Reorganisations

The Companies Act 2014 introduced provisions for corporate reorganisation, enabling limited companies to transfer assets, undertakings, or liabilities to another body corporate in exchange for shares or securities issued directly to the shareholders. This reorganisation can proceed without distributable reserves if approved through the Summary Approval Procedure (SAP) or by a special resolution confirmed by the court. Directors must confirm the company’s solvency and ability to discharge liabilities, ensuring compliance with requisite procedures, or the transaction may be voidable.

Capital changes such as consolidation, subdivision, and conversion of shares are permitted by ordinary resolution, unless restricted by the constitution. Companies must notify the Companies Registration Office (CRO) within 30 days of such changes. Variations in class rights require approval, typically by a 75% resolution of the class concerned. Where class rights are attached by the constitution, variation procedures depend on constitutional provisions. Rights may also be varied by unanimous shareholder agreement if no such provisions exist.

Class meetings to approve rights variations require specific quorums, and dissenting shareholders holding at least 10% of the class can challenge the variation in court within 28 days. The court may disallow variations if deemed unfairly prejudicial. All changes must be filed with the CRO.

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