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i

Sealy and Worthington’s

Text, Cases, and Materials
in Company Law

Eleventh edition

Sarah Worthington QC(Hon), FBA

Downing Professor of the Laws of England
Fellow of Trinity College, University of Cambridge
Bencher of Middle Temple

1
ii

1
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Tenth edition 2013
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contained in any third party website referenced in this work.
iii

Preface

The ambitions with this book remain as they have always been: to take the broad subject
matter of company law and present it as simply as possible, and in a manner which in-
forms and challenges; which reveals its distinctive goals and its underlying structure; and
which prompts questions and provokes deeper understanding and insight. To generations
of students and teachers this book is simply ‘Sealy’. Nevertheless, with a further tweak to
the title, this eleventh edition becomes Sealy and Worthington’s Text, Cases, and Materials
in Company Law. The nod to ‘text’ in the title does little more than acknowledge the
mechanism by which Len Sealy always sought to deliver his own ambitions for this book.
As in previous editions, I have aimed to continue this.
This edition also marks a change in formatting (and in paper—​perhaps in line with the
new plastic banknotes). As the subject matter of company law becomes increasingly vast,
the job of exposing its underlying structure becomes correspondingly more important.
To that end, two of the less obvious presentational changes are more important than they
might at first seem. Firstly, each chapter begins with a headline excerpt of its ‘contents’.
This is intended to serve as a succinct identification of the legal issues to be addressed.
Secondly, and more importantly—​even if less often appreciated as such—​the ‘Contents’
pages at the start of the book (at pp vii–xviii) set out in full all the headings and sub-​head-
ings in each chapter. These pages thus provide a detailed diagram of the skeleton of the
subject of company law on which the substance of each chapter then hangs.
Turning from the form of presentation to the subject’s essential substance, both the leg-
islature and the courts have been active. The Companies Act 2006 continues to be revised
and updated to reflect modern needs and commercial practices. On this front, perhaps
the most noteworthy change, in both philosophy and content, is the new requirement
for all companies to compile a public register of ‘people with significant control’ (a PSC
Register: see Chapter 14). This PSC Register must disclose the names of people who are
able to exert ‘significant influence or control’ over the company’s business: it matters not
whether the ‘person’ is corporate or human, a company shareholder or not, and, if a share-
holder, whether the legal owner of the shares or not. This change from earlier practices
was introduced, along with other important changes (such as to the CDDA 1986), by the
Small Business, Enterprise and Employment Act 2015 (SBEEA 2015).
In addition, corporate governance has remained firmly under the microscope, with fur-
ther revisions to the UK Corporate Governance Code and the UK Stewardship Code; and
continued attention to the issues addressed in the Kay Report (including problems of short-​
termism) and the Davies Report (gender diversity on boards).
The courts too have proved a significant source of further change. The Supreme Court
has been particularly active. Its major decisions include those on the separate legal per-
sonality of companies (Prest v Petrodel Resources Ltd [2013] UKSC 34, included in the last
edition only by way of late addendum); on attribution in corporate activity, especially
corporate wrongdoing (Bilta (UK) Ltd (In Liq) v Nazir [2015] UKSC 23); on directors’ duties
and proper purposes (Eclairs Group Ltd v JKX Oil & Gas Plc [2015] UKSC 71); and on rem-
edies (AIB Group (UK) Plc v Mark Redler & Co Solicitors [2014] UKSC 58; FHR European
Ventures LLP v Cedar Capital Partners LLC [2014] UKSC 45). The lower courts, too, have
been equally active.
All of this serves as a pointed reminder that companies are not mere abstractions.
Everything done by a company and everything done within a company is done by human
beings. Every case that comes to court involves real people facing real pressures. It is this
that brings the subject alive, fills it with events and characters and makes it fun to study
iv

iv  Preface

and to teach. The 2006 Act, as amended, may have introduced some new concepts and
changed some of the rules, but its role will only be, as before, to serve the same needs of
commerce and the people who engage in it: the same problems and questions will arise,
and there will be no better way for students to understand the law and to test how it will
work in practice than by examining how it would apply to the facts of known cases.
In this eleventh edition there has been some major restructuring of individual chapters.
In particular, Chapter 2 (on corporate personality and limited liability) and Chapter 3
(on corporate activity and legal liability) have been completely revised, with much ex-
tended text and commentary and the addition and reorganisation of relevant case extracts.
Chapter 7 (on directors’ duties) and Chapter 8 (on auditor liability) have also been modi-
fied. Extracts from the judgments in a good few older cases have again had to be discarded
or shortened in favour of newer substitutes.
Apart from statute and cases, other major influences on corporate law and practice con-
tinue to grow in importance, and need inclusion in order to give a balanced view: the regu-
lation of the financial services industry, the rules of the Stock Exchange, new rulings of
the European Court, and directives and reform proposals from the European Commission.
Finally, I must record my thanks to a number of people. First and foremost, Michael
Lok has once again provided unparalleled research assistance on all the areas addressed
in this book, and managed to do that while conducting an increasingly busy and suc-
cessful practice in Hong Kong. I am enormously grateful to him. Joy Ruskin-​Tompkins as
copy editor and Jonathan Price as proof reader have provided admirably rigorous, effec-
tive, prompt, and professional service. And John Carroll and Sarah Stephenson at Oxford
University Press have provided thoughtful, careful and proactive help at all stages of pro-
duction. Thank you to all of you.
This eleventh edition endeavours to state the law as at 31 March 2016, with some minor
additions at proofs stage.
Sarah Worthington
June 2016
v

New to this edition

Key revisions in the 11th edition include:

• Complete updating of statutory, regulatory and case law materials, including the
major changes introduced by SBEEA 2015, but also including changes to the core leg-
islation in CA 2006 and to the various corporate governance codes requiring ‘comply
or explain’ adherence.
• Major rewriting of Chapter 2 (Corporate personality and limited liability) in the light
of Prest v Petrodel Resources Ltd (2013, SC): ie changed structure, considerable new
text, and new cases.
• Major rewriting of Chapter 3 (Corporate activity and legal liability) to take into ac-
count a number of recent cases: ie changed structure, considerable new text, and
new cases.
• Supreme Court cases including:
• Prest v Petrodel Resources Ltd
• Bilta (UK) Ltd v Nazir
• AIB Group (UK) plc v Mark Redler & Co Solicitors
• Eclairs Group Ltd v JKX Oil & Gas Plc
• FHR European Ventures LLP v Cedar Capital Partners LLC
• Braganza v BP Shipping Ltd
• Re Nortel GmbH; Re Lehman Bros International (Europe)
• Court of Appeal cases including:
• Re Coroin Ltd
• Antonio Gramsci Shipping Corporation v Recoletos Ltd
• Brumder v Motornet Service and Repairs Ltd
• Speechley v Allott
• Smithton Ltd v Naggar
• Burry & Knight Ltd v Knight
• Relfo Ltd (In Liquidation) v Varsani
• Additional coverage of statutory derivative actions, with excerpts from leading recent
HCt and CA cases.
• Additional coverage of insolvency and proprietary issues, including notes on leading
recent HCt and CA cases.
vi

Source acknowledgements

Grateful acknowledgement is made to all the authors and publishers of copyright material
which appears in this book, and in particular to the following for permission to reprint
material from the sources indicated:
The Government of the Hong Kong Special Administrative Region: for extracts from
the following cases—Thanakharn Kasikorn Thai Chamkat (Mahachon) v Akai Holdings
Ltd (In Liquidation) FACV 9/2010; Moulin Global Eyecare Trading Ltd (In Liquidation)
(formerly known as Moulin Optical Manufactory Ltd) v The Commissioner of Inland
Revenue FACV5/​2013.
The Judgment published in this text is reproduced from those posted on the Judiciary’s
website with the permission of the Government. The Government accepts no liability or re-
sponsibility for the accuracy or completeness of any judgment being published in this text.
The Incorporated Council of Law Reporting: for extracts from the Appeal Cases (AC),
Chancery Reports (Ch), Court of Appeal (EWCA), High Court (EWHC), King’s Bench Reports
(KB), Queen’s Bench Reports (QB), and the Weekly Law Reports (WLR).
Informa Law: for an extract from Lloyd’s Law Reports.
RELX (UK) Limited, trading as LexisNexis: for extracts from the All England Law
Reports (ALL ER) and Butterworths Company Law Cases (BCLC).
Thomson Reuters (Professional) UK Limited: for extracts from British Company Law
Cases (BCLC) and British Company Cases (BCC).
Extracts from unreported case reports, Law Commission Reports, Consultation papers,
and Home Office reports and statistics are Crown copyright material and are reproduced
under Class Licence Number C2006010631 with the permission of the Controller of OPSI
and the Queen’s Printer for Scotland. Extracts from House of Lords Reports (UKHL) are
Parliamentary copyright and are reproduced by permission of the Controller of HMSO on
behalf of Parliament.
Every effort has been made to trace and contact the copyright holders but this has not
been possible in all cases. If notified, the publisher will undertake to rectify any errors or
omissions at the earliest opportunity.
vii

Contents

List of abbreviations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xix

Table of statutes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xx
Table of secondary legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xxxii
Table of cases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xxxiv

1 THE COMPANY AND ITS INCORPORATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Companies in action: special features and key parties . . . . . . . . . . . . . . . . . . . . . . . 2
Sources of company law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
UK Companies Acts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Regulatory amendments to CA 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
History of legislative reform . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
The Company Law Review (CLR) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Case law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
European law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Directives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
European Directives and Regulations relating to company law . . . . . . . . . . . . . . . 12
European law harmonisation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
The market for corporate law: country of incorporation, ‘seat’ and ‘COMI’ . . . . . . . 13
Human rights legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Self-​regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
The process of company law reform . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
The purpose of company law: enabling or regulatory? . . . . . . . . . . . . . . . . . . . . . . 21
Classification of companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Limited and unlimited companies: CA 2006 s 3 . . . . . . . . . . . . . . . . . . . . . . . . 21
Companies limited by shares and companies limited by guarantee . . . . . . . . . . 22
Public and private companies: CA 2006 s 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Change of company status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Charitable and community interest companies . . . . . . . . . . . . . . . . . . . . . . . . . 23
European public limited-​liability companies (SEs) . . . . . . . . . . . . . . . . . . . . . . 23
Classifications based on size . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
‘Single member’ companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Parent and subsidiary companies: CA 2006 s 1159 . . . . . . . . . . . . . . . . . . . . . . 24
Companies and other business structures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Incorporation, registration and the role of the registrar . . . . . . . . . . . . . . . . . . . . . 25
Incorporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Memorandum of association . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Constitutional documents: articles of association and the company’s objects . . . . 26
History . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Company names . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
The registrar’s decision to register . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
viii

viii  Contents

2 CORPORATE PERSONALITY AND LIMITED LIABILITY . . . . . . . . . . . . . . . . . . 34

General issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Separate corporate personality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
The consequences of separate legal personality . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
The company owns its own property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
The company enters into its own contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
The company runs its own business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
The company sues and is sued on its own liabilities . . . . . . . . . . . . . . . . . . . . . 48
Corporate groups: do they warrant special treatment? . . . . . . . . . . . . . . . . . . . . 51
General recognition that the company is a legal person . . . . . . . . . . . . . . . . . . 52
Presumption that the law applies to corporate persons as it does
to human persons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
The Human Rights Act 1998 and companies . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Nationality, domicile and residence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Status questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Limits to the idea of a company as a ‘person’? . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
‘Piercing the corporate veil’ vs separate legal personality . . . . . . . . . . . . . . . . . . . 63
The meaning of ‘piercing the corporate veil’ . . . . . . . . . . . . . . . . . . . . . . . . . . 64
The current position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Illustrating ‘concealment’ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Illustrating ‘evasion’ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
Connections between the company and other persons . . . . . . . . . . . . . . . . . . . . . . 75
Control of the company is not enough . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Contractual agreements and third parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Agency rules and third parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Property law and third parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
Property held on trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
Unjust enrichment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
Freezing orders and restraint orders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
Tort law and third parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
Statutory rules and third parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81

