Company Law Reform Bill [HL]

moved Amendments Nos. 430 to 432:"After Clause 576, insert the following new clause—" ““POWER OF PRIVATE COMPANIES TO REDEEM OR PURCHASE OWN SHARES OUT OF CAPITAL 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.””.”” After Clause 576, insert the following new clause— ““CONDITIONS FOR REDEMPTION OR PURCHASE OF OWN SHARES OUT OF CAPITAL (1)   Section 173 of the Companies Act 1985 (c. 6) (conditions for payment out of capital for redemption or purchase by a private company of its own shares) is amended as follows. (2)   In subsection (3) (under which the directors are required to make a statutory declaration as to the company’s financial position) for ““a statutory declaration”” substitute ““a statement””. (3)   For subsection (4) (directors’ opinion as to solvency: liabilities to be taken into account) substitute— ““(4)   In forming their opinion for the purposes of subsection (3)(a), the directors must take into account all of the company’s liabilities (including any contingent or prospective liabilities).””. (4)   In subsection (5) (further requirements)— (a)   in the opening words, for ““statutory declaration”” substitute ““statement””; (b)   in paragraphs (b) and (c) for ““declaration”” substitute ““statement””. (5)   For subsection (6) (offence of making declaration without reasonable grounds) substitute— ““(6)   If the directors make a statement under this section without having reasonable grounds for the opinion expressed in it, an offence is committed by every director who is in default. (7)   A person guilty of an offence under subsection (6) is liable— (a)   on conviction on indictment, to imprisonment for a term not exceeding two years or a fine (or both); (b)   on summary conviction— (i)   in England and Wales, to imprisonment for a term not exceeding twelve months or to a fine not exceeding the statutory maximum (or both); (ii)   in Scotland or Northern Ireland, to imprisonment for a term not exceeding six months, or to a fine not exceeding the statutory maximum (or both).””. (6)   The following amendments are consequential on that in subsection (2) above— (a)   in section 172(6) of the Companies Act 1985 (c. 6) for ““statutory declaration of the directors”” substitute ““directors’ statement””; (b)   in section 174 of that Act— (i)   in subsection (1), for ““statutory declaration”” substitute ““statement””, and (ii)   in subsection (4), for ““statutory declaration”” substitute ““directors’ statement””; (c)   in section 175 of that Act— (i)   in subsections (1)(c) and (5), for ““statutory declaration of the directors”” substitute ““directors’ statement””; (ii)   in subsection (6) for ““statutory declaration””, substitute ““directors’ statement””, and (iii)   in subsection (8), for ““declaration”” (twice) substitute ““statement””; (d)   in section 179 of that Act— (i)   in subsection (1)(d), for ““statutory declaration of the directors’”” substitute ““directors’ statement””, and (ii)   in subsection (1)(e), for ““declaration”” substitute ““statement””.”” After Clause 576, insert the following new clause— ““NOTICE TO REGISTRAR OF PAYMENT OUT OF CAPITAL FOR REDEMPTION OR PURCHASE OF OWN SHARES After section 177 of the Companies Act 1985 (c. 6) insert— ““177A NOTICE TO REGISTRAR OF PAYMENT OUT OF CAPITAL FOR REDEMPTION OR PURCHASE OF OWN SHARES (1)   A private limited company that makes a payment out of capital for the redemption or purchase of its own shares must, within 15 days after making the payment, give notice to the registrar. (2)   The notice must be accompanied by a statement of capital. (3)   The statement of capital must state with respect to the company’s share capital immediately following the payment out of capital— (a)   the total number of shares of the company, (b)   the aggregate nominal value of those shares, (c)   for each class of shares— (i)   prescribed particulars of the rights attached to the shares, (ii)   the total number of shares of that class, and (iii)   the aggregate nominal value of shares of that class, and (d)   the amount paid up and the amount (if any) unpaid on each share (whether on account of the nominal value of the share or by way of premium). (4)   If default is made in complying with this section, an offence is committed by— (a)   the company, and (b)   every officer of the company who is in default. (5)   A person guilty of an offence under this section is liable on summary conviction to a fine not exceeding level 3 on the standard scale and, for continued contravention, a daily default fine not exceeding one-tenth of level 3 on the standard scale.””.”” On Question, amendments agreed to. Clause 583 [Redenomination of share capital]: