Q&As

What is the position in relation to existing security interests following the conversion of a registered society into a company under the Co-operative and Community Benefit Societies Act 2014?

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Published on LexisPSL on 11/05/2017

The following Corporate Q&A provides comprehensive and up to date legal information covering:

  • What is the position in relation to existing security interests following the conversion of a registered society into a company under the Co-operative and Community Benefit Societies Act 2014?

A co-operative society or community benefit society (registered society) may, by special resolution, convert into a company limited by shares or by guarantee under section 112(1) of the Co-operative and Community Benefit Societies Act 2014 (CCBSA 2014). The use of the term ‘conversion’ is indicative of the fact that the process does not involve the creation of a new entity, but rather a change in its corporate form. This is underlined by CCBSA 2014, s 114(3) which provides that conversion does not affect any right or claim for the time being subsisting against the society and CCBSA 2014, s 114(4) which provides that for the purpose of enforcing any such right, claim or penalty, the society may be sued and proceeded against in the same way as if it had not become registered as a company. CCBSA 2014, s 114(5) further provides that any such right or claim has priority against the company's property over all other rights or claim against, or liabilities of, the company.

Consistent with the above, in the case of Re London Housing Society Ltd's Trust Deeds, Moreland v Woodward, the

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