3 CORPORATE ACTIVITY AND LEGAL LIABILITY . . . . . . . . . . . . . . . . . . . . . 83

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
Rules of attribution: how does a company act? . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
Contractual liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
General issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
The framework for assessing effective contractual engagement . . . . . . . . . . . . . . . 91
Capacity: what is a company legally set up to do? . . . . . . . . . . . . . . . . . . . . . . 92
Agency and authority in corporate contracting . . . . . . . . . . . . . . . . . . . . . . . . . 93
Overview of agency principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
Agency and actual authority—​who is ‘actually’ allowed to act for the company? . . . 94
1. Implied actual authority from appointment to a specific role in the company . . . 94
2. Implied actual authority from a course of dealing . . . . . . . . . . . . . . . . . . . . 98
ix

Contents  ix

Deemed authority I: statutory deeming provisions to avoid constitutional

limitations on directors’ authority—​CA 2006 s 40 . . . . . . . . . . . . . . . . . . . . . . 100
1. Meaning of ‘a person’ in CA 2006 s 40 . . . . . . . . . . . . . . . . . . . . . . . . . . 101
2. Meaning of ‘a dealing with the company’ in CA 2006 s 40 . . . . . . . . . . . . . 104
3. Meaning of ‘good faith’ in CA 2006 s 40 . . . . . . . . . . . . . . . . . . . . . . . . . 105
4. Meaning of ‘directors’ and ‘limitation under the constitution’ in CA 2006 s 40 . . 107
Deemed authority II: common law intervention in the absence of actual
authority—​relying on ostensible (or apparent) authority . . . . . . . . . . . . . . . . . . 107
1. The representation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112
2. The authority of the representor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112
3. Reliance—​no notice of the agent’s want of actual authority and causal links . . . 112
4. Bars on ‘self-​authorising agents’ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116
Deemed authority III: common law intervention in the absence of actual
authority—​the residual role of the ‘indoor management rule’ or ‘the rule
in Turquand’s case’ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
116
1. The interaction between the indoor management rule and agency rules . . . . . 118
Examples . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
118
Transactions involving directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122
Ratification by the company of unauthorised transactions . . . . . . . . . . . . . . . . . 123
Formalities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
123
Particular problems in this area . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
124
1. Directors’ authority and breach of directors’ duties . . . . . . . . . . . . . . . . . . 124
2. The problem of forged documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126
3. An amendment of the company’s articles will not excuse a breach of contract . . . 130
Summary of corporate contracting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131
Pre-​incorporation contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131
Corporate gifts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135
Tort liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136
Criminal liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146
Establishing corporate mental states, mens rea and criminal liability . . . . . . . . 148
What does a company know? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158
Denying attribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 164
Certain acts should not be attributed to the company at all . . . . . . . . . . . . . . 164
Certain acts, knowledge or intentions should not be attributed in
these particular circumstances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165
Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177
Despite attribution, the usual legal consequences should not prevail in
these circumstances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177
Attribution and illegality: companies and the ex turpi causa principle . . . . . . . . . 180
Litigation: procedural issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 184
Conduct of litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 184

4 SHAREHOLDERS AS AN ORGAN OF THE COMPANY . . . . . . . . . . . . . . . . . 187

General issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187
Dividing corporate power between members and directors . . . . . . . . . . . . . . . . . 189
Orthodox constitutional division of powers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 190
Articles and the rules governing their interpretation . . . . . . . . . . . . . . . . . . . . . . . 191
Practical consequences of the constitutional allocation of powers . . . . . . . . . . . . 196
Formal decision-​making by members . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 202
General issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 202
x

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Voting majorities: ordinary and special resolutions . . . . . . . . . . . . . . . . . . . . . . 202

Who can propose a written resolution? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 203
What are the essentials of a ‘meeting’? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 204
The role of the chairman . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 206
Who can call a meeting? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 208
What sort of notice must be given if a meeting is proposed? . . . . . . . . . . . . . . . 210
Who can propose a resolution (or circulate a statement) at a meeting? . . . . . . . 211
Are members’ meetings compulsory? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 211
How must meetings be conducted? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 212
‘Voice’ in decision-​making . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 213
Reform of the law relating to general meetings . . . . . . . . . . . . . . . . . . . . . . . . . 213
Informal decision-​making—​the ‘Duomatic’ principle . . . . . . . . . . . . . . . . . . . . . . . 214
Limitations on the free exercise of members’ voting rights . . . . . . . . . . . . . . . . . 222
General issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 222
Alteration of the articles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 228
CA 2006 s 21: alteration of articles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 228
Predecessor provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 228
Variation of class rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 247
Members’ decisions concerning directors’ breaches . . . . . . . . . . . . . . . . . . . . 247
CA 2006 s 180: consent, approval or authorisation by members . . . . . . . . . . . . . 248
CA 2006 s 239: ratification of acts of directors . . . . . . . . . . . . . . . . . . . . . . . . 248
Summary of limitations on members’ voting . . . . . . . . . . . . . . . . . . . . . . . . . 254
Shareholders’ agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 256
Members’ personal rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 261

5 CORPORATE GOVERNANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 273

General issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 273
FRC and the UK Corporate Governance Code for listed companies . . . . . . . . . . . . 275
Regulation of listed companies by the UK Corporate Governance Code . . . . . . 276
Qualities of boards and board members . . . . . . . . . . . . . . . . . . . . . . . . . . . . 276
Separation of the roles of chairman and managing director . . . . . . . . . . . . . . . . 277
Balance of executive and non-​executive directors . . . . . . . . . . . . . . . . . . . . . . 277
Directors’ remuneration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 278
Nomination committees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 278
Gender diversity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 279
Regulation of institutional investors by the UK Stewardship Code . . . . . . . . . . 280
Client and beneficiary-​primacy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 281
Enhanced interaction with investee companies . . . . . . . . . . . . . . . . . . . . . . . . . 281
Enhanced publicity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 281
Review and amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 281
Narrative reporting reforms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 282
Role of the company secretary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 282
Directors’ service contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 283
Remuneration of directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 284
Binding contracts to provide remuneration . . . . . . . . . . . . . . . . . . . . . . . . . . 284
Common law rules on setting directors’ remuneration . . . . . . . . . . . . . . . . . . 287
Statutory rules on setting directors’ remuneration . . . . . . . . . . . . . . . . . . . . . 291
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6 THE BOARD OF DIRECTORS AS AN ORGAN OF THE COMPANY . . . . . . . . . 294

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 294
Appointment of directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 295
Eligibility for appointment as a director . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 298
Defective appointments and the validity of acts of directors: CA 2006 s 161 . . . . . 298
Publicity and the appointment of directors: CA 2006 ss 162 and 167 . . . . . . . . . . 299
Acting as a board of directors: meetings and decisions . . . . . . . . . . . . . . . . . . . . 299
Removal of directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 300
Removal by the members . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 300
Dismissal by the board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 303
Directors acting after their office is vacated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 303
Rights of directors on termination of appointment . . . . . . . . . . . . . . . . . . . . . . . . . 303
Compensation claims for loss of office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 303
Other payments for loss of office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 309
Directors’ disqualification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 309
Outline of the statutory jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 309
Jurisdiction to disqualify for ‘unfitness’ under CDDA ss 6 and 8 . . . . . . . . . . . . 312
Permitting disqualified directors to act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 319
Cross-​fertilisation: CDDA and directors’ general duties . . . . . . . . . . . . . . . . . . 320
Disqualification orders and the disqualification period . . . . . . . . . . . . . . . . . . 323

7 DIRECTORS’ DUTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 326

General issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 326
Overview of codified directors’ duties (the ‘general’ duties) . . . . . . . . . . . . . . 327
Other duties owned by directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 328
Directors’ general duties are also owed by de facto and shadow directors . . . . . . . 328
Shadow directors: s 251 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 329
De facto directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 330
People who are not typically directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 335
Persons connected with a director: s 252 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 336
Directors’ duties are owed to the company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 336
Claims that directors owe duties to particular individuals . . . . . . . . . . . . . . . . 337
Duties to shareholders? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 338
Duties to creditors? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 340
Duties to employees? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 341
Scope and nature of directors’ general duties: CA 2006 s 170 . . . . . . . . . . . . . . . . . 341
Duty to act within powers: CA 2006 s 171 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 341
Duty to act in accordance with the company’s ‘constitution’: s 171(a) . . . . . . . 342
Duty to act for proper purposes: s 171(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . 342
Duty to promote the success of the company: CA 2006 s 172 . . . . . . . . . . . . . . . . 355
The crucial elements of s 172 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 356
The director’s ‘good faith’ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 356
‘The success of the company for the benefit of its members as a whole’ . . . . . . . . 356
A defence rather than duty? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 357
xii

