Company Law Bill [HL]

I shall speak to the clause stand part and to Amendment No. A78. Clause 567 amends Section 159 of the 1985 Act to make changes to the way in which companies may issue redeemable shares and redeem such shares. It implements a number of recommendations of the Company Law Review, including the removal of the current requirement for a private company to have authorisation in its articles of association for a proposed allotment of redeemable shares. To achieve consistency with the approach taken elsewhere in the Bill, the Government propose that the power of a private company to issue redeemable shares, contained in Section 159 of the 1985 Act, as amended by the Bill, should be subject to any provision in the company’s articles that may exclude or restrict the issue of redeemable shares. There may be good reasons why the members of a company may want to restrict, or prohibit, a power given to the directors by the Bill. It is right that they should be able to do so. Amendment No. A78 achieves that objective and restates Sections 159 and 160 of the 1985 Act, as amended by Clause 567 of the Bill. We have also taken the opportunity to clarify that the resolution authorising the directors to determine the terms, conditions and manner of redemption, as referred to in new Section 159A(1), is an ordinary resolution and to state expressly that the statement of capital which requires to be filed following an allotment of redeemable shares must include the terms and manner of redemption. I therefore propose that Clause 567 should be replaced by the clause inserted in the Bill by Amendment No. A78. Clause 567 negatived.