northern Ireland.

3

Where a company—

a

becomes a company to which section 690A applies,

b

immediately after becoming such a company, has in a part of Great Britain an established place of business but no branch, and

c

immediately before becoming such a company, had an established place of business in that part,

sections 691 and 692 shall, in relation to that part, continue to apply to the company (notwithstanding section 690B) until such time as it gives notice to the registrar for that part that it is a company to which that section applies.

4

Schedule 21B to this Act (transitional provisions in relation to change in registration regime) shall have effect.

1

If it appears to the Secretary of State that the corporate name of an oversea company is a name by which the company, had it been formed under this Act, would on the relevant date F875(determined in accordance with subsections (3A) and (3B)) have been precluded from being registered by section 26 either—

a

because it falls within subsection (1) of that section, or

b

if it falls within subsection (2) of that section, because the Secretary of State would not approve the company’s being registered with that name,

the Secretary of State may serve a notice on the company, stating why the name would not have been registered.

2

If the corporate name of an oversea company is in the Secretary of State’s opinion too like a name appearing on the relevant date in the index of names kept by the registrar of companies under section 714 or which should have appeared in that index on that date, or is the same as a name which should have so appeared, the Secretary of State 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 subsection (1) or (2) later than 12 months after the relevant date F876. . .

F8773A

For the purposes of subsections (1) to (3), the relevant date, in relation to a company, is the date on which it has complied with paragraph 1 of Schedule 21A or section 691(1) or, if there is more than one such date, the first date on which it has complied with that paragraph or that subsection since becoming an oversea company.

3B

But where the company’s corporate name has changed since the date ascertained in accordance with subsection (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 21A or section 692(2), as the case may be.

C2724

An oversea company on which a notice is served under subsection (1) or (2)—

a

may deliver to the registrar of companies for registration a statement in the prescribed form specifying a name approved by the Secretary of State other than its corporate name under which it proposes to carry on business in Great Britain, 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 Secretary of State (other than its corporate name) in substitution for the name previously registered.

5

The name by which an oversea company is for the time being registered under subsection (4) is, for all purposes of the law applying in Great Britain (including this Act and the M26Business Names Act 1985), deemed to be the company’s corporate name; but—

a

this does not affect references to the corporate name in this section, 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 section may be continued or commenced against it by its name for the time being so registered.

6

An oversea company on which a notice is served under subsection (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 Great Britain under its corporate name.

Nothing in this subsection or in section 697(2) (which imposes penalties for its contravention) invalidates any transaction entered into by the company.

7

The Secretary of State may withdraw a notice served under subsection (1) or (2) at any time before the end of the period mentioned in subsection (6); and that subsection does not apply to a company served with a notice which has been withdrawn.

694AF895 Service of documents: companies to which section 690A applies.

1

This section applies to any company to which section 690A applies.

2

Any process or notice required to be served on a company to which this section applies in respect of the carrying on of the business of a branch registered by it under paragraph 1 of Schedule 21A 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 section applies makes default, in respect of a branch, in delivering to the registrar the particulars mentioned in paragraph 3(e) of Schedule 21A, or

b

all the persons whose names have, in respect of a branch, been delivered to the registrar as persons falling within paragraph 3(e) of that Schedule are dead or have ceased to reside in Great Britain, 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 Great Britain.

4

Where a company to which this section applies has more than one branch in Great Britain, 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 section as required to be served in respect of the carrying on of the business of each of its branches.

695 Service of documents on oversea company.

1

Any process or notice required to be served on an oversea company F878to which section 691 applies is sufficiently served if addressed to any person whose name has been delivered to the registrar under preceding sections in 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 Great Britain 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 Great Britain.

695AF896 Registrar to whom documents to be delivered: companies to which section 690A applies.

1

References to the registrar, in relation to a company to which section 690A applies, (except references in Schedule 21C) shall be construed in accordance with the following provisions.

2

The documents which a company is required to deliver to the registrar shall be delivered—

a

to the registrar for England and Wales, if required to be delivered in respect of a branch in England and Wales, and

b

to the registrar for Scotland, if required to be delivered in respect of a branch in Scotland.

3

If a company closes a branch in a part of Great Britain, it shall forthwith give notice of that fact to the registrar for that part; and from the date on which notice is so given it is no longer obliged to deliver documents to that registrar in respect of that branch.

4

In subsection (3) above, the reference to closing a branch in either part of Great Britain includes a reference to a branch ceasing to be situated in that part on becoming situated elsewhere.

696F879Office where documents to be filed.

1

Any document which an oversea company F880to which section 691 applies; is required to deliver to the registar of companies shall be delivered to the registrar at the registration office in England and Wales or Scotland, according to where the company has established a place of business.

2

If the company has established a place of business both in England and Wales and in Scotland, the document shall be delivered at the registration office both in England and Wales and in Scotland.

3

References in this Part F881(except references in Schedule 21C) to the registrar of companies F882, in relation to a company to which section 691 applies, are to be construed in accordance with the above subsections.

4

If an oversea company F883to which section 691 applies ceases to have a place of business in either part of Great Britain, it shall forthwith give notice of that fact to the registrar of companies for that part; and as from the date on which notice is so given the obligation of the company to deliver any document to the registrar ceases.

697 Penalties for non-compliance.

1

If an oversea company fails to comply with any of sections 691 to 693 and 696, 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.

C2732

If an oversea company contravenes section 694(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.

F8843

if an oversea company fails to comply with section 695A or Schedule 21A, 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

F886698 Definitions F885. . ..

1

For purposes of this Chapter—

“certified” means certified in the prescribed manner to be a true copy or a correct translation;
“director”, in relation to an oversea company, includes shadow director; and
“secretary” includes any person occupying the position of secretary by whatever name called.

F8872

For the purposes of this Part (except section 699A and Schedule 21C):

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)

699 Channel Islands and Isle of Man companies.

1

With the exceptions specified in subsection (3) below, the provisions of this Act F889and the Companies Act 2006 requiring documents to be forwarded or delivered to or filed with the registrar of companies and applying to companies formed and registered under Part I apply also (if they would not otherwise) to an oversea company F888to which section 691 applies incorporated in the Channel Islands or the Isle of Man.

2

Those provisions apply to such a company—

a

if it has established a place of business in England and Wales, as if it were registered in England and Wales,

b

if it has established a place of business in Scotland, as if it were registered in Scotland, and

c

if it has established a place of business both in England and Wales and in Scotland, as if it were registered in both England and Wales and Scotland,

with such modifications as may be necessary and, in particular, apply in a similar way to documents relating to things done outside Great Britain as if they had been done in Great Britain.

3

The exceptions are—

section 6(1) (resolution altering company’s objects),
section 18 (alteration of memorandum or articles by statute or statutory instrument),
F891section 441 of the Companies Act 2006 (directors’ duty to file accounts),
section 288(2) (notice to registrar of change of directors or secretary), and
F890Chapter 3 of Part 3 of the Companies Act 2006 (resolutions and agreements affecting a company's constitution), so far as applicable to a resolution altering a company’s memorandum or articles.

F582 F582Chapter II Delivery of Accounts and Reports

Annotations:

Amendments (Textual)

F582

Ss. 651-706 repealed (1.10.2009) by Companies Act 2006 (c. 46), ss. 1295, 1300, Sch. 16; S.I. 2008/2860, art. 4, Sch. 1 (with arts. 5, 7, 8, Sch. 2 (as amended by S.I. 2009/1802, art. 18, Sch.))

F903699A Credit and financial institutions to which the Bank Branches Directive (89/117/EEC) applies.

1

This section 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 Great Britain.

2

Schedule 21C (delivery of accounts and reports) shall have effect in relation to any institution to which this section applies.

3

In this section—

“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;

F904“credit institution” means a credit institution as defined in F905Article 4(1)(a) of Directive 2006/48/EC of the European Parliament and of the Council of 14 June 2006 relating to the taking up and pursuit of the business of credit institutions, 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 as in Part VII.

699AAF906 Companies to which the Eleventh Company Law Directive applies.

1

This section applies to any limited company which—

a

is incorporated outside the United Kingdom and Gibraltar,

b

has a branch in Great Britain, and

c

is not an institution to which section 699A applies.

2

Schedule 21D to this Act (delivery of accounts and reports) shall have effect in relation to any company to which this section applies.

F907699B Scope of sections 700 to 703.

Sections 700 to 703 shall not apply to any institution to which section 699A applies F908or to any limited company which is incorporated outside the United Kingdom and Gibraltar and has a branch in the United Kingdom.

C274700 Preparation of accounts and reports by oversea companies.

C2751

Every oversea company 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 formed and registered under this Act.

2

The Secretary of State may by order—

a

modify the requirements referred to in subsection (1) for the purpose of their application to oversea companies;

b

exempt an oversea company from those requirements or from such of them as may be specified in the order.

3

An order may make different provision for different cases or classes of case and may contain such incidental and supplementary provisions as the Secretary of State thinks fit.

4

An order under this section shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

F897 C276701 Oversea company’s financial year and accounting reference periods.

1

F898Sections 390 to 392 of the Companies Act 2006 (financial year and accounting reference periods) apply to an oversea 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 Great Britain.

3

Omit F899section 392(3) (restriction on frequency with which current accounting reference period may be extended).

C277702F900 Delivery to registrar of accounts and reports of oversea company.

1

An oversea 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 section 700.

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 an oversea 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 section.

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 Great Britain.

4

If the relevant accounting period is treated as shortened by virtue of a notice given by the company under F901section 392 of the Companies Act 2006 (alteration of accounting reference date), the period allowed is that applicable in accordance with the above provisions or three months from the date of the notice under that section, whichever last expires.

5

If for any special reason the Secretary of State thinks fit he may, on an application made before the expiry of the period otherwise allowed, by notice in writing to an oversea company extend that period by such further period as may be specified in the notice.

6

In this section “the relevant accounting reference period” means the accounting reference period by reference to which the financial year for the accounts in question was determined.

C278703F902 Penalty for non-compliance.

1

If the requirements of section 702(1) 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 Act, 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 Act.

F596 F596Chapter III Registration of Charges

Annotations:

Amendments (Textual)

F596

Ss. 651-706 repealed (1.10.2009) by Companies Act 2006 (c. 46), ss. 1295, 1300, Sch. 16; S.I. 2008/2860, art. 4, Sch. 1 (with arts. 5, 7, 8, Sch. 2 (as amended by S.I. 2009/1802, art. 18, Sch.))

703AF583 Introductory provisions.

1

The provisions of this Chapter have effect for securing the registration in Great Britain of charges on the property of a registered oversea company.

2

Section 395(2) and (3) (meaning of “charge” and “property”) have effect for the purposes of this Chapter.

3

A “registered oversea company”, in relation to England and Wales or Scotland, means an oversea company which has duly delivered documents to the registrar for that part of Great Britain under section 691 and has not subsequently given notice to him under section 696(4) that it has ceased to have an established place of business in that part.

4

References in this Chapter to the registrar shall be construed in accordance with section 703E below and references to registration, in relation to a charge, are to registration in the register kept by him under this Chapter.

703BF583 Charges requiring registration.

1

The charges requiring registration under this Chapter are those which if created by a company registered in Great Britain would require registration under Part XII of this Act.

2

Whether a charge is one requiring registration under this Chapter shall be determined—

a

in the case of a charge over property of a company at the date it delivers documents for registration under section 691, as at that date,

b

in the case of a charge created by a registered oversea company, as at the date the charge is created, and

c

in the case of a charge over property acquired by a registered oversea company, as at the date of the acquisition.

3

In the following provisions of this Chapter references to a charge are, unless the context otherwise requires, to a charge requiring registration under this Chapter.

Where a charge not otherwise requiring registration relates to property by virtue of which it requires to be registered and to other property, the references are to the charge so far as it relates to property of the former description.

703CF584 The register.

1

The registrar shall keep for each registered oversea company a register, in such form as he thinks fit, of charges on property of the company.

2

The register shall consist of a file containing with respect to each such charge the particulars and other information delivered to the registrar under or by virtue of the following provisions of this Chapter.

3

Section 397(3) to (5) (registrar’s certificate as to date of delivery of particulars) applies in relation to the delivery of any particulars or other information under this Chapter.

703DF585 Company’s duty to deliver particulars of charges for registration.

1

If when an oversea company delivers documents for registration under section 691 any of its property is situtated in Great Britain and subject to a charge, it is the company’s duty at the same time to deliver the prescribed particulars of the charge, in the prescribed form, to the registrar for registration.

2

Where a registered oversea company—

a

creates a charge on property situated in Great Britain, or

b

acquires property which is situated in Great Britain and subject to a charge,

it is the company’s duty to deliver the prescribed particulars of the charge, in the prescribed form, to the registrar for registration within 21 days after the date of the charge’s creation or, as the case may be, the date of the acquisition.

This subsection does not apply if the property subject to the charge is at the end of that period no longer situated in Great Britain.

3

Where the preceding subsections do not apply and property of a registered oversea company is for a continuous period of four months situated in Great Britain and subject to a charge, it is the company’s duty before the end of that period to deliver the prescribed particulars of the charge, in the prescribed form, to the registrar for registration.

4

Particulars of a charge required to be delivered under subsections (1), (2) or (3) may be delivered for registration by any person interested in the charge.

5

If a company fails to comply with subsection (1), (2) or (3), then, unless particulars of the charge have been delivered for registration by another person, the company and every officer of it who is in default is liable to a fine.

6

Section 398(2), (4) and (5) (recovery of fees paid in connection with registration, filing of particulars in register and sending of copy of particulars filed and note as to date) apply in relation to particulars delivered under this Chapter.

703EF586 Registrar to whom particulars, &c. to be delivered.

1

The particulars required to be delivered by section 703D(1) (charges over property of oversea company becoming registered in a part of Great Britain) shall be delivered to the registrar to whom the documents are delivered under section 691.

2

The particulars required to be delivered by section 703D(2) or (3) (charges over property of registered oversea company) shall be delivered—

a

if the company is registered in one part of Great Britain and not in the other, to the registrar for the part in which it is registered, and

b

if the company is registered in both parts of Great Britain but the property subject to the charge is situated in one part of Great Britain only, to the registrar for that part;

and in any other case the particulars shall be delivered to the registrars for both parts of Great Britain.

3

Other documents required or authorised by virtue of this Chapter to be delivered to the registrar shall be delivered to the registrar or registrars to whom particulars of the charge to which they relate have been, or ought to have been, delivered.

4

If a company gives notice under section 696(4) that it has ceased to have an established place of business in either part of Great Britain, charges over property of the company shall cease to be subject to the provisions of this Chapter, as regards registration in that part of Great Britain, as from the date on which notice is so given.

This is without prejudice to rights arising by reason of events occurring before that date.

703FF587 Effect of failure to deliver particulars, late delivery and effect of errors and omissions.

1

The following provisions of Part XII—

a

section 399 (effect of failure to deliver particulars),

b

section 400 (late delivery of particulars), and

c

section 402 (effect of errors and omissions in particulars delivered),

apply, with the following modifications, in relation to a charge created by a registered oversea company of which particulars are required to be delivered under this Chapter.

2

Those provisions do not apply to a charge of which particulars are required to be delivered under section 703D(1) (charges existing when company delivers documents under section 691).

3

In relation to a charge of which particulars are required to be delivered under section 703D(3) (charges registrable by virtue of property being within Great Britain for requisite period), the references to the period of 21 days after the charge’s creation shall be construed as references to the period of four months referred to in that subsection.

703GF588 Delivery of further particulars or memorandum.

Sections 401 and 403 (delivery of further particulars and memorandum of charge ceasing to affect company’s property) apply in relation to a charge of which particulars have been delivered under this Chapter.

703HF589 Further provisions with respect to voidness of charges.

1

The following provisions of Part XII apply in relation to the voidness of a charge by virtue of this Chapter—

a

section 404 (exclusion of voidness as against unregistered charges),

b

section 405 (restrictions on cases in which charge is void),

1

The Secretary of State may by regulations make further provision as to the application of the provisions of this Chapter, or the provisions of Part XII applied by this Chapter, in relation to charges of any description specified in the regulations.

2

The regulations may apply any provisions of regulations made under section 413 (power to make further provision with respect to application of Part XII) or make any provision which may be made under that section with respect to the application of provisions of Part XII.

703LF593 Provisions as to situation of property.

1

The following provisions apply for determining for the purposes of this Chapter whether a vehicle which is the property of an oversea company is situated in Great Britain—

a

a ship, aircraft or hovercraft shall be regarded as situated in Great Britain if, and only if, it is registered in Great Britain;

b

any other description of vehicle shall be regarded as situated in Great Britain on a day if, and only if, at any time on that day the management of the vehicle is directed from a place of business of the company in Great Britain;

and for the purposes of this Chapter a vehicle shall not be regarded as situated in one part of Great Britain only.

2

For the purposes of this Chapter as it applies to a charge on future property, the subject-matter of the charge shall be treated as situated in Great Britain unless it relates exclusively to property of a kind which cannot, after being acquired or coming into existence, be situated in Great Britain; and references to property situated in a part of Great Britain shall be similarly construed.

703MF594 Other supplementary provisions.

1

The following provisions of Part XII apply for the purposes of this Chapter—

a

section 414 (construction of references to date of creation of charge),

b

section 415 (prescribed particulars and related expressions),

c

section 416 (notice of matters disclosed on the register),

d

section 417 (power of court to dispense with signature),

e

section 418 (regulations) and

f

section 419 (minor definitions).

703NF595 Index of defined expressions.

The following Table shows the provisions of this Chapter and Part XII defining or otherwise explaining expressions used in this Chapter (other than expressions used only in the same section)—

charge	sections 703A(2), 703B(3) and 395(2)
charge requiring registration	sections 703B(1) and 396
creation of charge	sections 703M(f) and 419(2)
date of acquisition (of property by a company)	sections 703M(f) and 419(3)
date of creation of charge	sections 703M(a) and 414
property	sections 703A(2) and 395(2)
registered oversea company	section 703A(3)
registrar and registration in relation to a charge	sections 703A(4) and 703E
situated in Great Britain in relation to vehicles	section 703L(1)
in relation to future property	section 703L(2)

F597 F597CHAPTER IV WINDING UP ETC.

Annotations:

Amendments (Textual)

F597

Ss. 651-706 repealed (1.10.2009) by Companies Act 2006 (c. 46), ss. 1295, 1300, Sch. 16; S.I. 2008/2860, art. 4, Sch. 1 (with arts. 5, 7, 8, Sch. 2 (as amended by S.I. 2009/1802, art. 18, Sch.))

F909703O Scope of Chapter.

This Chapter applies to any company to which section 690A applies.

F910703P Particulars to be delivered to the registrar: winding up.

1

Subject to subsection (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 subsection (1) above is 14 days from the date on which the winding up begins.

3

Subject to subsection (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—

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 subsection (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 subsection (1) or (2) is 14 days from the date on which the company becomes subject, or (as the case may be) ceases to be subject to the proceedings concerned.

4

The obligation to deliver a return under subsection (1) or (2) shall apply in respect of each branch which the company has in Great Britain (though where the company has more than one branch in a part of Great Britain 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).

F912703R Penalty for non-compliance

1

If a company fails to comply with section 703P(1) or 703Q(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 section 703P(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 section to prove that he took all reasonable steps for securing compliance with the requirements concerned.

C174 C175 C176Part XXIV The Registrar of Companies, His Functions and Offices

Annotations:

Modifications etc. (not altering text)

C174

Pt. XXIV (ss. 704-715) applied (with modifications) (6.1.1997) by S.I. 1996/2827, reg. 4, Sch. 1

C175

Power to amend and modify Pt. 24 conferred (1.7.2005) by Companies (Audit, Investigations and Community Enterprise) Act 2004 (c. 27), ss. 58(a), 65; S.I. 2004/3322, art. 2(3), Sch. 3 (subject to arts. 3-13)

C176

Pt. 24 (ss. 704-715A) modified (1.7.2005) by The Community Interest Company Regulations 2005 (S.I. 2005/1788), reg. 34(4)

704 Registration offices.

F598. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

705 Companies’ registered numbers.

F599. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

705A Registration of branches of oversea companies.

F600. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

706 Delivery to the registrar of documents in legible form.

F601. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F602707. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

707A The keeping of company records by the registrar.

1

F603. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2

F604. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3

F604. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4

F604. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

707B Delivery to the registrar using electronic communications

F605. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

708 Fees payable to registrar.

1

F606. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2

F606. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3

F606. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4

F606. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5

F607. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

709 Inspection, &c. of records kept by the registrar.

F608. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

710 Certificate of incorporation.

F609. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

710A Provision and authentication by registrar of documents in non-legible form.

