This Q&A assumes that: • the company in question is solvent • the company in question is not a company limited by guarantee with a share capital, which have been prohibited since the 1980s A company limited by guarantee is a type of company whose members have undertaken to contribute to the assets of the company in the event of it being wound up. It has not been possible for many decades to form a company limited by guarantee with a share capital. This means that members give a guarantee (only) and do not hold shares in the capital of the company, and it follows that it is not possible for companies limited by guarantee (whether charitable or not) to declare and pay dividends to members (given that

On becoming a member of a company, a person becomes liable to contribute to the company's assets to the extent and in the manner prescribed by the Companies Act 2006 (CA 2006), the general law and the company's articles of association. In the case of a company limited by shares, each member is liable to pay only the nominal value of the shares held by him (together with any premium which they may have agreed to pay). In addition, notwithstanding any provision of a company's articles, no member is bound by any amendment to the articles that requires them to subscribe for more shares than they then hold or in any way increases their liability to pay money to the company unless they have consented to that amendment in writing. Until a liquidation of a company takes place, the nominal value (and any agreed premium) due in respect of a member's shares are payable at the times

A private company may pass a resolution as a written resolution or at a general meeting, as set out in section 281(1) of the Companies Act 2006 (CA 2006). A public company may only pass a resolution at a general meeting (CA 2006, s 281(2)). The contract required for an off-market share buyback (unless it is a share buyback for the purposes of, or pursuant to, an employees' share scheme) must be approved by a members’ resolution, rather than the specific share buyback itself (CA 2006, ss 694(1), 693A). This is the case whether the contract is conditional or not. As set out in CA 2006, s 694(2), this means either: • the terms of the contract must be authorised by a members' resolution before the contract is entered into, or • the contract must provide that no shares may be purchased in pursuance of the contract until its terms have been authorised by a members' resolution An ordinary resolution

Where a private company limited by shares with a sole shareholder/director wishes to buy back some of its shares from that sole shareholder/director, key questions are: • How can the share buyback be approved at director-level, particularly in view of the fact that the shareholder/director will be interested in the share buyback and that their interest as a shareholder will conflict with their interest as a director? • How can the share buyback be approved at shareholder-level? Approval of a share buyback at director-level If a company with a sole shareholder/director wishes to buyback some of its shares from that sole shareholder/director, this gives rise to a situational conflict of interest for the purpose of section 175 of the Companies Act 2006 (CA 2006) and a transactional conflict of interest for the purpose of CA 2006, s 177 and the company’s articles of association. Situational conflicts of interest Under CA 2006, s 175(1), a director of a company ‘must avoid a situation in which they

Section 658 of the Companies Act 2006 (CA 2006) specifies that a limited company must not acquire its own shares, whether by purchase, subscription or otherwise, other than in accordance with the provisions of CA 2006, Pt 18 (CA 2006, ss 658–737). CA 2006, s 659 then provides various exceptions to this rule, in particular, permitting a limited company to ‘acquire any of its own fully paid shares otherwise than for valuable consideration’. Therefore, such a company can acquire its own shares for no consideration (eg as a gift), provided that they are fully paid, without any need to observe the prescribed procedure set out in CA 2006, Pt 18 to do so. However, CA 2006 does not give any guidance as to how a private limited company may acquire its fully paid shares for no consideration (where they are not shares that are being redeemed) or set out a procedure to be followed in those circumstances. As such, it is assumed that

As explained in Practice Note: How to adjourn a general meeting, under common law principles it is possible to adjourn but not postpone a meeting of the company once notice has been given. However in practice there are likely to be circumstances from time to time when either a postponement or even outright cancellation are in the best interests of the company. The difference between adjournment and postponement is that while an adjourned meeting is held at the original notified date, time and place and then put off to a future date, time and place,

The Leasehold Reform, Housing and Urban Development Act 1993 (LRHUDA 1993) provides that an individual tenant has the right to acquire a new lease by service of a notice under LRHUDA 1993, s 42 and payment of a premium. However where the leaseholder is also the freeholder, it is open to the freeholder simply to grant themselves a new lease whether ab initio or by surrender and regrant. There is no difficulty with the freeholder deciding to extend their own lease, and is common practice where properties have been converted into flats and the freehold is shared between the leaseholders. Usually no premium will be paid so the costs of doing so are minimal. However

It is common practice for a partnership agreement to set out the procedure for calculating a payment due to an outgoing or retiring partner (see for example clause 18 of the Precedent: Partnership agreement). It is also common practice to use a deed of retirement upon retirement of a partner, which often sets out provisions for calculating payments to the retiring partner (see Precedent: Deed of retirement from partnership). In

How can a right of pre-emption be protected at the Land Registry and are there time limits for registration of a pre-emption agreement at the Land Registry? Registration of pre-emption agreement dated before 13 October 2003 If the right of pre-emption was granted prior to 13 October 2003, it is not treated as an interest in land and therefore is not capable of protection by registration of a notice at its grant, although it is arguable that it matures into a proprietary interest when the seller’s obligation to offer the property to the buyer arises. At this point, the right of pre-emption may be registerable as an estate contract under the Land Charges Act 1972 (Pritchard

A right of pre-emption on the transfer of shares prohibits a shareholder from selling its shares to a non-shareholder without first offering them to the holder of the right of pre-emption. There are no provisions in the Companies Act 2006 (CA 2006) relating to pre-emption rights on transfer and, as such, any pre-emption rights on transfer must be imposed by contract (ie in a company’s articles of association and/or shareholders’ agreement). The law recognises pre-emption clauses as valid restrictions on the right to transfer. The provisions of the articles of association of the company and/or shareholders’ agreement should be carefully considered, in order to determine whether there are any relevant exemptions to the pre-emption rights. If, having done so, compliance with the pre-emption rights on the transfer of shares is

Section 3 of the Children Act 1989 (ChA 1989) defines parental responsibility as being ‘all the rights, duties, powers, responsibilities and authority which by law a parent of a child has in relation to the child and his property’. ChA 1989, s 2 provides that the mother of a child and a married father automatically have parental responsibility; an unmarried father can acquire parental responsibility in a number of ways, including registration on the birth certificate, by an agreement or by court order. Parental responsibility for a child can be acquired by individuals who are not either parents or step-parents by: • becoming a child’s guardian • being appointed as a special guardian • obtaining a child arrangements order (CAO) in which

For the purposes of this Q&A we have assumed that the context is matrimonial proceedings. Notices and restrictions may be used to afford some limited protection of an asset comprising land or property in respect of which an order or judgment is to be enforced. Notices A notice is a method by which a third party right is protected. Where the consent of the registered proprietor is not available a unilateral notice may be used. It will be entered on the register without investigation. However, the registrar is obliged to notify the registered proprietor and other specified persons. The registered proprietor can seek cancellation of the entry. However, the priority of the interest is protected by the notice unless and until it is cancelled. As an example, a property adjustment order can be protected by a notice. Application