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LEGISLATION |
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Creditors’ right to object to reduction of capital See CLM ¶706, ¶1458, ¶1486, ¶1488 SI 2008/719 When a company reduces its share capital by special resolution, the reduction must be approved by the court. A list of the company’s creditors needs to be prepared so that the court can ensure that they consent to the reduction or that their claims have been dealt with by the company. The creditors on this list are entitled to object to the reduction. In order to implement amendments to the Second Company Law Directive (EC Directive 2006/68), changes are being made to how the list of creditors is drawn up. Instead of all of the company’s creditors, only those who can show that there is a real likelihood that the proposed reduction would result in the company being unable to discharge their claims can be added to the list. This prevents minor creditors objecting to the reduction. This change comes into force on 6 April 2008, applying to applications for court approval of a reduction made on or after this date. These regulations only amend the CA 1985 provision dealing with the list of creditors (s 136 CA 1985). The CA 2006 provision (s 646 CA 2006) will not now come into force until 1 October 2009, so it is not being amended at this stage (the draft Companies (Reduction of Capital) Regulations 2008 amended both provisions). Implementation of corporate manslaughter law See CLM ¶7181 SI 2008/401 The Corporate Manslaughter and Corporate Homicide Act 2007 comes into force on 6 April 2008, applying to offences committed on or after that date. As expected, the only exceptions are: » the application of the duty of care to death in custody (s 2(1)(d) CMCHA 2007). Therefore, the common law offence of gross negligence manslaughter will continue to apply in this situation; and » the court's power to impose publicity orders (s 10 CMCHA 2007). The new offence was discussed in CLM 2007 Newsletter Issue 6 and Issue 1. Slight amendments have been made to Sch 1 CMCHA 2007 to reflect the name changes and reorganisation of certain government departments to which the offence applies (SI 2008/396). Dissolution after insolvency: treatment of company’s property See CLM ¶7492, ¶8063, ¶8398, ¶8579, ¶8665, ¶8973, ¶9154, ¶9326, ¶9327 SI 2008/670 SI 2008/672 If there are unclaimed dividends when a company is dissolved after a compulsory liquidation, they have to be paid into the Insolvency Services Account to be held on trust for the company's shareholders and former shareholders (reg 18 SI 1994/2507). Liquidators in voluntary liquidations can also do this, although it is not mandatory in their case. New regulations extend this power to administrators and administrative receivers from 6 April 2008 (SI 2008/670). The new regulations also limit the type of funds to be paid into the Insolvency Services Account on dissolution of a company after liquidation, administration or administrative receivership to unclaimed dividends and other funds held on trust (under the old regulations, it applied to undistributed assets as well). This means that only undistributed assets that actually belonged to the company become bona vacantia property. Associated regulations set a fee for these payments into the Insolvency Services Account in the case of administrations and administrative receiverships to match those payable in liquidations (SI 2008/672). Exemption for companies in administration from unoccupied business property rates See CLM ¶8927 SI 2008/386 For financial years commencing on or after 1 April 2008, companies in administration are exempt from paying rates on any unoccupied business properties they own. The background to this change was discussed in CLM 2008 Newsletter Issue 1. |