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Illustrations of the duty to act in good faith for the success of the company . . . 358
Duty to disclose own misconduct? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 361
Regard for other stakeholders? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 366
The interests of members . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 366
The interests of creditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 367
The interests of employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 372
Duty to exercise independent judgement: CA 2006 s 173 . . . . . . . . . . . . . . . . . . . 373
Duty to exercise reasonable care, skill and diligence: CA 2006 s 174 . . . . . . . . . . . 375
The old subjective test . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 376
The subjective/​objective test . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 378
‘Reasonable’ directors: keeping informed and delegating responsibilities . . . . . 380
Proving causative loss in negligence cases . . . . . . . . . . . . . . . . . . . . . . . . . . . 385
Duty to avoid conflicts of interest: CA 2006 s 175 . . . . . . . . . . . . . . . . . . . . . . . . 385
Context—​three sections dealing with fiduciary loyalty: CA 2006 ss 175–​177 . . . . 385
The earlier equitable principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 386
Statutory changes to the equitable rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . 387
Illustrations of the ‘conflicts’ rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 387
Irrelevant that company cannot or would not pursue the opportunity . . . . . . . . . 390
Which conflicts does CA 2006 s 175 catch? . . . . . . . . . . . . . . . . . . . . . . . . . . 394
What counts as a ‘conflict’? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 394
What does not count as a conflict? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 395
1. No possibility of a conflict . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 395
2. Prior authorisation by the directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . 397
3. Subsequent ratification by the company . . . . . . . . . . . . . . . . . . . . . . . . . 398
Which ‘opportunities’ are caught by the conflicts rule? . . . . . . . . . . . . . . . . . . . 398
1. Scope issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 398
2. Resigning to take up a corporate opportunity . . . . . . . . . . . . . . . . . . . . . . 412
Remedies for breach of the conflicts rule . . . . . . . . . . . . . . . . . . . . . . . . . . . . 420
Conflicts of duty and duty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 423
Duty not to accept benefits from third parties: CA 2006 s 176 . . . . . . . . . . . . . . . 426
Duty to declare an interest in a proposed or existing transaction
or arrangement: CA 2006 ss 177 and 182 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 427
Remedies for breach of the general duties: CA 2006 s 178 . . . . . . . . . . . . . . . . . . . 431
General issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 431
Remedial options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 431
Equitable compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 431
Disgorgement of profits—​personal remedy . . . . . . . . . . . . . . . . . . . . . . . . . . . 432
Disgorgement of profits—​proprietary remedy . . . . . . . . . . . . . . . . . . . . . . . . . 433
Rescission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 433
Limitation periods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 433
Specific examples . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 434
Relief from liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 452
The available options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 452
Consent, approval or authorisation by the company: CA 2006 s 180 . . . . . . . . 452
Equitable rules for authorisation by the company . . . . . . . . . . . . . . . . . . . . . . 452
Ratification of acts of directors: CA 2006 s 239 . . . . . . . . . . . . . . . . . . . . . . . . 454
Relief from liability granted by the court: CA 2006 s 1157 . . . . . . . . . . . . . . . . 460
Contracting out of liability: CA 2006 ss 232–​238 . . . . . . . . . . . . . . . . . . . . . . 462
xiii

Contents  xiii

Special rules on notice requirements and members’ approval for certain

transactions: CA 2006 ss 182–​231 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 462
Declarations of interest in existing transactions or arrangements:
ss 182–​187 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 462
Transactions with directors requiring the approval of members . . . . . . . . . . . . 464
Enhanced range of statutory remedies for these transactions . . . . . . . . . . . . . 465
Secondary liability (liability of third parties associated with directors’ wrongs) . . . 468
Required knowledge for secondary liability . . . . . . . . . . . . . . . . . . . . . . . . . . 469
Remedies associated with secondary liability . . . . . . . . . . . . . . . . . . . . . . . . . 475

8 COMPANY AUDITORS AND PROMOTERS . . . . . . . . . . . . . . . . . . . . . . . . . 481

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 481
Auditors and their relationship with the company . . . . . . . . . . . . . . . . . . . . . . . . 481
General policy and regulatory issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 482
Auditors’ liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 484
Promoters and their dealings with the company . . . . . . . . . . . . . . . . . . . . . . . . . 498

9 THE RAISING OF CAPITAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 506

Company ‘capital’ and its importance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 506
Attracting and protecting shareholders and creditors . . . . . . . . . . . . . . . . . . . . . . 508
Terminology associated with legal capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 509
The legal nature of shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 512
Minimum capital requirements for company formation . . . . . . . . . . . . . . . . . . . . . 514
Limiting access to shares: directors’ allotment rights and shareholders’
pre-​emption rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 514
Allotment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 514
Pre-​emption rights governing the issue of new shares . . . . . . . . . . . . . . . . . . . . 515
Pre-​emption rights governing the transfer of existing shares . . . . . . . . . . . . . . . 516
Offers to the public to purchase shares and remedies for misleading offers . . . . . . 519
Misrepresentation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 520
Loss of the remedy of rescission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 522
Availability of the remedy of damages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 523
Collecting in the company’s capital: payment for shares . . . . . . . . . . . . . . . . . . . 525
Issue of shares at a discount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 525
Issue of debentures at a discount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 527
Issue of shares at a premium . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 527
Issue of shares in exchange for property . . . . . . . . . . . . . . . . . . . . . . . . . . . . 529
Rules for public companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 530
Rules for private companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 531

10 DISTRIBUTIONS AND CAPITAL MAINTENANCE . . . . . . . . . . . . . . . . . . . . 533

Controls over a company’s distribution of capital . . . . . . . . . . . . . . . . . . . . . . . . 533
Permitted reductions of capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 534
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Redemptions and repurchases of shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 542

General exceptions to the prohibition in CA 2006 s 658 . . . . . . . . . . . . . . . . . 543
Redeemable shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 543
Repurchase of shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 544
Protection of shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 545
Financial assistance by a company for the acquisition of its own shares . . . . . . . 546
The meaning of ‘financial assistance’ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 548
Further guidance on the meaning of ‘financial assistance’ . . . . . . . . . . . . . . . . . 553
Exceptions to the statutory prohibition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 554
Consequences when a transaction breaches the prohibition . . . . . . . . . . . . . . 558
Dividend distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 565
Permitted distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 565
Requirement to pay dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 566
Payment of a dividend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 567
Distributions in kind . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 567
Consequences of an unauthorised distribution . . . . . . . . . . . . . . . . . . . . . . . . 567
Capitalisations and bonus shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 571
Disguised returns of capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 572

11 SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 580
The nature and classification of shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 580
Classes of shares and class rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 581
Variation of class rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 587
Statutory requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 587
Additional common law requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 588
Meaning of ‘class right’ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 588
Defining a ‘variation’ of class rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 588
Right of dissenting member to object to court . . . . . . . . . . . . . . . . . . . . . . . . 589
Transfer of shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 599
Share certificates, uncertificated shares and dematerialised securities . . . . . . . 600
Transfer of certificated securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 600
Transfer of uncertificated shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 601
Restrictions on transfer: directors’ approval and pre-​emption rights . . . . . . . . . . 601
Forged and fraudulent transfers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 604
Equitable interests in shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 608
Competing claims to shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 610
Disclosure of substantial interests in shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 614
Valuation of shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 614

12 BORROWING, DEBENTURES AND CHARGES . . . . . . . . . . . . . . . . . . . . . . . 619

General issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 619
Debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 622
Secured debt: mortgages, fixed and floating charges . . . . . . . . . . . . . . . . . . . . . . 623
Mortgages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 624
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Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 624
Fixed charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 624
Floating charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 625
Debenture holders’ remedies and the protection afforded by charges . . . . . . . . . . 626
Different protections afforded to fixed and floating charge holders . . . . . . . . . 626
Requirement to register charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 627
Statutory requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 627
Certificate of registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 628
Effect of failure to register . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 628
Extension of the registration period and rectification of the register . . . . . . . . . 629
Registration, priority and constructive notice of registered charges . . . . . . . . . 629
Company’s own register of charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 630
Further reform of the registration system . . . . . . . . . . . . . . . . . . . . . . . . . . . . 630
Fixed and floating charges: definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 632
Floating charges: creation and effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 634
Creation of floating charges and impact of failure to register . . . . . . . . . . . . . . 634
Limitations on the assets which may be made subject to a floating charge . . . . . 636
Dealings with assets subject to a floating charge . . . . . . . . . . . . . . . . . . . . . . 638
Crystallisation of floating charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 641
Treatment of floating charges on the company’s liquidation . . . . . . . . . . . . . . 646
Distinguishing between fixed and floating charges . . . . . . . . . . . . . . . . . . . . . . . 650
Avoiding the statutory regime for company securities . . . . . . . . . . . . . . . . . . . . . 660
Retention of title agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 660

13 REMEDIES FOR MALADMINISTRATION OF THE COMPANY . . . . . . . . . . . . 664

General issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 664
Pursuing claims for maladministration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 665
Actionable wrongs committed against the company . . . . . . . . . . . . . . . . . . . . 665
Actionable wrongs committed against individual members . . . . . . . . . . . . . . . 666
Why is shareholder litigation such a problem? . . . . . . . . . . . . . . . . . . . . . . . . . . 667
The old common law rule in Foss v Harbottle . . . . . . . . . . . . . . . . . . . . . . . . . . . 669
The rule in Foss v Harbottle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 669
Exceptions to the rule in Foss v Harbottle . . . . . . . . . . . . . . . . . . . . . . . . . . . . 670
Company claims and the statutory derivative action: CA 2006 ss 260ff . . . . . . . . . . 671
In outline . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 671
Grounds for bringing a derivative claim and parties to the claim . . . . . . . . . . . 672
Court permission to continue a derivative claim . . . . . . . . . . . . . . . . . . . . . . . 674
Compulsory refusal of permission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 674
1. The action is not designed to promote the success of the company . . . . . . . . . 675
2. Proper authorisation or ratification . . . . . . . . . . . . . . . . . . . . . . . . . . . . 675
Discretionary refusal of permission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 675
Illustrations of the courts’ exercise of control over applications . . . . . . . . . . . . . 676
Residual use of common law derivative claims . . . . . . . . . . . . . . . . . . . . . . . . . . 695
Domestic companies and ‘multiple’ derivative claims . . . . . . . . . . . . . . . . . . . 695
Foreign-​registered companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 697
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Personal claims by members . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 700

The sources of members’ personal rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 700
The procedural form of members’ personal claims . . . . . . . . . . . . . . . . . . . . . . 701
Establishing the member’s personal right: personal and corporate claims
can coexist . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 702
Can the member’s personal right be enforced? . . . . . . . . . . . . . . . . . . . . . . . . . 706
The ‘no reflective loss’ principle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 706
Unfairly prejudicial conduct of the company’s affairs . . . . . . . . . . . . . . . . . . . . . . . 715
The pros and cons of CA 2006 s 994 claims . . . . . . . . . . . . . . . . . . . . . . . . . . . 716
Basic principles: comprehensive overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . 717
Who may apply . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 717
Respondents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 718
Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 719
Grounds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 720
Meaning of ‘the company’s affairs’ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 720
Meaning of ‘unfairly prejudicial’ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 721
Meaning of ‘interests of members’ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 722
Members in their capacity as members . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 722
Use of CA 2006 s 994 to protect non-​member interests . . . . . . . . . . . . . . . . . . . 723
Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 725
Buy-​out orders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 725
Relevance of alternative remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 726
Examples of ‘unfairly prejudicial’ conduct . . . . . . . . . . . . . . . . . . . . . . . . . . . 727
Analysis of conduct which amounts to ‘unfair prejudice’ . . . . . . . . . . . . . . . . 729
A special approach to ‘legitimate expectations’? . . . . . . . . . . . . . . . . . . . . . . . 734
Remedies: valuing shares in buy-​out orders . . . . . . . . . . . . . . . . . . . . . . . . . . . 741
Unfair prejudice and other remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 749