F610. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

710B Documents relating to Welsh companies.

F611. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

711 Public notice by registrar of receipt and issue of certain documents.

F612. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

711A Exclusion of deemed notice.

F613. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F614712. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

713 Enforcement of company’s duty to make returns.

F615. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

714 Registrar’s index of company and corporate names.

F616. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F617715. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

715A Interpretation.

F618. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

C179 F646Part XXV Miscellaneous and Supplementary Provisions

Annotations:

Amendments (Textual)

F646

Ss. 716-734 repealed (prosp.) by Companies Act 2006 (c. 46), ss. 1295, 1300, Sch. 16 and the repeal being partly in force, as to which see individual sections.

Modifications etc. (not altering text)

C179

Power to amend and modify Pt. 25 conferred (1.7.2005) by Companies (Audit, Investigations and Community Enterprise) Act 2004 (c. 27), ss. 58(b), 65; S.I. 2004/3322, art. 2(3), Sch. 3 (subject to arts. 3-13)

716 Prohibition of partnerships with more than 20 members.

F619. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

717 Limited partnerships: limit on number of members.

F620. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

718 Unregistered companies.

F621. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

719 Power of company to provide for employees on cessation or transfer of business.

F622. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

720 Certain companies to publish periodical statement.

F623. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

721 Production and inspection of books where offence suspected.

F624. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

722 Form of company registers, etc.

F625. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

723 Use of computers for company records.

F626. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

723A Obligations of company as to inspection of registers, &c.

F627. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

723B Confidentiality orders

F628. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

723C Effect of confidentiality orders

F629. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

723D Construction of sections 723B and 723C

F630. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

723E Sections 723B and 723C: offences

F631. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

723F Regulations under sections 723B to 723E

F632. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F633724. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

725 Service of documents.

F634. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

C177726 Costs and expenses in actions by certain limited companies.

1

F635. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

C1782

Where in Scotland a limited company is pursuer 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 defender’s expenses if successful in his defence, order the company to find caution and sist the proceedings until caution is found.

727 Power of court to grant relief in certain cases.

F636. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

728 Enforcement of High Court orders.

F637. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

729 Annual report by Secretary of State.

F638. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

730 Punishment of offences.

1

F639. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2

F639. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3

F639. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4

F639. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5

F640. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

730AMeaning of “officer in default”

F641. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

731 Summary proceedings.

F642. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

732 Prosecution by public authorities.

F643. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

733 Offences by bodies corporate.

F644. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

734 Criminal proceedings against unincorporated bodies.

F645. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Part XXVI Interpretation

735“Company”, etc.

F647. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

735A Relationship of this Act to Insolvency Act.

F648. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

735B Relationship of this Act to Parts IV and V of the Financial Services Act 1986.

F649. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

736“Subsidiary”, “holding company” and “wholly-owned subsidiary”.

F650. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

736A Provisions supplementing s. 736.

F651. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

736B Power to amend ss. 736 and 736A.

F652. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

737“Called-up share capital”.

F653. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

738“Allotment” and “paid up”.

F654. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

739“Non-cash asset”.

F655. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

740“Body corporate” and “corporation”.

F656. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

741“Director” and “shadow director”.

F657. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

742 Expressions used in connection with accounts.

F658. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

742A Meaning of “offer to the public”

F659. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

742B Meaning of “banking company”

F660. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

742C Meaning of “insurance company” and “authorised insurance company”

F661. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

743“Employees’ share scheme”.

F662. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

743A Meaning of “office copy” in Scotland.

F663. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

744 Expressions used generally in this Act.

F664. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

744A Index of defined expressions.

F665. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Part XXVII Final Provisions

745 Northern Ireland.

F666. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F667746 Commencement.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

747 Citation.

This Act may be cited as the Companies Act 1985.

SCHEDULES

F668 F668SCHEDULE 1Particulars of Directors etc. to be Contained in Statement Under Section 10

Annotations:

Amendments (Textual)

F668

Schs. 1, 2 repealed (1.10.2009) by Companies Act 2006 (c. 46), ss. 1295, 1300, Sch. 16; S.I. 2008/2860, art. 4, Sch. 1 (with arts. 5, 7, 8, Sch. 2 (as amended by S.I. 2009/1802, art. 18, Sch.))

Directors

1

—Subject as provided below, the statement under section 10(2) shall contain the following particulars with respect to each person named as director—

a

in the case of an individual, his present F913name, any former F913name, his usual residential address, his nationality, his business occupation (if any), particulars of any other directorships held by him, or which have been held by him F914and his date of birth;

b

in the case of a corporation F915or Scottish firm, its corporate F916or firm name and registered or principal office.

2

b

in the case of a corporation or a Scottish firm, its corporate or firm name and registered or principal office.

2

However, if all the partners in a 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

F9194

In paragraphs 1(a) and 3(1)(a) above—

a

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.

5

Where a confidentiality order made under section 723B is in force in respect of any individual named as a director or secretary, paragraphs 1(a) and 3(1)(a) have effect as if the references to the usual residential address of the individual were references to the address for the time being notified by him under regulations made under sections 723B to 723F to any companies or oversea companies of which he is a director, secretary or permanent representative, or, if he is not such a director, secretary or permanent representative either the address specified in his application for a confidentiality order under regulations made under section 723B or the address last notified by him under regulations made under sections 723B to 723F as the case may be.

F669 F669SCHEDULE 2 Interpretation of References to “Beneficial Interest”

Annotations:

Amendments (Textual)

F669

Schs. 1, 2 repealed (1.10.2009) by Companies Act 2006 (c. 46), ss. 1295, 1300, Sch. 16; S.I. 2008/2860, art. 4, Sch. 1 (with arts. 5, 7, 8, Sch. 2 (as amended by S.I. 2009/1802, art. 18, Sch.))

F920Part I References in Sections 23, 145, 146 and 148

Annotations:

Amendments (Textual)

F920

Sch 2: heading inserted (subject to the transitional and saving provisions in S.I. 1990/355, arts. 6–9) by Companies Act 1989 (c. 40, SIF 27), ss. 23, 213(2), Sch. 10 para. 18(2)

Employer’s charges and other rights of recovery

3

F942 F942F936Part II References in Schedule 5

Annotations:

Amendments (Textual)

F942

Sch. 1 Pt. 2 repealed (6.4.2008) by The Companies Act 2006 (Consequential Amendments etc) Order 2008 (S.I. 2009/948), arts. 2(2), 3, Sch. 1 para. 89, Sch. 2 (with arts. 6, 11, 12)

F936

Sch. 2 paras. 6–9 inserted (subject to the transitional and saving provisions in S.I. 1990/355, arts. 6–9, Sch. 3) by Companies Act 1989 (c. 40, SIF 27), ss. 23, 213(2), Sch. 10 para. 18(7)

F937 Employer’s charges and other rights of recovery

Annotations:

Amendments (Textual)

F937

Sch. 2 paras. 6–9 inserted (subject to the transitional and saving provisions in S.I. 1990/355, arts. 6–9, Sch. 3) by Companies Act 1989 (c. 40, SIF 27), ss. 23, 213(2), Sch. 10 para. 18(7)

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) below;

b

if the trust is for the purposes of an employee’s share scheme, any such rights as are mentioned in paragraph (a) of that sub-paragraph,

being rights of the undertaking or any of its subsidiary undertakings.

2

The rights referred to are—

a

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 under F938section 61 of the Pension Schemes Act 1993 (deduction of contributions equivalent premium from refund of scheme contributions) or otherwise as reimbursement or partial reimbursement for any F939contributions equivalent premiumpaid in connection with the scheme under F938Chapter III of Part III of that Act.

F940 Trustee’s right to expenses, remuneration, indemnity, &c.

Annotations:

Amendments (Textual)

F940

Sch. 2 paras. 6–9 inserted (subject to the transitional and saving provisions in S.I. 1990/355, arts. 6–9, Sch. 3) by Companies Act 1989 (c. 40, SIF 27), ss. 23, 213(2), Sch. 10 para. 18(7)

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 idemnified 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.

F941 Supplementary

Annotations:

Amendments (Textual)

F941

Sch. 2 paras. 6–9 inserted (subject to the transitional and saving provisions in S.I. 1990/355, arts. 6–9, Sch. 3) by Companies Act 1989 (c. 40, SIF 27), ss. 23, 213(2), Sch. 10 para. 18(7)

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 VII.

3

This Part of this Schedule applies in relation to debentures as it applies in relation to shares.

4

5

In sub-paragraph (4) of this paragraph and in paragraph 7(2) “employee” and “employer” shall be read as if a director of an undertaking were employed by it.

C180 C181 F676SCHEDULE 3 Mandatory Contents of Prospectus

Section 56, et passim in Part III.

Annotations:

Amendments (Textual)

F676

Schs. 1-15B repealed (prosp.) by Companies Act 2006 (c. 46), ss. 1295, 1300, Sch. 16 and the repeal being partly in force, as to which see individual provisions

Modifications etc. (not altering text)

C180

Sch. 3 applied with modifications by S.I. 1985/680, regs. 4–6, Sch.

C181

Sch. 3 modified by S.I. 1991/823, reg. 2(1), Sch.1

F671Part I Matters to be Stated

Annotations:

Amendments (Textual)

F671

Sch. 3 repealed by Financial Services Act 1986 (c. 60, SIF 69), s. 212(3), Sch. 17 Pt. I (the repeal being or coming into force as mentioned in S.I. 1986/2246, art. 5, Sch. 4, 1988/1960, art. 4 (as amended) and S.I. 1988/2285, art. 5 and being otherwiseprosp.)

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

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

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 aquired, as the case may be) has been carried on.

Part II Auditors’ 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) below, 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 no F672subsidiary 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.

F6733

If the company has subsidiary undertakings, the report shall—

a

deal separately with the company’s profits or 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.

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) above 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 VII.

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

The expression “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 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 Act for appointment as auditors of a company.

F6752

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.

3

The accountants making any report required for purposes of paragraph 17 or 18 shall be named in the prospectus.

F677 F677SCHEDULE 4

Annotations:

Amendments (Textual)

F677

Sch. 4 repealed (6.4.2008) by Companies Act 2006 (c. 46), ss. 1295, 1300, Sch. 16; S.I. 2007/3495, art. 8(a), Sch. 2 Pt. 1 (with arts. 7, 12)

C279Part I General Rules and Formats

Annotations:

Modifications etc. (not altering text)

C279

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 below 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 paragraph (b) the individual amounts of any items so combined shall be disclosed in a note to the accounts.

5

Subject to paragraph 4(3) below, 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.

7

F943. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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 F944may be adjusted and F945particulars 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 B The Required Formats for Accounts

Preliminary

6

References in this Part of this Schedule 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 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

Annotations:

Amendments (Textual)

F946

Words substituted by Companies Act 1989 (c. 40, SIF 27), ss. 4(2), 213(2), Sch. 1 para. 2(1) (subject to the transitional and saving provisions in S.I. 1990/355, arts. 6–9, Sch. 2)

F947

Words substituted by Companies Act 1989 (c. 40, SIF 27), ss. 4(2), 213(2), Sch. 1 para. 3(1) (subject to the transitional and saving provisions in S.I. 1990/355, arts. 6–9, Sch. 2)

F948

Words substituted by Companies Act 1989 (c. 40, SIF 27), ss. 4(2), 213(2), Sch. 1 para. 4(1) (subject to the transitional and saving provisions in S.I. 1990/355, arts. 6–9, Sch. 2)

F949

Sch. 4 Balance Sheet Format 1 Item 1: words substituted (12.11.2004 with effect as mentioned in reg. 1(2) of the amending S.I.) by The Companies Act 1985 (International Accounting Standards and Other Accounting Amendments) Regulations 2004 (S.I. 2004/2947), reg. 14(1), Sch. 2 para. 4(2)(a)

Modifications etc. (not altering text)

C280

Sch. 4. Pt. I, Balance Sheet Formats 1and 2 and Note (2) amended (31.10.1994) by 1994 c. 26, s. 106(1), Sch. 4 para. 1(2);S.I. 1994/2550, art. 2

C280 Format I

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 in F946group undertakings

2. Loans to F946group undertakings

3. Shares in F947participating interests

4. Loans to F948undertakings 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 by F946group undertakings

3. Amounts owed by F948undertakings 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 in F946group 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 to F946group undertakings

7. Amounts owed to F948undertakings 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 to F946group undertakings

7. Amounts owed to F948undertakings in which the company has a participating interest

8. Other creditors including taxation and social security (9)

9. Accruals and deferred income (10)

F949provisions 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 Share premium account

III 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

Balance Sheet Formats

Annotations:

Amendments (Textual)

F950

Words substituted by Companies Act 1989 (c. 40, SIF 27), ss. 4(2), 213(2), Sch. 1 para. 2(1) (subject to the transitional and saving provisions in S.I. 1990/355, arts. 6–9, Sch. 2)

F951

Words substituted by Companies Act 1989 (c. 40, SIF 27), ss. 4(2), 213(2), Sch. 1 para. 3(1) (subject to the transitional and saving provisions in S.I. 1990/355, arts. 6–9, Sch. 2)

F952

Words substituted by Companies Act 1989 (c. 40, SIF 27), ss. 4(2), 213(2), Sch. 1 para. 4(1) (subject to the transitional and saving provisions in S.I. 1990/355, arts. 6–9, Sch. 2)

F954

Sch. 4 Balance Sheet Format 2 Item B: words substituted (12.11.2004 with effect as mentioned in reg. 1(2) of the amending S.I.) by The Companies Act 1985 (International Accounting Standards and Other Accounting Amendments) Regulations 2004 (S.I. 2004/2947), reg. 14(1), Sch. 2 para. 4(2)(b)

F953

Words in Sch. 4 Pt. I Section B Note (13) on the Balance sheet formats substituted (2.2.1996) by S.I. 1996/189, reg. 14(1), Sch. 1 para. 3 (with reg. 16)

Modifications etc. (not altering text)

C281

Sch. 4 Pt. I Balance Sheet Formats 1 and 2 and Note (2) amended (31.10.1994) by 1994 c. 26, s. 106(1), Sch. 4 para. 1(2); S.I. 1994/2550, art. 2

Format 2

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 in F950group undertakings

2. Loans to F950group undertakings

3. Shares in F951participating interests

4. Loans to F952undertakings 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 by F950group undertakings

3. Amounts owed by F952undertakings 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 in F950group 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

III 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

F954provisions 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 to F950group undertakings

7. Amounts owed to F952undertakings 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.

C281(2) Concessions, 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.1 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 items F953and for the aggregate of all of these items.

Profit and loss account formats

Annotations:

Amendments (Textual)

F955

Words substituted by Companies Act 1989 (c. 40, SIF 27), ss. 4(2), 213(2), Sch. 1 para. 2(1) (subject to the transitional and saving provisions in S.I. 1990/355, arts. 6–9, Sch. 2)

F956

Words substituted by Companies Act 1989 (c. 40, SIF 27), ss. 4(2), 213(2), Sch. 1 para. 3(1) (subject to the transitional and saving provisions in S.I. 1990/355, arts. 6–9, Sch. 2)

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 in F955group undertakings

8. Income from F956participating 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

Annotations:

Amendments (Textual)

F957

Words substituted by Companies Act 1989 (c. 40, SIF 27), ss. 4(2), 213(2), Sch. 1 para. 2(1) (subject to the transitional and saving provisions in S.I. 1990/355, arts. 6–9, Sch. 2)

F958

Words substituted by Companies Act 1989 (c. 40, SIF 27), ss. 4(2), 213(2), Sch. 1 para. 3(1) (subject to the transitional and saving provisions in S.I. 1990/355, arts. 6–9, Sch. 2)

Modifications etc. (not altering text)

C282

Sch. 4 Pt.I, Balance Sheet Formats 1 and 2 and Note (2) amended (31.10.1994) by 1994 c. 26, s. 106(2), Sch. 4 para. 1(2); S.I. 1994/2550, art. 2

C282 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

6. Staff costs:

(a) wages and salaries

(b) social security costs

7. (a)Depreciation and other amounts written off tangible and intangible fixed assets

(b) Exceptional amounts written off current assets

8. Other operating charges

9. Income from shares in F957group undertakings

10. Income from F958participating 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

Annotations:

Amendments (Textual)

F959

Words substituted by Companies Act 1989 (c. 40, SIF 27), ss. 4(2), 213(2), Sch. 1 para. 2(1) (subject to the transitional and saving provisions in S.I. 1990/355, arts. 6–9, Sch. 2)

F960

Words substituted by Companies Act 1989 (c. 40, SIF 27), ss. 4(2), 213(2), Sch. 1 para. 3(1) (subject to the transitional and saving provisions in S.I. 1990/355, arts. 6–9, Sch. 2)

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 in F959group undertakings

4. Income from F960participating 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

Annotations:

Amendments (Textual)

F961

Words substituted by Companies Act 1989 (c. 40, SIF 27), ss. 4(2), 213(2), Sch. 1 para. 2(1) (subject to the transitional and saving provisions in S.I. 1990/355, arts. 6–9, Sch. 2)

F962

Words substituted by Companies Act 1989 (c. 40, SIF 27), ss. 4(2), 213(2), Sch. 1 para. 3(1) (subject to the transitional and saving provisions in S.I. 1990/355, arts. 6–9, Sch. 2)

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

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 in F961group undertakings

6. Income from F962participating 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

(Formal 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 F961group 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 to F961group 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 II Accounting Principles and Rules

Section A Accounting Principles

Preliminary

9

Subject to paragraph 15 below, 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.

F96311

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

C283b

all liabilities F965. . . which have arisenF965. . . 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 F964section 233 of this Act.

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 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 B Historical Cost Accounting Rules

Preliminary

16

F966Subject to sections C and D of this Part of this Schedule, 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 rules

17

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 of this Schedule 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 items

20

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 of this Schedule, 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) below, 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 item

24

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 amount

25

1

Subject to the following sub-paragraph, 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 cost

26

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;

provided, however, in a case within paragraph (b) above, 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

the amount of that difference shall be disclosed in a note to the accounts.

4

Subject to sub-paragraph (5) below, for the purposes of sub-paragraph (3)(b) above, 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 unknown

28

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 C Alternative 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 of this Schedule 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 of this Schedule may be included either—

a

at 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 of this Schedule 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 below 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 of this Schedule 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, 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

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;

on capitalisation;

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

In F969sub-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 of this Schedule, and subject to sub-paragraphs (3) and (4) below, 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 or debited to the fair value reserve must be disclosed in a note to the accounts.

Part III Notes to the Accounts

Preliminary

35

Any information required in the case of any company by the following provisions of this Part of this Schedule shall (if not given in the company’s accounts) be given by way of a note to those accounts.

Disclosure of accounting policies

35AReserves and dividends

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 paragraph (b) or (c)

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).

F97036A

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 debentures

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) above “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—

F974a

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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.

F9742

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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 section 221 of this Act shall be stated.

Fixed assets

42

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;

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.

Reserves and provisions

45AInformation about fair value of assets and liabilities

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, 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) of this 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.

45DInformation where investment property and living animals and plants included at fair value

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) above, references in relation to any item to the comparable amounts determined in accordance with that sub-paragraph are references to–

a

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.

46

1

Where any amount is transferred—

a

to or from any reserves; or

b

to any F976provisions for liabilities ; or

c

from any F977provision 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 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 the item “other provisions” in the company’s balance sheet in any case where the amount of that provision is material.

Provision for taxation

F97847

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 commitments

50

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; F981. . .

F981b

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F982

51

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

Where any outstanding loans made under the authority of section 153(4)(b) F983, (bb) or (c) or section 155 of this Act (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.

F9843

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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 expenditure

53

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, F985. . .

F985i

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F985ii

. . .; 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 F986group undertakings, but, with that exception, it applies to interest or charges on all loans, whether made on the security of debentures or not.

F9873

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F9874

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F9875

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F9876

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F988

54 F9891

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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 turnover

55

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; F990. . .

b

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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 turnover F991. . ., 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.

Particulars of staff

56. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F992. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

57

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

F993. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3

F993. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

58AF994Dormant companies acting as agents

Where the directors of a company take advantage of the exemption conferred by section 249AA, 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.

