Companies (Amendment) Act, 1983

Variation of rights attached to special classes of shares.

38.—(1) This section shall have effect with respect to the variation of the rights attached to any class of shares in a company whose share capital is divided into shares of different classes.

(2) Where the rights are attached to a class of shares in the company otherwise than by the memorandum, and the articles of the company do not contain provision with respect to the variation of the rights, those rights may be varied if, but only if—

(a) the holders of three-quarters in nominal value of the issued shares of that class consent in writing to the variation; or

(b) a special resolution passed at a separate general meeting of the holders of that class sanctions the variation;

and any requirement (howsoever imposed) in relation to the variation of those rights is complied with to the extent that it is not comprised in paragraphs (a) and (b).

(3) Where—

(a) the rights are attached to a class of shares in the company by the memorandum or otherwise;

(b) the memorandum or articles contain provision for the variation of those rights; and

(c) the variation of those rights is connected with the giving, variation, revocation or renewal of an authority for the purposes of section 20 or with a reduction of the company's share capital under section 72 of the Principal Act,

those rights shall not be varied unless—

(i) the condition mentioned in subsection (2) (a) or (b) is satisfied; and

(ii) any requirement of the memorandum or articles in relation to the variation of rights of that class is complied with to the extent that it is not comprised in the condition in subparagraph (i).

(4) Where the rights are attached to a class of shares in the company by the memorandum or otherwise and—

(a) where they are so attached by the memorandum, the articles contain provision with respect to their variation which had been included in the articles at the time of the company's original incorporation; or

(b) where they are so attached otherwise, the articles contain such provision (whenever first so included);

and in either case the variation is not connected as mentioned in subsection (3) (c), those rights may only be varied in accordance with that provision of the articles.

(5) Where the rights are attached to a class of shares in the company by the memorandum and the memorandum and articles do not contain provision with respect to the variation of the rights, those rights may be varied if all the members of the company agree to the variation.

(6) The provisions of sections 133 and 134 of the Principal Act and the provisions of the articles relating to general meetings shall, so far as applicable, apply in relation to any meeting of shareholders required by this section or otherwise to take place in connection with the variation of the rights attached to a class of shares, and shall so apply with the necessary modifications and subject to the following provisions, namely—

(a) the necessary quorum at any such meeting other than an adjourned meeting shall be two persons holding or representing by proxy at least one-third in nominal value of the issued shares of the class in question and at an adjourned meeting one person holding shares of the class in question or his proxy;

(b) any holder of shares of the class in question present in person or by proxy may demand a poll.

(7) Any alteration of a provision contained in the articles of a company for the variation of the rights attached to a class of shares or the insertion of any such provision into the company's articles shall itself be treated as a variation of those rights.

(8) Section 78 of the Principal Act shall apply in relation to subsection (2) as it applies in relation to a provision of the memorandum or articles of a company to the like effect.

(9) In this section and, except where the context otherwise requires,in any provision for the variation of the rights attached to a class of shares contained in the company's memorandum or articles references to the variation of those rights shall include references to their abrogation.

(10) Nothing in subsections (2) to (5) shall be construed as derogating from the powers of the court under section 15 or any of the following sections of the Principal Act, that is to say, sections 10, 201, 203 and 205.

(11) This section shall not apply in relation to any variation made by a company, other than a public limited company registered as such on its original incorporation, before the date on which the earlier of the following events occurs, that is to say, the re-registration or registration of the company as a public limited company and the end of the general transitional period.