Part V Share Capital, its Increase, Maintenance and Reduction
Chapter VI Financial Assistance by a Company for Acquisition of its Own Shares
Private companies
156 Statutory declaration under s. 155.
1
A statutory declaration made by a company’s directors under section 155(6) shall contain such particulars of the financial assistance to be given, and of the business of the company of which they are directors, as may be prescribed, and shall identify the person to whom the assistance is to be given.
F11A
A statement made by a company’s directors under section 155(6A) shall state—
a
the names and addresses of all the directors of the company,
b
whether the business of the company is that of a banking company or insurance company or some other business,
c
that the company or (as the case may be) a company (naming such company) of which it is the holding company is proposing to give financial assistance in connection with the acquisition of shares in the company or (as the case may be) its holding company (naming that holding company),
d
whether the assistance is for the purpose of that acquisition or for reducing or discharging a liability incurred for the purpose of that acquisition,
e
the name and address of the person to whom the assistance is to be given (and in the case of a company its registered office),
f
the name of the person who has acquired or will acquire the shares and the number and class of the shares acquired or to be acquired,
g
the principal terms on which the assistance will be given,
h
the form the financial assistance will take (stating the amount of cash or value of any asset to be transferred to the person assisted), and
i
the date on which the assistance is to be given.
2
The declaration F2under section 155(6) or (as the case may be) statement under section 155(6A) shall state that the directors have formed the opinion, as regards the company’s initial situation immediately following the date on which the assistance is proposed to be given, that there will be no ground on which it could then be found to be unable to pay its debts; and either—
a
if it is intended to commence the winding up of the company within 12 months of that date, that the company will be able to pay its debts in full within 12 months of the commencement of the winding up, or
b
in any other case, that the company will be able to pay its debts as they fall due during the year immediately following that date.
3
In forming their opinion for purposes of subsection (2), the directors shall take into account the same liabilities (including contingent and prospective liabilities) as would be relevant under F3section 122 of the Insolvency Act (winding up by the court) to the question whether the company is unable to pay its debts.
4
The directors’ statutory declaration F4or statement shall have annexed to it a report addressed to them by their company’s auditors stating that—
a
they have enquired into the state of affairs of the company, and
b
they are not aware of anything to indicate that the opinion expressed by the directors in the declaration F4or statement as to any of the matters mentioned in subsection (2) of this section is unreasonable in all the circumstances.
5
The statutory declaration F4or statement and auditors’ report shall be delivered to the registrar of companies—
a
together with a copy of any special resolution passed by the company under section 155 and delivered to the registrar in compliance with section 380, or
b
where no such resolution is required to be passed, within 15 days after the making of the declaration.
6
If a company fails to comply with subsection (5), 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.
7
A director of a company who makes a statutory declaration F4or statement under section 155 without having reasonable grounds for the opinion expressed in it is liable to imprisonment or a fine, or both.