F995Part IV Special Provisions Where Company is a Parent Company or Subsidiary Undertaking

Annotations:

Amendments (Textual)

F995

Sch. 4 Pt. IV: heading substituted (subject to the transitional and saving provisions in S.I. 1990/355, arts. 6–9) by Companies Act 1989 (c. 40, SIF 27), ss. 4(2), 213(2), Sch. 1 para. 11(1)

F996 Dealings with or interests in F997group undertakings

Annotations:

Amendments (Textual)

F996

Sch. 4 Pt. IV para. 59 and cross-heading substituted (subject to the transitional and saving provisions in S.I. 1990/355, arts. 6-9) by Companies Act 1989 (c. 40, SIF 27), ss. 4(2), 213(2), Sch. 1 para. 11(2)

F997

Words substituted by Companies Act 1989 (c. 40, SIF 27), ss. 4(2), 213(2), Sch. 1 para. 2(1) (subject to the transitional and saving provisions in S.I. 1990/355, arts. 6–9, Sch. 2)

F99859. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F999 Guarantees and other financial commitments in favour of F1000group undertakings

Annotations:

Amendments (Textual)

F999

Sch. 4 Pt. IV para. 59A inserted (subject to the transitional and saving provisions in S.I. 1990/355, arts. 6–9) by Companies Act 1989 (c. 40, SIF 27), ss. 4(2), 213(2), Sch. 1 para. 11(3)

F1000

Words substituted by Companies Act 1989 (c. 40, SIF 27), ss. 4(2), 213(2), Sch. 1 para. 2(1) (subject to the transitional and saving provisions in S.I. 1990/355, arts. 6–9, Sch. 2)

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 paragraph (a) shall also be stated separately from those within paragraph (b).

60F1001. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Part V Special Provisions where the Company is an Investment Company

71

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 of an investment company in respect of any fixed asset investments need not be charged to the company’s profit and loss account provided 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

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 purposes of this paragraph, a company’s net assets are the aggregate of its assets less the aggregate of its liabilities (including any F1002provision for liabilities within paragraph 89 F1003that is made in Companies Act accounts and any provision that is made in IAS accounts ); and “undistributable reserves” has the meaning given by section 264(3) of this Act.

73

A company shall be treated as an investment company for the purposes of this Part of this Schedule 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 section 266 of this Act, and

b

it was not at any time during that year prohibited under section 265(4) of this Act (no distribution where capital profits have been distributed, etc.) from making a distribution by virtue of that section.

74F1004. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Part VI

75F1005. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Part VII Interpretation of Schedule

76

The following paragraphs apply for the purposes of this Schedule and its interpretation.

76AFinancial instruments

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 designated 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. F1017

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”.

77F1006. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Historical cost accounting rules

82

References to the historical cost accounting rules shall be read in accordance with paragraph 29.

82AInvestment property

“Investment property” means land held to earn rent or for capital appreciation.

Leases

83

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 investments

F100784

1

“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 Great Britain.

2

“Recognised investment exchange” and “overseas investment exchange” have the meaning given in Part 18 of the Financial Services and Markets Act 2000.

Loans

85

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.

Materiality

86

Amounts which in the particular context of any provision of this Schedule are not material may be disregarded for the purposes of that provision.

87F1008. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Provisions

88

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 of this Schedule 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.

89

References to F1009provisions for liabilities are to any amount retained as reasonably necessary for the purposes of providing for any liability F1010the 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.

90F1011. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

93 Scots land tenure

In the application of this Schedule to Scotland, “land of freehold tenure” means land in respect of which the company F1012is the proprietor of the dominium utile or, in the case of land not held on feudal tenure,is the owner; “land of leasehold tenure” means land of which the company is the tenant under a lease F1012; and the reference to ground-rents, rates and other outgoings includes feu-duty and ground annual.

Staff costs

94

1

“Social security costs” means any contributions by the company to any state social security or pension scheme, fund or arrangement.

F10132

“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 of F1014the 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 of F1015section 231A(1)(a) .

95F1016. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F678 F678 Schedule 4A

Annotations:

Amendments (Textual)

F678

Sch. 4A repealed (6.4.2008) by Companies Act 2006 (c. 46), ss. 1295, 1300, Sch. 16; S.I. 2007/3495, art. 8(a), Sch. 2 Pt. 1 (with arts. 7, 12)

General rules

1

Group accounts shall comply so far as practicable with the F1018provisions of F1020. . . Schedule 4 (form and content of company accounts) as if the undertakings included in the consolidation (“the group”) were a single company.

F10192

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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 consolidation F1021does 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 three 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.

F1022 Elimination of group transactions

Annotations:

Amendments (Textual)

F1022

Sch. 4A inserted (subject to the transitional and saving provisions in S.I. 1990/355, arts. 6–9) by Companies Act 1989 (c. 40, SIF 27), ss. 5(2), 213(2), Sch. 2

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.

F1023 Acquisition and merger accounting

Annotations:

Amendments (Textual)

F1023

Sch. 4A inserted (subject to the transitional and saving provisions in S.I. 1990/355, arts. 6–9) by Companies Act 1989 (c. 40, SIF 27), ss. 5(2), 213(2), Sch. 2

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.

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.

F10254

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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 re-statement of opening consolidated reserves).

7

In ascertaining for the purposes of sub-paragraph F1026. . ., (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 off F1027otherwise than in the consolidated profit and loss account for that or any earlier financial yearotherwise 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 above 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 Secretary of State agrees that the information should not be disclosed.

F1028 Minority interests

Annotations:

Amendments (Textual)

F1028

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) above shall be treated as one to which a letter is assigned, and

b

the additional items required by sub-paragraphs (3) and (4) above shall be treated as ones to which an Arabic number is assigned.

F1029 Interests in subsidiary undertakings excluded from consolidation

Annotations:

Amendments (Textual)

F1029

Sch. 4A inserted (subject to the transitional and saving provisions in S.I. 1990/355, arts. 6–9) by Companies Act 1989 (c. 40, SIF 27), ss. 5(2), 213(2), Sch. 2

18. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1030. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1031 Joint ventures

Annotations:

Amendments (Textual)

F1031

Sch. 4A inserted (subject to the transitional and saving provisions in S.I. 1990/355, arts. 6–9) by Companies Act 1989 (c. 40, SIF 27), ss. 5(2), 213(2), Sch. 2

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 of F1032this Schedule relating to the preparation of consolidated accounts apply, with any necessary modifications, to proportional consolidation under this paragraph.

F1033 Associated undertakings

Annotations:

Amendments (Textual)

F1033

Sch. 4A inserted (subject to the transitional and saving provisions in S.I. 1990/355, arts. 6–9) by Companies Act 1989 (c. 40, SIF 27), ss. 5(2), 213(2), Sch. 2

C28420

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

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.

F679 F679SCHEDULE 5

Annotations:

Amendments (Textual)

F679

Sch. 5 repealed (6.4.2008) by Companies Act 2006 (c. 46), ss. 1295, 1300, Sch. 16; S.I. 2007/3495, art. 8(a), Sch. 2 Pt. 1 (with arts. 7, 12)

Part I Companies not Required to Prepare Group Accounts

Subsidiary undertakings

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 Great Britain, the country in which it is incorporated;

F1034b

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

c

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 section 229, it shall be stated with respect to each subsidiary undertaking which of those exclusions applies.

F1035 Holdings in subsidiary undertakings

Annotations:

Amendments (Textual)

F1035

Sch. 5 substituted (subject to the transitional and saving provisions in S.I. 1990/355, arts 6–9, Sch. 2) by Companies Act 1989 (c. 40, SIF 27), ss. 6(2), 213(2), Sch. 3

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.

F1036 Financial information about subsidiary undertakings

Annotations:

Amendments (Textual)

F1036

Sch. 5 substituted (subject to the transitional and saving provisions in S.I. 1990/355, arts 6–9, Sch. 2) by Companies Act 1989 (c. 40, SIF 27), ss. 6(2), 213(2), Sch. 3

if not, its financial year ending last before the end of the company’s financial year.

F1038 Financial years of subsidiary undertakings

Annotations:

Amendments (Textual)

F1038

Sch. 5 substituted (subject to the transitional and saving provisions in S.I. 1990/355, arts 6–9, Sch. 2) by Companies Act 1989 (c. 40, SIF 27), ss. 6(2), 213(2), Sch. 3

F10394

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).

F1040 Further information about subsidiary undertakings

Annotations:

Amendments (Textual)

F1040

Sch. 5 substituted (subject to the transitional and saving provisions in S.I. 1990/355, arts 6–9, Sch. 2) by Companies Act 1989 (c. 40, SIF 27), ss. 6(2), 213(2), Sch. 3

F10415. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1042 Shares and debentures of company held by subsidiary undertakings

Annotations:

Amendments (Textual)

F1042

Sch. 5 substituted (subject to the transitional and saving provisions in S.I. 1990/355, arts 6–9, Sch. 2) by Companies Act 1989 (c. 40, SIF 27), ss. 6(2), 213(2), Sch. 3

6

1

The number, description and amount of the shares in F1043. . . the company held by or on behalf of its subsidiary undertakings shall be disclosed.

2

Sub-paragraph (1) does not apply in relation to shares F1044. . . in the case of which the subsidiary undertaking is concerned as personal representative or, subject as follows, as trustee.

3

The exception for shares F1044. . .in relation to which the subsidiary undertaking is concerned as trustee does not apply if the company, or any subsidiary undertaking of the company, is beneficially interested under the trust, otherwise than by way of security only for the purposes of a transaction entered into by it in the ordinary course of a business which includes the lending of money.

4

Schedule 2 to this Act has effect for the interpretation of the reference in sub-paragraph (3) to a beneficial interest under a trust.

F1045 Significant holdings in undertakings other than subsidiary undertakings

Annotations:

Amendments (Textual)

F1045

Sch. 5 substituted (subject to the transitional and saving provisions in S.I. 1990/355, arts 6–9, Sch. 2) by Companies Act 1989 (c. 40, SIF 27), ss. 6(2), 213(2), Sch. 3

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 to F104620 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) exceeds F1046one-fifth of the amount (as so stated) of the company’s assets.

F10478

1

The name of the undertaking shall be stated.

2

There shall be stated—

a

if the undertaking is incorporated outside Great Britain, the country in which it is incorporated;

F1048b

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

c

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

b

if not, its financial year ending last before the end of the company’s financial year.

9AF1050 Membership of certain undertakings

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 Great Britain) or, if it does not have such an office, its head office (whether in or outside Great Britain).

3

Where the undertaking is a qualifying partnership there shall also be stated either—

a

that a copy of the latest accounts of the undertaking has been or is to be appended to the copy of the company’s accounts sent to the registrar under section 242 of this Act, or

b

the name of at least one body corporate (which may be the company) in whose group accounts the undertaking has been or is to be dealt with on a consolidated basis.

4

Information otherwise required by sub-paragraph (2) above need not be given if it is not material.

5

Information otherwise required by sub-paragraph (3)(b) above need not be given if the notes to the company’s accounts disclose that advantage has been taken of the exemption conferred by regulation 7 of the Partnerships and Unlimited Companies (Accounts) Regulations 1993.

6

In this paragraph—

“dealt with on a consolidated basis”, “member”, “qualifying company” and “qualifying partnership” have the same meanings as in the Partnerships and Unlimited Companies (Accounts) Regulations 1993;

“qualifying undertaking” means a qualifying partnership or a qualifying company.

F1051 Arrangements attracting merger relief

Annotations:

Amendments (Textual)

F1051

Sch. 5 substituted (subject to the transitional and saving provisions in S.I. 1990/355, arts 6–9, Sch. 2) by Companies Act 1989 (c. 40, SIF 27), ss. 6(2), 213(2), Sch. 3

F105210. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1053 Parent undertaking drawing up accounts for larger group

Annotations:

Amendments (Textual)

F1053

Sch. 5 substituted (subject to the transitional and saving provisions in S.I. 1990/355, arts 6–9, Sch. 2) by Companies Act 1989 (c. 40, SIF 27), ss. 6(2), 213(2), Sch. 3

C28511

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 Great Britain, the country in which it is incorporated;

F1054b

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

c

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.

F1055 Identification of ultimate parent company

Annotations:

Amendments (Textual)

F1055

Sch. 5 substituted (subject to the transitional and saving provisions in S.I. 1990/355, arts 6–9, Sch. 2) by Companies Act 1989 (c. 40, SIF 27), ss. 6(2), 213(2), Sch. 3

C28612

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—

a

if that company is incorporated outside Great Britain, the country in which it is incorporated;

F1056b

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4

In this paragraph “company” includes any body corporate.

F1057 Constructions of references to shares held by company

Annotations:

Amendments (Textual)

F1057

Sch. 5 substituted (subject to the transitional and saving provisions in S.I. 1990/355, arts 6–9, Sch. 2) by Companies Act 1989 (c. 40, SIF 27), ss. 6(2), 213(2), Sch. 3

where apart from the right to exercise them for the purpose of preserving the value of the security, or of realising it, the rights attached to the shares are exercisable only in accordance with his instructions, and

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 attached to the shares are exercisable only in his interests.

F1059Part II Companies Required to Prepare Group Accounts

Annotations:

Amendments (Textual)

F1059

Sch. 5 substituted (subject to the transitional and saving provisions in S.I. 1990/355, arts 6–9, Sch. 2) by Companies Act 1989 (c. 40, SIF 27), ss. 6(2), 213(2), Sch. 3

Introductory

14

In this Part of this Schedule “the group” means the group consisting of the parent company and its subsidiary undertakings.

F1060 Subsidiary undertakings

Annotations:

Amendments (Textual)

F1060

Sch. 5 substituted (subject to the transitional and saving provisions in S.I. 1990/355, arts 6–9, Sch. 2) by Companies Act 1989 (c. 40, SIF 27), ss. 6(2), 213(2), Sch. 3

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 Great Britain, the country in which it is incorporated;

F1061b

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

c

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 section 258(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 subsection (2)(a) of that section (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.

F1062 Holdings in subsidiary undertakings

Annotations:

Amendments (Textual)

F1062

Sch. 5 substituted (subject to the transitional and saving provisions in S.I. 1990/355, arts 6–9, Sch. 2) by Companies Act 1989 (c. 40, SIF 27), ss. 6(2), 213(2), Sch. 3

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 paragraphs (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.

F1063 Financial information about subsidiary undertakings not included in the consolidation

Annotations:

Amendments (Textual)

F1063

Sch. 5 substituted (subject to the transitional and saving provisions in S.I. 1990/355, arts 6–9, Sch. 2) by Companies Act 1989 (c. 40, SIF 27), ss. 6(2), 213(2), Sch. 3

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

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.

1

The number, description and amount of the shares in F1069. . .the company held by or on behalf of its subsidiary undertakings shall be disclosed.

2

Sub-paragraph (1) does not apply in relation to shares F1070. . . in the case of which the subsidiary undertaking is concerned as personal representative or, subject as follows, as trustee.

3

The exception for shares. . .in relation to which the subsidiary undertaking is concerned as trustee does not apply if the company or any of its subsidiary undertakings is beneficially interested under the trust, otherwise than by way of security only for the purposes of a transaction entered into by it in the ordinary course of a business which includes the lending of money.

4

Schedule 2 to this Act has effect for the interpretation of the reference in sub-paragraph (3) to a beneficial interest under a trust.

F1071 Joint ventures

Annotations:

Amendments (Textual)

F1071

Sch. 5 substituted (subject to the transitional and saving provisions in S.I. 1990/355, arts 6–9, Sch. 2) by Companies Act 1989 (c. 40, SIF 27), ss. 6(2), 213(2), Sch. 3

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.

F1072 Associated undertakings

Annotations:

Amendments (Textual)

F1072

Sch. 5 substituted (subject to the transitional and saving provisions in S.I. 1990/355, arts 6–9, Sch. 2) by Companies Act 1989 (c. 40, SIF 27), ss. 6(2), 213(2), Sch. 3

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 Great Britain, the country in which it is incorporated;

F1073b

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

c

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 paragraphs (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.

F1074 Other significant holdings of parent company or group

Annotations:

Amendments (Textual)

F1074

Sch. 5 substituted (subject to the transitional and saving provisions in S.I. 1990/355, arts 6–9, Sch. 2) by Companies Act 1989 (c. 40, SIF 27), ss. 6(2), 213(2), Sch. 3

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 to F107520 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) exceeds F1075one-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 Great Britain, the country in which it is incorporated;

F1076b

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

c

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 to F107820 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) exceeds F1078one-fifthof 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 Great Britain, the country in which it is incorporated;

F1079b

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

c

b

if not, its financial year ending last before the end of the parent company’s financial year.

28AF1081 Parent company’s or group’s membership of certain undertakings

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 Great Britain) or, if it does not have such an office, its head office (whether in or outside Great Britain).

3

Where the undertaking is a qualifying partnership there shall also be stated either—

a

that a copy of the latest accounts of the undertaking has been or is to be appended to the copy of the company’s accounts sent to the registrar under section 242 of this Act, or

b

the name of at least one body corporate (which may be the company) in whose group accounts the undertaking has been or is to be dealt with on a consolidated basis.

4

Information otherwise required by sub-paragraph (2) above need not be given if it is not material.

5

6

In this paragraph—

“qualifying undertaking” means a qualifying partnership or a qualifying company.

F1082 Arrangements attracting merger relief

Annotations:

Amendments (Textual)

F1082

Sch. 5 substituted (subject to the transitional and saving provisions in S.I. 1990/355, arts 6–9, Sch. 2) by Companies Act 1989 (c. 40, SIF 27), ss. 6(2), 213(2), Sch. 3

F108329. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1084 Parent undertaking drawing up accounts for larger group

Annotations:

Amendments (Textual)

F1084

Sch. 5 substituted (subject to the transitional and saving provisions in S.I. 1990/355, arts 6–9, Sch. 2) by Companies Act 1989 (c. 40, SIF 27), ss. 6(2), 213(2), Sch. 3

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 Great Britain, the country in which it is incorporated;

F1085b

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

c

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.

F1086 Identification of ultimate parent company

Annotations:

Amendments (Textual)

F1086

Sch. 5 substituted (subject to the transitional and saving provisions in S.I. 1990/355, arts 6–9, Sch. 2) by Companies Act 1989 (c. 40, SIF 27), ss. 6(2), 213(2), Sch. 3

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—

a

if that company is incorporated outside Great Britain, the country in which it is incorporated;

F1087b

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4

In this paragraph “company” includes any body corporate.

F1088 Construction of references to shares held by parent company or group

Annotations:

Amendments (Textual)

F1088

Sch. 5 substituted (subject to the transitional and saving provisions in S.I. 1990/355, arts 6–9, Sch. 2) by Companies Act 1989 (c. 40, SIF 27), ss. 6(2), 213(2), Sch. 3

32

1

References in this Part of this Schedule to shares held by the parent company or the group shall be construed as follows.

2

For the purposes of paragraphs 16, 22(4) and (5) and 23 to 25 (information about holdings in subsidiary and other undertakings)—

a

there shall be attributed to the parent company shares held on its behalf by any person; but

b

there shall be treated as not held by the parent company shares held on behalf of a person other than the company.

3

References to shares held by the group are to any shares held by or on behalf of the parent company or any of its subsidiary undertakings; but there shall be treated as not held by the group any shares held on behalf of a person other than the parent company or any of its subsidiary undertakings.

4

Shares held by way of security shall be treated as held by the person providing the security—

a

b

F680 F680SCHEDULE 6

Annotations:

Amendments (Textual)

F680

Sch. 6 repealed (6.4.2008) by Companies Act 2006 (c. 46), ss. 1295, 1300, Sch. 16; S.I. 2007/3495, art. 8(a), Sch. 2 Pt. 1 (with arts. 7, 12); and Sch. 6 para. 27(1)(d) and certain words in Sch. 6 paras. 15-17, 19, 22, 24 are expressed to be repealed (6.4.2008 with effect as stated in Sch. 1 para. 90(2) of the amending S.I.) by S.I. 2008/948, arts. 2(1), 3, Sch. 1 para. 90(1), Sch. 2 (with arts. 6, 11, 12)

F1089Part IChairman’s and Directors’ Emoluments, Pensions and Compensation for Loss of Office

Annotations:

Amendments (Textual)

F1089

Sch. 6 Pt. I inserted (the existing Part I renumbered as Part II) by Companies Act 1989 (c. 40, SIF 27), ss. 6(4), 213(2), Sch. 4 para. 3 (subject to the transitional and saving provisions mentioned in S.I. 1990/355, arts. 6–9)

CHAPTER 1 PROVISIONS APPLYING TO QUOTED AND UNQUOTED COMPANIES

F1096 Aggregate amount of directors’ emoluments etc.

Annotations:

Amendments (Textual)

F1096

Sch. 6 para. 1 substituted (31.3.1997) by S.I. 1997/570, reg. 2

1F1097Aggregate amount of directors’ emoluments etc.

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

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—
1. a
  the market price of the shares on the day on which the option was exercised; and
2. b
  the price actually paid for the shares;
'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;
F1099. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
'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;
F1100“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—
1. a
  as director of any of its subsidiary undertakings; or
2. b
  otherwise in connection with the management of the affairs of the company or any of its subsidiary undertakings;
F1101“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 section 188(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.

