The Gazette 1983

GAZETTE

SEPTEMBER1983

electrical forms of typing and also photo- copying); (ii) a copy of a written statement by the auditors of the company that in their opinion the relevant balance sheet (see below) shows that at the balance sheet date the amount of the company's net" assets was not less than the aggregate of its called-up share capital and "undistributable reserves" (see below); (iii) a copy of the relevant balance sheet together with a copy of an unqualified report (as defined) by the auditors in relation thereto; (iv) where shares have been allotted between the balance sheet date and the date of the special resolution as fully or partly paid up otherwise than in cash, an expert's report as required by Section 30 of the Act as to the value of such non-cash consideration; and (v) a statutory declaration in prescribed form (Form F2) by a director or secretary that the special resolution referred to at (a) above has been passed and that the conditions referred to at (c) below have been satisfied and that between the balance sheet date and the date of the application there has been no change in the financial position of the company that has resulted in the amount of the company's net assets becoming less than the aggregate of its called up share capital and undistributable reserves; (c) the conditions specified in Section 19(5Xa) and (b) (where applicable — dealing with non-cash consideration for shares) and in Section 10(lXa) to (d) (see below) are satisfied in relation to the company. "undistributable reserves" is defined by Section 46(2) of the Act. "relevant balance sheet" means a balance sheet prepared as at a date not more than seven months before the application for re-registration. Section 10 of the Act sets out the requirements as to share capital of a private company applying to re-register as a public limited company. Principally, the nominal value of the allotted share capital must not be less than the authorised minimum and each allotted share must be paid up at least as to one quarter of its nominal value and the whole of any premium. There are also provisions dealing with the valuation of non-cash consideration for shares. If the Registrar is satisfied with the application made under Section 9, he shall issue the company with a certificate of incorporation on re-registration as a public limited company and upon the issue of such certificate the company by virtue of such issue becomes a public limited company and any alterations to its memorandum and articles take effect accordingly. A certificate of incorporation on re-registration is conclusive evidence that the requirements of the Act in respect of re-registration and of matters precedent and incidental thereto have been complied with and that the company is a public limited company. Section 35 of the 1963 Act has been amended to dispense with the need for private limited companies

that it shall not do business or exercise any borrowing powers unless the Registrar has issued it with a certificate that the Company's allotted share capital is not less than "the authorised minimum". Section 19 of the Act defines "the authorised minimum" as £30,000 or such greater sum as may be specified by order made by the Minister of Trade, Commerce and Tourism. Section 6(3) of the Act prescribes matters which must be stated in a statutory declaration by a director or secretary of a company in support of an application for such a certificate. It should be noted that a share allotted in pursuance of an employees' share scheme (as defined in Section 2) may not be taken into account in calculating the authorised minimum unless the share is paid up at least to one- quarter of the nominal value of the share and the whole of any premium of the share. A certificate under Section 6 shall be conclusive evidence that the company is entitled to do business and exercise any borrowing powers. There are provisions in the Act making the doing of business or the exercising of borrowing powers without a certificate an offence for the company and any officer of the company in default. Further, although the provisions of Section 6 are without prejudice to the validity of any act of a public limited company, if a public limited company enters into a transaction in contravention of the Section but fails to comply with its obligations thereunder within 21 days of being called upon to do so, the directors of the company shall be jointly and severally liable to indemnify the other party to the transaction in respect of any loss or damage suffered by him by reason of such failure. The Registrar may take steps to strike a public limited company off the Register if it has not been issued with a certificate under Section 6 within one year of its registration. (2) Re-registration of private companies Section 9 of the Act sets out the requirements for the re- registration of a private company as a public limited company. This will from now on represent "going public" and, as we shall see, no "old public limited companies" may be created after the appointed day. The requirements are — (a) a special resolution that the company be so re- registered be passed which resolution must also (i) alter the company's memorandum so that it states that the company is to be a public limited company; (ii) ma ke such o t h er a l t e r a t i o ns in the memorandum as are necessary to bring it in substance and in form into conformity with the requirements of the Act, and (iii) make such alterations in the company's

articles as are requisite. (This will invariably involve adopting a new long form set of articles appropriate to a public company);

(b) An application for re-registration in the prescribed form must be delivered signed by a director or secretary together with the following documents: (i) a printed copy of the memorandum and

articles as altered. (As previously "printed" will be interpreted as including all modern

242

•