A limited company with a share capital must comply with Companies Act 2006 (CA 2006) when reducing its capital. CA 2006 does not prescribe the manner in which the reduction of capital is to be effected. A company is free to reduce its share capital 'in any way' it sees fit, subject to the prohibition on the use of cancellation schemes to effect a public company takeover, the requirement that a company must have at least one share that is not redeemable in issue following a reduction of capital using the solvency statement procedure and any provision of a company's articles of association restricting or prohibiting a reduction of

For information on charitable incorporated organisations (CIOs), see Practice Note: Charitable incorporated organisations. This includes links to all the relevant guidance issued by the Charity Commission (CC) on setting up and running a CIO. See, for example, the guidance in FAQs about charitable incorporated organisations (CIOs) and/or Trustees of a CIO and Can a CIO have a corporate trustee? which have information about who may and may not be a trustee of a CIO. Aside from a shortlist

A dividend is a type of distribution made by a company to its members. The Companies Act 2006 (CA 2006) governs how a company may make distributions in CA 2006, Pt 23 (CA 2006, ss 829–853). A distribution will be unlawful if it does not comply with the requirements of CA 2006, Pt 23 and the applicable common law rules as modified by those provisions. For more information, see Practice Note: Distributions. In addition, there are normally detailed provisions relating to dividends in a company’s articles of association. Such provisions in the company’s articles will bind the company in question unless amended, removed or waived. A company’s articles typically provide the company with the power to pay dividends and set out when, and how, dividends can be declared and paid. In particular, it is usual for them to provide that: • the directors may recommend a final dividend (ie one to be paid at the end of the financial year to which

Section 324 of the Companies Act 2006 (CA 2006), which replaced the more restrictive section 372 of the Companies Act 1985, confers on any member of a company the right to appoint another person as their proxy to attend and to speak and vote at a meeting of the company. Indeed,

In these circumstances, there would be two contracts—that between the consumer and the company as contractor and that between the company and its subcontractor. The issue is therefore whether the company can insert a clause in its terms and conditions with the consumer that the consumer is prohibited from dealing directly with the subcontractor. The Consumer Rights Act 2015 The legal position is governed by statute, namely the Consumer Rights Act 2015 (CRA 2015) and whether such a term restricting the consumer in this way is enforceable under CRA 2015. For an overview of CRA 2015, see Practice Note: Consumer Rights Act 2015—summary. CRA 2015 received Royal Assent on 26 March 2015 and clarified and consolidated the existing muddled consumer legislation on unfair terms which had previously been contained in the Unfair Contract Terms Act 1977 and the Unfair Terms

It is not possible to combine a return of capital of a limited company to shareholders with the striking off and dissolution procedure set out in Part 31 of the Companies Act 2006 (CA 2006). The procedure to strike off a company is very simple and consists of filing a form DS01 and the appropriate fee with Companies House, who will only examine the form to ensure that it is procedurally correct. Any steps to return capital to shareholders or otherwise deal with a company’s

A company may serve a statutory demand to an ex-director for a director’s loan as directors are personally liable for debt resulting from loan account. Therefore, so long as the situation meets the requirements for the service of statutory demands under personal insolvency law, a demand may be served. The result of such a demand provides a creditor with one of the grounds upon

Pursuant to paragraph 16(c) of Schedule 4 to the Income Tax (Earnings and Pensions) Act 2003 (ITEPA 2003), eligible shares, for company share option plan (CSOP) purposes, include ordinary share capital in a company which either is, or has control of, a company which is a member of a

A company may be restored to the register: • by the administrative restoration procedure, and • by court order The administrative restoration procedure was introduced by the Companies Act 2006 (CA 2006) as a simpler way to restore a company to the register, without the need to go to court. This procedure only applies to companies that have been struck off under CA 2006, ss 1000 or 1001 (power of registrar to strike off defunct company) and

As a result of the coronavirus (COVID-19) pandemic, over the coming weeks and months an increasing number of UK companies are expected to seek to preserve their cash by suspending and/or cancelling dividends. This Q&A considers the relevant law, guidance and practice. For information on dividends generally, see Practice Notes: Dividends—the legal framework and Distributions. For further details of the rules and guidance that apply to a listed company or an AIM company proposing to pay a dividend, see Practice Note: Dividends—listed and AIM companies. Declaration of dividends It is usual for a company's articles of association to provide that: • its directors may recommend a final dividend (ie one to be paid after the financial year to which the profits being distributed relate), which is then declared by the approval of the shareholders, usually by ordinary resolution, the amount declared not exceeding the amount recommended by the directors, and • its directors may decide to pay an interim dividend (ie one to be paid during

You have asked whether the fact that a company has changed its name from 'X plc' to 'X' Ltd' on its re-registration as a private company under section 97 of the Companies Act 2006 (CA 2006) would constitute a change of name for the purposes of CA 2006, s 1004(1)(a), with the result that the company is prevented from making an application for voluntary striking off under CA 2006, s 1003. Looking at

This Q&A assumes that all the companies are UK resident and have a UK fixed establishment. VAT group membership is governed by the Value Added Tax Act 1994 (VATA 1994) and depends on the establishment of the company and control. See Practice Note: VAT groups, in particular, section: Eligibility for VAT group membership. VATA 1994, s 43A(1) states that two or more bodies corporate are eligible