BLP WS14
PROCEDURE PLAN
Transfer of shares
Board meeting
How transfer? s544 – in accordance with that company’s articles
Call MA 9: Any director or authorised company secretary can call
Apply to facts
Notice MA 9: Notice must be given to each director, wherever he is, and need not be in writing.
Contents must include MA9(2): Proposed date and time, location, how the directors will communicate if not
in same place.
The notice itself must be reasonable which is what is usual (Re Homer)
Apply to facts – if small company, what is usual is often same day
Interest s177: Interested directors must make a declaration
Apply to facts and look to exemptions – if directors already aware s177(6)(b)
MA14: Interested directors do not count in quorum nor can they vote
Apply to facts – even if didn’t make declaration won’t be able to count/vote - only for resolutions
they’re interested in
MA14(4)(b): permitted cause – buying shares in own company or its subsidiary – does this apply?
Quorum MA11: Any two of the directors
Is this going to be satisfied? Do we know who is attending?
Say we need at least X and Y – take into account interests – say bare minimum
Resolutions - MA26(5): BR to approve registration of transfer of shares.
(MA) - Directors have discretion regarding registration – power to veto
- Must make this decision within a reasonable time – within 2 months.
- Can Refuse:
- MA 26(5) gives directors power to refuse register of share transfer
- This should only be exercised when it is in the best interests of the company (s.172) Re Smith &
Fawcett Ltd)
- Must give transferee (buyer) notice of refusal to register shares as soon as is practicable, along with
the reasons for refusal (s.771(1)(b).)
- Must also give transferee further information as it may reasonably request (s.771(2)
- If directors wrongly refuse to approve the transfer then their decision may be challenged by an
application to the court for an order to rectify the register (CA 2006, s125)
- Effects: Legal ownership will not pass to transferee. Instead, will hold shares on bare trust for
transferee. Transferor retains rights to receive dividends and vote at GMs but must account for
transferee as beneficial owner for dividends and only vote according to transferee’s instructions.
- MA3: Authorise execution of and issue new share certificate (as a deed) - within 2 months.
- (M&A) MA17 – Resolve to appoint new directors.
- (M&A) MA18 – Give notice in writing and noted in board minutes.
- (M&A) MA3 – New accountant. Board resolution.
Voting MA7: Show of hands by simple majority – more than 50%
State how the decision would pass with what exact directors are needed
MA13: If deadlock, Chair can use their casting vote
Is there a chair? Remember that, practically, avoid doing this – too authoritative
Admin s248/MA15: Directors board minutes/written record of each BR must be kept for 10 years at company’s
registered office or SAIL
Must send share certificate with new shareholder’s name to new shareholder within 2 months (s776)
Enter name on Register of Members (s.113) within 2 months (s771)
Notify Registrar of Companies on confirmation statement (returned annually) CS01 of change in
composition of membership.
Amend PSC register if needs be (over 25%)
File form PSC01/2 if needs be – individual/a company.
PSC04 if existing shareholder band goes up >50 >75%;
PSC07 - Removal of a PSC.
Buyer will…
1
PROCEDURE PLAN
Transfer of shares
Board meeting
How transfer? s544 – in accordance with that company’s articles
Call MA 9: Any director or authorised company secretary can call
Apply to facts
Notice MA 9: Notice must be given to each director, wherever he is, and need not be in writing.
Contents must include MA9(2): Proposed date and time, location, how the directors will communicate if not
in same place.
The notice itself must be reasonable which is what is usual (Re Homer)
Apply to facts – if small company, what is usual is often same day
Interest s177: Interested directors must make a declaration
Apply to facts and look to exemptions – if directors already aware s177(6)(b)
MA14: Interested directors do not count in quorum nor can they vote
Apply to facts – even if didn’t make declaration won’t be able to count/vote - only for resolutions
they’re interested in
MA14(4)(b): permitted cause – buying shares in own company or its subsidiary – does this apply?
Quorum MA11: Any two of the directors
Is this going to be satisfied? Do we know who is attending?
Say we need at least X and Y – take into account interests – say bare minimum
Resolutions - MA26(5): BR to approve registration of transfer of shares.
(MA) - Directors have discretion regarding registration – power to veto
- Must make this decision within a reasonable time – within 2 months.
- Can Refuse:
- MA 26(5) gives directors power to refuse register of share transfer
- This should only be exercised when it is in the best interests of the company (s.172) Re Smith &
Fawcett Ltd)
- Must give transferee (buyer) notice of refusal to register shares as soon as is practicable, along with
the reasons for refusal (s.771(1)(b).)
- Must also give transferee further information as it may reasonably request (s.771(2)
- If directors wrongly refuse to approve the transfer then their decision may be challenged by an
application to the court for an order to rectify the register (CA 2006, s125)
- Effects: Legal ownership will not pass to transferee. Instead, will hold shares on bare trust for
transferee. Transferor retains rights to receive dividends and vote at GMs but must account for
transferee as beneficial owner for dividends and only vote according to transferee’s instructions.
- MA3: Authorise execution of and issue new share certificate (as a deed) - within 2 months.
- (M&A) MA17 – Resolve to appoint new directors.
- (M&A) MA18 – Give notice in writing and noted in board minutes.
- (M&A) MA3 – New accountant. Board resolution.
Voting MA7: Show of hands by simple majority – more than 50%
State how the decision would pass with what exact directors are needed
MA13: If deadlock, Chair can use their casting vote
Is there a chair? Remember that, practically, avoid doing this – too authoritative
Admin s248/MA15: Directors board minutes/written record of each BR must be kept for 10 years at company’s
registered office or SAIL
Must send share certificate with new shareholder’s name to new shareholder within 2 months (s776)
Enter name on Register of Members (s.113) within 2 months (s771)
Notify Registrar of Companies on confirmation statement (returned annually) CS01 of change in
composition of membership.
Amend PSC register if needs be (over 25%)
File form PSC01/2 if needs be – individual/a company.
PSC04 if existing shareholder band goes up >50 >75%;
PSC07 - Removal of a PSC.
Buyer will…
1