14 PUBLIC DISCLOSURE, MARKET REGULATION AND PUBLIC

INVESTIGATIONS OF COMPANIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 751
Public disclosure and the disclosure philosophy . . . . . . . . . . . . . . . . . . . . . . . . . . 751
General disclosure obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 752
The Registrar of Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 752
Errors on the register . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 753
Register of ‘people with significant control’: the PSC Register . . . . . . . . . . . . . 753
Publication in the Gazette . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 754
Publicity at the company’s own registered office . . . . . . . . . . . . . . . . . . . . . . 755
Specific provision of information to members . . . . . . . . . . . . . . . . . . . . . . . . 755
Publicity on business documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 756
Enforcement of the disclosure regime . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 756
Listed companies and the Stock Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . 757
Public regulation of securities markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 757
Transparency obligations: investigation and notification of major voting
shareholdings in certain public companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 759
The Transparency Directive . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 759
Substantial holdings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 759
Consequences of infringement of transparency obligations . . . . . . . . . . . . . . . . 760
Liability for false or misleading statements concerning the transparency rules . . . . 760
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Company investigations into share ownership and the disclosure register . . . . . 761
Disclosure and public offerings of shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 762
History . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 762
Securities markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 763
Official listing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 764
Prospectuses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 764
Restrictions on public offers by private companies . . . . . . . . . . . . . . . . . . . . . . 765
Content of prospectuses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 765
Exemptions from the prospectus requirements . . . . . . . . . . . . . . . . . . . . . . . . 765
FCA sanctions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 766
Liability for misleading statements and omissions in prospectuses . . . . . . . . . . . 766
Under-​subscription for the new issue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 767
Market abuse: insider dealing and market manipulation . . . . . . . . . . . . . . . . . . . 767
Controlling market abuse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 767
Insider dealing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 768
Insider dealing: common law protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . 768
Insider dealing: statutory civil protection (FSMA 2000 s 118) . . . . . . . . . . . . . . . 769
Insider dealing: criminal protection (Criminal Justice Act 1993 Pt V) . . . . . . . . . . 769
Market abuse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 769
Public investigation of companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 770
Powers of investigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 770
Conduct of the investigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 771
Inspections and the privilege against self-​incrimination . . . . . . . . . . . . . . . . . . 777
Inspections and subsequent fair trials—​criminal and civil cases . . . . . . . . . . . . . 777

15 RECONSTRUCTIONS, MERGERS AND TAKEOVERS . . . . . . . . . . . . . . . . . . 779

General issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 779
Meaning of the terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 779
Schemes of reconstruction under IA 1986 ss 110–​111 . . . . . . . . . . . . . . . . . . . . . . 781
Arrangements and reconstructions under CA 2006 ss 895–​901 . . . . . . . . . . . . . . 784
What is a ‘compromise or arrangement’? . . . . . . . . . . . . . . . . . . . . . . . . . . . . 785
Defining the classes for member or creditor meetings . . . . . . . . . . . . . . . . . . . 786
Court sanctioning of the scheme . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 792
Scheme jurisdiction: use of CA 2006 by foreign companies . . . . . . . . . . . . . . . 794
Proposals for reform of the law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 794
Takeovers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 796
Regulation of takeovers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 796
The Panel on Takeovers and Mergers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 797
Restricting barriers to takeovers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 801
Disclosure requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 801
‘Virtual bids’ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 802
Mandatory offer rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 802
Deal protection measures and inducement fees . . . . . . . . . . . . . . . . . . . . . . . 802
Position of minority members following a takeover . . . . . . . . . . . . . . . . . . . . 802
Directors’ role in a takeover . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 806
Enforcement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 808
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16 RESCUE AND INSOLVENCY PROCEDURES . . . . . . . . . . . . . . . . . . . . . . . . . 810

General issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 810
Insolvency and rescue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 811
‘Commercial’ insolvency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 811
‘Balance sheet’ insolvency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 811
‘Ultimate’ insolvency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 811
Statutory framework . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 811
Company voluntary arrangements (CVAs) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 812
Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 813
Purpose of administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 813
Appointment of the administrator . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 814
Powers and duties of the administrator . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 817
Effect of appointment on directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 821
Termination of administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 821
Priority of expenses of administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 821
Receivership and administrative receivership . . . . . . . . . . . . . . . . . . . . . . . . . . . 822
Receivership generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 822
Administrative receivership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 824
Enterprise Act 2002 reforms—​limited scope for administrative receiverships . . . . . 824
Powers of management—​company contracts . . . . . . . . . . . . . . . . . . . . . . . . . 825
Duties of administrative receivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 827
Distribution of assets subject to the receivership . . . . . . . . . . . . . . . . . . . . . . . . . 832
Liquidation or winding up . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 834
Voluntary winding up . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 834
Compulsory winding up generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 834
Permitted petitioners for a compulsory winding up . . . . . . . . . . . . . . . . . . . . 835
Grounds for compulsory winding up . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 838
Compulsory winding up because the company is unable to pay its debts . . . . . . . 838
Compulsory winding up on the ‘just and equitable’ ground . . . . . . . . . . . . . . . . 840
The courts’ discretion to order a compulsory winding up . . . . . . . . . . . . . . . . 850
The functions, powers and duties of the liquidator . . . . . . . . . . . . . . . . . . . . . 850
The conduct of the liquidation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 851
‘Commencement’ of winding up . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 851
The liquidator’s ability to ‘claw back’ property—​unwinding transactions . . . . . . . 852
The liquidator’s ability to require wrongdoers to make personal contributions
to the assets of the company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
853
Re-​use of company names and the ‘phoenix syndrome’ . . . . . . . . . . . . . . . . . . 854
Insolvency and corporate groups . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
855
The common law ‘anti-​deprivation principle’ . . . . . . . . . . . . . . . . . . . . . . . . .855
Cases illustrating the conduct of the liquidation . . . . . . . . . . . . . . . . . . . . . . .
855
Assets available for distribution by the liquidator . . . . . . . . . . . . . . . . . . . . . . 866
Application of assets by the liquidator . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 867
Investigating and reporting the affairs of the company . . . . . . . . . . . . . . . . . . . . 870
Investigations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 870
Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 870
Dissolution of the company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 871
Restoration to the register . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 872

Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 875
xix

List of abbreviations

Abbreviation Detail
APPCGG All Party Parliamentary Corporate Governance Group
BERR Department for Business, Enterprise and Regulatory Reform*
BIS Department for Business, Innovation and Skills*
CA 1985 Companies Act 1985
CA 1989 Companies Act 1989
CA 2006 Companies Act 2006
C(AICE)A 2004 Companies (Audit, Investigations and Community Enterprise) Act 2004
CDDA 1986 Company Directors Disqualification Act 1986
CEO Chief executive officer
CIC Community interest company
CJEU Court of Justice of the European Union
CLR The collective publications of the DTI’s Company Law Review
COMI Centre of main interest
CPR Civil Procedure Rules
CVA Company voluntary arrangement
DTI Department of Trade and Industry*
EA 2002 Enterprise Act 2002
ECtHR European Court of Human Rights
EEIG European Economic Interest Grouping
FCA Financial Conduct Authority**
FPC Financial Policy Committee
FRC Financial Reporting Council
FSA Financial Services Authority**
FSA 1986 Financial Services Act 1986
FSA 2012 Financial Services Act 2012
FSMA 2000 Financial Services and Markets Act 2000
IA 1986 Insolvency Act 1986
IR 1986 Insolvency Rules 1986
LLP Limited liability partnership
MiFID Markets in Financial Instruments Directive (2004/​39/​EC)
NED Non-​executive director
PIE Public-​Interest Entities
PRA Prudential Regulation Authority**
PSC People with significant control
RIE Recognised investment exchange
SBEEA 2015 Small Business, Enterprise and Employment Act 2015
SE Societas Europaea
UKLA United Kingdom Listing Authority
UNCITRAL United Nations Commission on International Trade Law

* These are recent successor government departments (always including responsibility for companies, although
other responsibilities have been added and subtracted with each change). The DTI ceased to exist in 2007, replaced
by BERR, which itself was replaced by BIS in June 2009.
** The FSA 2012 abolished the FSA with effect from 1 April 2013, and its responsibilities were then split between
two new agencies, the FCA and the PRA, and the Bank of England.
xx

Table of statutes

UK Companies Act 1948 . . . 189, 200, 289, 467

s 1(1) . . . 32
Arbitration Act 1889 s 10 . . . 220
s 4 . . . 265 s 20(1) . . . 270
Arbitration Act 1996 s 54 . . . 466, 551, 553, 562, 563
s 9 . . . 265 s 72 . . . 539
Bank of England Act 1993 s 95(1) . . . 661
s 9(c) . . . 758 s 95(2)(e) . . . 661
s 143 . . . 220
Bankruptcy Act 1914
s 143(4) . . . 220
s 44(1) . . . 858
ss 151–​158 . . . 466
s 44(4)(b) . . . 858
s 162 . . . 488
Bills of Sale Act 1878 . . . 620 s 165(b) . . . 773
Bills of Sale Act 1882 . . . 620 s 165(b)(ii) . . . 772, 773
s 167(3) . . . 773
Bribery Act 2010 . . . 146, 443
s 184 . . . 301, 846, 848
s 7 . . . 146, 427
s 206 . . . 786
s 7(2) . . . 146
s 209 . . . 787, 803, 805
s 9 . . . 146
s 210 . . . 242, 269, 716, 722, 729, 732,
Bribery Act 2012 . . . 443 747, 846
Charging Orders Act 1979 s 222 . . . 838
s 5(2)(a)–​(b) . . . 613 s 222(f) . . . 846, 847
Civil Liability (Contribution) Act 1978 . . . 172 s 223 . . . 838
s 223(a) . . . 838
Companies Act 1844 . . . 5, 27 s 224 . . . 838
Companies Act 1856 s 224(1) . . . 839
s 16 . . . 263 s 227 . . . 856
s 50 . . . 230, 263 s 302 . . . 868
s 51 . . . 231 s 322 . . . 648
s 120 . . . 784 s 384A . . . 492
s 133 . . . 783 Sch, Table A, Art 4 . . . 591
s 161 . . . 782 Companies Act 1948 to 1976 . . . 32
s 192 . . . 784
Companies Act 1955
Companies Act 1862 . . . 39, 40, 42, 503, 525, 846 s 2 . . . 473
s 8 . . . 583
s 14 . . . 231 Companies Act 1967
s 16 . . . 513 s 109 . . . 773, 775
s 18 . . . 30 Companies Act 1980
s 50 . . . 229, 583 s 75 . . . 741
s 51 . . . 583 Companies Act 1981
s 79 . . . 835 s 42 . . . 555
s 82 . . . 835
Companies Act 1985 . . . 4, 6, 26, 27, 206,
s 161 . . . 782, 783
298, 510, 565, 631, 666, 746, 756, 759,
s 360 . . . 611
801, 811
Companies Act 1867 . . . 526 Pt VIII . . . 568
s 25 . . . 266 Pt XIIIA . . . 796, 802
Companies Act 1900 . . . 30, 627 Pt XIV . . . 4, 749, 770, 776, 777, 835
s 8(2) . . . 528 Pt XV . . . 4
Companies Act 1907 . . . 38 s 4 . . . 220
s 14 . . . 192, 268, 271
Companies Act 1908 s 14(1) . . . 192
s 14(1) . . . 262, 265, 268 s 16 . . . 229
s 27 . . . 612 s 17(2)(b) . . . 230
Companies Act 1929 . . . 467, 536 s 28(6) . . . 135
Table A s 29 . . . 29
Art 68 . . . 307 s 35A . . . 100, 101, 102, 103, 104, 105, 106
xxi

