We have assumed that: • the company is incorporated in the UK • the shares are being bought back by the issuer (rather than redeemed) • there has been no artificiality introduced to ensure each transfer is for less than £1,000, and • the shares are to be cancelled and not bought back to treasury Stamp duty is prima facie chargeable on transfers for consideration of shares in a company incorporated in the UK (and in some cases with respect to other securities and/or non-UK companies). Stamp duty applies to a buyback of shares by an English company, on the basis that the shares are acquired by the company before being cancelled. As explained in Practice Note: Tax consequences of share buybacks—main rules, on a company share buyback,

A company’s articles of association usually deal with the entitlement of its shareholders to a dividend and how payment of any dividend should be allocated between them. Shareholders' entitlement to dividends In the absence of anything to the contrary in a company's articles, as between a company and its shareholders, it is those shareholders on the register of members at the time a dividend is declared (in the case of a final dividend declared by the shareholders) or the decision is made to pay it (in the case of an interim dividend payable on a decision the directors) who will be entitled to the dividend (Re Wakley, Wakley v Vachell, Godfrey Phillips Ltd v Investment Trust Corpn Ltd). This is on the basis that, although the dividend may be calculated by reference to

In Re Armstrong Brands Ltd (in administration), a floating charge was signed by a director of a company but left undated. It was not in fact dated until some three

Employers must include in the written particulars of employment a note of a person to whom the employee can submit a grievance, and the manner in which any the grievance should be submitted (section 3(1)(b) of the Employment Rights Act 1996). They should also bear in mind the importance of complying with the Acas Code of Practice on disciplinary and grievance procedures (see Practice Note: Acas disciplinary and grievance code—effect of non-compliance). There are otherwise no statutory requirements as to how grievances must be brought or dealt with. It may be that a grievance

There is no procedural requirement pursuant to the Companies Act 2006 for a company to take any steps to repay share capital prior to making an application for voluntary striking off. However, one of the common preparatory steps taken prior to making the application is to reduce capital and return the value of the underlying capital to shareholders. If a company chooses not to repay capital to shareholders prior to the application, there is no requirement for a waiver letter from shareholders. On dissolution, any underlying

What is a negative pledge? A negative pledge is a contractual undertaking which prohibits or restricts the borrower from creating further encumbrances over its assets. In the case of secured lending, negative pledge clauses are primarily intended to ensure, among other things, that the borrower is prevented from incurring excessive liabilities (by restricting the amount of security a borrower can create, the lender can indirectly restrict the amount of debt it can incur). Most secured lenders insert a negative-pledge provision into their documents and it is generally considered to be one of the most important undertakings given by the borrower. A negative pledge does not give rise to a security interest under English law because it does not give the lender any proprietary rights in the borrower's property. However, one way for a third party to be put on notice of the existence of a negative pledge is by the third party searching the register at Companies

When a company has gone into insolvent liquidation, it is not possible for the directors of that company in liquidation to use the same or a similar name of that company in liquidation for a period of five years from the date of liquidation (section 216(7) of the Insolvency Act 1986 (IA 1986)). For full details of what and who is prohibited and the penalties for breach, see Practice Note: Prohibited names under section 216 of the Insolvency Act 1986. It is correct that this only applies to companies that have gone into insolvent liquidation, not administration. However, companies who sell the business to connected parties from administration should also be aware of this as

Part 7 of the Income Tax (Earnings and Pensions) Act 2003 (ITEPA 2003) imposes HMRC reporting obligations on ‘responsible persons’ in relation to any specified ‘reportable events’—which include where a securities option is acquired pursuant to a right or opportunity available by reason of the employment of the person who acquires it (ITEPA 2003, s 421K). For these purposes, ‘employment’ extends to where the relevant person is an office-holder of the company (see ITEPA 2003, s 5), and also includes a former or prospective ‘employment’ (ITEPA 2003, s 421B(2)(b)). If the relevant company has granted a right to acquire shares to a non-employee then this will normally constitute a securities option for these purposes (for more details see Practice Note: What is an employment-related security? — Securities options). And, even where the relevant company is not a person’s employer, it may nevertheless be a ‘responsible person’ for the HMRC reporting obligations

Section 549(1) of the Companies Act 2006 (CA 2006) provides that the directors of a company must not exercise any power of the company to allot shares or grant rights to subscribe for, or to convert any security into, such shares, except in accordance with CA 2006, s 550 (private company with single class of shares) or CA 2006, s 551 (authorisation by company). This Q&A considers a scenario where the company in question will, when the put option is exercised, be seeking to allot shares in accordance with CA 2006, s 551. Under CA 2006, s 551(1), the directors of a company may exercise a power of that company to allot shares or grant rights to subscribe for, or to convert any security into, shares only if they have authority

The General Data Protection Regulation, Regulation (EU) 2016/679 (the GDPR) applies to the processing of personal data. Its requirements include that: • personal data is processed lawfully, fairly and in a transparent matter (Article 5(1)(a) of Regulation (EU) 2016/679, the GDPR) • data subjects have the right to be provided with certain pieces of information that describe their relationship with the controller of the data (Articles 13–14 of Regulation (EU) 2016/679, the GDPR) For more information, see Practice Note: Data protection principles. Privacy policies Privacy policies assist organisations to provide the necessary information about their data processing activities. They may be combined with other information-provision mechanisms such as a policy on the use of cookies (see below) or information provided at the time a consent is requested. In the context of providing information through a website, guidance endorsed by the European Data Protection

For the purposes of this Q&A we have assumed the company is a private company limited by shares. Liability for maintaining the register of members We refer you to Practice Note: Company records—a company's statutory registers. Every company is required to keep a register of members (CA 2006, s 113). This register records and determines who the members of the company are and is a key component of the company’s records (CA 2006, s 112). A company's register of members constitutes prima facie evidence of the matters that the CA 2006 directs or authorises a company to record in it (CA 2006, s 127). Therefore, it is important that it is accurate and complete. Among other things, CA 2006, s 113 requires that the register must record the shares each member holds, distinguishing each share by its number

The service of documents in insolvency proceedings is determined by reference to the Insolvency (England and Wales) Rules 2016 (IR 2016), SI 2016/1024, Sch 4. The table of requirements for service at the end of IR 2016, SI 2016/1024, Sch 4 states that a winding-up petition is to be treated as a claim form, and that service is in accordance with IR 2016, SI 2016/1024, Sch 4, para 2. The primary requirement is that winding-up petition must be served at a company's registered office by handing it to one of those persons listed in IR 2016, SI 2016/1024, Sch 4, para 2(1), or depositing it at or about