Company Law Bill [HL]

The question posed by Amendment No. A91 is whether a resolution to reduce capital may be passed on the same day as the resolution to redenominate the share capital. The answer to that is, ““yes””. The drafting says that the resolution must be passed within three months of the resolution to redenominate. We do not consider that that would preclude the passing of the resolution to reduce capital on the same day. The question posed by Amendments Nos. A92 and A93 is whether a company should be given a longer time to renominalise the value of its shares following a redenomination of share capital. The procedural requirements of subsection (3) are intended to give companies flexibility about when they renominalise the value of their shares following a redenomination, should they wish to do so. The amendments tabled by the noble Lord would give companies a longer period of time, as he expressed, during which they could undertake this exercise. In particular, the proposed amendments would give companies three months from the date that the resolution to redenominate capital takes effect, rather than three months from the date on which the resolution is passed to carry out this exercise. Under Clause 578, a resolution to redenominate a company’s share capital will lapse at the end of a period of 15 days beginning on the date on which it is passed. Therefore, the effect of the noble Lord’s amendments—I think he recognises this—would be to provide companies with, at most, an extra period of 15 days within which to reduce their share capital. The Government do not consider that there is anything particular about this provision that points to the need for companies to have an extra 15 days within which to conduct this procedure. We consider that it may in fact prove easier for companies, when planning their timetable in advance of embarking on the exercise, if the deadline for the making of a reduction under Clause 582 expires within three months of the date of passing of the resolution. While we understand the point behind the amendment, we consider that the Bill already gives companies ample time to make arrangements for adjusting the value of their shares following a redenomination of capital.