Table of statutes   xxi

s 35A(1) . . . 102, 103 s 432(1) . . . 770

s 35A(6) . . . 102 s 432(2) . . . 771, 772, 773
s 36C . . . 132, 133, 135 s 434(5A)–​(5B) . . . 777
s 39 . . . 100 s 436(2)–​(3) . . . 773
s 50 . . . 231 s 438 . . . 666, 770, 771
s 103 . . . 532 s 442 . . . 771
s 113 . . . 532 s 445 . . . 771
s 125 . . . 27, 229, 587, 588, 589, 591 ss 446A–​446B . . . 771
s 151 . . . 548, 549, 550, 551, 552, 554, 555, 556, s 447 . . . 312, 771, 773, 775, 777
558, 559, 560, 561, 564 s 456 . . . 721
s 151(1) . . . 531, 549, 550, 552, 554 s 459 . . . 209, 242, 255, 260, 269, 399, 402, 408,
s 151(2) . . . 550, 552 411, 566, 716, 717, 718, 721, 722, 723, 724,
s 152 . . . 548, 549 725, 726, 727, 729, 733, 735, 736, 737, 739,
s 152(1) . . . 552 742, 743, 744, 747, 807, 849
s 152(1)(a)(i)–​(iii) . . . 549 s 461 . . . 717, 730
s 152(1)(a)(ii) . . . 552 s 461(1) . . . 746, 747
s 152(3) . . . 548 s 652 . . . 135
s 153 . . . 549 s 727 . . . 379, 461, 570
s 153(1) . . . 549 s 736 . . . 297
s 153(1)(a) . . . 556 s 736A(6) . . . 297
s 153(2) . . . 549, 555 s 736A(7) . . . 297
s 153(2)(a) . . . 555, 556 Companies Act 1989 . . . 4, 5, 6, 102, 138, 572
s 153(3) . . . 549 Pt VII . . . 869
ss 155–​158 . . . 555, 557 s 82 . . . 771
s 164 . . . 222
s 170(4) . . . 343 Companies Act 2006 . . . 1, 4, 5, 6, 8, 19, 20, 22,
s 171 . . . 343 23, 27, 28, 81, 138, 190, 192, 202, 213,
s 221(1) . . . 861 228, 280, 281, 298, 300, 328, 333, 356, 393,
s 221(2)(a) . . . 861 498, 509, 510, 546, 557, 565, 631, 666, 669,
s 227(1) . . . 861 672, 675, 695, 696, 749, 752, 756, 757, 760,
s 227(3) . . . 861 770, 868
s 241(1) . . . 861 Parts 1–​39 . . . 4
s 241(3) . . . 861 Pt 10 . . . 327, 336, 350, 385, 438, 454, 465
s 242(1)–​(2) . . . 861 Chap 3 . . . 387
ss 263–​276 . . . 568 Chap 4 . . . 387, 452
s 277 . . . 568 Pt 11 . . . 96, 358
s 277(1) . . . 568, 569 Chap 1 . . . 696
s 303 . . . 300, 742 Pt 14 . . . 385
s 309(1) . . . 372, 373 Pt 15 . . . 326, 760
ss 309A–​309C . . . 462 Pt 16 . . . 327
ss 309A–​310 . . . 462 Pt 21, Chap 2 . . . 600
s 317 . . . 205, 428, 463, 468 Pt 21A . . . 753
s 317(1) . . . 300 Pt 22 . . . 349
s 319 . . . 222 Pt 23 . . . 565
s 320 . . . 466, 467, 577, 733 Pt 25 . . . 620, 627, 628
s 320(1) . . . 466 Chap 1 . . . 627
s 320(1)(b) . . . 467 Chap 2 . . . 627
s 322 . . . 466, 467 Chap A1 . . . 627
s 322(2)(a) . . . 467 Pt 26 . . . 779, 780, 781, 783, 784, 786, 793,
s 322(3)(b) . . . 466, 467 794, 795
s 322A . . . 102, 103, 104 Pt 27 . . . 779, 780, 781, 783, 784
s 322A(4)(7) . . . 102 Pt 28 . . . 779, 796, 798
s 330 . . . 467, 468 Chap 3 . . . 803
s 341 . . . 468 Chap 4 . . . 801
s 341(2)(a) . . . 468 Pt 32 . . . 771
s 371 . . . 208, 209 Pt 42 . . . 482
s 395 . . . 629, 634, 636 s 1(1) . . . 546
s 425 . . . 599, 791, 794, 795 s 2(1)(b)–​(c) . . . 4
ss 425–​427 . . . 213 s 2(2) . . . 4
ss 425–​427A . . . 599, 794 s 3 . . . 4, 21
s 428 . . . 806 s 3(4) . . . 3
s 431(1) . . . 770 s 4 . . . 4, 22
s 432 . . . 770 s 7 . . . 3, 25
xxii

xxii   Table of statutes

s 7(2) . . . 25 s 61 . . . 1
s 8 . . . 26, 192, 228 s 69 . . . 28
s 9 . . . 25 s 69(4) . . . 28
s 9(5)(b) . . . 26 s 80(3) . . . 135
s 11(2) . . . 509 s 82 . . . 756
s 12 . . . 25 s 89 . . . 23, 201, 234
s 13 . . . 25, 228 s 112 . . . 187, 512, 600, 672, 717
s 14 . . . 25 s 113 . . . 187
s 15 . . . 25 s 114 . . . 755
s 15(4) . . . 25, 30, 31 s 116 . . . 755
s 16 . . . 25 ss 116–​117 . . . 355
s 16(3) . . . 26, 30 s 126 . . . 611, 612, 613, 753
s 17 . . . 26, 188, 341 s 136 . . . 545
s 18 . . . 177 s 144 . . . 545
s 20 . . . 25, 26, 188, 190 ss 145–​153 . . . 213
s 21 . . . 93, 187, 221, 228, 229, 230, 231, 234, s 151 . . . 556
263, 295, 583, 591, 752 s 154 . . . 21, 295
s 21(1) . . . 27, 202 s 155 . . . 295, 331
s 22 . . . 27, 93, 228, 230, 588 s 155(1) . . . 295, 331
s 22(2) . . . 27, 228 ss 156A–​156C . . . 295
s 23 . . . 228 s 157 . . . 295
s 25 . . . 228 s 160 . . . 295
s 26(1) . . . 671 s 161 . . . 287, 296, 298, 303
s 28 . . . 25, 192, 587 s 161(1)(c) . . . 303
s 28(1) . . . 228 s 162 . . . 299, 755
s 28(2) . . . 228 ss 162–​164 . . . 299
s 29 . . . 93 s 165 . . . 299, 755
s 29(1) . . . 220, 221 s 167 . . . 299
s 30 . . . 221 s 168 . . . 47, 131, 187, 197, 200, 202, 210,
s 31 . . . 131 211, 259, 294, 296, 301, 302, 303, 304, 742,
s 31(1) . . . 27, 92 846, 848
s 31(2) . . . 27 ss 168–​169 . . . 300
s 31(4) . . . 92 s 168(1) . . . 300
s 33 . . . 27, 191, 221, 264, 265, 267, 268, 269, s 168(5)(a) . . . 301, 304
270, 271, 339, 503, 508, 513, 666, 669, 701 s 169 . . . 131, 211
s 33(1) . . . 262 s 169(5)(b) . . . 301
s 39 . . . 92, 93, 110, 131 s 170 . . . 327, 341, 366, 500
ss 39–​40 . . . 619 s 170(1) . . . 336
s 39(1) . . . 91, 92 s 170(2) . . . 329, 341, 387, 414, 418, 420
s 40 . . . 91, 100, 101, 103, 104, 105, 106, 107, s 170(3) . . . 341
108, 110, 116, 117, 122, 131, 287, 298, 504 s 170(3)–​(4) . . . 328, 376
s 40(1)–​(5) . . . 101 s 170(4) . . . 341, 361
s 40(2) . . . 100 s 170(5) . . . 329
s 40(2)(b) . . . 100, 105 s 171 . . . 92, 100, 131, 211, 327, 341, 423, 515, 601
s 40(2)(b)(i) . . . 106 ss 171–​173 . . . 431
s 40(3) . . . 100 ss 171–​174 . . . 431
s 41 . . . 101, 102, 104, 117, 122, 123, 131, 504 s 171(1) . . . 681
s 41(1) . . . 123 s 171(a) . . . 342, 343, 431, 571
s 42 . . . 92, 93 s 171(b) . . . 342, 343, 350, 426, 571, 668, 806
s 43 . . . 90 s 172 . . . 190, 250, 260, 261, 281, 327, 337, 342,
ss 43–​52 . . . 123 355, 356, 357, 358, 364, 366, 367, 372, 423,
s 43(1) . . . 123 426, 674, 675, 677, 678, 679, 680, 681, 682,
s 43(2) . . . 124 683, 684, 685, 756
s 44 . . . 117, 124, 126, 127, 827 s 172(1) . . . 356, 357, 358, 361, 366, 367,
s 44(2) . . . 126, 127, 608 681, 685
s 44(5) . . . 118, 127, 128, 608, 126, 126 s 172(1)(b) . . . 341, 358, 372, 373
s 51 . . . 132, 133, 134, 135, 231 s 172(2) . . . 356, 357, 681
s 53 . . . 25, 29 s 172(3) . . . 168, 367
ss 55–​56 . . . 29 s 173 . . . 300, 327, 373, 426
s 58 . . . 21 s 173(2)(a) . . . 373
ss 58–​60 . . . 1 s 174 . . . 327, 375, 376, 377, 378, 426, 431,
s 60 . . . 1 666, 860
xxiii

