Companies Act 2006 (c. 46)

(The document as of February, 2008)

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(2) But if in such a case the transferee--

(a) subsequently becomes entitled to such a certificate or other document by virtue of any provision of those regulations, and

(b) gives notice in writing of that fact to the company,

section 776 (duty to company as to issue of certificates etc) has effect as if the reference in subsection (1) of that section to the date of the lodging of the transfer were a reference to the date of the notice.

Issue of certificates etc on allotment or transfer to financial institution

778 Issue of certificates etc: allotment or transfer to financial institution

(1) A company--

(a) of which shares or debentures are allotted to a financial institution,

(b) of which debenture stock is allotted to a financial institution, or

is not required in consequence of that allotment or transfer to comply with section 769(1) or 776(1) (duty of company as to issue of certificates etc).

(2) A "financial institution" means--

(a) a recognised clearing house acting in relation to a recognised investment exchange, or

(b) a nominee of--

(i) a recognised clearing house acting in that way, or

(ii) a recognised investment exchange,

designated for the purposes of this section in the rules of the recognised investment exchange in question.

(3) Expressions used in subsection (2) have the same meaning as in Part 18 of the Financial Services and Markets Act 2000 (c. 8).

Share warrants

779 Issue and effect of share warrant to bearer

(1) A company limited by shares may, if so authorised by its articles, issue with respect to any fully paid shares a warrant (a "share warrant") stating that the bearer of the warrant is entitled to the shares specified in it.

(2) A share warrant issued under the company's common seal or (in the case of a company registered in Scotland) subscribed in accordance with the Requirements of Writing (Scotland) Act 1995 (c. 7) entitles the bearer to the shares specified in it and the shares may be transferred by delivery of the warrant.

(3) A company that issues a share warrant may, if so authorised by its articles, provide (by coupons or otherwise) for the payment of the future dividends on the shares included in the warrant.

780 Duty of company as to issue of certificates on surrender of share warrant

(1) A company must, within two months of the surrender of a share warrant for cancellation, complete and have ready for delivery the certificates of the shares specified in the warrant.

(2) Subsection (1) does not apply if the company's articles provide otherwise.

(3) If default is made in complying with subsection (1) an offence is committed by every officer of the company who is in default.

(4) A person guilty of an offence under subsection (3) 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.

781 Offences in connection with share warrants (Scotland)

(1) If in Scotland a person--

(a) with intent to defraud, forges or alters, or offers, utters, disposes of, or puts off, knowing the same to be forged or altered, any share warrant or coupon, or any document purporting to be a share warrant or coupon issued in pursuance of this Act, or

(b) by means of any such forged or altered share warrant, coupon or document--

(i) demands or endeavours to obtain or receive any share or interest in a company under this Act, or

(ii) demands or endeavours to receive any dividend or money payment in respect of any such share or interest,

knowing the warrant, coupon or document to be forged or altered,

he commits an offence.

(2) If in Scotland a person without lawful authority or excuse (of which proof lies on him)--

(a) engraves or makes on any plate, wood, stone, or other material, any share warrant or coupon purporting to be--

(i) a share warrant or coupon issued or made by any particular company in pursuance of this Act, or

(ii) a blank share warrant or coupon so issued or made, or

(iii) a part of such a share warrant or coupon, or

(b) uses any such plate, wood, stone, or other material, for the making or printing of any such share warrant or coupon, or of any such blank share warrant or coupon or of any part of such a share warrant or coupon, or

he commits an offence.

(3) A person guilty of an offence under subsection (1) is liable on summary conviction to imprisonment for a term not exceeding six months or to a fine not exceeding level 5 on the standard scale (or both).

(4) A person guilty of an offence under subsection (2) is liable--

(a) on conviction on indictment, to imprisonment for a term not exceeding seven years or a fine (or both);

(b) on summary conviction, to imprisonment for a term not exceeding six months or a fine not exceeding the statutory maximum (or both).

Supplementary provisions

782 Issue of certificates etc: court order to make good default

(1) If a company on which a notice has been served requiring it to make good any default in complying with--

(a) section 769(1) (duty of company as to issue of certificates etc on allotment),

(b) section 776(1) (duty of company as to issue of certificates etc on transfer), or

fails to make good the default within ten days after service of the notice, the person entitled to have the certificates or the debentures delivered to him may apply to the court.

(2) The court may on such an application make an order directing the company and any officer of it to make good the default within such time as may be specified in the order.

(3) The order may provide that all costs (in Scotland, expenses) of and incidental to the application are to be borne by the company or by an officer of it responsible for the default.

