This Q&A assumes that the purported share buyback is an off-market share buyback and that it has been carried out by a private limited company. The requirement for a share buyback contract and shareholder authority A limited company may only carry out an off-market share buyback: • pursuant to a contract that is approved by a shareholders’ resolution before the share buyback takes place in accordance with section 694 of the Companies Act 2006 (CA 2006), or • where the share buyback is for the purposes of, or pursuant to, an employees’ share scheme, if it has first been authorised by a shareholders' resolution 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 shareholder resolution (rather than the specific share buyback itself). This is the case whether the contract is conditional or not. This means either: • the

The purpose of serving a statutory demand is to establish that a debtor company is unable to pay its debts. If a debtor fails to pay the sums demanded and this is not disputed, the company is deemed to be unable to pay its debts and the court can make a winding-up order

Doctrine of privity At common law, the doctrine of privity provides that only the parties to a contract may take the benefit of or be burdened by its provisions. The Contracts (Rights of Third Parties) Act 1999 (C(RTP)A 1999)

The government guidance: Insolvency (VAT Notice 700/56) covers some of the procedures for value added tax (VAT) in a company voluntary arrangement (CVA). Generally, the company (and not the supervisor) remains legally obliged to account for VAT as appropriate. As noted in paragraph 2.4.8 of VAT Notice 700/56, the ‘trader usually continues to be responsible for the business activities unless, in the case of a company, the proposal provided for either an administrator

The directors of a company remain in office after the appointment of an administrator although, as the administrator has the power to carry on the business of the company and to do any act on behalf of the company under Schedule 1 of the Insolvency Act 1986 (IA 1986), the directors can only exercise their management powers with the administrator's consent. The administrator has the power under IA 1986, Sch 1 to sell the property of the company and so does not need to involve the

The process for the removal of the charge depends on whether the charge entered is floating or fixed. Floating charge An administrator is able to sell property subject to a floating charge as if it were not bound by the charge (pursuant to paragraph 70 of Schedule B1 to the Insolvency Act 1986 (IA 1986)). HM Land Registry requirements for removing notice of the floating charge will depend upon how it was entered in the register. Where a floating charge has been entered either: • as an agreed notice • by the Registrar on first registration of the registered estate, or • under the earlier provisions of the Land Registration Act 1925 you

Wrongful trading is a claim which arises under the Insolvency Act 1986 (IA 1986) and applies when a company has gone into an insolvent liquidation (IA 1986, s 214) or administration (IA 1986, s 246ZB). This is defined in IA 1986, ss 214(6) and 214(6A) as being when the company goes into liquidation or administration at a time when its assets are insufficient for the payment of its debts and other liabilities and the expenses of the winding up or administration. Requirements of a wrongful trading claim When bringing a wrongful trading claim, the liquidator or administrator must establish three things: • the date on which the company's director(s) knew

We have limited this Q&A to cover litigation against a company in Creditors' voluntary liquidation (CVL). Where a company is in CVL there is no automatic stay of proceedings and accordingly, you can issue proceedings against the insured company (without seeking consent or a lift of stay) in order to obtain judgement and seek enforcement against the insurer. However, the court has discretion to order a stay of proceedings should the proposed litigation have a negative impact on the general body of creditors. In such circumstances, the burden is on the liquidator

This Q&A is referring to execution of a document as a deed on behalf of a company. Requirements for execution of a deed on behalf of a company by single signatory Documents executed as deeds by a company must be expressed as being executed by the company. A document will be deemed to be executed as a deed if it is duly executed by the company and delivered as a deed. That is to say that

This question looks at a scenario where a company A holds a sponsor licence and is being taken over by another company, company B, which does not have a licence. Another company in the same group as company B, company C, does have a sponsor licence. As to whether it is possible for company C to register company B as its branch, and for the relevant immigration processes as regards the transfer of the sponsored workers to then proceed on that basis, there does not seem to be any bar in the Sponsor Guidance to this approach. The Practice Note: Applying for a sponsor licence under Workers and Temporary Workers: eligibility and suitability states that: 'An organisation which has different subsidiaries, location offices or campuses (all of which are termed 'branches' for these purposes) in the UK can choose to register: • all its branches

For the purpose of answering this Q&A, we have not considered the methods available generally for the service of a statutory demand on a company (ie personal service, service by post etc). A statutory demand is not a court document, and no application can, therefore, be made in relation to its service. For the rules on service, it is necessary to start with the insolvency legislation. Section 122(1)(f) of the Insolvency Act 1986 (IA 1986) provides for one of the grounds by which a company may be wound up by the court—that the company is unable to pay its debts. The definition of ‘unable to pay its debts’ is then found in IA 1986, s 123, which includes at IA 1986, s 123(1)(a) where: ‘a creditor (by assignment or otherwise) to whom the company is indebted in a sum exceeding £750 then due has served on the company, by leaving it at

The payment of an interim dividend is not an action that will result in a company being dormant. Whether or not a company is dormant depends on whether there have been any significant accounting transactions (section 1169 of the Companies Act 2006 (CA 2006)). A significant accounting transaction is one that the company should enter in its accounting records, which would include an interim dividend payment (CA 2006, s 386). This means that paying an interim dividend would actually prevent a company from becoming dormant for the time being. For details, see Practice Note: Dormant companies—accounts and audit—What is a dormant company? The payment of an interim