Table of statutes   xxiii

s 174(2)(a) . . . 179 s 223(1)(b) . . . 464

s 175 . . . 79, 256, 327, 341, 364, 385, 386, 387, s 223(1)(c) . . . 464
394, 395, 397, 403, 412, 418, 420, 423, 426, ss 226A–​226F . . . 291
427, 431, 452, 453, 454, 675 s 226C . . . 291
ss 175–​177 . . . 386, 387 s 227 . . . 284
s 175(2) . . . 395 ss 227–​230 . . . 284, 464
s 175(3) . . . 386, 387 ss 228–​229 . . . 304, 755, 756
s 175(4) . . . 398 s 231 . . . 428, 464, 465
s 175(4)–​(6) . . . 390, 393 s 232 . . . 328, 376, 395, 462
s 175(4)(a) . . . 395, 397, 407 ss 232–​238 . . . 462
s 175(4)(b) . . . 387, 397 s 232(1) . . . 328
s 175(5) . . . 387, 397, 398 s 232(2) . . . 462
s 175(5)–​(6) . . . 427 s 232(3) . . . 462
s 175(6) . . . 387, 398 s 232(4) . . . 426, 462
s 175(7) . . . 386, 387, 427 s 239 . . . 246, 247, 248, 268, 328, 355, 368, 370,
s 176 . . . 327, 341, 386, 387, 394, 426, 427, 431 386, 390, 420, 427, 428, 454, 455, 667, 675,
s 176(3) . . . 426 685, 686, 687
s 176(4) . . . 387, 412, 426 s 239(1) . . . 454
s 177 . . . 205, 300, 327, 386, 389, 404, 427, 428, s 239(3) . . . 355, 455, 458
430, 431, 452, 463, 468 s 239(4) . . . 248, 355, 390, 455, 458, 685,
s 178 . . . 328, 376, 386, 420, 423, 428, 686, 687
431, 463 s 239(7) . . . 390, 427, 454, 455, 675, 685, 686
s 179 . . . 431 ss 240–​246 . . . 299
s 180 . . . 248, 328, 386, 427, 428, 452, 675 s 247 . . . 190, 358
s 180(1) . . . 452 s 247(2) . . . 358
s 180(4) . . . 452, 675, 685 s 250 . . . 328
s 180(4)(a) . . . 427, 452 s 251 . . . 188, 299, 329
s 180(4)(b) . . . 426 s 251(2) . . . 329, 330
s 182 . . . 327, 386, 404, 427, 428, 462, 463 s 251(3) . . . 329, 330
ss 182–​187 . . . 428, 462 s 252 . . . 248, 336, 686
ss 182–​231 . . . 187, 462 s 252(5)(d) . . . 248
s 182(2) . . . 462 s 254 . . . 686
s 182(3) . . . 462 s 260 . . . 55, 188, 341, 665, 669, 670, 671,
s 182(4) . . . 462 688, 695
s 182(6)(b) . . . 463 ss 260–​264 . . . 188
s 183 . . . 428, 462, 463 s 260(1) . . . 671, 672, 673, 695, 696, 715
ss 184–​187 . . . 462 s 260(2) . . . 671, 695, 696, 715
s 188 . . . 304, 464 s 260(2)(a) . . . 675
ss 188–​189 . . . 283, 284 s 260(2)(b) . . . 672, 715
s 189 . . . 464 s 260(3) . . . 672, 715
s 190 . . . 465 s 260(4) . . . 672
ss 190–​196 . . . 464 s 260(5) . . . 669
s 190(3) . . . 464 s 260(5)(c) . . . 696
s 191 . . . 464 s 261 . . . 680
ss 192–​194 . . . 464 s 261(1) . . . 676
s 195 . . . 464, 465 s 261(2) . . . 671, 674, 676, 677
s 196 . . . 464 s 261(3) . . . 673
ss 197–​214 . . . 464 s 262 . . . 672
s 197(5) . . . 464 s 263 . . . 577, 671, 677
s 198 . . . 464 s 263(2) . . . 656, 671, 674, 675, 679, 681, 683,
ss 198–​203 . . . 464 684, 691
s 201 . . . 464 s 263(2)(a) . . . 674, 678, 682
ss 204–​209 . . . 464 s 263(2)(b) . . . 674, 675, 685
s 205 . . . 462 s 263(2)(c) . . . 675, 685
s 207 . . . 464 s 263(3) . . . 671, 674, 675, 676, 677, 683, 691
s 213 . . . 464, 468 s 263(3)(b) . . . 675, 677, 678, 692
s 213(3)(a) . . . 468 s 263(3)(f) . . . 683, 689, 691, 692, 702
s 213(3)(b) . . . 468 s 263(4) . . . 671, 674, 675, 676, 677, 693
s 214 . . . 464 s 263(e) . . . 685
ss 215–​222 . . . 309, 464 s 264 . . . 672
s 222 . . . 309 s 268 . . . 677
s 223(1)(a) . . . 284 s 271 . . . 282
xxiv

xxiv   Table of statutes

s 273 . . . 282 s 340 . . . 211, 212, 214

s 275 . . . 299, 755 s 340B . . . 214
ss 277–​279 . . . 299 s 341 . . . 212
s 281 . . . 202 ss 355–​359 . . . 212
s 281(2) . . . 202 s 357 . . . 23, 24, 204
s 281(3) . . . 202 s 360A . . . 212
s 281(4)(a) . . . 202 s 360B . . . 213, 214
s 282 . . . 202, 203, 212 s 366 . . . 136, 465
s 283 . . . 93, 202, 231, 583, 587 s 381 . . . 756
s 284 . . . 202 s 384A . . . 752
s 288 . . . 21, 221 s 384B . . . 752
ss 288–​300 . . . 202 s 385 . . . 763
s 288(3)(a)–​(b) . . . 204 s 394 . . . 752
ss 290–​297 . . . 204 s 399 . . . 52, 752
s 291 . . . 204 s 412 . . . 284
ss 292–​295 . . . 214 s 414A . . . 756
s 292(5) . . . 204 s 414C . . . 358, 756
s 293(3) . . . 686 s 414C(1) . . . 358
s 294 . . . 214 s 415 . . . 327, 492, 752
s 295(4) . . . 383 s 416 . . . 756
s 300 . . . 202 s 417 . . . 358
s 301 . . . 210 s 420 . . . 752
s 302 . . . 208 s 422A . . . 291
s 305 . . . 208 ss 423–​424 . . . 755, 756
s 305(4) . . . 217 s 437 . . . 212
s 306 . . . 205, 208, 210, 302 s 439 . . . 291
s 306(4) . . . 205 s 439A . . . 291
s 307 . . . 210, 212 s 441 . . . 752, 756
ss 307–​317 . . . 210 s 444 . . . 23
s 307(1) . . . 217 s 448 . . . 22
s 311 . . . 210, 212 ss 451–​453 . . . 756
s 311(2)–​(3) . . . 211 s 463 . . . 382
s 311A . . . 211 s 465 . . . 23
s 313 . . . 793 s 475 . . . 23, 482
s 314 . . . 211 s 476 . . . 482, 752
ss 314–​317 . . . 214 s 477 . . . 482, 752
s 315 . . . 211 ss 478–​479C . . . 482
s 317 . . . 211 s 480 . . . 482, 752
s 318 . . . 212 s 482 . . . 482
ss 318–​323 . . . 214 ss 485–​494 . . . 482
s 318(1) . . . 204 ss 495–​497 . . . 752
s 318(3) . . . 204 ss 495–​509 . . . 482
s 319 . . . 212 s 496 . . . 492
ss 320–​322 . . . 465 s 507 . . . 485
s 321(2) . . . 203 s 510 . . . 202, 482, 483
s 322(3)(a) . . . 467 ss 510–​526 . . . 482
s 322A . . . 212, 203 s 511 . . . 210, 482
s 323 . . . 212 s 515 . . . 210
s 324 . . . 196, 212 s 532 . . . 376, 483
ss 324–​330 . . . 212 ss 532–​538 . . . 482
ss 324–​331 . . . 214 s 534 . . . 483, 492
s 324A . . . 212 ss 534–​536 . . . 376
s 327 . . . 212 s 536 . . . 483
s 333 . . . 212, 251 s 540 . . . 512, 599
s 334 . . . 212, 587 s 542 . . . 509
s 335 . . . 587 s 542(3) . . . 509
s 336 . . . 212 s 544 . . . 599
s 336(1) . . . 212 s 546 . . . 509
s 337 . . . 212 s 547 . . . 510
s 338 . . . 211, 212 s 549 . . . 515
ss 338–​340B . . . 214 ss 549–​551 . . . 515
s 338A . . . 211 s 550 . . . 515
s 339 . . . 211 s 550(b) . . . 515
xxv

Table of statutes   xxv

s 551(1) . . . 342, 348 s 656 . . . 212, 514, 535

s 552 . . . 525 s 658 . . . 534, 542, 543
s 553 . . . 525 s 659 . . . 543
s 555 . . . 515 s 662 . . . 543
s 558 . . . 509 s 670 . . . 546
s 560 . . . 512, 515 s 677 . . . 547, 548, 550, 553
ss 560–​577 . . . 342, 515 s 677(1)(a)–​(c) . . . 549
s 561 . . . 806 s 677(1)(d) . . . 549
ss 564–​577 . . . 515 s 678 . . . 546, 547, 548, 550, 553, 555, 558, 559,
ss 569–​571 . . . 202 561, 562, 563, 564, 573
ss 578–​579 . . . 767 s 678(2) . . . 548, 549, 555, 558
s 582 . . . 528 s 678(2)(a) . . . 555
s 583(3) . . . 530 s 678(2)(b) . . . 556
ss 584–​587 . . . 530 s 678(3) . . . 547
s 585(1) . . . 530 s 678(4) . . . 548, 549
s 586 . . . 514 s 678(4)(a) . . . 557
s 587(1) . . . 530 s 679(2) . . . 548
s 588 . . . 530, 605 s 679(4) . . . 548
s 593 . . . 530, 531, 532, 752 s 680 . . . 558, 564
ss 593–​609 . . . 530 s 681 . . . 521, 543, 549
s 593(1)(c) . . . 531 s 682 . . . 549
s 593(3) . . . 531 s 684 . . . 533, 543, 581
s 594 . . . 530 s 684(4) . . . 581
s 594(1)–​(3) . . . 530 s 685 . . . 543
s 595 . . . 530 ss 685–​689 . . . 543
s 597 . . . 752 s 686 . . . 543
s 598 . . . 531, 752 s 687 . . . 544
ss 598–​599 . . . 530, 531 s 688 . . . 544
ss 598–​604 . . . 498 s 690 . . . 544
s 599 . . . 531 s 691(1) . . . 544
s 602 . . . 752 s 691(2) . . . 544
s 603 . . . 530 s 691(3) . . . 545
s 605 . . . 530 s 692 . . . 545
s 606 . . . 531 s 692(1ZA) . . . 545
s 610 . . . 510, 529 s 693A . . . 544
s 611 . . . 510 s 694 . . . 544
ss 611–​613 . . . 529 s 695 . . . 246, 544
s 612 . . . 510 s 697 . . . 544
s 614 . . . 529 s 698 . . . 544
s 616 . . . 621 s 700 . . . 544
s 617 . . . 259 s 701 . . . 544
ss 626–​640 . . . 187 s 702 . . . 755
s 629 . . . 581 s 704 . . . 544
s 629(1) . . . 588 s 705 . . . 545
s 630 . . . 535, 539, 541, 568, 587, 588, 589, 787 s 706 . . . 554
s 630(3) . . . 587, 588 s 709 . . . 544
s 630(5) . . . 588 ss 709–​723 . . . 544
s 630(6) . . . 535, 539, 588 s 716(1) . . . 202
s 631 . . . 587, 589 s 717 . . . 246
s 633 . . . 203 s 721 . . . 203
s 641 . . . 533 s 724 . . . 555
s 641(1) . . . 202 ss 726–​731 . . . 545
s 641(1)(a)–​(b) . . . 535 s 733 . . . 544, 545
s 641(2A) . . . 786 s 735 . . . 524, 867
s 641(4) . . . 535 s 738 . . . 622
s 641(6) . . . 535 s 743 . . . 755
ss 642–​644 . . . 535 s 755 . . . 765
s 645 . . . 535 s 756 . . . 765
ss 645–​651 . . . 535 ss 757–​759 . . . 765
s 645(2)(b) . . . 535 s 760 . . . 765
s 645(3) . . . 535 s 761 . . . 21, 514
s 653 . . . 515 s 763 . . . 21, 514
s 655 . . . 524 s 765 . . . 509, 514
xxvi

