• Chapter 6 Chapter 6 Alteration Of Share Capital

    • How Share Capital May Be Altered

      • 567. 567. Alteration of share capital of limited company

        (1) A limited company having a share capital may not alter its share capital except in the following ways.
        (2) The company may-
        (a) increase its share capital by allotting new shares in accordance with this Part, or
        (b) reduce its share capital in accordance with Chapter 10.
        (3) The company may sub-divide or consolidate all or any of its share capital in accordance with section 568.
        (4) Nothing in this section affects-
        (a) the power of a company to purchase its own shares, or to redeem shares, in accordance with Part 17,
        (b) the power of a company to purchase its own shares in pursuance of an order of the Court under-
        (i) section 82 (application to Court to cancel resolution for re-registration as a private company),
        (ii) section 663(6) (powers of Court on objection to redemption or purchase of shares out of capital),
        (iii) section 697 (remedial order in case of breach of prohibition of public offers by private company), or
        (iv) Part 28 (protection of members against unfair prejudice),
        (c) the forfeiture of shares, or the acceptance of shares surrendered in lieu, in pursuance of the company’s articles, for failure to pay any sum payable in respect of the shares,
        (d) the cancellation of shares under section 602 (duty to cancel shares held by or for a public company),
        (e) the power of a company-
        (i) to enter into a compromise or arrangement in accordance with Part 25 (arrangements and reconstructions), or
        (ii) to do anything required to comply with an order of the Court on an application under that Part.

        • 567A. Redenomination of share capital

          (1) A limited company having a share capital may by resolution redenominate its share capital or any class of its share capital.
          “Redenominate” means convert shares from having a fixed nominal value in one currency to having a fixed nominal value in another currency.
          (2) The conversion must be made at an appropriate spot rate of exchange specified in the resolution.
          (3) The rate must be either—
          (a) a rate prevailing on a day specified in the resolution, or
          (b) a rate determined by taking the average of rates prevailing on each consecutive day of a period specified in the resolution.
          The day or period specified for the purposes of paragraph (a) or (b) must be within the period of 28 days ending on the day before the resolution is passed.
          (4) A resolution under this section may specify conditions which must be met before the redenomination takes effect.
          (5) Redenomination in accordance with a resolution under this section takes effect—
          (a) on the day on which the resolution is passed, or
          (b) on such later day as may be determined in accordance with the resolution.
          (6) A resolution under this section lapses if the redenomination for which it provides has not taken effect at the end of the period of 28 days beginning on the date on which it is passed.
          (7) A company's articles may prohibit or restrict the exercise of the power conferred by this section.
          (8) Chapter 3 (resolutions and agreements affecting a company's constitution) applies to a resolution under this section.
          (9) For each class of share affected by the redenomination, the new nominal value of each share shall be calculated by converting the old nominal values of all the shares of that class to the new currency at the rate of exchange specified in the resolution and dividing that amount by the number of shares in that class.

        • 567C. Notice to registrar of redenomination

          (1) If a limited company having a share capital redenominates any of its share capital, it must within one month after doing so give notice to the registrar, specifying the shares redenominated.
          (2) The notice must—
          (a) state the date on which the resolution was passed, and
          (b) be accompanied by a statement of capital.
          (3) The statement of capital must state with respect to the company's share capital as redenominated by the resolution—
          (a) the total number of shares of the company,
          (b) the aggregate nominal value of those shares, expressed in the new currency following redenomination,
          (c) the aggregate amount (if any) unpaid on those shares (whether on account of their nominal value or by way of premium), and
          (d) 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.
          (4) If default is made in complying with this section, a contravention is committed by—
          (a) the company, and
          (b) every officer of the company who is in default.
          (5) A person guilty of a contravention under this section is liable to a fine not exceeding level 2.

    • Sub-division Or Consolidation Of Shares

      • 568. Sub-division or consolidation of shares

        (1) A limited company having a share capital may-
        (a) sub-divide its shares, or any of them, into a greater number of shares than its existing shares, or
        (b) consolidate and divide all or any of its share capital into a lesser number of shares than its existing shares.
        (2) In any sub-division, consolidation or division of shares under this section, the proportion between the amount paid and the amount (if any) unpaid on each resulting share must be the same as it was in the case of the share from which that share is derived.
        (3) A company may exercise a power conferred by this section only if its members have passed a resolution authorising it to do so.
        (4) A resolution under subsection (3) may authorise a company-
        (a) to exercise more than one of the powers conferred by this section,
        (b) to exercise a power on more than one occasion,
        (c) to exercise a power at a specified time or in specified circumstances.
        (5) The company’s articles may exclude or restrict the exercise of any power conferred by this section.

      • 569. Notice to Registrar of sub-division or consolidation

        (1) If a company exercises the power conferred by section 568 (sub-division or consolidation of shares) it must within one month after doing so give notice to:
        (a) (in the case of a company other than a restricted scope company) the Registrar, or
        (b) (in the case of a restricted scope company) to each of its members,
        specifying the shares affected.
        (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 exercise of the power-
        (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,
        (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.
        (4) If default is made in complying with this section, a contravention of these Regulations is committed by-
        (a) the company, and
        (b) every officer of the company who is in default.
        (5) A person who commits a contravention of this section is liable to a level 2 fine.