CHAPTER 2 PROVISIONS APPLYING ONLY TO UNQUOTED COMPANIES

F1102 X32Details of highest paid director’s emoluments etc.

Annotations:

Editorial Information

X32

There is a version of this provision that is earlier than the first version listed in the table of attributes below. This is because, when the new Chapter 1 Heading was inserted on 1.8.2002 only the version of this provision that was current on that date became associated with that new heading. To view the earlier version, it is recommended that you perform a search for a specific date earlier than the start date of the first version listed in the table of attributes below.

Amendments (Textual)

F1102

Sch. 6 para. 2 substituted (31.3.1997) for Sch. 6 paras. 2-6 by S.I. 1997/570, reg. 3(1)

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—
1. a
  he had left the company’s service at the end of the financial year;
2. b
  there were no increase in the general level of prices in Great Britain during the period beginning with the end of that year and ending with his attaining that age;
3. c
  no question arose of any commutation of the pension or inverse commutation of the lump sum; and
4. 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;
'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 purposes of that paragraph.

F1104 X34Pensions of directors and past directors

Annotations:

Editorial Information

X34

Amendments (Textual)

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.

F1106 X36 Compensation to directors for loss of office

Annotations:

Editorial Information

X36

Amendments (Textual)

F1106

X378

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;

F1107. . ..

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.

F11084

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.

F11085

Sub-paragraph (6)(a) of paragraph 1 applies for the purposes of this paragraph as it applies for the purposes of that paragraph.

F1109 X38 Sums paid to third parties in respect of directors’ services

Annotations:

Editorial Information

X38

Amendments (Textual)

F1109

X399

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.

F1110 X40Supplementary

Annotations:

Editorial Information

X40

Amendments (Textual)

F1110

X4110

1

The following applies with respect to the amounts to be shown under F1111this Part of 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, by virtue of sections 314 and 315 of this Act (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.

F11123

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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).

X4211

1

The amounts to be shown for any financial year under F1113this Part of this Schedule 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.

X4312

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 of this Schedule, 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.

F1114 X44Interpretation

Annotations:

Editorial Information

X44

Amendments (Textual)

F1114

X4513

1

The following applies for the interpretation of this Part of this Schedule.

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 sub-paragraph) 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 7 F1115. . . 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.

F11163

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 M29;

b

'retirement benefits’ has the meaning assigned to relevant benefits by section 612(1) of that Act.

4

References in this Part of this Schedule to a person being “connected” with a director, and to a director “controlling” a body corporate, shall be construed in accordance with section 346.

F1117 X46Supplementary

Annotations:

Editorial Information

X46

Amendments (Textual)

F1117

X4714

This Part of this Schedule 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.

F1090 Details of chairman’s and directors’ emoluments

Annotations:

Amendments (Textual)

F1090

F10913

1

The emoluments of the chairman shall be shown.

2

The “chairman” means the person elected by the directors to be chairman of their meetings, and includes a person who, though not so elected, holds an office (however designated) which in accordance with the company’s constitution carries with it functions substantially similar to those discharged by a person so elected.

3

Where there has been more than one chairman during the year, the emoluments of each shall be stated so far as attributable to the period during which he was chairman.

4

The emoluments of a person need not be shown if his duties as chairman were wholly or mainly discharged outside the United Kingdom.

F10925

In paragraphs 3 and 4 “emoluments" has the same meaning as in paragraph 1, except that it does not include contributions paid in respect of a person under a pension scheme.

F1093 F1094 Emoluments waived

Annotations:

Amendments (Textual)

F1093

Sch. 6 para. 2 substituted (31.3.1997) for Sch. 6 paras. 2-6 by S.I. 1997/570, reg. 3(1)

F1094

F10956

1

There shall be shown—

a

the number of directors who have waived rights to receive emoluments which, but for the waiver, would have fallen to be included in the amount shown under paragraph 1(1), and

b

the aggregate amount of those emoluments.

2

For the purposes of this paragraph it shall be assumed that a sum not receivable in respect of a period would have been paid at the time at which it was due, and if such a sum was payable only on demand, it shall be deemed to have been due at the time of the waiver.

F1118 F1119Part II Loans, Quasi-loans and Other Dealings in Favour of Directors

Annotations:

Amendments (Textual)

F1118

Sch. 6 Pt. II (as renumbered): heading substituted (subject to the transitional and saving provisions mentioned in S.I. 1990/355, arts. 6-9) by Companies Act 1989 (c. 40, SIF 27), ss. 6(4), 213(2), Sch. 4 para. 4(1)

F1119

Sch. 6 Pt. II paras. 15-27 renumbered from 1-3 and 5-14 (subject to the transitional and saving provisions mentioned in S.I. 1990/355, arts. 6-9) and internal cross-references in that Part renumbered accordingly by Companies Act 1989 (c. 40, SIF 27), ss. 6(4), 213(2), Sch. 4 para. 4(2)

F112015

F1121The 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 F1122section 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.

F112316

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 F1124section 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 of its holding company had, directly or indirectly, a material interest.

F1125 C28717

1

For purposes of paragraphs 15(c) and 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 purposes of those sub-paragraphs 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.

“The 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.

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.

F1136 Excluded transactions

Annotations:

Amendments (Textual)

F1136

Sch. 6 Pt. II para 24 (renumbered): heading substituted (subject to the transitional and saving provisions mentioned in S.I. 1990/355, arts. 6–9) by Companies Act 1989 (c. 40, SIF 27), ss. 6(4), 213(2), Sch. 4 para. 4(5)

F113724

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 the following sub-paragraph 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 F1138section 203 of the Companies Act 2006 relating to credit transactions,

d

agreements to enter into credit transactions.

F113925

In relation to a company’s accounts for a financial year, compliance with this Part is not required by virtue of paragraph 15(c) or 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

the value of each transaction or arrangement within paragraph 15(c) or 16(c) (as the case may be) in which that director had (directly or indirectly) a material interest and which was made after the commencement of the financial year with the company or any of its subsidiaries, and

b

the value of each such 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 [24]5,000 or 1 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 any F1140provisions for liabilities within paragraph 89 of Schedule 4 F1141that is made in Companies Act accounts and any provision that is made in IAS accounts ).

F114226

F1143Section 258 of the Companies Act 2006 (power of Secretary of State to alter sums by statutory instrument subject to negative resolution in Parliament) applies as if the money sums specified in paragraph 24 or 25 above were specified in F1144Part 10 of that Act.

Interpretation

F114527

F11471

The following provisions of the Companies Act 2006 apply for the purposes of this Part of this Schedule—

a

F115630

The following provisionsF1157 of the Companies Act 2006 apply for the purposes of this Part of this Schedule—

a

section 199 (meaning of “quasi-loan”),

b

section 202 (meaning of “credit transaction”), and

c

section 212 (person for whom a transaction or arrangement is entered into);

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.

18F1158. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F681 F681SCHEDULE 7

Annotations:

Amendments (Textual)

F681

Sch. 7 repealed (6.4.2008) by Companies Act 2006 (c. 46), ss. 1295, 1300, Sch. 16; S.I. 2007/3495, art. 8(a), Sch. 2 Pt. 1 (with arts. 7, 12)

Part I Matters of a General Nature

Asset values

1 F11591

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2

If, in the case of F1160such of the fixed assets of the company F1161. . . 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 directors’ 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.

F11623

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 of its subsidiary undertakings included in the consolidation.

2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1163. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1164. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2B. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1165. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1168 Political donations and expenditure

Annotations:

Amendments (Textual)

F1168

Sch. 7 Pt. I paras. 3-5 and cross-headings preceding paras. 3, 5 substituted (16.2.2001) for Sch. 7 Pt. I paras. 3-5 and cross-heading preceding para. 3 by 2000 c. 41, s. 140 (with s. 156(6), Sch. 23 para. 13); S.I. 2001/222, art. 2, Sch. 1 Pt. I (subject to transitional provisions in Sch. 1 Pt. II)

F11663

1

If—

a

the company (not being the wholly-owned subsidiary of a company incorporated in Great Britain) has in the financial year—

i

made any donation to any registered party or to any other EU political organisation, or

ii

incurred any EU political expenditure, and

b

the amount of the donation or expenditure, or (as the case may be) the aggregate amount of all donations and expenditure falling within paragraph (a), exceeded £200,

the directors’ report for the year shall contain the particulars specified in sub-paragraph (2).

2

Those particulars are—

a

as respects donations falling within sub-paragraph (1)(a)(i)—

i

the name of each registered party or other organisation to whom any such donation has been made, and

ii

the total amount given to that party or organisation by way of such donations in the financial year; and

b

as respects expenditure falling within sub-paragraph (1)(a)(ii), the total amount incurred by way of such expenditure in the financial year.

3

If—

a

at the end of the financial year the company has subsidiaries which have, in that year, made any donations or incurred any such expenditure as is mentioned in sub-paragraph (1)(a), and

b

it is not itself the wholly-owned subsidiary of a company incorporated in Great Britain,

the directors’ report for the year is not, by virtue of sub-paragraph (1), required to contain the particulars specified in sub-paragraph (2); but, if the total amount of any such donations or expenditure (or both) made or incurred in that year by the company and the subsidiaries between them exceeds £200, the directors’ report for the year shall contain those particulars in relation to each body by whom any such donation or expenditure has been made or incurred.

4

Any expression used in this paragraph which is also used in Part XA of this Act has the same meaning as in that Part.

F11674

1

If the company (not being the wholly-owned subsidiary of a company incorporated in Great Britain) has in the financial year made any contribution to a non-EU political party, the directors’ report for the year shall contain—

a

a statement of the amount of the contribution, or

b

(if it has made two or more such contributions in the year) a statement of the total amount of the contributions.

2

If—

a

at the end of the financial year the company has subsidiaries which have, in that year, made any such contributions as are mentioned in sub-paragraph (1), and

b

it is not itself the wholly-owned subsidiary of a company incorporated in Great Britain,

the directors’ report for the year is not, by virtue of sub-paragraph (1), required to contain any such statement as is there mentioned, but it shall instead contain a statement of the total amount of the contributions made in the year by the company and the subsidiaries between them.

3

In this paragraph “contribution”, in relation to an organisation, means—

a

any gift of money to the organisation (whether made directly or indirectly);

b

any subscription or other fee paid for affiliation to, or membership of, the organisation; or

c

any money spent (otherwise than by the organisation or a person acting on its behalf) in paying any expenses incurred directly or indirectly by the organisation.

4

In this paragraph “non-EU political party” means any political party which carries on, or proposes to carry on, its activities wholly outside the member States.

F1176 Charitable donations

Annotations:

Amendments (Textual)

F1176

F11775

1

If—

a

the company (not being the wholly-owned subsidiary of a company incorporated in Great Britain) has in the financial year given money for charitable purposes, and

b

the money given exceeded £200 in amount,

the directors’ report for the year shall contain, 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.

2

If—

a

at the end of the financial year the company has subsidiaries which have, in that year, given money for charitable purposes, and

b

it is not itself the wholly-owned subsidiary of a company incorporated in Great Britain,

sub-paragraph (1) does not apply to the company; but, if the amount given in that year for charitable purposes by the company and the subsidiaries between them exceeds £200, the directors’ report for the year shall contain, 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.

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 out of account for the purposes of this paragraph.

4

For the purposes of this paragraph “charitable purposes” means purposes which are exclusively charitable, and as respects Scotland F1178a purpose is charitable if it is listed in section 7(2) of the Charities and Trustee Investment (Scotland) Act 2005 .

C2915AFinancial instruments

1

In relation to the use of financial instruments by a company F1179. . . , the directors' report must contain an indication of –

a

the financial risk management objectives and policies of the company F1180. . . , including the policy for hedging each major type of forecasted transaction for which hedge accounting is used, and

b

the exposure of the company F1180. . . to price risk, credit risk, liquidity risk and cash flow risk,

unless such information is not material for the assessment of the assets, liabilities, financial position and profit or loss of the company F1180. . . .

F11811A

In relation to a group directors' report sub-paragraph (1) has effect as if the references to the company were references to the company and its subsidiary undertakings included in the consolidation.

2

In sub-paragraph (1) the expressions “hedge accounting”, “price risk”, “credit risk”, “liquidity risk” and “cash flow risk” have the same meaning as they have in Council Directive 78/660/EEC on the annual accounts of certain types of companies, and in Council Directive 83/349/EEC on consolidated accounts, as amended.

Miscellaneous

C289 C2906

F11711

The directors’ report shall contain—

a

particulars of any important events affecting the company F1172. . . which have occurred since the end of the financial year,

b

an indication of likely future developments in the business of the company F1173. . . , F1169. . .

c

an indication of the activities (if any) of the company F1174. . . in the field of research and development F1170and

d

(unless the company is an unlimited company) and indication of the existence of branches (as defined in section 698(2)) of the company outside the United Kingdom

F11752

In relation to a group directors' report paragraphs (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 II Disclosure Required by Company Acquiring its Own Shares, etc.

Sch. 7 Pt. IV repealed (2.2.1996) by S.I. 1996/189, reg. 14(4)(c) (with reg. 16)

10

1

In the case of companies of such classes as may be prescribed by regulations made by the Secretary of State, the directors’ report shall contain such information as may be so prescribed about the arrangements in force in the financial year for securing the health, safety and welfare at work of employees of the company and its subsidiaries, and for protecting other persons against risks to health or safety arising out of or in connection with the activities at work of those employees.

2

Regulations under this Part may—

a

make different provision in relation to companies of different classes,

b

enable any requirements of the regulations to be dispensed with or modified in particular cases by any specified person or by any person authorised in that behalf by a specified authority,

c

contain such transitional provisions as the Secretary of State thinks necessary or expedient in connection with any provision made by the regulations.

3

The power to make regulations under this paragraph is exercisable by statutory instrument subject to annulment in pursuance of a resolution of either House of Parliament.

4

Any expression used in sub-paragraph (1) above and in Part I of the M30Health and Safety at Work etc. Act 1974 has the same meaning here as it has in that Part of that Act; section 1(3) of that Act applies for interpreting that sub-paragraph; and in sub-paragraph (2) “specified” means specified in regulations made under that sub-paragraph.

Part V Employee Involvement

11

1

This Part of this Schedule 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 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.

F1184PART VI

Annotations:

Amendments (Textual)

F1184

Sch. 7 Pt. VI substituted (4.3.1997) by S.I. 1997/571, reg. 2(2) (subject to transitional provisions in reg. 3)

12F1185 Policy and practice on payment of creditors

i

the identity of the person, and

ii

the nature of the rights;

e

where—

i

the company has an employees' share scheme, and

ii

b

the company is not under any other obligation to disclose it.

6

In this paragraph—

“securities” means shares or debentures;
“takeover bid” has the same meaning as in the Takeovers Directive;
“the Takeovers Directive” means Directive 2004/25/EC of the European Parliament and of the Council;
“voting rights” means rights to vote at general meetings of the company in question, including rights that arise only in certain circumstances.

F682 F682F735SCHEDULE 7ZA

Annotations:

Amendments (Textual)

F682

Sch. 7ZA omitted (12.1.2006) by virtue of The Companies Act 1985 (Operating and Financial Review) (Repeal) Regulations 2005 (S.I. 2005/3442), reg. 2(2)(a), Sch. 1 para. 17

F735

Sch. 7ZA inserted (22.3.2005) by The Companies Act 1985 (Operating and Financial Review and Directors' Report etc.) Regulations 2005 (S.I. 2005/1011), reg. 9

Review objective

1

An operating and financial review must be 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 the 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

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's 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.

Compliance with standards

8

The review must—

a

state whether it has been prepared in accordance with relevant reporting standards, and

b

contain particulars of, and reasons for, any departure from such standards.

Application of Schedule to group operating and financial review

9

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.

F683 F683F736SCHEDULE 7A

Annotations:

Amendments (Textual)

F683

Sch. 7A repealed (6.4.2008) by Companies Act 2006 (c. 46), ss. 1295, 1300, Sch. 16; S.I. 2007/3495, art. 8(a), Sch. 2 Pt. 1 (with arts. 7, 12)

F736

Sch. 7A inserted (1.8.2002) by The Directors' Remuneration Report Regulations 2002 (S.I. 2002/1986), reg. 9, Sch.

PART 1 INTRODUCTORY

1

In the directors’ remuneration report for a financial year (“the relevant financial year”) there shall be shown the information specified in Parts 2 and 3 below.

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 2 INFORMATION NOT SUBJECT TO AUDIT

2 Consideration by the directors of matters relating to directors’ remuneration

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;

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 date on which the directors’ remuneration report is laid before the company in general meeting.

4 Performance Graph

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

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 paragraph (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.

5 Service contracts

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.

7 Share options

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 8.

2

Sub-paragraph (1) is subject to paragraph 9 (aggregation of information to avoid excessively lengthy reports).

3

The information specified in paragraphs (a) to (c) of paragraph 8 shall be presented in tabular form in the report.

4

In paragraph 8 “share option”, in relation to a person, means a share option granted in respect of qualifying services of the person.

8

The information required by sub-paragraph (1) of paragraph 7 in respect of such a person as is mentioned in that sub-paragraph is—

a

the number of shares that are subject to a share option—

i

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, and

ii

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,

in each case differentiating between share options having different terms and conditions;

b

information identifying those share options that have been awarded in the relevant financial year, those that have been exercised in that year, those that in that year have expired unexercised and those whose terms and conditions have been varied in that year;

c

for each share option that is unexpired at any time in the relevant financial year—

i

the price paid, if any, for its award,

ii

the exercise price,

iii

the date from which the option may be exercised, and

iv

the date on which the option expires;

d

a description of any variation made in the relevant financial year in the terms and conditions of a share option;

e

a summary of any performance criteria upon which the award or exercise of a share option is conditional, including a description of any variation made in such performance criteria during the relevant financial year;

f

for each share option that has been exercised during the relevant financial year, the market price of the shares, in relation to which it is exercised, at the time of exercise; and

g

for each share option that is unexpired at the end of the relevant financial year—

i

the market price at the end of that year, and

ii

the highest and lowest market prices during that year,

of each share that is subject to the option.

9

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 paragraphs (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.

12 Pensions

1

The directors’ remuneration report shall, for each person who has served as a director of the company at any time during the relevant financial 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 paragraph (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 paragraph (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 paragraph (c), from

ii

the transfer value of those benefits that is required to be contained in the report by paragraph (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.

13 Excess retirement benefits of directors and past directors

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 31st March 1997, whichever is the later.

2

In subsection (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.

14 Compensation for past directors

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).

15 Sums paid to third parties in respect of a director’s services

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

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 section 346.

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 sections 314 and 315 of this Act (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.

3

19

1

The amounts to be shown for any financial year under Part 3 of this Schedule 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

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.

F684 F684F737SCHEDULE 7B

Annotations:

Amendments (Textual)

F684

Sch. 7B repealed (6.4.2008) by Companies Act 2006 (c. 46), ss. 1295, 1300, Sch. 16; S.I. 2007/3495, art. 8(a), Sch. 2 Pt. 1 (with arts. 7, 12)

F737

Sch. 7B inserted (6.4.2005) by Companies (Audit, Investigations and Community Enterprise) Act 2004 (c. 27), ss. 12, 65, Sch. 1; S.I. 2004/3322, art. 2(2), Sch. 2 (subject to arts. 3-13)

Part 1Specified persons

1

The Secretary of State.

2

The Department of Enterprise, Trade and Investment for Northern Ireland.

3

The Treasury.

4

The Bank of England.

5

The Financial Services Authority.

6

The Commissioners of Inland Revenue.

Part 2Specified descriptions of disclosures

7

A disclosure for the purpose of assisting a body designated by an order under section 46 of the Companies Act 1989 (delegation of functions of Secretary of State) to exercise its functions under Part 2 of that Act.

8

A disclosure with a view to the institution of, or otherwise for the purposes of, disciplinary proceedings relating to the performance by an accountant or auditor of his professional duties.

9

A disclosure for the purpose of enabling or assisting the Secretary of State or the Treasury to exercise any of their functions under any of the following—

a

this Act;

b

the insider dealing legislation;

c

the Insolvency Act 1986;

d

the Company Directors Disqualification Act 1986;

e

the Financial Services and Markets Act 2000.

10

A disclosure for the purpose of enabling or assisting the Department of Enterprise, Trade and Investment for Northern Ireland to exercise any powers conferred on it by the enactments relating to companies or insolvency.

11

A disclosure for the purpose of enabling or assisting the Bank of England to exercise its functions.

12

A disclosure for the purpose of enabling or assisting the Commissioners of Inland Revenue to exercise their functions.