xxvi   Table of statutes

s 768 . . . 600, 605 s 859H . . . 629, 636

s 770 . . . 600 s 859H(3) . . . 629
s 771(1) . . . 601, 603 s 859H(4) . . . 629
s 775 . . . 117, 605, 608 s 859I(4) . . . 628
s 775(3) . . . 600 s 859I(6) . . . 628
s 775(4) . . . 608 s 859L . . . 630
s 775(4)(b) . . . 601 s 859M . . . 629
s 779 . . . 512, 599 s 859Q . . . 630
s 779(4) . . . 512, 599 s 859R . . . 630
s 790A . . . 753 s 860 . . . 627
ss 790A–​790ZG . . . 753 s 871 . . . 752
s 790C(10) . . . 753 s 874 . . . 629, 866
s 790D . . . 754 ss 876–​877 . . . 755
s 790E . . . 754 s 894(1) . . . 627
s 790F . . . 754 s 895 . . . 52, 599, 785, 786, 791, 812
s 790G . . . 754 ss 895–​901 . . . 779, 783, 784, 812
s 790H . . . 754 s 896 . . . 786, 787
s 790I . . . 754 s 899 . . . 784, 785, 793
s 790M . . . 753 s 899(2)(c)–​(d) . . . 784
s 790O(4) . . . 754 s 900 . . . 793, 871
s 790P . . . 754 s 900(2)(e) . . . 793
s 790R . . . 754 ss 936–​937 . . . 781
s 790U(1) . . . 753 ss 943–​946 . . . 798
s 793 . . . 352, 761 s 954 . . . 808
s 794 . . . 760, 761 s 955 . . . 808
s 795 . . . 761 ss 966–​972 . . . 801
ss 797–​802 . . . 761 s 974 . . . 786, 787
s 799 . . . 727 s 977(2) . . . 787
s 801 . . . 761 s 979 . . . 339, 780, 802, 803, 804, 805, 806
s 803 . . . 761 s 983 . . . 780, 802
s 808 . . . 755, 761 s 986 . . . 803, 805, 806
s 809 . . . 755 s 988 . . . 787, 805
s 820 . . . 761 s 992 . . . 801
s 821 . . . 761 s 993 . . . 853
s 823 . . . 761 s 994 . . . 195, 209, 223, 242, 243, 255, 261, 269,
s 824 . . . 761 303, 328, 374, 385, 399, 402, 408, 482, 483,
s 829 . . . 565, 572 508, 527, 566, 614, 618, 666, 668, 671, 675,
s 829(2)(a) . . . 572 679, 686, 689, 690, 691, 692, 693, 701, 715,
s 830 . . . 566, 568, 573 716, 717, 718, 719, 721, 722, 723, 725, 731,
s 830(1) . . . 565 749, 835, 846, 849, 850
s 830(2) . . . 565 ss 994–​996 . . . 719
s 831 . . . 566 s 994(1) . . . 717, 720
s 831(1) . . . 566 s 994(1A) . . . 482
s 832 . . . 566 s 994(1)(a)–​(b) . . . 720
s 833 . . . 565, 566 s 994(2) . . . 717, 918
s 845 . . . 567 s 995 . . . 718, 771
ss 845–​846 . . . 567 s 996 . . . 482, 701, 715, 726, 746
s 847 . . . 567, 568 s 996(1)–​(2) . . . 715, 725
s 854 . . . 756 s 996(2)(c) . . . 690, 691, 692
ss 854–​856A . . . 752 s 1000 . . . 135, 872
s 858 . . . 752, 756 s 1001 . . . 871, 872
s 858(1) . . . 756 s 1003 . . . 871
s 859A . . . 620, 627, 628, 634, 636, 638, 661, 662 ss 1004–​1010 . . . 872
s 859A(2) . . . 628 s 1012 . . . 871
s 859A(6) . . . 627, 628 s 1024 . . . 872
s 859B . . . 627 ss 1024–​1034 . . . 872
s 859C . . . 628 s 1029 . . . 872
s 859D . . . 630 s 1029(2) . . . 872
s 859D(2)(c) . . . 629, 630, 638 s 1030(1) . . . 872
s 859E . . . 628 s 1031(1)(c) . . . 872
s 859F . . . 627, 628, 629 s 1035 . . . 771
s 859F(2) . . . 629 ss 1035–​1039 . . . 770
xxvii

Table of statutes   xxvii

s 1061 . . . 752 s 3 . . . 310

s 1064 . . . 754 s 4 . . . 310
s 1077 . . . 499, 754, 755 s 5 . . . 310
s 1078 . . . 752 s 6 . . . 309, 310, 312, 313, 315, 316, 317, 318,
s 1078(3) . . . 499 376, 871
s 1079 . . . 755, 852 s 6(1)(a) . . . 319
s 1079B . . . 296 s 7(2) . . . 312
s 1080 . . . 752 s 7(2A) . . . 311
s 1095 . . . 296 s 7(3) . . . 871
s 1112 . . . 753 s 7A . . . 813, 871
s 1116 . . . 755 s 7A(1) . . . 871
s 1116(5) . . . 755 s 7A(4) . . . 871
s 1139 . . . 185 s 7A(10) . . . 871
s 1150(2) . . . 510 s 8 . . . 309, 310, 312, 771
s 1157 . . . 214, 379, 431, 460, 461, 464, 570, s 8(2A) . . . 311
571, 853 s 8ZA . . . 310
s 1159 . . . 24, 297, 546 s 9A . . . 310, 310
s 1166 . . . 544, 582 s 10 . . . 310
s 1176 . . . 771 s 12C . . . 310
s 1214 . . . 781 ss 15A–​15C . . . 311, 385
s 1266 . . . 759, 760 s 17 . . . 317, 318
s 1268 . . . 760 s 18 . . . 311
s 1270 . . . 760 Sch 1 . . . 310
s 1282 . . . 833 Competition Act 1998 . . . 183
s 1289 . . . 5
s 1290 . . . 5 Contracts (Rights of Third Parties) Act
s 1292(1) . . . 627 1999 . . . 134, 257, 264
Sch 1A . . . 753 s 1(3) . . . 134
Sch 1B . . . 754 s 6(2) . . . 264
Sch 6 . . . 297 Corporate Manslaughter and Corporate Homicide
Sch 10 . . . 482 Act 2007 . . . 147, 148
Companies Act 2007 s 1 . . . 147
s 171 . . . 261 s 18 . . . 147

Companies Acts 1862–​1893 . . . 30 Criminal Justice Act 1988 . . . 832

s 77 . . . 79
Companies Acts 1907–​1908 . . . 18
Criminal Justice Act 1993
Companies Acts 1928–​1929 . . . 18 Pt IV . . . 763
Companies Acts 1947–​1948 . . . 18 Pt V . . . 6, 53, 763, 769
Companies (Audit, Investigations and Community s 61(1)–​(2) . . . 769
Enterprise) Act 2004 s 63(2) . . . 769
Pt 2 . . . 23 Dentists Act 1878 . . . 28
s 35(2) . . . 23 Deregulation Act 2015 . . . 20
Companies Clauses Consolidation Act Deregulation and Contracting Out Act 1994 . . . 19
1845 . . . 5, 795
Employment Rights Act 1996
Companies (Consolidation) Act 1908 . . . 30, 649 s 98 . . . 163
Companies Consolidation (Consequential Enterprise Act 2002 . . . 661, 812, 813, 815, 817,
Provisions) Act 1985 . . . 6 824, 825, 833
Companies Securities (Insider Dealing) Enterprise and Regulatory Reform Act
Act 1985 . . . 6 2013 . . . 291, 752
Company Act 1985 . . . 190 Equality Act 2010 . . . 61
Company Directors Disqualification Act European Communities Act 1972 . . . 19
1986 . . . 4, 6, 53, 81, 290, 295, 298, 310, 311, s 9(1) . . . 106
315, 318, 328, 813, 854, 870 s 9(2) . . . 132, 135
s 1 . . . 317
ss 1–​5A . . . 310 Financial Services Act 1986 . . . 6, 18, 762, 799
s 1(1) . . . 311 Financial Services Act 2012 . . . 757, 758,
s 1(A) . . . 311 762, 763
s 1A(1) . . . 311 Pt 7 . . . 770
s 2 . . . 310 s 3 . . . 758
xxviii

xxviii   Table of statutes

Financial Services and Markets Act 2000 . . . 4, 6, s 6 . . . 812

520, 524, 758, 760, 762, 763, 764, 767, 835 s 8 . . . 813
Pt IV . . . 763 s 8(1) . . . 816
Pt VI . . . 764 s 8(1)(b) . . . 816
Pt VIII . . . 767, 769 s 8(2) . . . 820
s 1B . . . 762 s 8(3) . . . 815
s 1C . . . 762 s 14(1) . . . 820
s 1D . . . 762 s 15 . . . 663
s 1E . . . 762 s 29(2) . . . 824
s 77 . . . 764 s 37(1) . . . 823
s 85 . . . 764 s 39 . . . 823
s 85(3) . . . 764 s 40 . . . 627, 650, 824, 833
s 85(4) . . . 764 s 40(3) . . . 833
s 85(5)(a) . . . 765 s 42 . . . 824
s 85(5)(b) . . . 765, 766 s 43 . . . 824, 832
s 85(6)(b) . . . 765, 766 s 44 . . . 823, 824, 826
s 86(1)(a) . . . 765 s 44(1) . . . 826
s 86(1)(b) . . . 765 s 44(1)(a) . . . 825, 826
s 86(1)(c) . . . 765 s 44(1)(b) . . . 825
s 86(1)(d) . . . 765 s 44(1)(c) . . . 825, 826
s 86(7) . . . 765 s 44(2) . . . 825, 826
s 87 . . . 765 s 44(2)(a) . . . 124
s 87A . . . 765, 766 s 44(2A)–​(2D) . . . 825
s 87G . . . 765, 766 s 44(2)(b) . . . 124
s 87G(3A) . . . 765 s 45(2) . . . 824
ss 87K–​87M . . . 766 s 47 . . . 824, 870
ss 89A–​89G . . . 759 s 48 . . . 824
s 89F . . . 760 s 72A . . . 824
ss 89K–​89L . . . 760 ss 72A–​72EA . . . 626
s 90(1) . . . 766, 767 ss 72B–​72EA . . . 626
s 90(4) . . . 766, 767 ss 72B–​72H . . . 825
s 90A . . . 760 s 74 . . . 2
s 90B . . . 760 s 74(2)(f) . . . 867
s 91 . . . 764, 766 s 76 . . . 866
s 97 . . . 764, 766 s 79 . . . 584, 835
s 118 . . . 769 s 84 . . . 834
s 118B . . . 769 s 84(1) . . . 203
s 118C(5)(a) . . . 770 s 84(1)(b) . . . 841
s 123 . . . 768 s 86 . . . 851
s 130A . . . 769 s 88 . . . 852
s 131 . . . 768 s 89 . . . 834
s 168(3) . . . 771 s 90 . . . 834
s 381 . . . 768 s 90(2) . . . 834
s 382 . . . 760 s 91 . . . 834
ss 383–​384 . . . 768 s 94 . . . 871
s 397 . . . 769 s 96 . . . 834
s 402 . . . 769 s 99 . . . 870
Sch 10 . . . 767 s 106 . . . 871
Sch 11A, para 9 . . . 765 s 107 . . . 783, 868
Human Rights Act 1998 . . . 16, 54, 55, 713, 793, 795 s 110 . . . 779, 780, 781, 783, 784, 795
s 110(3)(b) . . . 781
Income and Corporation Taxes Act 1988 s 111 . . . 779, 780, 781, 782, 783, 794
s 765(1) . . . 56 s 115 . . . 832, 867
Industrial and Provident Societies Act 1965 . . . 1 s 118 . . . 870, 871
Insolvency Act 1985 . . . 18 s 122 . . . 195, 835, 838
s 122(1) . . . 835, 870
Insolvency Act 1986 . . . 4, 6, 16, 18, 328, 376,
s 122(1)(f) . . . 626, 811, 835
547, 621, 717, 811, 813, 820, 834, 850, 851,
s 122(1)(g) . . . 223, 599, 666, 701, 719,
853, 854, 855, 870
835, 846
Pt I . . . 784, 795, 812
s 122(2) . . . 599
Pt II . . . 795, 813
s 123 . . . 835, 838
Pt III . . . 823
s 123(1) . . . 811
ss 1–​7 . . . 812
s 123(1)(a) . . . 626
xxix

