Companies (Amendment) Act, 1983
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Experts' reports on non-cash assets acquired from subscribers, etc. |
32.—(1) A public limited company, other than a company re-registered under section 12 , shall not, unless the conditions mentioned in subsection (3) have been complied with, enter into an agreement with a relevant person for the transfer by him during the initial period of one or more non-cash assets to the company or another for a consideration to be given by the company equal in value at the time of the agreement to at least one-tenth of the nominal value of the company's share capital issued at that time. | |
(2) In this section— | ||
(a) in relation to a company formed as a public limited company, “relevant person” means any subscriber to the memorandum of the company and “initial period” means the period of two years beginning with the date on which the company is issued with a certificate under section 6 that it is entitled to do business; | ||
(b) in relation to a company re-registered, or registered in accordance with section 18 , as a public limited company, “relevant person” means any person who was a member of the company on the date of the re-registration or registration and “initial period” means the period of two years beginning with that date. | ||
(3) The conditions referred to in subsection (1) are that— | ||
(a) the consideration to be received by the company (that is to say, the asset to be transferred to the company or the advantage to the company of its transfer to another person) and any consideration other than cash to be given by the company have been valued under the following provisions of this section (without prejudice to any requirement to value any consideration under section 30 ); | ||
(b) a report with respect to the consideration to be so received and given has been made to the company in accordance with those provisions during the six months immediately preceding the date of the agreement; | ||
(c) the terms of the agreement have been approved by an ordinary resolution of the company; and | ||
(d) not later than the giving of the notice of the meeting at which the resolution is proposed, copies of the resolution and report have been circulated to the members of the company entitled to receive that notice and, if the relevant person is not then such a member, to that person. | ||
(4) Subsection (1) shall not apply to the following agreements for the transfer of an asset for a consideration to be given by the company, that is to say— | ||
(a) where it is part of the ordinary business of the company to acquire or arrange for other persons to acquire assets of a particular description, an agreement entered into by the company in the ordinary course of its business for the transfer of an asset of that description to it or such a person, as the case may be; or | ||
(b) an agreement entered into by the company under the supervision of the court or an officer authorised by the court for the purpose, for the transfer of an asset to the company or to another. | ||
(5) Section 30 (5) and (7) shall apply to a valuation and report of any consideration under this section as those subsections apply to a valuation of and report on any consideration under subsection (1) of that section. | ||
(6) The report of the independent person under this section shall— | ||
(a) state the consideration to be received by the company, describing the asset in question, specifying the amount to be received in cash, and the consideration to be given by the company, specifying the amount to be given in cash; | ||
(b) state the method and date of valuation; | ||
(c) contain or be accompanied by a note as to the matters mentioned in section 30 (8) (a) to (c); and | ||
(d) contain or be accompanied by a note that on the basis of the valuation the value of the consideration to be received by the company is not less than the value of the consideration to be given by it. | ||
(7) If a public limited company enters into an agreement with any relevant person in contravention of subsection (1) and either he has not received a report under this section or there has been some other contravention of this section or section 30 (5) or (7) which he knew or ought to have known amounted to a contravention, then, subject to subsection (8)— | ||
(a) the company shall be entitled to recover from the relevant person any consideration given by the company under the agreement or an amount equivalent to its value at the time of the agreement; and | ||
(b) the agreement, so far as not carried out, shall be void. | ||
(8) Where a company enters into an agreement in contravention of subsection (1) and that agreement is or includes an agreement for the allotment of shares in that company, then, whether or not the agreement also contravenes section 30 — | ||
(a) subsection (7) shall not apply to the agreement insofar as it is an agreement for the allotment of shares; and | ||
(b) section 26 (4) and section 30 (10) shall apply in relation to the shares as if they had been allotted in contravention of section 30 . |