13

A disclosure for the purpose of enabling or assisting the Financial Services Authority to exercise its functions under any of the following—

a

the legislation relating to friendly societies or to industrial and provident societies;

b

the Building Societies Act 1986;

c

Part 7 of the Companies Act 1989;

d

the Financial Services and Markets Act 2000.

14

A disclosure in pursuance of any Community obligation.

Part 3Overseas regulatory bodies

15

A disclosure is made in accordance with this Part of this Schedule if—

a

it is made to a body within paragraph 16, and

b

it is made for the purpose of enabling or assisting that body to exercise the functions mentioned in that paragraph.

16

A body is within this paragraph if it exercises functions of a public nature under legislation in any country or territory outside the United Kingdom which appear to the authorised person to be similar to his functions under section 245B of this Act.

17

In determining whether to disclose information to a body in accordance with this Part of this Schedule, the authorised person must have regard to the following considerations—

a

F1349PART I GENERAL RULES AND FORMATS

Annotations:

Amendments (Textual)

F1349

Sch. 8 substituted (1.3.1997) by S.I. 1997/220, reg. 2(2), Sch. 1

Section A General Rules

F13501

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 below in section B of this Part; 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) above 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.

F13512

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 below, 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 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.

F13523

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 of 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 below 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 within paragraph (b) the individual amounts of any items so combined shall be disclosed in a note to the accounts.

5

Subject to paragraph 4(3) below, 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.

7

F1353. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F13544

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 F1355may be adjusted and F1356particulars of the non-comparability and of any adjustment shall be disclosed in a note to the accounts.

3 F13575

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

Section B The Required Formats for Accounts

Preliminary

F13586

F13597

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.

F13608

In the notes following the formats—

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—
1. a
  the assets were acquired for valuable consideration and are not required to be shown under goodwill; or
2. b
  the assets in question were created by the company itself.
(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—
1. a
  the amount of any convertible loans, and
2. b
  the amount for creditors in respect of taxation and social security.
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 or 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 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

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

a
Raw materials and consumables
b
Other external charges

6. Staff costs:

a
wages and salaries
b
social security costs
c
other pension costs

a
Depreciation and other amounts written off tangible and intangible fixed assets
b
Exceptional amounts written off current assets

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 stocks of finished goods and in work in progress

a

Raw materials and consumables

b

Other external charges

3. Staff costs:

a

wages and salaries

b

social security costs

c

other pension costs

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 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 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 is prepared by reference to Format 1 or Format 3.

PART II ACCOUNTING PRINCIPLES AND RULES

Section A Accounting Principles

Preliminary

F13639

Subject to paragraph 15 below, 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

F136410

The company shall be presumed to be carrying on business as a going concern.

F136511

Accounting policies shall be applied consistently within the same accounts and from one financial year to the next.

F136612

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 liabilities F1367. . . which have arisen F1367. . . 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 section 233 of this Act.

F136813

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.

F136914

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

F137015

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 B Historical Cost Accounting Rules

Preliminary

F137116

F1372Subject to sections C and D of this Part of this Schedule, 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 rules

F137317

F137418

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.

F137519

1

2

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 items

F137620

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 of this Schedule, 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.

F137721

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) below, 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

F137822

Subject to paragraph 23, the amount to be included in respect of any current asset shall be its purchase price or production cost.

F137923

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 Miscellaneous and supplementary provisions

Excess of money owed over value received as an asset item

F138024

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 amount

F138125

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 cost

F138226

1

The purchase price of an asset shall be determined by adding to the actual price paid any expenses incidental to its acquisition.

2

3

In addition, there may be included in the production cost of an asset—

a

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;

4

In the case of current assets distribution costs may not be included in production costs.

F138327

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) below 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 unknown

F138428

Where there is no record 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 C Alternative Accounting Rules

Preliminary

F138529

1

The rules set out in section B are referred to below in this Schedule as the historical cost accounting rules.

2 F138630

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

F138731

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 of this Schedule 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 of this Schedule may be included at their current cost.

5

Stocks may be included at their current cost.

Application of the depreciation rules

F138832

1

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

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 of this Schedule to be stated after taking into account any necessary provision for depreciation or diminution in value of assets included under it;

Additional information to be provided in case of departure from historical cost accounting rules

F138933

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) above, references in relation to any item to the comparable amounts determined as there mentioned are references to—

a

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

F139034

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

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

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

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

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

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

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 or debited to the fair value reserve must be disclosed in a note to the accounts.

F1411PART III NOTES TO THE ACCOUNTS

Annotations:

Amendments (Textual)

F1411

Sch. 8 substituted (1.3.1997) by S.I. 1997/220, reg. 2(2), Sch. 1

Preliminary

F139135

Any information required in the case of any small company by the following provisions of this Part of this Schedule shall (if not given in the company’s accounts) be given by way of a note to those accounts.

35AReserves and dividends

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 paragraph (b) or (c).

Disclosure of accounting policies

F139236

Information supplementing the balance sheet

F139337

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.

Fixed assets

F139640

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

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.

F139741

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

Investments

F139842

1

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 purposes of the accounts, taken as being higher than the latter.

42AInformation about fair value of assets and liabilities

1

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 provisions

F139943

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

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;

Miscellaneous matters

F140547

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

F140648

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 turnover

F140749

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 matters

F140850

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

F140951

1

2

F1410. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3

F1410. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1412 Dormant companies acting as agents

Annotations:

Amendments (Textual)

F1412

Sch. 8 para. 51A and preceding heading inserted (26.5.2000) by S.I. 2000/1430, art. 6

F141351A

F1414PART IV INTERPRETATION OF SCHEDULE

Annotations:

Amendments (Textual)

F1414

Sch. 8 substituted (1.3.1997) by S.I. 1997/220, reg. 2(2), Sch. 1

52

The following paragraphs apply for the purposes of this Schedule and its interpretation.

52AFinancial instruments

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 designated 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. F1424

2 Historical cost accounting rules

F141553

References to the historical cost accounting rules shall be read in accordance with paragraph 29.

53AInvestment property

“Investment property” means land held to earn rent or for capital appreciation.

Listed investments

F141654

1

“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 Great Britain.

2

“Recognised investment exchange” and “overseas investment exchange” have the meaning given in Part 18 of the Financial Services and Markets Act 2000.

Loans

F141755

Materiality

F141856

Amounts which in the particular context of any provision of this Schedule are not material may be disregarded for the purposes of that provision.

Provisions

F141957

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 F142058

References to F1421provisions for liabilities are to any amount retained as reasonably necessary for the purpose of providing for any liability F1422the 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 costs

F142359

1

“Social security costs” means any contributions by the company to any state social security or pension scheme, fund or arrangement.

2

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.

F686 F686 SCHEDULE 8A

Annotations:

Amendments (Textual)

F686

Sch. 8A repealed (6.4.2008) by Companies Act 2006 (c. 46), ss. 1295, 1300, Sch. 16; S.I. 2007/3495, art. 8(a), Sch. 2 Pt. 1 (with arts. 7, 12)

F1475PART I BALANCE SHEET FORMATS

Annotations:

Revaluation reserve

IV

Other reserves

V

Profit and loss account

B

F1479Provisions for liabilities

C

Creditors(2)

D

Accruals 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 item 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 disclosed in the notes to the accounts.

F1480PART II NOTES TO THE ACCOUNTS

Annotations:

Amendments (Textual)

F1480

Sch. 8A inserted (1.3.1997) by S.I. 1997/220, reg. 2(3), Sch. 2

Preliminary

F14813

Disclosure of accounting policies

F14824

Information supplementing the balance sheet

Share capital and debentures

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 assets

F14857

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

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.

7AFinancial fixed assets

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

Details of indebtedness

F14868

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

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.

F14879General

1

2

F1488. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3

F1488. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9AF1489Dormant companies acting as agents

F687 F687SCHEDULE 9

Annotations:

Amendments (Textual)

F687

Sch. 9 repealed (6.4.2008) by Companies Act 2006 (c. 46), ss. 1295, 1300, Sch. 16; S.I. 2007/3495, art. 8(a), Sch. 2 Pt. 1 (with arts. 7, 12); Sch. 9 para. 3(4)(5) and certain words in Sch. 9 para. 3(3)(a) are expressed to be repealed (6.4.2008 with effect as stated in Sch. 1 para. 91(2) of the amending S.I.) by S.I. 2008/948, arts. 2(1), 3, Sch. 1 para. 90(1), Sch. 2 (with arts. 6, 11, 12)

F11871. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1188Part IF1189Form and Content of Accounts

Annotations:

Amendments (Textual)

F1188

Sch. 9: by virtue of S.I. 1991/2705, regs. 5(1), 9, Pts. I and II of Sch. 9 have formed (2.12.1991) a new Schedule numbered Schedule 9A.

F1189

Sch. 9 Pt. I: descriptive Part heading before paragraph 2 substituted by Companies Act 1989 (c. 40, SIF 27), ss. 18(3)(4), 213(2), Sch. 7 (subject to the transitional and saving provisions mentioned in S.I. 1990/355, arts. 6–9)

F1191 F1190 Supplementary provisions

Annotations:

Amendments (Textual)

F1191

Sch. 9 Pt. I paras. 18A–18C inserted (subject to the saving and transitional provisions mentioned in S.I. 1990/355, arts. 6–9, Sch 2) by Companies Act 1989 (c. 40, SIF 27), ss. 18(3)(4), 213(2), Sch. 7 Pt. I para. 4

F1190

Sch. 9: by virtue of S.I. 1991/2705, regs. 5(1), 9, Pts. I and II of Sch. 9 have formed (2.12.1991) a new Schedule numbered Schedule 9A.

F119218A

1

Accounting policies shall be applied consistently within the same accounts and from one financial year to the next.

2

If it appears to the directors of a company that there are special reasons for departing from the principle stated in sub-paragraph (1) 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.

F119318B

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.

F119418C

1

In respect of every item shown in the balance sheet or profit and loss account, or stated in a note to the accounts, there shall be shown or stated the corresponding amount for the financial year immediately preceding that to which the accounts relate, subject to sub-paragraph (3).

2

Where the corresponding amount is not comparable, it shall be adjusted and particulars of the adjustment and the reasons for it shall be given in a note to the accounts.

3

Sub-paragraph (1) does not apply in relation to an amount shown—

a

as an amount the source or application of which is required by paragraph 8 above (reserves and provisions),

b

in pursuance of paragraph 13(10) above (acquisitions and disposals of fixed assets),

c

by virtue of paragraph 13 of Schedule 4A (details of accounting treatment of acquisitions),

d

Sch. 9 Pt. I paras. 1-87 inserted (2.12.1991) by S.I. 1991/2705, regs. 5(4), 9, Sch. 1

Modifications etc. (not altering text)

C292

Sch. 9 Pt. I modified (coming into force in accordance with s. 3 of the amending Act) by 1999 c. iv, ss. 3, 7(6)

C293

Sch. 9 Pt. 1 extended (24.6.2003) by The Uncertificated Securities (Amendment) (Eligible Debt Securities) Regulations 2003 (S.I. 2003/1633), reg. 15, Sch. 2 para. 2(e)

CHAPTER 1 GENERAL RULES AND FORMATS

SECTION AGENERAL RULES

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 F1218may be adjusted and F1219particulars 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 be 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.

8. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1220. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8A

SECTION BTHE REQUIRED FORMATS FOR ACCOUNTS

Preliminary

9

1

References in this Part of this Schedule 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 of this Schedule 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)

2. Treasury bills and other eligible bills(20)

a
Treasury bills and similar securities(2)
b
Other eligible bills(3)

3. Loans and advances to banks(4),(20)

a
Repayable on demand
b
Other loans and advances

4. Loans and advances to customers(5),(20)

5. Debt securities [and other fixed income securities](6),(20)

a
Issued by public bodies
b
Issued by other issuers

7. Participation 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

2. Customer accounts (12) (20)

a
Repayable on demand
b
With agreed maturity dates or periods of notice

3. Dept securities in issue(13),(20)

a
Bonds and medium term notes
b
Others

4. Other liabilities

5. Accruals and deferred income

6. F1221Provisions for liabilities

a
Provisions for pensions and similar obligations
b
Provisions for tax
c
Other provisions

7. Subordinated(14),(20)

8. Called up sharer 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

2. Commitments(18)

(1) Commitments arising out of sale and option to resell transactions (19)
(2) Other commitments

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.

2

Treasury bills and other eligible bills: Treasury bills and similar securities

(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).

3

Treasury bills and other eligible bills: Other eligible bills

(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.

4

Loans and advances to banks

(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:
1. a
  claims on group undertakings included therein; and
2. 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:
1. i
  liabilities to group undertakings included therein; and
2. ii
  liabilities to undertakings in which the company has a participating interest included therein.

Special rules

11Subordinated assets

1

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.

14Sale and option to resell transactions

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.

15Managed funds

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

2. Interest payable(2)

3. Dividend income

a

Income from equity shares [and other variable-yield securities]

b

Income from participating interests

c

Income from shares in group undertakings

4. Fees and commissions receivable(3)

5. Fees and commissions payable(4)

6. Dealing [profits][losses](5)

7. Other operating income

8.Administrative expenses

a

Staff costs

i

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 yearSchedule 1Part I

FORMAT 2

Horizontal layout

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 oopserating 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. xtraordinary loss after tax

15. Other taxes not shown under the preceding items

16. Profit for the financial year

A. Charges

1. Interest payable(2 )

2.. Fees and commissions payable(4)

3. Dealing losses(5)

4. Administrative expenses

a
Staff costs
1. i
  Wages and salaries
2. ii
  Social security costs
3. iii
  Other pension costs
b
Other administrative expenses

5. Depreciation and amortisation(6)

6. Other oopserating 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. xtraordinary loss after tax

15. Other taxes not shown under the preceding items

16. Profit 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:
1. a
  income from assets included in Assets items 1 to 5 in the balance sheet format, however calculated;
2. b
  income resulting from covered forward contracts spread over the actual duration of the contract and similar in nature to interest; and
3. 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).
2
Interest payable
(Format 1, item 2; Format 2, item A1)
This item shall include all expenditure arising out of banking activities, including:
1. a
  charges arising out of liabilities included in Liabilities items 1, 2, 3 and 7 in the balance sheet format, however calculated;
2. b
  charges resulting from covered forward contracts, spread over the actual duration of the contract and similar in nature to interest; and
3. 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).
3
Fees and commissions receivable
(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 administra tion 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.

4
Fees and commissions payable
(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 administra tion 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:
1. 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) below;
2. 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
3. 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 commit ments
(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 II ACCOUNTING PRINCIPLES AND RULES

SECTION AACCOUNTING PRINCIPLES

16

Subject to paragraph 22 below, 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 liabilities F1222. . . which have arisen F1222. . . 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 section 233 of this Act.

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 SECTION BVALUATION RULES

HISTORICAL COST ACCOUNTING RULES

Preliminary

23

Subject to F1223paragraphs 39 to 44F of this Part of this Schedule, 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 of this Part of this Schedule.

Fixed assets

24General rules

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.

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 below.

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

34

1

Subject to paragraph 33 above, 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

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

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.

38Substitution of original amount where price or cost unknown

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 purposes 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 of this Schedule 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 above) 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 below 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) above, references in relation to any item to the comparable amounts determined as there mentioned are references to:

a

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

F1224a

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 F1225sub-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

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

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

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

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 of this Schedule, and subject to sub-paragraphs (3) and (4) below, 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

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 or debited to 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 III NOTES TO THE ACCOUNTS

Preliminary

47

1

Any information required in the case of a company by the following provisions of this Part of this Schedule shall F1226(if not given in the company's accounts) be given by way of a note to the accounts F1227. . . .

2

F1228. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3

F1228. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

General

48Disclosure of accounting policies

49 50Sums denominated in foreign currencies

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.

50AReserves and dividends

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 paragraph (b) or (c).

Information supplementing the balance sheet

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

54

1

If the company has issued any debentures during the financial year to which the accounts relate, the following information shall be given:

F1230a

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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.

F12312

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3 55Fixed assets

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 above;

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 of this Schedule.

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

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:

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

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.

59Reserves and provisions

1

Where any amount is transferred:

a

to or from any reserves;

b

to any F1232provisions for liabilities, or

c

from any F1233provision 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 of this Schedule 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 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.

60Provision for taxation

The amount of any provision for deferred taxation shall be stated separately from the amount of any provision for other taxation.

61Maturity analysis

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 categories:

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 yearsfrom 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.

62Debt and other fixed income securities

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.

63Subordinated liabilities

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.

64Fixed cumulative dividends

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.

65Details of assets charged

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.

any parent company or fellow subsidiary undertaking of the company; or

b

any subsidiary undertaking of the company;

73Miscellaneous matters

1

Particulars shall be given of any case where the cost of any asset is for the first time determined under paragraph 38 of this Part of this Schedule.

2

Where any outstanding loans made under the authority of section 153(4)(b), (bb) or (c) or section 155 of this Act (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.

F12383

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Information supplementing the profit and loss account

F123974. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

75Particulars of tax

F12401

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2

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]).

76Particulars of income

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 77Particulars of staff

F1241. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

78Management and agency services

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.

79Subordinated liabilities

Any amounts charged to the profit and loss account representing charges incurred during the year with respect to subordinated liabilities shall be disclosed.

80Sundry income and charges

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).

81Miscellaneous matters

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 IV INTERPRETATION OF PART I

82General

The following definitions apply for the purposes of this Part of this Schedule and its interpretation:

F1242 . . .

F1243. . .

“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;

F1244“Investment property” means land held to earn rent or for capital appreciation.

“Lease” includes an agreement for a lease;

“Listed security” means a security listed on a recognised stock exchange, or on any stock exchange of repute outside Great Britain 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.

82AFinancial instruments

For the purposes of this Part of this Schedule, 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 designated 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 of this Schedule 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. F1251

2 83Loans

For the purposes of this Part of this Schedule 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.

84Materiality

For the purposes of this Part of this Schedule amounts which in the particular context of any provision of this Part are not material may be disregarded for the purposes of that provision.

85Provisions

For the purposes of this Part of this Schedule 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 to F1245provisions for liabilities are to any amount retained as reasonably necessary for the purpose of providing for any liability F1246the 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.

86Scots land tenure

In the application of this Part of this Schedule to Scotland, “land of freehold tenure” means land in respect of which the company F1247is the proprietor of the dominium utile or, in the case of land not held on feudal tenure, is the owner; “land of leasehold tenure” means land of which the company is the tenant under a lease F1247; and the reference to ground-rents, rates and other outgoings includes feu-duty and ground annual.

87Staff costs

For the purposes of this Part of this Schedule and its interpretation:

a

“Social security costs” means any contributions by the company to any state social security or pension scheme, fund or arrangement;

F1248b

c

any amount stated in respect of F1249the 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 of F1250section 231A(1)(a) .

F1252PART II CONSOLIDATED ACCOUNTS

Annotations:

Amendments (Textual)

F1252

Sch. 9 Pt. II paras. 1-7 inserted (2.12.1991) by S.I. 1991/2705, regs. 5(4), 9, Sch. 1

1Undertakings to be included in consolidation

F1253. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5Foreign currency translation

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 of this Schedule 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.

7Information as to undertaking in which shares held as a result of financial assistance operation

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 section 229(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 section 242 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

F1254. . . If any document required to be appended is in a language other than English F1255. . . , 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

Amendments (Textual)

F1209

Loans, quasi-loans and other dealings

F12102

Where a banking company, or a company which is the holding company of a credit institution, prepares annual accounts for a financial year, it need not comply with the provisions of Part II of Schedule 6 (loans, quasi-loans and other dealings) in relation to a transaction or arrangement of a kind mentioned in F1211section 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 or (as the case may be) credit institution is a party.

Other transactions, arrangements and agreements

3

F1212Where a banking company, or a company which is the holding company of a credit institution, takes advantage of the provisions of paragraph 2 of this Part of this Schedule for the purposes of its annual accounts for a financial year, then, in preparing those accounts, it shall comply with the provisions of Part III of Schedule 6 (other transactions, arrangements and agreements) only in relation to a transaction, arrangement or agreement made by that banking company or (as the case may be) credit institution 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 F1214. . . 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.

F12153

In this paragraph—

a

“director” includes a shadow director;

b

“chief executive” has the meaning given in section 417 of the Financial Services and Markets Act 2000; and

c

“manager” has the meaning given in section 423(3) of that Act.

4

For the purposes of that Part as it applies by virtue of this paragraph, a F1213body corporate which a person does not control shall not be treated as connected with him.

5

F1216Sections 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 F1213body corporate.

