If the rights attaching to any shares in a company are to be changed, consideration should always be given to whether this will involve a variation of class rights. Pursuant to section 630 of the Companies Act 2006 (CA 2006), class rights may only be varied: • in accordance with any provisions in a company’s articles of association in relation to variation of the rights, or • if there are no such provisions in a company’s articles, with the consent of the members of the class of shares whose rights are being varied, in accordance with CA 2006, s 630 In order to ascertain whether CA 2006, s 630 applies, it is first necessary to determine whether a variation of class

An employee benefit trust (EBT) can be used to hold cash or shares for the benefit of its beneficiaries. For further information on the beneficiaries of an EBT, see Practice Note: Setting up an employee benefit trust. Deferred cash bonuses do not need to be settled by an EBT but can be. While an EBT is useful as it ring-fences the cash monies for distribution to the beneficiaries of the EBT only, there are also disadvantages

STOP PRESS: From 6 April 2017, the Insolvency Rules 1986, SI 1986/1925 were revoked and replaced by the Insolvency (England and Wales) Rules 2016 (IR 2016), SI 2016/1024. The content in this Q&A may have been affected by this change. The general position is that a liquidator of a company may enter into any compromise or arrangement that might have been entered into by the company itself (Taylor, Noter [1992] BCC 440 (not available in Lexis®Library)). A liquidator acts as an agent on behalf of the company (rather than property vesting in the office-holder) and directs the principal as well as acts for it. Given

Liquidators are able to disclaim onerous property (see section 178 of Insolvency Act 1986 (IA 1986)). The liquidator may disclaim unprofitable contracts or property that is not readily saleable or may give rise to a liability to pay money or undertake an onerous act. For further reading on what constitutes onerous property (and therefore capable of being disclaimed), see Practice Note: What is considered onerous property or contracts? Reported cases involving the disclaimer of freehold property are comparatively rare. However, it has been accepted in a number of cases that freehold property is capable of falling within the definition of 'onerous property' contained in IA 1986, s 178(3)(b). See Commentary: Disclaimer of Freehold Property: Property Insolvency [8.5]. Disclaimer of a freehold is called ‘escheat’. Disclaimer

For an overview of the administration regime, see: Administration—overview. Once a company enters administration, the administrator acts as agent of the company and seeks to achieve the purpose of the administration, as approved by creditors. It is the administrator, therefore, who will deal with any litigation that the company was involved with prior to their appointment, rather than the directors or company's members. There are a number of notice requirements the administrator must undertake immediately upon appointment. See Practice Note: Administration—the process post appointment for full details of what the

Where a company incorporated under CA 1985 intends to replace its articles with bespoke articles, do both Table A and the model articles need to be disapplied? The articles of association registered by a company when it was incorporated remain its articles of association unless the company registers a change to those articles. Newer versions or amendments to the default statutory articles are not automatically applied to existing companies, therefore the articles will remain unchanged unless and until the company takes action to amend them or adopt new articles. For companies incorporated prior to 1 October 2009, their existing customised articles or the relevant statutory form of default articles (known as ‘Table A’ for companies

In respect of EMI options granted before 6 April 2024, HMRC’s guidance is clear that if a company makes a mistake in the notification form after 92 days of granting the original Enterprise Management Incentives (EMI) option, but within nine months of notifying HMRC of the grant of the original EMI option and the company believes it has a reasonable excuse for not re-notifying within the original 92-day deadline, then the company should advise HMRC of all the facts including the date of the grant of options, the name of company, the scheme name and the unique scheme reference number (as allocated by ERS service). Note, the reasonable excuse is in relation to not re-notifying HMRC of the original error rather than in respect of the error itself. For

When completing a claim form CPR PD 16, para 2.4 sets out naming requirements for different types of parties, including companies: • a company or LLP that is registered in England and Wales should be described by its full registered name including suffix (if any) eg Plc, Limited, LLP • any other company or corporation should be described by the full name by which it is known including suffix where appropriate For further guidance, see Practice Note: Claim form—the contents. It

If the pension scheme has individual trustees, their replacement by a corporate trustee needs to comply with the provisions of the sections 241–243 of the Pensions Act 2004 (PeA 2004) and the Occupational Pension Schemes (Member-nominated Trustees and Directors) Regulations 2006, SI 2006/714, dealing with member-nominated trustees (MNTs) and directors (MNDs). For more information on

A company restored to the register without a director in place would immediately be in breach of section 154 of the Companies Act 2006 (CA 2006). See Q&A: What are the consequences of a company not having any directors? If a company has been struck off the register and is due to be restored by court order, but its sole director is

Subject to the distributing company having sufficient distributable reserves and any restrictions in its articles of association, there is some flexibility regarding the consideration that is payable in respect of an intra-group transfer. However, tax and accounting advice should be taken on this issue and the consideration that is payable will determine the amount of the distribution for the purposes of the Companies Act 2006 (CA 2006). CA

Whether a company should enter into individual indemnities with individual directors or utilise something like a deed poll which is effectively a standard form of indemnity having the benefit of covering existing and future directors without them having to enter into separate, negotiated indemnities with the company, is a matter for the parties to decide and agree upon. The latter clearly has a degree of administrative simplicity about it although many directors may prefer to