• Reduction of capital confirmed by the Court

    • 586. Application to Court for order of confirmation

      (1) Where a company has passed a resolution for reducing share capital, it may apply to the Court for an order confirming the reduction.
      (2) If the proposed reduction of capital involves either—
      (a) diminution of liability in respect of unpaid share capital, or
      (b) the payment to a shareholder of any paid-up share capital,
      section 587 (creditors entitled to object to reduction) applies unless the Court directs otherwise.
      (3) The Court may, if having regard to any special circumstances of the case it thinks proper to do so, direct that section 587 is not to apply as regards any class or classes of creditors.
      (4) The Court may direct that section 587 is to apply in any other case.

    • 587. Creditors entitled to object to reduction

      (1) Where this section applies (see section 586(2) and (4)), every creditor of the company who—
      (a) at the date fixed by the Court is entitled to any debt or claim that, if that date were the commencement of the winding up of the company would be admissible in proof against the company, and
      (b) can show that there is a real likelihood that the reduction would result in the company being unable to discharge his debt or claim when it fell due,
      is entitled to object to the reduction of capital.
      (2) The Court shall settle a list of creditors entitled to object.
      (3) For that purpose the Court—
      (a) shall ascertain, as far as possible without requiring an application from any creditor, the names of those creditors and the nature and amount of their debts or claims, and
      (b) may publish notices fixing a day or days within which creditors not entered on the list are to claim to be so entered or are to be excluded from the right of objecting to the reduction of capital.
      (4) If a creditor entered on the list whose debt or claim is not discharged or has not determined does not consent to the reduction, the Court may, if it thinks fit, dispense with the consent of that creditor on the company securing payment of his debt or claim.
      (5) For this purpose the debt or claim must be secured by appropriating (as the Court may direct) the following amount—
      (a) if the company admits the full amount of the debt or claim or, though not admitting it, is willing to provide for it, the full amount of the debt or claim,
      (b) if the company does not admit, and is not willing to provide for, the full amount of the debt or claim, or if the amount is contingent or not ascertained, an amount fixed by the Court after the like enquiry and adjudication as if the company were being wound up by the Court.

    • 588. Offences in connection with list of creditors

      (1) If an officer of the company—
      (a) intentionally or recklessly—
      (i) conceals the name of a creditor entitled to object to the reduction of capital, or
      (ii) misrepresents the nature or amount of the debt or claim of a creditor, or
      (b) is knowingly concerned in any such concealment or misrepresentation,
      he commits a contravention of these Regulations.
      (2) A person commits a contravention of this section is liable to a level 2 fine.

    • 589. Court order confirming reduction

      (1) The Court may make an order confirming the reduction of capital on such terms and conditions as it thinks fit.
      (2) The Court must not confirm the reduction unless it is satisfied, with respect to every creditor of the company who is entitled to object to the reduction of capital that either—
      (a) his consent to the reduction has been obtained, or
      (b) his debt or claim has been discharged, or has determined or has been secured.
      (3) Where the Court confirms the reduction, it may order the company to publish (as the Court directs) the reasons for reduction of capital, or such other information in regard to it as the Court thinks expedient with a view to giving proper information to the public, and (if the Court thinks fit) the causes that led to the reduction.
      (4) The Court may, if for any special reason it thinks proper to do so, make an order directing that the company must, during such period (commencing on or at any time after the date of the order) as is specified in the order, add to its name as its last words the words "and reduced".

      If such an order is made, those words are, until the end of the period specified in the order, deemed to be part of the company's name.

    • 590. Registration of order and statement of capital

      (1) The Registrar, on production of an order of the Court confirming the reduction of a company's share capital and the delivery of a copy of the order and of a statement of capital (approved by the Court), shall register the order and statement.

      This is subject to section 591 (public company reducing capital below authorised minimum).
      (2) The statement of capital must state with respect to the company's share capital as altered by the order—
      (a) the total number of shares of the company,
      (b) the aggregate issue price 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 issue price of shares of that class, and
      (d) the amount paid up and the amount (if any) unpaid on each share.
      (3) The resolution for reducing share capital, as confirmed by the Court's order, takes effect—
      (a) in the case of a reduction of share capital that forms part of a compromise or arrangement sanctioned by the Court under Part 25 (arrangements and reconstructions)—
      (i) on delivery of the order and statement of capital to the Registrar, or
      (ii) if the Court so orders, on the registration of the order and statement of capital,
      (b) in any other case, on the registration of the order and statement of capital.
      (4) Notice of the registration of the order and statement of capital must be published in such manner as the Court may direct.
      (5) The Registrar must certify the registration of the order and statement of capital.
      (6) The certificate—
      (a) must be signed by the Registrar or authenticated by the Registrar's official seal, and
      (b) is conclusive evidence—
      (i) that the requirements of these Regulations with respect to the reduction of share capital have been complied with, and
      (ii) that the company's share capital is as stated in the statement of capital.