F688 F688F738SCHEDULE 9A

Annotations:

Amendments (Textual)

F688

Sch. 9A repealed (6.4.2008) by Companies Act 2006 (c. 46), ss. 1295, 1300, Sch. 16; S.I. 2007/3495, art. 8(a), Sch. 2 Pt. 1 (with arts. 7, 12)

F738

Sch. 9A substituted (19.12.1993) by virtue of S.I. 1993/3246, regs. 4, 6, 7, Sch. 1

PART I Individual Accounts

Chapter I General Rules and Formats

Section A General Rules

2

1

Any item required in accordance with paragraph 1 above 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 below, 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 below (except for items concerning technical provisions and the 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;

any relevant order under that section; and

c

Schedule 2 to that Act.

6A

Section B The Required Formats for Accounts

Preliminary

7

1

References in this Part of this Schedule 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 item 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) above.

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 F14961

In the profit and loss account format set out below—

a

the heading “Technical account General business” is for F1497business which consists of effecting or carrying out contracts of general insurance; and

b

the heading “Technical account Long term business” is for F1498business which consists of effecting or carrying out contracts of long term insurance.

F14992

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

Own shares(14)

V

Other(15)

G

Prepayments and accrued income

I

Accrued interest and rent(16)

II

Deferred acquisition costs(17)

III

Other prepayments and accrued income

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 —
1. a
  the assets were acquired for valuable consideration and are not required to be shown under goodwill; or
2. b
  the assets in question were created by the company itself.
3
Goodwill
(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.I.)
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 funds.
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 investments 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, owed 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 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 above or in accordance with the terms of the reinsurance policy.
13
Debtors
(Assets item E)
Amounts owed 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 items 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 —
1. a
  allowance has been made in the computation of the long term business provision made under paragraph 46 below and shown under Liabilities item C2 or D in the balance sheet, for —
  1. i
    the explicit recognition of such costs, or
  2. 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
2. 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 below 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—
1. a
  how the deferral of acquisition costs has been treated (unless otherwise expressly stated in the accounts), and
2. b
  where such costs are included as a deduction from the provisions at Liabilities item C.I, the amount of such deduction, or
3. 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 item 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)
F1501This item shall comprise 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 2000This item shall F1502also 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 below.
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

10Additional items

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 section 268 of this Act.

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.

11Managed funds

1

For the purposes of this paragraph “managed funds” are funds of a group pension fund —

F1503a

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 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.

12Deferred acquisition costs

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 investments(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)

F15042a

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 contracts 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 —
1. i
  premiums yet to be determined, where the premium calculation can be done only at the end of the year;
2. 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;
3. 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;
4. iv
  in the case of co-insurance, the company’s portion of total premiums;
5. 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 contracts entered into by the company. Portfolio entries payable on the conclusion or amendment of outward reinsurance 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 below.
Sums recoverable on the basis of subrogation and salvage (within the meaning of paragraph 47 below) shall be deducted. Where the difference between—
1. a
  the loss provision made at the beginning of the year for outstanding claims incurred in previous years, and
2. 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.8.(c) 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 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: F1505 item I.2
Long term business technical account: F1506 item II.12
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 business 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 II Accounting Principles and Rules

Section A Accounting Principles

Preliminary

13

Subject to paragraph 19 below, 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 below.

Accounting principles

14

The company shall be presumed to be carrying on business as a going concern.

15

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 B Current Value Accounting Rules

Preliminary

20. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1508. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F150921. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Valuation of assets: general

22

1

Subject to paragraph 24 below, 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 below.

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 below.

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 below 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 above or their amortised value may be shown in the balance sheet, in which case the provisions of this paragraph apply.

3

Subject to sub-paragraph (4) below, 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) above 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 above 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) below, 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) above 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) below.

2

Market value shall mean the price at which land and buildings could be sold under private contract 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 above, and

b

in the case of a determination under paragraph 22 above, 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 35 and 37 below 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 above (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 below as it applies by virtue of sub-paragraph (1) is referred to below 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 above.

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 above shall be disclosed in the notes to the accounts.

4

In the case of each balance sheet item valued in accordance with paragraph 23 above 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) above, references in relation to any item to the comparable amounts determined as there mentioned are references to —

a

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) below, with respect to any determination of the value of an asset of a company in accordance with paragraph 22 or 23 above, 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

F1510a

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 F1511sub-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 BA

VALUATION AT FAIR VALUE

29AInclusion of financial instruments at fair value

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

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.

29BDetermination of fair value

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

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.

29CInclusion of hedged items at fair value

29DOther assets that may be included at fair value

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

3

In this paragraph, “fair value” means fair value determined in accordance with relevant international accounting standards.

29EAccounting for changes in value

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 in this Part of this Schedule, and subject to sub-paragraphs (3) and (4) below, 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.

29FThe fair value reserve

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 or debited to the fair value reserve shall be disclosed in a note to the accounts.

Section C Historical Cost Accounting Rules

Preliminary

30. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1512. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Valuation of assets

31General rules

Subject to any provision for depreciation or diminution in value made in accordance with paragraph 32 or 33 below, the amount to be included in respect of any asset in the balance sheet format shall be its cost.

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.

36Goodwill

1

The application of paragraphs 31 to 33 above in relation to goodwill (in any case where goodwill is treated as an asset) is subject to the following provisions of this paragraph.

2

3

The period chosen shall not exceed the useful economic life of the goodwill in question.

4

Miscellaneous and supplemental

37Excess of money owed over value received as an asset item

1

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.

38Assets included at a fixed amount

1

Subject to the following sub-paragraph, 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.

39Determination of cost

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

3

In addition, there may be included in the cost of an asset constructed by the company —

a

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) above, 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) below 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

5 41Substitution of original amount where price or cost unknown

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 39 above, or any such record cannot be obtained without unreasonable expense or delay, its cost shall be taken for the purposes of paragraphs 31 to 36 above 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 D Rules for Determining Provisions

42Preliminary

Provisions which are to be shown in a company’s accounts shall be determined in accordance with paragraphs 43 to 53 below.

43Technical provisions

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.

44Provision for unearned premiums

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.

45Provision for unexpired risks

The provision for unexpired risks (as defined in paragraph 81 below) shall be computed on the basis of claims and administrative expenses 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.

46Long term business provision

1

The long term business provision shall in principle 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 F1513Directive 2002/83/EC of the European Parliament and of the Council of 5th November 2002 concerning life assurance .

Provisions for claims outstanding

47 General business

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) above, “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 below 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 data 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.

49Long term business

The amount of the provision for claims shall be equal to the sums due to beneficiaries, plus the costs of settling claims.

50F1514Equalisation reserves

The 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.

51Accounting on a non-annual basis

1

Either of the methods described in paragraphs 52 and 53 below 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

F151554

1

2

F1516. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3

F1516. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

General

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

61

1

If the company has issued any debentures during the financial year to which the accounts relate, the following information shall be given —

F1518a

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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.

F15192

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3 62Assets

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 above;

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 above); or

b

on any basis permitted by paragraph 22 or 23 above,

(leaving out of account in either case any provisions for depreciation or diminution in value).

3

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

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.

66Reserves and provisions

1

Where any amount is transferred—

a

to or from any reserves;

b

to any F1522provisions for other risks ; or

c

from any F1522provisions 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) above 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.

67Provision for taxation

The amount of any provision for deferred taxation shall be stated separately from the amount of any provision for other taxation.

68Details of indebtedness

F15231

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

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.

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).

F152671. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

72Miscellaneous matters

1

Particulars shall be given of any case where the cost of any asset is for the first time determined under paragraph 41 above.

2 F15273

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Information supplementing the profit and loss account

73Separate statement of certain items of income and expenditure

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, F1528. . . ; 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.

F15293

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F15304

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F15315

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

74Particulars of tax

F15321

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2

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).

75Particulars of business

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) below, the amounts required to be disclosed by sub-paragraphs (1) and (2) above 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 contracts 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

iii

above 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) below, 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) above shall not be required if it does not exceed 5 per cent.of total gross premiums.

78Commissions

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.

79Particulars of staff

F1533. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

80Miscellaneous matters

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 IV Interpretation of Part I

81General

1

The following definitions apply for the purposes of this Part of this Schedule and its interpretation—

F1534. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
“fungible assets” means assets of any description which are substantially indistinguishable one from another;
F1535“general business” means business which consists of effecting or carrying out contracts of general insurance;
F1539“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 Great Britain 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;
F1536“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 business F1537in accordance with rules made by the Financial Services Authority under Part X of the Financial Services and Markets Act 2000;
F1538“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.

81AFinancial instruments

For the purposes of this Part of this Schedule, 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 2 and paragraphs 65A to 65C and 81A of this Part of this Schedule 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. F1546

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”.

82Loans

83Materiality

For the purposes of this Part of this Schedule amounts which in the particular context of any provision of this Part are not material may be disregarded for the purposes of that provision.

84Provisions

For the purposes of this Part of this Schedule 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 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 to F1541provisions for other risksF1540. . . are to any amount retained as reasonably necessary for the purpose of providing for any liability F1542the 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.

85Scots land tenure

In the application of this Part of this Schedule to Scotland—

“land of freehold tenure” means land in respect of which the company is the proprietor of the dominium utile or, in the case of land not held on feudal tenure, is the owner;
“land of leasehold tenure” means land of which the company is the tenant under a lease;

and the reference to ground-rents, rates and other outgoings includes feu-duty and ground annual.

86Staff costs

For the purposes of this Part of this Schedule and its interpretation —

a

“Social security costs” means any contributions by the company to any state social security or pension scheme, fund or arrangement;

F1543b

c

any amount stated in respect of F1544the 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 of F1545section 231A(1)(a)

Part II Consolidated Accounts

Schedule 4A to apply Part I of this Schedule with modifications

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 below;

F1547b

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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-paragraph—

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) above 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), and
b
“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 1

2

1

For the purposes of paragraph 1 above, 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 Great Britain, 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) investments relating to long term business.

5

In the case of subsidiary undertakings which do not have a head office in Great Britain, 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.

F689 X1SCHEDULE 10

Annotations:

Editorial Information

Sch. 10: the earliest available versions of Sch. 10 and its contents are those having effect on 2.12.1991

Amendments (Textual)

F689

Sch. 10 repealed (19.12.1993) by S.I. 1993/3246, regs. 5(1), 6, 7, Sch. 2 para.7

Recent issues

1

This paragraph applies where a company prepares individual accounts in accordance with the special provisions of this Part relating to F1334. . . insurance companies.

2

If in the financial year to which the accounts relate the company has issued any shares or debentures, the directors’ report shall state the reason for making the issue, the classes of shares or debentures issued and, as respects each class, the number of shares or amount of debentures issued and the consideration received by the company for the issue.

F1335 Turnover and profitability

Annotations:

Amendments (Textual)

F1335

Sch. 10 substituted by Companies Act 1989 (c. 40, SIF 27), ss. 18(5), 213(2), Sch. 8 (subject to the transitional and saving provisions mentioned in S.I. 1990/355, arts. 6–9)

2

1

This paragraph applies where a company prepares group accounts in accordance with the special provisions of this Part relating to F1336. . . insurance groups.

2

If in the course of the financial year to which the accounts relate the group carried on business of two or more classes F1337. . . that in the opinion of the directors differ substantially from each other, there shall be contained in the directors’ report a statement of—

a

the proportions in which the turnover for the financial year (so far as stated in the consolidated accounts) is divided amongst those classes (describing them), and

b

as regards business of each class, the extent or approximate extent (expressed in money terms) to which, in the opinion of the directors, the carrying on of business of that class contributed to or restricted the profit or loss of the group for that year (before taxation).

3

In sub-paragraph (2) “the group” means the undertakings included in the consolidation.

4

For the purposes of this paragraph classes of business which in the opinion of the directors do not differ substantially from each other shall be treated as one class.

F1338 Labour force and wages paid

Annotations:

Amendments (Textual)

F1338

Sch. 10 substituted by Companies Act 1989 (c. 40, SIF 27), ss. 18(5), 213(2), Sch. 8 (subject to the transitional and saving provisions mentioned in S.I. 1990/355, arts. 6–9)

3

1

This paragraph applies where a company prepares individual or group accounts in accordance with the special provisions of this Part relating to F1339. . . insurance companies or groups.

2

There shall be stated in the directors’ report—

a

the average number of persons employed by the company or, if the company prepares group accounts, by the company and its subsidiary undertakings, and

b

the aggregate amount of the remuneration paid or payable to persons so employed.

3

The average number of persons employed shall be determined by adding together the number of persons employed (whether throughout the week or not) in each week of the financial year and dividing that total by the number of weeks in the financial year.

4

The aggregate amount of the remuneration paid or payable means the total amount of remuneration paid or payable in respect of the financial year; and for this purpose remuneration means gross remuneration and includes bonuses, whether payable under contract or not.

5

The information required by this paragraph need not be given if the average number of persons employed is less than 100.

6

No account shall be taken for the purposes of this paragraph of persons who worked wholly or mainly outside the United Kingdom.

7

This paragraph does not apply to a company which is a wholly-owned subsidiary of a company incorporated in Great Britain.

F690 F690SCHEDULE 10A

Annotations:

Amendments (Textual)

F690

Sch. 10A repealed (6.4.2008) by Companies Act 2006 (c. 46), ss. 1295, 1300, Sch. 16; S.I. 2007/3495, art. 8(a), Sch. 2 Pt. 1 (with arts. 7, 12)

Introduction

1

The provisions of this Schedule explain expressions used in section 258 (parent and subsidiary undertakings) and otherwise supplement that section.

F1257 Voting rights in an undertaking

Annotations:

Amendments (Textual)

F1257

Sch. 10A added by Companies Act 1989 (c. 40, SIF 27), ss. 21(2), 213(2), Sch. 9 (subject to the transitional and saving provisions mentioned in S.I. 1990/355, arts. 6–9)

2

1

In section 258(2)(a) and (d) F1258and (3A)(a)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.

F1259 Right to appoint or remove a majority of the directors

Annotations:

Amendments (Textual)

F1259

Sch. 10A added by Companies Act 1989 (c. 40, SIF 27), ss. 21(2), 213(2), Sch. 9 (subject to the transitional and saving provisions mentioned in S.I. 1990/355, arts. 6–9)

3

1

In section 258(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.

F1260 Right to exercise dominant influence

Annotations:

Amendments (Textual)

F1260

Sch. 10A added by Companies Act 1989 (c. 40, SIF 27), ss. 21(2), 213(2), Sch. 9 (subject to the transitional and saving provisions mentioned in S.I. 1990/355, arts. 6–9)

4

1

For the purposes of section 258(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 section 258(4)(a).

F1261 Rights exercisable only in certain circumstances or temporarily incapable of exercise

Annotations:

Amendments (Textual)

F1261

Sch. 10A added by Companies Act 1989 (c. 40, SIF 27), ss. 21(2), 213(2), Sch. 9 (subject to the transitional and saving provisions mentioned in S.I. 1990/355, arts. 6–9)

C2945

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.

F1262 Rights held by one person on behalf of another

Annotations:

Amendments (Textual)

F1262

Sch. 10A added by Companies Act 1989 (c. 40, SIF 27), ss. 21(2), 213(2), Sch. 9 (subject to the transitional and saving provisions mentioned in S.I. 1990/355, arts. 6–9)

C2956

Rights held by a person in a fiduciary capacity shall be treated as not held by him.

C2967

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.

F1263 Rights attached to shares held by way of security

Annotations:

Amendments (Textual)

F1263

Sch. 10A added by Companies Act 1989 (c. 40, SIF 27), ss. 21(2), 213(2), Sch. 9 (subject to the transitional and saving provisions mentioned in S.I. 1990/355, arts. 6–9)

C2978

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, and

b

F1264 Rights attributed to parent undertaking

Annotations:

Amendments (Textual)

F1264

Sch. 10A added by Companies Act 1989 (c. 40, SIF 27), ss. 21(2), 213(2), Sch. 9 (subject to the transitional and saving provisions mentioned in S.I. 1990/355, arts. 6–9)

C2989

1

a

there were substituted for the words “are shown as an asset” in sub-section (1) the words “are included as an asset”; and

b

the reference to paragraph 20 of Schedule 4 in sub-section (2)(b) was to paragraph 27 of Part I of Schedule 9.

F12714

Sections 270(2) and 275 shall apply as if the references therein to paragraphs 88 and 89 of Schedule 4 were to paragraph 85 of Part I of Schedule 9.

F12725

Sections 272 and 273 shall apply as if in section 272(3) there were substituted, for the references to F1273sections 226, 226A and 226B and Schedule 4, references to section 255 and Part I of Schedule 9.

F12746

Section 276 shall apply as if the references to paragraphs 12(a) and 34(3)(a) of X48Schedule 4 were to paragraphs 19(a) and 44(3)(a) of Schedule 9 .

F1290Modifications where accounts prepared in accordance with special provisions for insurance companies

Annotations:

Amendments (Textual)

F1290

Sch. 11 paras. 7-11 substituted (19.12.1993) for Sch. 11 paras. 7-13 by S.I. 1993/3246, regs. 5(1), 6, 7, Sch. 2 para.8

F12757

Section 264(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).

F12768

Section 269 shall apply as if the reference to paragraph 20 of Schedule 4 in subsection (2)(b) were a reference to paragraph 35 of Part I of Schedule 9A.

F12779

F1278In the case of Companies Act accounts, sections 270(2) and 275 shall apply as if the reference to provisions of any of the kinds mentioned in paragraphs 88 and 89 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.

F127910

Sections 272 and 273 shall apply as if the references in section 272(3) to F1280sections 226, 226A and 226B and Schedule 4 were references to section 255 and Part I of Schedule 9A.

F128111

Section 276 shall apply as if the references to paragraphs 12(a) and 34(3)(a) of Schedule 4 X49 were references to paragraphs 16(a) and 29(3)(a) of Part I of Schedule 9A.

F1282 X5012

Sections 272 and 273 apply as if in section 272(3)—

a

for the references to F1283section 226 and Schedule 4 there were substituted references to F1283section 255 and Part I of F1284Schedule 9A, and

b

immediately before paragraph (a) there were inserted “except where the company is entitled to avail itself, and has availed itself, of any of the provisions of F1285paragraph F1286. . . 28 of F1284Schedule 9A”.

F1287 X5113

Section 275 applies as if—

a

for subsection (1) there were substituted—

1
For purposes of section 263, any provision (within the meaning of F1288Part I of F1289Schedule 9A), other than one in respect of any diminution of value of a fixed asset appearing on a revaluation of all the fixed assets of the company, or of all its fixed assets other than goodwill, is to be treated as a realised loss

b

“fixed assets” were defined to include any other asset which is not a current asset.

SCHEDULE 12 . . . F692

Annotations:

Amendments (Textual)

F692

Sch. 12 repealed by Company Directors Disqualification Act 1986 (c. 46, SIF 27), s. 23(2), Sch. 4

C182 F697SCHEDULE 13 Provisions Supplementing and Interpreting Sections 324 to 328

Sections 324, 325, 326, 328 and 346.

Annotations:

Amendments (Textual)

F697

Schs. 1-15B repealed (prosp.) by Companies Act 2006 (c. 46), ss. 1295, 1300, Sch. 16 and the repeal being partly in force, as to which see individual provisions

Modifications etc. (not altering text)

C182

Sch. 13 excluded (12.2.1992) by S.I. 1992/225, reg. 23(1)(b).

Sch. 13 modified (12.2.1992) by S.I. 1992/225, reg. 121, Sch. 8 para. 1(b).

F693 F693 Part I

Annotations:

Amendments (Textual)

F693

Sch. 13 Pt. 1 repealed (1.10.2007) by Companies Act 2006 (c. 46), ss. 1295, 1300, Sch. 16; S.I. 2007/2194, art. 8, Sch. 2 Pt. 1 (with art. 12)

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 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 of this Schedule.

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 section 346(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”), then, for 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 section 346(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 subscribe for shares or debentures are not to be taken, for 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 unidentifiable.

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 England and Wales as a bare trustee or as a custodian trustee, or under the law in force in Scotland, as a simple trustee.

11 F12911

There is to be disregarded an interest of a person subsisting by virtue of—

F1292a

any unit trust scheme which is an authorised unit trust scheme F1293. . .;

b

a scheme made under section 22 F1294or 22A of the M31Charities Act 1960 F1295or section 24 or 25 of the Charities Act 1993, section 11 of the M32Trustee Investments Act 1961 or section 1 of the M33Administration of Justice Act 1965; or

c

the scheme set out in the Schedule to the M34Church Funds Investment Measure 1958.

F12962

Unit trust scheme” and “authorised unit trust scheme” have the meaning given in section 237 of the Financial Services and Markets Act 2000.

