Company Law Bill [HL]

moved Amendment No. A82:"Page 276, line 24, at beginning insert—" ““(   )   In section 171 of the Companies Act 1985 (c. 6) (power of private companies to redeem or purchase own shares out of capital), for subsection (1) substitute— ““(1)   A private limited company may in accordance with this section, but subject to any restriction or prohibition in the company’s articles, make a payment in respect of the redemption or purchase of its own shares otherwise than out of distributable profits or the proceeds of a fresh issue of shares.””.”” The noble Lord said: Sections 171 to 177 of the 1985 Act provide a statutory scheme for the redemption or purchase of own shares out of capital. This scheme is available to private companies only. Under Section 171 of that Act, a private company may make such a payment out of capital if it is authorised to do so by the company’s articles of association. Consistent with the approach that we have taken elsewhere in the Bill—for example, in connection with a reduction of capital under Clause 561—the amendment removes the requirement for prior authorisation in the articles for a payment out of capital under Section 171. Again, consistent with the approach that we have taken in the Bill, this relaxation is expressed to be subject to any contrary provision in the articles that may restrict, or prohibit, such a payment. The amendment is about ensuring that any provision in the 1985 Act which is on a similar theme to provisions introduced or amended by the Bill fits with those provisions. I hope that noble Lords will feel able to agree. I beg to move. On Question, amendment agreed to. On Question, Whether Clause 571, as amended, shall stand part of the Bill?