Chapter 2 Evidencing and transfer of title to securities without written instrument

Introductory

783 Scope of this Chapter

In this Chapter--

(a) "securities" means shares, debentures, debenture stock, loan stock, bonds, units of a collective investment scheme within the meaning of the Financial Services and Markets Act 2000 (c. 8) and other securities of any description;

(b) references to title to securities include any legal or equitable interest in securities;

(d) references to transfer without a written instrument include, in relation to bearer securities, transfer without delivery.

784 Power to make regulations

(1) The power to make regulations under this Chapter is exercisable by the Treasury and the Secretary of State, either jointly or concurrently.

(2) References in this Chapter to the authority having power to make regulations shall accordingly be read as references to both or either of them, as the case may require.

(3) Regulations under this Chapter are subject to affirmative resolution procedure.

Powers exercisable

785 Provision enabling procedures for evidencing and transferring title

(1) Provision may be made by regulations for enabling title to securities to be evidenced and transferred without a written instrument.

(2) The regulations may make provision--

(a) for procedures for recording and transferring title to securities, and

(b) for the regulation of those procedures and the persons responsible for or involved in their operation.

(3) The regulations must contain such safeguards as appear to the authority making the regulations appropriate for the protection of investors and for ensuring that competition is not restricted, distorted or prevented.

(4) The regulations may, for the purpose of enabling or facilitating the operation of the procedures provided for by the regulations, make provision with respect to the rights and obligations of persons in relation to securities dealt with under the procedures.

(5) The regulations may include provision for the purpose of giving effect to--

(a) the transmission of title to securities by operation of law;

(b) any restriction on the transfer of title to securities arising by virtue of the provisions of any enactment or instrument, court order or agreement;

(6) The regulations may make provision with respect to the persons responsible for the operation of the procedures provided for by the regulations--

(a) as to the consequences of their insolvency or incapacity, or

(b) as to the transfer from them to other persons of their functions in relation to those procedures.

786 Provision enabling or requiring arrangements to be adopted

(1) Regulations under this Chapter may make provision--

(a) enabling the members of a company or of any designated class of companies to adopt, by ordinary resolution, arrangements under which title to securities is required to be evidenced or transferred (or both) without a written instrument; or

(b) requiring companies, or any designated class of companies, to adopt such arrangements.

(2) The regulations may make such provision--

(a) in respect of all securities issued by a company, or

(b) in respect of all securities of a specified description.

(3) The arrangements provided for by regulations making such provision as is mentioned in subsection (1)--

(a) must not be such that a person who but for the arrangements would be entitled to have his name entered in the company's register of members ceases to be so entitled, and

(b) must be such that a person who but for the arrangements would be entitled to exercise any rights in respect of the securities continues to be able effectively to control the exercise of those rights.

(4) The regulations may--

(a) prohibit the issue of any certificate by the company in respect of the issue or transfer of securities,

(b) require the provision by the company to holders of securities of statements (at specified intervals or on specified occasions) of the securities held in their name, and

(5) In this section--

(a) references to a designated class of companies are to a class designated in the regulations or by order under section 787; and

(b) "specified" means specified in the regulations.

787 Provision enabling or requiring arrangements to be adopted: order-making powers

(1) The authority having power to make regulations under this Chapter may by order--

(a) designate classes of companies for the purposes of section 786 (provision enabling or requiring arrangements to be adopted);

(b) provide that, in relation to securities of a specified description--

(i) in a designated class of companies, or

(ii) in a specified company or class of companies,

specified provisions of regulations made under this Chapter by virtue of that section either do not apply or apply subject to specified modifications.

(2) In subsection (1) "specified" means specified in the order.

(3) An order under this section is subject to negative resolution procedure.

Supplementary

788 Provision that may be included in regulations

Regulations under this Chapter may--

(a) modify or exclude any provision of any enactment or instrument, or any rule of law;

(b) apply, with such modifications as may be appropriate, the provisions of any enactment or instrument (including provisions creating criminal offences);

(c) require the payment of fees, or enable persons to require the payment of fees, of such amounts as may be specified in the regulations or determined in accordance with them;

(d) empower the authority making the regulations to delegate to any person willing and able to discharge them any functions of the authority under the regulations.

789 Duty to consult

Before making--

(a) regulations under this Chapter, or

(b) any order under section 787,

the authority having power to make regulations under this Chapter must carry out such consultation as appears to it to be appropriate.

790 Resolutions to be forwarded to registrar

Chapter 3 of Part 3 (resolutions affecting a company's constitution) applies to a resolution passed by virtue of regulations under this Chapter.