C30112

There is to be disregarded any interest—

a

of the Church of Scotland General Trustees or of the Church of Scotland Trust in shares or debentures held by them;

b

of any other person in shares or debentures held by those Trustees or that Trust otherwise than as simple trustees.

“The Church of Scotland General Trustees” are the body incorporated by the order confirmed by the M35Church of Scotland (General Trustees) Order Confirmation Act 1921; and “the Church of Scotland Trust” is the body incorporated by the order confirmed by the M36Church of Scotland Trust Order Confirmation Act 1932.

13

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 to 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.

F694 F694Part II

Annotations:

Amendments (Textual)

F694

Sch. 13 Pts. 2-4 repealed (6.4.2007) by Companies Act 2006 (c. 46), ss. 1177, 1295, 1300, Sch. 16; S.I. 2006/3428, arts. {4(1)(c)}, 7(c), Sch. 4 Pt. 1 (subject to art. 5, Sch. 1 and with arts. 6, 8, Sch. 5 (as amended by S.I. 2007/3495, art. 11, Sch. 5))

14

1

An obligation imposed on a person by section 324(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.

15

1

An obligation imposed on a person by section 324(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 a 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.

16

In reckoning, for purposes of paragraphs 14 and 15, any period of days, a day that is a Saturday or Sunday, or a bank holiday in any part of Great Britain, is to be disregarded.

F695 F695Part III

Annotations:

Amendments (Textual)

F695

17

1

Where an event of whose occurrence a director is, by virtue of section 324(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 section 324(2)(b) is not discharged in the absence of inclusion in the notice of the price to be received by him under the contract.

18

1

An obligation imposed on a director by virtue of section 324(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 section 324(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.

19

and shall F1297 . . . be open to the inspection of any member of the company without charge and of any other person on payment of F1298such fee as may be prescribed.

26

1

Any member of the company or other person may require a copy of the register, or of any part of it, on payment of F1299such 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.

27

The company shall send notice in the prescribed form to the registrar of companies 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.

28

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 entered 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 entered in the register, make any necessary alteration in the index.

C30429

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.

F698 F698SCHEDULE 14

Annotations:

Amendments (Textual)

F698

Sch. 14 repealed (1.10.2009) by Companies Act 2006 (c. 46), ss. 1295, 1300, Sch. 16; S.I. 2008/2860, art. 4, Sch. 1 (with arts. 5, 7, 8, Sch. 2 (as amended by S.I. 2009/1802, art. 18, Sch.))

Part I Countries and Territories in Which Overseas Branch Register May be Kept

Annotations:

Amendments (Textual)

F1300

Entry in Sch. 14 Pt. I inserted (1.7.1997) by S.I. 1997/1313, art. 2

Northern Ireland

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

F1300The 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 II General Provisions With Respect to Overseas Branch Registers

1

A company keeping an overseas branch register shall give to the registrar of companies notice in the prescribed form of the situation of the office where any overseas 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 overseas branch register is deemed to be part of the company’s register of members (“the principal register”).

C305 C3062

It shall be kept in the same manner in which the principal register is by this Act required to be kept, except that the advertisement before closing the register shall be inserted in a newspaper circulating in the district where the overseas branch register is kept.

3 C3071

A competent court in a country or territory where an overseas branch register is kept may exercise the same jurisdiction of rectifying the register as is under this Act exercisable by the court in Great Britain; and the offences of refusing inspection or copies of the register, and of authorising or permitting the refusal, may be prosecuted summarily before any tribunal having summary criminal jurisdiction.

2

This paragraph extends only to those countries and territories where, immediately before the coming into force of this Act, provision to the same effect made by section 120(2) of the M37Companies Act 1948 had effect as part of the local law.

4

1

The company shall—

a

transmit to its registered office a copy of every entry in its overseas 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 overseas branch register duly entered up from time to time.

Every such duplicate is deemed for all purposes of this Act 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 section 353(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) above he is liable to the same penalty as if he were an officer of the company who was in default.

5

Subject to the above provisions with respect to the duplicate register, the shares registered in an overseas branch register shall be distinguished from those registered in the principal register; and no transaction with respect to any shares registered in an overseas branch register shall, during the continuance of that registration, be registered in any other register.

6

A company may discontinue to keep an overseas branch register, and thereupon all entries in that register shall be transferred to some other overseas branch register kept by the company in the same country or territory, or to the principal register.

7

Subject to the provisions of this Act, any company may, by its articles, make such provisions as it thinks fit respecting the keeping of overseas branch registers.

8

An instrument of transfer of a share registered in an overseas branch register (other than such a register kept in Northern Ireland) is deemed a transfer of property situated outside the United Kingdom . . . F1301.

Part III Provisions for Branch Registers of Oversea Companies to be Kept in Great Britain

9

1

If by virtue of the law in force in any country or territory to which this paragraph applies companies incorporated under that law have power to keep in Great Britain branch registers of their members resident in Great Britain, Her Majesty may by Order in Council direct that—

a

so much of section 353 as requires a company’s register of members to be kept at its registered office,

b

section 356 (register to be open to inspection by members), and

c

section 359 (power of court to rectify),

shall, subject to any modifications and adaptations specified in the Order, apply to and in relation to any such branch registers kept in Great Britain as they apply to and in relation to the registers of companies subject to those sections.

2

The countries and territories to which this paragraph applies are—

a

all those specified in Part I of this Schedule, plus the Channel Islands and the Isle of Man,

b

Botswana, Zambia and Tonga, and

c

any territory for the time being under Her Majesty’s protection or administered by the Government of the United Kingdom under the Trusteeship System of the United Nations.

SCHEDULE 15F699. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Annotations:

Amendments (Textual)

F699

Sch. 15 repealed by Companies Act 1989 (c. 40, SIF 27), ss. 212, 213(2), Sch. 24 (subject to transitional and saving provisions in S.I. 1990/1707, arts. 4 and 5)

F700 F700Schedule 15A

Annotations:

Amendments (Textual)

F700

Sch. 15A repealed (1.10.2007) by Companies Act 2006 (c. 46), ss. 1295, 1300, Sch. 16; S.I. 2007/2194, art. 8, Sch. 2 Pt. 1 (with art. 12)

Part I Exceptions

1

Section 381A does not apply to—

a

a resolution under section 303 removing a director before the expiration of his period of office, or

b

a resolution under section 391 removing an auditor before the expiration of his term of office.

F1302Part II Adaptation of Procedural Requirements

Annotations:

Amendments (Textual)

F1302

Sch. 15A (new) inserted by Companies Act 1989 (c. 40, SIF 27), ss. 114(1), 213(2)

Introductory

2

1

In this Part of this Schedule (which adapts certain requirements of this Act in relation to proceedings under section 381A)—

a

a “written resolution” means a resolution agreed to, or proposed to be agreed to, in accordance with that section, 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 section.

2

A written resolution is not effective if any of the requirements of this Part of this Schedule is not complied with.

F1303 Section 95 (disapplication of pre-emption rights)

Annotations:

Amendments (Textual)

F1303

Sch. 15A (new) inserted by Companies Act 1989 (c. 40, SIF 27), ss. 114(1), 213(2)

3

1

The following adaptations have effect in relation to a written resolution under section 95(2) (disapplication of pre-emption rights), or renewing a resolution under that provision.

2

So much of section 95(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

Section 95(6) (offences) applies in relation to the inclusion in any such statement of matter which is misleading, false or deceptive in a material particular.

F1304 Section 155 (financial assistance for purchase of company’s own shares or those of holding company)

Annotations:

Amendments (Textual)

F1304

Sch. 15A (new) inserted by Companies Act 1989 (c. 40, SIF 27), ss. 114(1), 213(2)

4

In relation to a written resolution giving approval under section 155(4) or (5) (financial assistance for purchase of company’s own shares or those of holding company), section 157(4)(a) (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.

F1305 Sections 164, 165 and 167 (authority for off-market purchase or contingent purchase contract of company’s own shares)

Annotations:

Amendments (Textual)

F1305

Sch. 15A (new) inserted by Companies Act 1989 (c. 40, SIF 27), ss. 114(1), 213(2)

5

1

The following adaptations have effect in relation to a written resolution—

a

conferring authority to make an off-market purchase of the company’s own shares under section 164(2),

b

conferring authority to vary a contract for an off-market purchase of the company’s own shares under section 164(7), or

c

varying, revoking or renewing any such authority under section 164(3).

2

Section 164(5) (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 section 381A(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

Section 164(6) (documents to be available at company’s registered office and at meeting) does not apply, but the documents referred to in that provision and, where that provision applies by virtue of section 164(7), the further 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.

4

The above adaptations also have effect in relation to a written resolution in relation to which the provisions of section 164(3) to (7) apply by virtue of—

a

section 165(2) (authority for contingent purchase contract), or

b

section 167(2) (approval of release of rights under contract approved under section 164 or 165).

F1306 Section 173 (approval for payment out of capital)

Annotations:

Amendments (Textual)

F1306

Sch. 15A (new) inserted by Companies Act 1989 (c. 40, SIF 27), ss. 114(1), 213(2)

6

1

Amendments (Textual)

F702

Sch. 15B repealed (6.4.2008) by Companies Act 2006 (c. 46), ss. 1295, 1300, Sch. 16; S.I. 2007/3495, art. 8(a), Sch. 2 Pt. 1 (with arts. 7, 12)

F701

Sch. 15A renumbered by Companies Act 1989 (c. 40, SIF 27), ss. 114(2), 213(2)

1F1309Meeting of transferee company

Subject to paragraphs 10(1), 12(4) and 14(2), the court shall not sanction a compromise or arrangement under section 425(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.

where the directors of a transferor company have reported to the directors of a transferee company such a change as is mentioned in sub-paragraph (b) above, 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 a 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 or transferee company summoned either under section 425(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, has been approved by ordinary resolution of every transferor company concerned in the scheme.

4F1312Directors’ report

1

The directors’ report shall consist of—

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.

6F1314Inspection of documents

1

The documents referred to in paragraph 3(e) are, in relation to any company,—

a

the draft terms;

b

the directors’ report F1315referred to in paragraph 4 above;

c

the expert’s report;

F1316d

the company’s accounts within the meaning of section 239 for the last three complete financial years ending on or before a date one month earlier than the first meeting of the company summoned either under section 425(1) or for the purposes of paragraph 1 (in this paragraph referred to as the “relevant date”);

e

if the last complete financial year in respect of which accounts were prepared for the company ended more than 6 months before the relevant date, an accounting statement in the form described in the following sub-paragraph.

F1316d

the company’s annual accounts, together with the relevant directors’ report and auditors’ report, for the last three financial years ending on or before the relevant date; and

e

if the last of those financial years ended more than six months before the relevant date, an accounting statement in the form described in the following provisions.

F1317In paragraphs (d) and (e) “the relevant date” means one month before the first meeting of the company summoned under section 425(1) or for the purposes of paragraph 1.

F13182

The accounting statement shall consist of—

a

a balance sheet dealing with the state of affairs of the company; and

b

where the company has subsidiaries and section 229 would apply if the relevant date were the end of the company’s financial year, a further balance sheet or balance sheets dealing with the state of affairs of the company and the subsidiaries.

3

Subject to sub-paragraph (4) below, any balance sheet required by sub-paragraph (2)(a) or (b) above shall comply with section 228 or section 230 (as appropriate) and with all other requirements of this Act as to the matters to be included in a company’s balance sheet or in notes thereto (applying those sections and Schedule 4 and those other requirements with such modifications as are necessary because the balance sheet is prepared otherwise than as at the last day of the financial year) and must be signed in accordance with section 238.

4

Notwithstanding sub-paragraph (3) above, any balance sheet required by sub-paragraph (2)(a) or (b) above shall deal with the state of affairs of the company or subsidiaries as at a date not earlier than the first day of the third month preceding the date when the draft terms were adopted by the directors, and the requirement in section 228 to give a true and fair view shall for the purposes of this paragraph have effect as a requirement to give a true and fair view of the state of affairs of the company as at the first-mentioned date.

5

In sub-paragraphs (1) to (4) above, references to sections 228, 229, 230, 238 and 239 and Schedule 4 shall, in the case of a company within the meaning of Article 3 of the Companies M38(Northern Ireland) Order 1986, have effect as references to Articles 236, 237, 238, 246 and 247 and Schedule 4 of that Order respectively, and references to the requirements of this Act shall have effect as references to the requirements of that Order.

F13182

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 three 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 Act 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 Article 3 of the Companies (Northern Ireland) Order 1986, the references in this paragraph to the requirements of this Act shall be construed as reference to the corresponding requirements of that Order.

7F1319Transferor company holding its own shares

The court shall not sanction under section 425(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.

8F1320Securities other than shares to which special rights are attached

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 section 425(2) unless under the scheme that person is to receive rights in a transferee company of equivalent value.

2

Sub-paragraph (1) above 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.

9F1321Date and consequences of the compromise or arrangement

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 section 427 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 provide 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) above, 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) above if it is satisfied that the steps there mentioned cannot be completed by the date (or latest date) fixed under that sub-paragraph.

10F1322Exceptions

1

The court may sanction a compromise or arrangement under section 425(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) below have been complied with.

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 paragraph (b) above, 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.

F1324 Transferee company or companies holding shares in the transferor company

Annotations:

Amendments (Textual)

F1324

Sch. 15A (old) inserted by S.I. 1987/1991, reg. 2(c), Sch. Pt. II

F132512

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, section 427A and this Schedule shall apply subject to the following sub-paragraphs.

2

The draft terms need not give particulars of the matters mentioned in paragraph 2(2)(b), (c) or (d).

3

Section 426 and sub-paragraphs (a) and (d) of paragraph 3 shall not apply, and sub-paragraph (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 section 425(2) notwithstanding that—

a

any meeting otherwise required by section 425 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,

it is satisfied that the conditions specified in the following sub-paragraphs have been complied with.

5

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.

F132814

1

Where the scheme is a Case 1 Scheme and in the case of every transferor company concerned ninety per cent. or more (but not all) of—

a

4

The Lord Advocate.

5

The Director of Public Prosecutions.

6

The Director of Public Prosecutions for Northern Ireland.

7

The Financial Services Authority.

8

A constable.

9

A procurator fiscal.

10

The Scottish Ministers.

F740SCHEDULE 15DDisclosures

Section 449

Annotations:

Amendments (Textual)

F740

Sch. 15D inserted (6.4.2005 except for paras. 40, 45 and 1.7.2005 otherwise) by Companies (Audit, Investigations and Community Enterprise) Act 2004 (c. 27), ss. 25, 65, Sch. 2 para. 25; S.I. 2004/3322, art. 2(2)(3), Schs. 2, 3 (subject to arts. 3-13)

1

A disclosure for the purpose of enabling or assisting a person authorised under F703section 457 of the Companies Act 2006 to exercise his functions.

2

A disclosure for the purpose of enabling or assisting an inspector appointed under Part 14 to exercise his functions.

3

A disclosure for the purpose of enabling or assisting a person authorised under section 447 of this Act or section 84 of the Companies Act 1989 to exercise his functions.

4

A disclosure for the purpose of enabling or assisting a person appointed under section 167 of the Financial Services and Markets Act 2000 (general investigations) to conduct an investigation to exercise his functions.

5

A disclosure for the purpose of enabling or assisting a person appointed under section 168 of the Financial Services and Markets Act 2000 (investigations in particular cases) to conduct an investigation to exercise his functions.

6

A disclosure for the purpose of enabling or assisting a person appointed under section 169(1)(b) of the Financial Services and Markets Act 2000 (investigation in support of overseas regulator) to conduct an investigation to exercise his functions.

7

A disclosure for the purpose of enabling or assisting a person appointed under section 284 of the Financial Services and Markets Act 2000 (investigations into affairs of certain collective investment schemes) to conduct an investigation to exercise his functions.

8

A disclosure for the purpose of enabling or assisting a person appointed under regulations made under sections 262(1) and (2)(k) of the Financial Services and Markets Act 2000 (investigations into open-ended investment companies) to conduct an investigation to exercise his functions.

9

A disclosure for the purpose of enabling or assisting the Secretary of State or the Treasury to exercise any of their functions under any of the following—

F704a

the Companies Acts (as defined in section 2(1) of the Companies Act 2006);

F705b

Part 5 of the Criminal Justice Act 1993 (insider dealing);

c

the Insolvency Act 1986;

d

the Company Directors Disqualification Act 1986;

F706da

Part 42 of the Companies Act 2006 (statutory auditors);

F707e

Parts 3 and 7 of the Companies Act 1989 (investigations and powers to obtain information and financial markets and insolvency);

f

the Financial Services and Markets Act 2000.

10

A disclosure for the purpose of enabling or assisting the Scottish Ministers to exercise their functions under the enactments relating to insolvency.

11

12

A disclosure for the purpose of enabling or assisting a person appointed or authorised by the Department of Enterprise, Trade and Investment for Northern Ireland under the enactments relating to companies or insolvency to exercise his functions.

13

F708A disclosure for the purpose of enabling or assisting the Pensions Regulator to exercise the functions conferred on it by or by virtue of any of the following—

a

the Pension Schemes Act 1993;

b

the Pensions Act 1995;

c

the Welfare Reform and Pensions Act 1999;

d

the Pensions Act 2004;

e

any enactment in force in Northern Ireland corresponding to any of those enactments.

F72013A

A disclosure for the purpose of enabling or assisting the Board of the Pension Protection Fund to exercise the functions conferred on it by or by virtue of Part 2 of the Pensions Act 2004 or any enactment in force in Northern Ireland corresponding to that Part.

14

A disclosure for the purpose of enabling or assisting the Bank of England to exercise its functions.

15

A disclosure for the purpose of enabling or assisting the body known as the Panel on Takeovers and Mergers to exercise its functions.

16

A disclosure for the purpose of enabling or assisting organs of the Society of Lloyd’s (being organs constituted by or under the Lloyd’s Act 1982) to exercise their functions under or by virtue of the Lloyd’s Acts 1871 to 1982.

17

A disclosure for the purpose of enabling or assisting the Office of Fair Trading to exercise its functions under any of the following—

a

the Fair Trading Act 1973;

b

the Consumer Credit Act 1974;

c

the Estate Agents Act 1979;

d

the Competition Act 1980;

e

the Competition Act 1998;

f

the Financial Services and Markets Act 2000;

g

the Enterprise Act 2002;

h

F709. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

i

the Unfair Terms in Consumer Contracts Regulations 1999 (S.I. 1999/2083).

F710j

the Business Protection from Misleading Marketing Regulations 2008;

k

the Consumer Protection from Unfair Trading Regulations 2008.

18

A disclosure for the purpose of enabling or assisting the Competition Commission to exercise its functions under any of the following—

a

the Fair Trading Act 1973;

b

the Competition Act 1980;

c

the Competition Act 1998;

d

the Enterprise Act 2002.

19

A disclosure with a view to the institution of, or otherwise for the purposes of, proceedings before the Competition Appeal Tribunal.

20

A disclosure for the purpose of enabling or assisting an enforcer under Part 8 of the Enterprise Act 2002 to exercise its functions under that Part.

21

A disclosure for the purpose of enabling or assisting the F711Charity Commission to exercise its functions.

22

A disclosure for the purpose of enabling or assisting the Attorney General to exercise his functions in connection with charities.

23

A disclosure for the purpose of enabling or assisting the National Lottery Commission to exercise its functions under sections 5 to 10 and 15 of the National Lottery etc. Act 1993.

24

A disclosure by the National Lottery Commission to the National Audit Office for the purpose of enabling or assisting the Comptroller and Auditor General to carry out an examination under Part 2 of the National Audit Act 1983 into the economy, effectiveness and efficiency with which the National Lottery Commission has used its resources in discharging its functions under sections 5 to 10 of the National Lottery etc. Act 1993.

25

A disclosure for the purpose of enabling or assisting a qualifying body under the Unfair Terms in Consumer Contracts Regulations 1999 (S.I. 1999/2083) to exercise its functions under those Regulations.

26

A disclosure for the purpose of enabling or assisting an enforcement authority under the Consumer Protection (Distance Selling) Regulations 2000 (S.I. 2000/2334) to exercise its functions under those Regulations.

27

A disclosure for the purpose of enabling or assisting a local weights and measures authority in England and Wales to exercise its functions under section 230(2) of the Enterprise Act 2002.

28

A disclosure for the purpose of enabling or assisting the Financial Services Authority to exercise its functions under any of the following—

a

the legislation relating to friendly societies or to industrial and provident societies;

b

the Building Societies Act 1986;

c

Part 7 of the Companies Act 1989;

d

the Financial Services and Markets Act 2000.

29

A disclosure for the purpose of enabling or assisting the competent authority for the purposes of Part 6 of the Financial Services and Markets Act 2000 to exercise its functions under that Part.

