We assume for the purpose of this Q&A that the proposed reduction of capital does not form part of a compromise or arrangement sanctioned by the court under Part 26 of the Companies Act 2006 (CA 2006). CA 2006 sets out how a company limited by shares may reduce its capital. A reduction of capital in accordance with CA 2006, Pt 17, Ch 10 (CA 2006, ss 641–657) may be affected by a special resolution supported by a solvency statement (the solvency statement procedure) or by a special resolution confirmed by court order (the court procedure). The solvency statement procedure is only available to a private company limited by shares—it cannot be used by any other type of company (CA 2006, s 641(1)(a)). In contrast, any limited company having a share

A distribution of non-cash assets (being any property or interest in property, other than cash) is known as a distribution in kind or a distribution in specie. In the Companies Act 2006 (CA 2006), 'cash' is defined and expressed to include foreign currency. A company is permitted to make a distribution within the meaning of CA 2006, s 829, provided that it is made in accordance with CA 2006, Pt 23 . A company is not required to have an express authority in its articles of association to make a distribution, unless that distribution is a distribution in specie. If a distribution in specie is proposed,

In this Q&A, we have focused on current UK law under the Data Protection Act 1998 (DPA 1998). The data export restriction Article 25 of Directive 95/46/EC (the Data Protection Directive) prohibits controllers in EU Member States: • from transferring personal data to any territory outside the EEA • unless an ‘adequate’ level of privacy protection is ensured for the data transferred The Data Protection Directive is incorporated into UK law by the DPA 1998, which includes at its core eight data protection principles for handling personal information, see Practice Note: Data protection principles under the DPA 1998. The eighth and final of these data protection principles enshrines the above restriction as follows: 'Personal data shall not be transferred to a country or territory outside the European Economic Area unless that country or territory ensures an adequate level of protection for the rights and freedoms of data

The effect of a company voluntary arrangement (CVA) is to establish a statutory contract between a company and each of its creditors. There is no automatic

At any time when a tenancy falls within the definition in section 23 of the Landlord and Tenant Act 1954 (LTA 1954), the provisions of LTA 1954 apply to that tenancy; and, therefore to the person who holds that tenancy, the tenant. Accordingly, generally stated, if a tenancy falls within LTA 1954, the person who has a right to renew under LTA 1954 is the tenant under that tenancy. In any given situation, the first steps must therefore to identify what is the relevant tenancy? And, who is the tenant? In this scenario, prior to the acquisition, a tenancy existed which was owned by the tenant company. The first question therefore is: did the tenancy satisfy the requirements in LTA 1954, s 23 namely, was there a ‘tenancy where the property comprised in the tenancy is or includes premises which are occupied by the tenant and are so occupied

There are essentially three key issues to be considered—how many directors are required to make a decision, how many directors are required for a quorate meeting and whether all the directors present at the meeting can vote and count in the quorum for that meeting. Decision-making by directors The decision-making process for directors is generally governed by a company’s articles of association. Among other things, the articles will usually set out the process for calling a board meeting, the notice and quorum requirements for calling such meeting, how decisions are passed and how to deal with conflicts of interest. Directors usually take decisions collectively. If the company has adopted the Model articles—private limited company (Model Articles), article 7(1) provides that any decision of the directors must either be a majority decision or must have been made unanimously in accordance with the provisions of article 8. Article 7(2) provides that if the company only has one director (and no provision in the articles requires it to have

Deed There are four key requirements for deeds: • a deed must be in writing • it must be clear from the face of the instrument that it is a deed and is intended to be a deed • the form of execution for a deed will vary depending upon the type of legal person that is executing the deed—execution by a company is discussed below • a deed must be delivered for it to take effect For further guidance, see Practice Note: Executing documents—deeds and simple contracts. Execution by a company Documents executed as deeds must be expressed as being executed by the company. A document will be deemed to be executed as a deed if it is

A power of attorney is a document by which one legal person gives another legal person the power to act on their behalf and in their name. It is a common tool for delegating power to act. It can either grant wide authority or be very specific. For an example, see our Precedent: Power of attorney for commercial transactions, which is a general power of attorney granted by a company to an individual to execute various documents and take various action on its behalf in respect of a transaction when, say, a director is not present. One thing to consider will be the extent of the powers granted by the company to the individual. When a document is to be executed or an action carried out under a power of attorney, you should check and make sure that the necessary authority to execute the document or perform the act as set out in the power. Generally,

As set out in Practice Note: Landlord's consent to assign or underlet, the landlord of a ‘qualifying tenancy’ (section 19(1E) of the Landlord and Tenant Act 1927 (LTA 1927), ie a non-residential tenancy entered into after 1 January 1996), is entitled under LTA 1927, s 19(1A) to specify within the lease conditions subject to which consent to be assigned may be given. This section is qualified by LTA 1927, s 19(1C) which provides that the protection under LTA 1927 s 19(1A) will not

Can an entity be a ‘connected [person]’ as defined in section 1122 of the Corporation Tax Act 2010 (CTA 2010) or an ‘associated company’ with the meaning of CTA 2010, section 449 if the entity is offshore? Both terms are applied in a number of places throughout the taxes acts, so the precise meaning will depend on, and must be considered in the context of, the specific rules being considered. The concept of 'connected' is generally used in corporate tax legislation to charge tax on the market value of a transaction (rather than the actual consideration

The construction industry scheme (CIS) was devised to limit the amount of tax lost as a result of subcontractors in the construction industry under-declaring or failing to notify their chargeability to UK tax. For further information, see Practice Note: The construction industry scheme—when does it apply? Scope of CIS The obligation to deduct tax imposed by the CIS rules applies only to a contract payment. A ‘contract payment' is defined as: ‘… any payment which is made under a construction contract and is so made by the contractor (see section 57(3)) to— (a) the sub-contractor, (b) a person nominated by the sub-contractor

The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013, SI 2013/3134 (CCR 2013) define a services contract as ‘a contract, other than a sales contract, under which a trader supplies or agrees to supply a service to a consumer and the consumer pays or agrees to pay the price’ (CCR 2013, SI 2013/3134, reg 5). The CCR 2013 do not address whether payment of a price includes only monetary consideration. The CCR 2013 implement the Consumer Rights Directive 2011/83/EU—you may therefore find it helpful to refer to the Consumer Rights Directive Guidance, particularly para 2.3: ‘2.3. Application of the Directive to contracts for “free” products The definitions of sales and service contracts set out in Article 2(5) and (6) refer to the consumer paying a “price”. The reference to “price” in this context would