Company Law Bill [HL]

moved Amendment No. A78:"After Clause 567, insert the following new clause—" ““REDEEMABLE SHARES    For sections 159 to 160 of the Companies Act 1985 (c. 6) (redeemable shares) substitute— ““159   POWER TO ISSUE REDEEMABLE SHARES (1)   A limited company having a share capital may issue shares that are to be redeemed or are liable to be redeemed at the option of the company or the shareholder (““redeemable shares””), subject to the following provisions. (2)   The articles of a private limited company may exclude or restrict the issue of redeemable shares. (3)   A public limited company may only issue redeemable shares if it is authorised to do so by its articles. (4)   No redeemable shares may be issued at a time when there are no issued shares of the company that are not redeemable. 159A   TERMS AND MANNER OF REDEMPTION (1)   The directors of a limited company may determine the terms, conditions and manner of redemption of shares if they are authorised to do so— (a)   by a resolution of the company, or (b)   by the company’s articles. (2)   A resolution giving authority under this section may be an ordinary resolution, even though it alters the company’s articles. (3)   Where the directors are authorised to determine the terms, conditions or manner of redemption of shares, they must do so before the shares are allotted. (4)   Any obligation of the company to state in a statement of capital the rights attached to shares extends, in the case of redeemable shares, to the terms and manner of redemption. 159B   PAYMENT FOR REDEEMABLE SHARES (1)   Redeemable shares in a limited company may not be redeemed unless they are fully paid. (2)   The terms of redemption of shares in a limited company may provide that the amount payable on redemption may, by agreement between the company and the holder of the shares, be paid on a date later than the redemption date. (3)   Unless redeemed in accordance with provision authorised by subsection (2), the shares must be paid for on redemption. 160   FINANCING OF REDEMPTION (1)   Redeemable shares in a limited company may only be redeemed out of— (a)   distributable profits of the company, or (b)   the proceeds of a fresh issue of shares made for the purposes of the redemption. (2)   Any premium payable on redemption of shares in a limited company must be paid out of distributable profits of the company, subject to the following provision. (3)   If the redeemable shares were issued at a premium, any premium payable on their redemption may be paid out of the proceeds of a fresh issue of shares made for the purposes of the redemption, up to an amount equal to— (a)   the aggregate of the premiums received by the company on the issue of the shares redeemed, or (b)   the current amount of the company’s share premium account (including any sum transferred to that account in respect of premiums on the new shares), whichever is the less. (4)   The amount of the company’s share premium account is reduced by a sum corresponding (or by sums in the aggregate corresponding) to the amount of any payment made under subsection (3). (5)   Subsections (1) and (2) are subject to— section 171 (private companies redeeming shares out of capital), and section 178(4) (terms of redemption enforceable in a winding up). 160A   REDEEMED SHARES TREATED AS CANCELLED    Where shares in a limited company are redeemed— (a)   the shares are treated as cancelled, and (b)   the amount of the company’s issued share capital is diminished by the nominal value of the shares accordingly.”””” On Question, amendment agreed to.