30

A disclosure for the purpose 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 exercise its functions.

31

1

A disclosure for the purpose of enabling or assisting a recognised investment exchange or a recognised clearing house to exercise its functions as such.

2

Recognised investment exchange and recognised clearing house have the same meaning as in section 285 of the Financial Services and Markets Act 2000.

32

A disclosure 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 exercise its functions in its capacity as a body designated under that section.

33

A disclosure with a view to the institution of, or otherwise for the purposes of, civil proceedings arising under or by virtue of the Financial Services and Markets Act 2000.

34

A disclosure for the purpose of enabling or assisting a body designated by order under F712section 1252 of the Companies Act 2006 (delegation of functions of Secretary of State) to exercise its functions under F713Part 42 of that Act (statutory auditors).

35

A disclosure for the purpose of enabling or assisting a recognised supervisory or qualifying body (within the meaning of F714Part 42 of the Companies Act 2006) to exercise its functions as such.

36

A disclosure for the purpose of enabling or assisting an official receiver (including the Accountant in Bankruptcy in Scotland and the Official Assignee in Northern Ireland) to exercise his functions under the enactments relating to insolvency.

37

A disclosure for the purpose of enabling or assisting the Insolvency Practitioners Tribunal to exercise its functions under the Insolvency Act 1986.

38

A disclosure for the purpose of enabling or assisting a body which is for the time being a recognised professional body for the purposes of section 391 of the Insolvency Act 1986 F715or Article 350 of the Insolvency (Northern Ireland) Order 1989(recognised professional bodies) to exercise its functions as such.

39

1

A disclosure for the purpose of enabling or assisting an overseas regulatory authority to exercise its regulatory functions.

2

Overseas regulatory authority and regulatory functions have the same meaning as in section 82 of the Companies Act 1989.

40

A disclosure for the purpose of enabling or assisting the Regulator of Community Interest Companies to exercise functions under the Companies (Audit, Investigations and Community Enterprise) Act 2004.

41

A disclosure with a view to the institution of, or otherwise for the purposes of, criminal proceedings.

42

A disclosure with a view to the institution of, or otherwise for the purposes of, proceedings on an application under section 6, 7 or 8 of the Company Directors Disqualification Act 1986 F716or Article 9, 10 or 11 of the Company Directors Disqualification (Northern Ireland) Order 2002.

43

A disclosure with a view to the institution of, or otherwise for the purposes of, proceedings before the Financial Services and Markets Tribunal.

44

A disclosure for the purposes of proceedings before the Financial Services Tribunal by virtue of the Financial Services and Markets Act 2000 (Transitional Provisions) (Partly Completed Procedures) Order 2001 (S.I. 2001/3592).

F72144A

A disclosure for the purposes of proceedings before the Pensions Regulator Tribunal.

45

A disclosure for the purpose of enabling or assisting a body appointed under section 14 of the Companies (Audit, Investigations and Community Enterprise) Act 2004 (supervision of periodic accounts and reports of issuers of listed securities) to exercise functions mentioned in subsection (2) of that section.

46 F7171

A disclosure with a view to the institution of, or otherwise for the purposes of, disciplinary proceedings relating to the performance by a F718relevant lawyer , auditor, accountant, valuer or actuary of his professional duties.

F7192

“Relevant lawyer” means—

a

a person who, for the purposes of the Legal Services Act 2007, is an authorised person in relation to an activity which constitutes a reserved legal activity (within the meaning of that Act),

b

a solicitor or barrister in Northern Ireland, or

c

a solicitor or advocate in Scotland.

47

1

A disclosure with a view to the institution of, or otherwise for the purposes of, disciplinary proceedings relating to the performance by a public servant of his duties.

2

Public servant means an officer or employee of the Crown or of any public or other authority for the time being designated for the purposes of this paragraph by the Secretary of State by order.

3

An order under sub-paragraph (2) must be made by statutory instrument subject to annulment in pursuance of a resolution of either House of Parliament.

48

A disclosure for the purpose of the provision of a summary or collection of information framed in such a way as not to enable the identity of any person to whom the information relates to be ascertained.

49

6

The person must by the order be made subject—

a

to the same liabilities and obligations as those to which the company was subject under the lease in respect of the property at the commencement of the winding up, or

b

(if the court thinks fit) only to the same liabilities and obligations as if the lease had been assigned to him at that date;

and in either event (if the case so requires) the liabilities and obligations must be as if the lease had comprised only the property comprised in the vesting order.

7

A creditor or sub-lessee declining to accept a vesting order on such terms is excluded from all interest in and security over the property.

8

If there is no person claiming under the company who is willing to accept an order on such terms, the court has power to vest the company’s estate and interest in the property in any person liable (either personally or in a representative character, and either alone or jointly with the company) to perform the lessee’s obligations under the lease, freed and discharged from all interests, rights and obligations created by the company in the lease or in relation to the lease.

9

For the purposes of paragraph 5 above, a heritable security is duly recorded if it is recorded in the Register of Sasines and is duly registered if registered in accordance with the M39Land Registration (Scotland) Act 1979.

F726 F726SCHEDULE 21

Annotations:

Amendments (Textual)

F726

Schs. 20-22 repealed (1.10.2009) by Companies Act 2006 (c. 46), ss. 1295, 1300, Sch. 16; S.I. 2008/2860, art. 4, Sch. 1 (with arts. 5, 7, 8, Sch. 2 (as amended by S.I. 2009/1802, art. 18, Sch.))

Interpretation

1

In this Schedule—

“registration” means registration in pursuance of section 680 in Chapter II of Part XXII of this Act, and “registered” has the corresponding meaning, 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

All the provisions of this Act 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 Act, subject as follows.

C3082

Table A does not apply unless adopted by special resolution.

3

Provisions relating to the numbering of shares do 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 an Act of Parliament relating to the company,

b

without the sanction of the Secretary of State, 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.

F13326

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 Act 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 an Act of Parliament, royal charger 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 Act, have been required to be contained in the memorandum and are not authorised to be altered by this Act.

9

F1333None of the provisions of this Act, and none of the provisions of the Companies Act 2006 (except section 996(2)), derogate from any power of altering the company’s constitution or regulations which may, by virtue of any Act of Parliament or other instrument constituting or regulating it, be vested in the company.

F727 F727SCHEDULE 21A

Annotations:

Amendments (Textual)

F727

Schs. 20-22 repealed (1.10.2009) by Companies Act 2006 (c. 46), ss. 1295, 1300, Sch. 16; S.I. 2008/2860, art. 4, Sch. 1 (with arts. 5, 7, 8, Sch. 2 (as amended by S.I. 2009/1802, art. 18, Sch.))

F14251 Duty to register

C3091

A company shall, within one month of having opened a branch in a part of Great Britain, 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 section 699AA applies, such particulars in relation to the registration of documents under Schedule 21D as are specified in paragraph 4.

C3102

The return shall, except where sub-paragraph (3) below applies, be accompanied by the documents specified in paragraph 5 and, if the company is one to which Part I of Schedule 21D 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 21D 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) above, the reference to having opened a branch in a part of Great Britain 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 Great Britain the company is subject to any proceedings referred to in section 703P(1) (winding up) or 703Q(1) (insolvency proceedings etc), the company shall deliver a return under section 703P(1) or (as the case may be) 703Q(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, section 703P(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 section within one month of the date of the branch being opened.

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 paragraph (a) above.

5

In sub-paragraphs (3)(a) and (4)(a) above—

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 the same part of Great Britain as the branch covered by the return; and

b

b

if any of the documents mentioned in paragraph (a) above is not written in the English language, a translation of it into English certified in the prescribed manner to be a correct translation.

F14326

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 withparagraph 1 in respect of the branch, and

b

if any of the documents mentioned in paragraph (a) above 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) above, “financial period” and “accounting documents” shall be construed in accordance with paragraph 6 of Schedule 21D.

F14337 Alterations

b

an alteration relates to more than one of those branches,

sub-paragraph (1) above 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) above—

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 a part of Great Britain 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, statutes 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.

F14348

1

Sub-paragraph (2) below 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 below, deliver to the registrar of companies 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) above 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 Great Britain in due course of post (if despatched with due diligence).

4

Sub-paragraph (2) above shall also apply where, after a company has made a return under sub-paragraph (2)(b) above, 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 a part of Great Britain 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.

9

1

If an individual in respect of whom a confidentiality order under section 723B is in force becomes a director, secretary or permanent representative of a company that has delivered a return under paragraph 1(1)—

a

the return required to be delivered to the registrar under paragraph 7(1) shall contain the address for the time being notified to the company by the director, secretary or permanent representative under regulations made under sections 723B to 723F, but shall not contain his usual residential address; and

b

with the return under paragraph 7(1) the company shall deliver to the registrar a return in the prescribed form containing the usual residential address of that director, secretary or permanent representative.

2

If after a company has delivered a return under paragraph 1(1) a confidentiality order under section 723B is made in respect of an existing director, secretary or permanent representative of the company, the company shall within the time specified below deliver to the registrar of companies for registration a return in the prescribed form containing the address for the time being notified to it by the director, secretary or permanent representative under regulations made under sections 723B to 723F.

3

Sub-paragraph (4) applies if, at any time after a company has delivered a return under paragraph 1(1), there is an alteration in the usual residential address of a director, secretary or permanent representative of the company in respect of whom a confidentiality order under section 723B is in force.

4

The company shall within the time specified below deliver to the registrar of companies for registration a return in the prescribed form containing the new address.

5

The time for the delivery of a return required by sub-paragraph (2) or (4) is 21 days after the date on which notice of the alteration in question could have been received in Great Britain in due course of post (if despatched with due diligence).

6

Where a company has more than one branch in Great Britain and any provision of this paragraph requires a return to be made to the registrar, that provision requires the company to deliver a return in respect of each of the branches; but 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.

F728 F728SCHEDULE 21B

Annotations:

Amendments (Textual)

F728

Schs. 20-22 repealed (1.10.2009) by Companies Act 2006 (c. 46), ss. 1295, 1300, Sch. 16; S.I. 2008/2860, art. 4, Sch. 1 (with arts. 5, 7, 8, Sch. 2 (as amended by S.I. 2009/1802, art. 18, Sch.))

F14351

1

This paragraph applies where a company which becomes a company to which section 690A applies was, immediately before becoming such a company (referred to in this paragraph as the relevant time), a company to which section 691 applies.

2

The company need not include the particulars specified in paragraph 2(1)(d) of Schedule 21A in the first return to be delivered under paragraph 1(1) of that Schedule to the registrar for a part of Great Britain if at the relevant time—

a

it had an established place of business in that part,

b

it had complied with its obligations under section 691(1)(b)(i), and

c

it had no outstanding obligation to make a return to the registrar for that part under subsection (1) of section 692, so far as concerns any alteration of the kind mentioned in subsection (1)(b) of that section,

and if it states in the return that the particulars have been previously filed in respect of a place of business of the company in that part, giving the company’s registered number.

3

The company shall not be required to deliver the documents mentioned in paragraph 5 of Schedule 21A with the first return to be delivered under paragraph 1(1) of that Schedule to the registrar for a part of Great Britain if at the relevant time—

a

it had an established place of business in that part,

b

it had delivered the documents mentioned in section 691(1)(a) to the registrar for that part, and

c

it had no outstanding obligation to make a return to that registrar under subsection (1) of section 692, so far as concerns any alteration in any of the documents mentioned in paragraph (a) of that subsection,

and if it states in the return that the documents have been previously filed in respect of a place of business of the company in that part, giving the company’s registered number.

F14362

1

This paragraph applies where a company which becomes a company to which section 691 applies was, immediately before becoming such a company (referred to in this paragraph as the relevant time), a company to which section 690A applies.

2

The company shall not be required to deliver the documents mentioned in section 691(1)(a) to the registrar for a part of Great Britain if at the relevant time—

a

it had a branch in that part,

b

the documents mentioned in paragraph 5 of Schedule 21A 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 for that part 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 been previously 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 section 691(1)(b)(i) in the return to be delivered under section 691(1)(b) to the registrar for a part of Great Britain if at the relevant time—

a

it had a branch in that part,

b

it had complied with its obligations under paragraph 1(1)(a) of Schedule 21A 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 for that part 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) above applies, the reference in section 692(1)(b) to the list ofthe directors and secretary shall be construed as a reference to the list contained in the returnunder paragraph 1(1) of Schedule 21A with any alterations in respect of which a return under paragraph 7(1) of that Schedule has been made.

F729 F729 SCHEDULE 21C

Annotations:

Amendments (Textual)

F729

Schs. 20-22 repealed (1.10.2009) by Companies Act 2006 (c. 46), ss. 1295, 1300, Sch. 16; S.I. 2008/2860, art. 4, Sch. 1 (with arts. 5, 7, 8, Sch. 2 (as amended by S.I. 2009/1802, art. 18, Sch.))

F1437Part IInstitutions required to prepare accounts under parent law

Annotations:

Amendments (Textual)

F1437

Sch. 21C inserted (1.1.1993) by S.I. 1992/3179, reg. 2(2), Sch.1.

F14381 Scope of Part and Interpretation

1

This Part of this Schedule applies to any institution to which section 699A 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 Great Britain.

2

In this Part of this Schedule, “branch” has the meaning given by section 699A.

F14392 Duty to deliver copies in Great Britain

1

An institution to which this Part of this Schedule 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 sub-paragraph or, if earlier, the date of compliance with it, and

b

if any of the documents mentioned in paragraph (a) above is not written in the English language, a translation of it into English certified in the prescribed manner to be a correct translation.

Where an institution to which this Part of this Schedule applies had, immediately prior to becoming such an institution, a branch in Northern Ireland which was its only or principal branch within the United Kingdom it may, instead of delivering the documents mentioned in sub-paragraph (1)(a) under that paragraph, deliver thereunder a notice that it has become an institution to which this Part of this Schedule applies, provided that those documents have been delivered to the registrar for Northern Ireland pursuant to the Companies (Northern Ireland) Order 1986 M40.

F14403

1

An institution to which this Part of this Schedule 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 paragraph (a) above 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.

F14414

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.

F14425

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 Great Britain, 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) above 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.

F14436 Registrar to whom documents to be delivered

The documents which an institution is required to deliver to the registrar under this Part of this Schedule shall be delivered—

a

to the registrar for England and Wales if the institution’s only branch, or (if it has more than one) its principal branch within the United Kingdom, is in England and Wales; or

b

to the registrar for Scotland if the institution’s only branch, or (if it has more than one) its principal branch within the United Kingdom, is in Scotland.

F14447 Penalty for non-compliance

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.

F14458 Interpretation

1

In this Part of this Schedule—

“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 enactment (including any subordinate legislation within the meaning of section 21 of the Interpretation Act 1978 M41) having effect for Great Britain or its constitution to publicly disclose 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 of this Schedule, the following are accounting documents in relation to a financial period of an institution—

a

the accounts of the institution for 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 paragraph (a) above, and

d

any report of the auditors on the report mentioned in paragraph (b) above.

F1446PART IIINSTITUTIONS NOT REQUIRED TO PREPARE ACCOUNTS UNDER PARENT LAW

Annotations:

Amendments (Textual)

F1446

Sch. 21C inserted (1.1.1993) by S.I. 1992/3179, reg. 2(2), Sch.1.

F14479 Scope of Part and Interpretation

1

This Part of this Schedule applies to any institution to which section 699A 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 of this Schedule, “branch” has the meaning given by section 699A.

F1448 C31110 Preparation of accounts and reports

An institution to which this Part of this Schedule 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 section 700 applied.

F144911

F1450Sections 390 to 392 of the Companies Act 2006 apply to an institution to which this Part of this Schedule applies subject to the following modifications—

C312a

for the references to the incorporation of the company there shall be substituted references to the institution becoming an institution to which this Part of this Schedule applies; and

b

F1451section 392(3) shall be omitted.

F145212 Duty to deliver accounts and reports

C3131

An institution to which this Part of this Schedule 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 10.

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.

F145313 Time for delivery

1

The period allowed for delivering accounts and reports under paragraph 12 above is13 months after the end of the relevant accounting reference period, subject to the following provisions of this paragraph.

C3142

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’s becoming an institution to which this Part of this Schedule applies.

3

If the relevant accounting reference period is treated as shortened by virtue of a notice given by the institution under F1454section 392 of the Companies Act 2006, the period allowed is that applicable in accordance with the above provisions or 3 months from the date of the notice under that section, whichever last expires.

4

If for any special reason the Secretary of State thinks fit he may, on an application made before the expiry of the period otherwise allowed, by notice in writing to an institution to which this Part of this Schedule 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.

F145514 Registrar to whom documents to be delivered

The documents which an institution is required to deliver to the registrar under this Part of the Schedule shall be delivered—

a

to the registrar for England and Wales if the institution’s only branch, or (if it has more than one) its principal branch within Great Britain, is in England and Wales; or

b

to the registrar for Scotland if the institution’s only branch, or (if it has more than one) its principal branch within Great Britain, is in Scotland.

F145615 Penalty for non-compliance

1

If the requirements of paragraph 12 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 Act, 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.

F730 F730 SCHEDULE 21D

Annotations:

Amendments (Textual)

F730

Schs. 20-22 repealed (1.10.2009) by Companies Act 2006 (c. 46), ss. 1295, 1300, Sch. 16; S.I. 2008/2860, art. 4, Sch. 1 (with arts. 5, 7, 8, Sch. 2 (as amended by S.I. 2009/1802, art. 18, Sch.))

F1457PART I COMPANIES REQUIRED TO MAKE DISCLOSURE UNDER PARENT LAW

Annotations:

Amendments (Textual)

F1457

Sch. 21D inserted (1.1.1993) by S.I. 1992/3179, reg. 3, Sch. 2, para.18.

F14581 Scope of Part

This Part of this Schedule applies to any company to which section 699AA applies which is required by its parent law to prepare, have audited and disclose accounts.

F14592 Duty to deliver copies in Great Britain

1

This paragraph applies in respect of each branch which a company to which this Part of this Schedule applies has in Great Britain.

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 21A 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-paragaph (2) above 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) above, 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.

F14603

Paragraph 2 above 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 21A 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.

F14614 Time for delivery

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.

F14625 Penalty for non-compliance

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.

F14636 Interpretation

1

In this Part of this Schedule—

“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 of this Schedule, 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 paragraph (a) above, and

d

any report of the auditors on the report mentioned in paragraph (b) above.

F1464PART II COMPANIES NOT REQUIRED TO MAKE DISCLOSURE UNDER PARENT LAW

Annotations:

Amendments (Textual)

F1464

Sch. 21D inserted (1.1.1993) by S.I. 1992/3179, reg. 3, Sch. 2, para.18.

F14657 Scope of Part

This Part of this Schedule applies to any company to which section 699AA applies which is not required by the law of the country in which it is incorporated to prepare, have audited and publicly disclose accounts.

F1466 C3158 Preparation of accounts and reports

A company to which this Part of this Schedule 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 section 700 applied.

F14679

F1468Sections 390 to 392 of the Companies Act 2006 apply to a company to which this Part of this Schedule applies subject to the following modifications—

C316a

for the references to the incorporation of the company there shall be substituted references to the company becoming a company to which this Part of this Schedule applies, and

b

F1469section 392(3) shall be omitted.

F147010 Duty to deliver accounts and reports

C3171

A company to which this Part of this Schedule 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 is respect of a financial year shall deliver them in respect of each branch which it has in Great Britain at the end of that year.

4

Sub-paragraph (3) above is without prejudice to section 695A(3).

F147111

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 21A 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.

F147212 Time for delivery

1

The period allowed for delivering 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.

C3182

3

If the relevant accounting reference period is treated as shortened by virtue of a notice given by the company under F1473section 392 of the Companies Act 2006 , the period allowed is that applicable in accordance with the above provisions or 3 months from the date of the notice under that section, whichever last expires.

4

If for any special reason the Secreatry of State thinks fit he may, on an application made before the expiry of the period otherwise allowed, by notice in writing to a company to which this part of this Schedule 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.

F147413 Penalty for non-compliance

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 Act, 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

F734

Sch. 25 repealed (1.10.2009) by Companies Act 2006 (c. 46), ss. 1295, 1300, Sch. 16; S.I. 2008/2860, art. 4, Sch. 1 (with arts. 5, 7, 8, Sch. 2 (as amended by S.I. 2009/1802, art. 18, Sch.))

38 Relief from section 56 in respect of group reconstructions.

1

This section 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 1948 Act to transfer any amount in excess of the minimum premium value to the share premium account.

3

In subsection (2) above “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 subsection (3) above, 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

Section 37 of this Act shall not apply in a case to which this section applies.