Part 22 Information about interests in a company's shares

Introductory

791 Companies to which this Part applies

This Part applies only to public companies.

792 Shares to which this Part applies

(1) References in this Part to a company's shares are to the company's issued shares of a class carrying rights to vote in all circumstances at general meetings of the company (including any shares held as treasury shares).

(2) The temporary suspension of voting rights in respect of any shares does not affect the application of this Part in relation to interests in those or any other shares.

Notice requiring information about interests in shares

793 Notice by company requiring information about interests in its shares

(1) A public company may give notice under this section to any person whom the company knows or has reasonable cause to believe--

(a) to be interested in the company's shares, or

(b) to have been so interested at any time during the three years immediately preceding the date on which the notice is issued.

(2) The notice may require the person--

(a) to confirm that fact or (as the case may be) to state whether or not it is the case, and

(b) if he holds, or has during that time held, any such interest, to give such further information as may be required in accordance with the following provisions of this section.

(3) The notice may require the person to whom it is addressed to give particulars of his own present or past interest in the company's shares (held by him at any time during the three year period mentioned in subsection (1)(b)).

(4) The notice may require the person to whom it is addressed, where--

(a) his interest is a present interest and another interest in the shares subsists, or

(b) another interest in the shares subsisted during that three year period at a time when his interest subsisted,

to give, so far as lies within his knowledge, such particulars with respect to that other interest as may be required by the notice.

(5) The particulars referred to in subsections (3) and (4) include--

(a) the identity of persons interested in the shares in question, and

(b) whether persons interested in the same shares are or were parties to--

(i) an agreement to which section 824 applies (certain share acquisition agreements), or

(ii) an agreement or arrangement relating to the exercise of any rights conferred by the holding of the shares.

(6) The notice may require the person to whom it is addressed, where his interest is a past interest, to give (so far as lies within his knowledge) particulars of the identity of the person who held that interest immediately upon his ceasing to hold it.

(7) The information required by the notice must be given within such reasonable time as may be specified in the notice.

794 Notice requiring information: order imposing restrictions on shares

(1) Where--

(a) a notice under section 793 (notice requiring information about interests in company's shares) is served by a company on a person who is or was interested in shares in the company, and

(b) that person fails to give the company the information required by the notice within the time specified in it,

the company may apply to the court for an order directing that the shares in question be subject to restrictions.

For the effect of such an order see section 797.

(2) If the court is satisfied that such an order may unfairly affect the rights of third parties in respect of the shares, the court may, for the purpose of protecting those rights and subject to such terms as it thinks fit, direct that such acts by such persons or descriptions of persons and for such purposes as may be set out in the order shall not constitute a breach of the restrictions.

(3) On an application under this section the court may make an interim order.

Any such order may be made unconditionally or on such terms as the court thinks fit.

(4) Sections 798 to 802 make further provision about orders under this section.

795 Notice requiring information: offences

(1) A person who--

(a) fails to comply with a notice under section 793 (notice requiring information about interests in company's shares), or

(b) in purported compliance with such a notice--

(i) makes a statement that he knows to be false in a material particular, or

(ii) recklessly makes a statement that is false in a material particular,

commits an offence.

(2) A person does not commit an offence under subsection (1)(a) if he proves that the requirement to give information was frivolous or vexatious.

(3) A person guilty of an offence under this section 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).

796 Notice requiring information: persons exempted from obligation to comply

(1) A person is not obliged to comply with a notice under section 793 (notice requiring information about interests in company's shares) if he is for the time being exempted by the Secretary of State from the operation of that section.

(2) The Secretary of State must not grant any such exemption unless--

(a) he has consulted the Governor of the Bank of England, and

(b) he (the Secretary of State) is satisfied that, having regard to any undertaking given by the person in question with respect to any interest held or to be held by him in any shares, there are special reasons why that person should not be subject to the obligations imposed by that section.

Orders imposing restrictions on shares

797 Consequences of order imposing restrictions

(1) The effect of an order under section 794 that shares are subject to restrictions is as follows--

(a) any transfer of the shares is void;

(b) no voting rights are exercisable in respect of the shares;

(d) except in a liquidation, no payment may be made of sums due from the company on the shares, whether in respect of capital or otherwise.

(2) Where shares are subject to the restriction in subsection (1)(a), an agreement to transfer the shares is void.

This does not apply to an agreement to transfer the shares on the making of an order under section 800 made by virtue of subsection (3)(b) (removal of restrictions in case of court-approved transfer).

