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Changes over time for: Paragraph 38
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Version Superseded: 01/10/2009
Status:
Point in time view as at 06/04/1997. This version of this provision has been superseded.
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Changes to legislation:
There are currently no known outstanding effects for the Companies Act 1985, Paragraph 38.
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Relief from section 56 in respect of group reconstructions.E+W+S
38(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.
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