(3) Where shares are subject to the restriction in subsection (1)(c) or (d), an agreement to transfer any right to be issued with other shares in right of those shares, or to receive any payment on them (otherwise than in a liquidation), is void.

This does not apply to an agreement to transfer any such right on the making of an order under section 800 made by virtue of subsection (3)(b) (removal of restrictions in case of court-approved transfer).

(4) The provisions of this section are subject--

(a) to any directions under section 794(2) or section 799(3) (directions for protection of third parties), and

(b) in the case of an interim order under section 794(3), to the terms of the order.

798 Penalty for attempted evasion of restrictions

(1) This section applies where shares are subject to restrictions by virtue of an order under section 794.

(2) A person commits an offence if he--

(a) exercises or purports to exercise any right--

(i) to dispose of shares that to his knowledge, are for the time being subject to restrictions, or

(ii) to dispose of any right to be issued with any such shares, or

(b) votes in respect of any such shares (whether as holder or proxy), or appoints a proxy to vote in respect of them, or

(c) being the holder of any such shares, fails to notify of their being subject to those restrictions a person whom he does not know to be aware of that fact but does know to be entitled (apart from the restrictions) to vote in respect of those shares whether as holder or as proxy, or

(d) being the holder of any such shares, or being entitled to a right to be issued with other shares in right of them, or to receive any payment on them (otherwise than in a liquidation), enters into an agreement which is void under section 797(2) or (3).

(3) If shares in a company are issued in contravention of the restrictions, an offence is committed by--

(a) the company, and

(b) every officer of the company who is in default.

(4) A person guilty of an offence under this section is liable--

(a) on conviction on indictment, to a fine;

(b) on summary conviction, to a fine not exceeding the statutory maximum.

(5) The provisions of this section are subject--

(a) to any directions under--

section 794(2) (directions for protection of third parties), or
section 799 or 800 (relaxation or removal of restrictions), and

(b) in the case of an interim order under section 794(3), to the terms of the order.

799 Relaxation of restrictions

(1) An application may be made to the court on the ground that an order directing that shares shall be subject to restrictions unfairly affects the rights of third parties in respect of the shares.

(2) An application for an order under this section may be made by the company or by any person aggrieved.

(3) If the court is satisfied that the application is well-founded, it may, for the purpose of protecting the rights of third parties in respect of the shares, and subject to such terms as it thinks fit, direct that such acts by such persons or descriptions of persons and for such purposes as may be set out in the order do not constitute a breach of the restrictions.

800 Removal of restrictions

(1) An application may be made to the court for an order directing that the shares shall cease to be subject to restrictions.

(2) An application for an order under this section may be made by the company or by any person aggrieved.

(3) The court must not make an order under this section unless--

(a) it is satisfied that the relevant facts about the shares have been disclosed to the company and no unfair advantage has accrued to any person as a result of the earlier failure to make that disclosure, or

(b) the shares are to be transferred for valuable consideration and the court approves the transfer.

(4) An order under this section made by virtue of subsection (3)(b) may continue, in whole or in part, the restrictions mentioned in section 797(1)(c) and (d) (restrictions on issue of further shares or making of payments) so far as they relate to a right acquired or offer made before the transfer.

(5) Where any restrictions continue in force under subsection (4)--

(a) an application may be made under this section for an order directing that the shares shall cease to be subject to those restrictions, and

(b) subsection (3) does not apply in relation to the making of such an order.

801 Order for sale of shares

(1) The court may order that the shares subject to restrictions be sold, subject to the court's approval as to the sale.

(2) An application for an order under subsection (1) may only be made by the company.

(3) Where the court has made an order under this section, it may make such further order relating to the sale or transfer of the shares as it thinks fit.

(4) An application for an order under subsection (3) may be made--

(a) by the company,

(b) by the person appointed by or in pursuance of the order to effect the sale, or

(5) On making an order under subsection (1) or (3) the court may order that the applicant's costs (in Scotland, expenses) be paid out of the proceeds of sale.

802 Application of proceeds of sale under court order

(1) Where shares are sold in pursuance of an order of the court under section 801, the proceeds of the sale, less the costs of the sale, must be paid into court for the benefit of the persons who are beneficially interested in the shares.

(2) A person who is beneficially interested in the shares may apply to the court for the whole or part of those proceeds to be paid to him.

(3) On such an application the court shall order the payment to the applicant of--

(a) the whole of the proceeds of sale together with any interest on them, or

(b) if another person had a beneficial interest in the shares at the time of their sale, such proportion of the proceeds and interest as the value of the applicant's interest in the shares bears to the total value of the shares.

This is subject to the following qualification.

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