Table of statutes   xxix

s 123(1)(a)–​(d) . . . 840 s 237 . . . 870

s 123(1)(e) . . . 840 s 238 . . . 290, 573, 852, 854, 857, 858, 859,
s 123(2) . . . 811, 840 863, 866, 867
s 124 . . . 668, 835, 838, 840 ss 238–​241 . . . 647, 852
s 124(2)–​(3) . . . 835 s 238(4) . . . 859, 860
s 124(2)–​(4A) . . . 837 s 238(5) . . . 860
s 124(4) . . . 835 s 239 . . . 573, 627, 852, 854, 857, 858, 863,
s 124A . . . 71, 835 866, 867
s 125(2) . . . 726, 846, 850 s 239(6) . . . 852
s 127 . . . 852, 855, 856, 857, 863, 866 s 240 . . . 866
s 128 . . . 852, 866 s 240(1)(a) . . . 852
s 129 . . . 852 s 241 . . . 853
s 130 . . . 826 s 242 . . . 857
s 131 . . . 870 s 243 . . . 867
s 132(1) . . . 871 s 245 . . . 573, 627, 646, 648, 650, 852, 866
s 133 . . . 870 s 245(2) . . . 650
s 135 . . . 835 s 245(3)(a) . . . 852
ss 136–​137 . . . 810 s 245(4) . . . 852
s 145 . . . 850 s 246 . . . 870
s 156 . . . 832, 867 s 246ZA–​ZC . . . 817
s 160 . . . 851 s 246ZB . . . 267
s 165 . . . 851 s 249 . . . 852
s 167(1) . . . 52 s 249(2) . . . 852
s 172(8) . . . 871 s 251 . . . 298, 650
s 175 . . . 656, 812, 852, 867 s 386 . . . 833, 852, 867
s 175(2)(a) . . . 867 ss 388–​389 . . . 824
s 175(2)(b) . . . 627, 657, 833 s 423 . . . 68, 290, 573, 863, 867
s 176A . . . 627, 824, 833, 867 s 423(3) . . . 604
s 176A(3)(a) . . . 833 s 426 . . . 16
s 176A(4) . . . 833 s 435 . . . 647, 852
s 176A(5) . . . 833 Sch 1 . . . 817, 820, 824, 863
s 176ZA . . . 627, 833 para 14 . . . 777
s 178 . . . 851, 866 Sch 4 . . . 52, 851, 863
s 183 . . . 852, 866 Sch 6 . . . 812, 833, 852, 867
s 184 . . . 852 paras 8–​12 . . . 627
s 187 . . . 190 Sch A1 . . . 784, 795, 812
s 189 . . . 867 para 43 . . . 813
s 197ZA . . . 866 Sch B1 . . . 813
s 201 . . . 790, 871 para 3(1) . . . 813
s 202 . . . 871 para 3(2) . . . 814, 825
s 205 . . . 871 para 4 . . . 814
s 212 . . . 251, 369, 378, 571, 573, 820, 851, 853, para 5 . . . 825
863, 866 para 11(a)–​(b) . . . 815, 817
s 212(3) . . . 820, 853 para 14 . . . 825
s 213 . . . 310, 853, 854, 861, 866, 867 para 42 . . . 818
ss 213–​215 . . . 817 para 43 . . . 818
s 214 . . . 290, 310, 320, 367, 370, 376, 379, para 55 . . . 817
385, 573, 853, 854, 860, 861, 863, 866, 867 para 59 . . . 817
s 214(1) . . . 854, 862 para 59(1) . . . 817
s 214(2) . . . 860 para 60 . . . 817
s 214(3) . . . 862 para 64 . . . 821, 824
s 214(4) . . . 378, 853, 861 para 65(2) . . . 627
s 216 . . . 298, 854 para 69 . . . 775
s 216(3) . . . 854 para 70 . . . 627
s 217 . . . 298, 854 paras 70–​71 . . . 817
s 230(3) . . . 850 para 71 . . . 627, 820, 821
s 231 . . . 573 para 74 . . . 715
s 233 . . . 822 para 75 . . . 853
s 233A . . . 822 para 76 . . . 821
s 234 . . . 870 paras 79–​83 . . . 821
s 234(1) . . . 870 para 84 . . . 871
s 235 . . . 870 para 99 . . . 821
s 236 . . . 777, 851, 870 para 99(3)–​(4) . . . 821
xxx

xxx   Table of statutes

Insolvency Act 1994 Small Business, Enterprise and Employment Act

s 2 . . . 827 2015 . . . 20, 295, 385, 752, 753, 813, 817
Insolvency Act 2000 . . . 812 s 7(3) . . . 871
s 33 . . . 23
Insolvency Act 1986 s 84 . . . 599
Sch B1 s 87 . . . 295, 310, 331
para 99 . . . 627 s 94 . . . 755
Interpretation Act 1978 . . . 53 s 100 . . . 25
s 5 . . . 53 s 101 . . . 296
Sch 1 . . . 53 s 102 . . . 296
Joint Stock Companies Act 1856 . . . 5, 27 s 105 . . . 310
s 108(1) . . . 312
Joint Stock Companies Arrangement Act
s 110 . . . 311
1870 . . . 213
Stock Transfer Act 1982 . . . 600
Law of Property Act 1925 . . . 54, 270
s 53(1)(c) . . . 124 Trade Descriptions Act 1968 . . . 155
ss 85 87 . . . 624 s 24(1) . . . 87, 155
Law of Property (Miscellaneous Provisions) Act 1989 Trade Union and Labour Relations
s 2(1) . . . 124 (Consolidation) Act 1992
s 10(3) . . . 28
Law Reform (Contributory Negligence) Act
s 1(1) . . . 178 Trading with the Enemy Act 1939
s 2 . . . 58
Limitation Act 1980 . . . 851
s 2 . . . 449 Trustee Act 1925
s 5 . . . 449 s 3(2)(a) . . . 483
s 21(1) . . . 433, 434 s 61 . . . 569
s 21(1)(a) . . . 434, 449 s 68(7) . . . 569
s 21(1)(b) . . . 446, 449 Unfair Contract Terms Act 1977
s 21(2) . . . 434, 450 s 2(2) . . . 483
s 21(3) . . . 434, 449
s 36 . . . 434 AUSTRALIA
Limited Liability Partnerships Act 2000 . . . 1, 25, 492
Corporations Act 2001
Lotteries Act 1823 . . . 29 s 236(3) . . . 696
s 41 . . . 29
Matrimonial Causes Act 1973 CANADA
s 24(1) . . . 65
s 37 . . . 68 Charter of Rights and Freedoms
Merchant Shipping Act 1894 s 2(a) . . . 55
s 502 . . . 88, 149
EUROPEAN UNION
Merchant Shipping Act 1988 . . . 61
Misrepresentation Act 1967 . . . 504, 523 EC Treaty
s 2(1) . . . 520, 524 Art 43 . . . 56
s 2(2) . . . 520 Art 52 . . . 14, 15, 62
Art 54(3)(g) . . . 11
Partnership Act 1890
Art 58 . . . 11, 14, 15
s 35 . . . 847
Art 189 . . . 9
Pensions Act 2004 . . . 821 Art 251 . . . 8
Pharmacy Act 1868 . . . 53 Treaty on the Functioning of the European
Prevention of Fraud (Investments) Act 1939 . . . 18 Union . . . 7
Prevention of Fraud (Investments) Act 1958 . . . 757 Treaty of Lisbon . . . 7
Registered Homes Act 1984 . . . 554
Regulatory Reform Act 2001 . . . 20 GREECE
Restrictive Trade Practices Act 1976 . . . 88 Law No 1386/​1983 . . . 10
s 176 . . . 386, 426
Sale of Goods Act 1979 . . . 4 INTERNATIONAL
s 49 . . . 662
European Convention on Human Rights . . . 16
Serious Crime Act 2007 Art 6 . . . 55, 777, 778
Pt 2 . . . 148 Protocol 1, Art 1 . . . 793, 794
xxxi

Table of statutes   xxxi

OECD Convention on Combating Bribery of SPAIN

Foreign Public Officials in International
Business Transactions 1999 . . . 443 Civil Code . . . 9
s 20 . . . 88
UN Convention against Corruption 2003 . . . 443 s 20(3) . . . 88
UNCITRAL Model Law . . . 16, 870 s 20(4)(e) . . . 88
Art 16(3) . . . 16 Workers’ Compensation Act 1922 . . . 45

NEW ZEALAND USA

Securities Amendment Act 1988 . . . 85 Uniform Commercial Code
s 20 . . . 88 Art 9 . . . 631
s 20(3) . . . 88
s 20(4)(e) . . . 88
xxxii

Table of secondary legislation

UK Art 16 . . . 300
Art 17 . . . 299
Civil Procedure (Amendment) Rules 2007 Art 18 . . . 299
(SI 2007/​2204) Art 21 . . . 300
r 21 . . . 671 Art 29 . . . 212
Civil Procedure Rules 1998 (SI 1998/​ Art 49 . . . 601
3132) . . . 185, 671 Art 63(5) . . . 601
r 19.6 . . . 666, 702 Companies (Northern Ireland) Order 1986
r 19.9–​19.9F . . . 671 (SI 1986/​1032)
rr 73.11–​73.21 . . . 613 Art 131 . . . 259
rr 73.16–​73.21 . . . 613
Companies (Shareholders’ Rights) Regulations
Companies Act 2006 (Amendment of Part 25) 2009 (SI 2009/​1632) . . . 211
Regulations 2013 (SI 2013/​600) . . . 627
Companies (Tables A to F) (Amendment)
Companies Act 2006 (Commencement No 3 Regulations 2008 (SI 2008/​739) . . . 190, 191
Consequential Amendments, Transitional
Provisions and Savings) Order 2007 EEIG Regulations 1989 (SI 1989/​638)
(SI 2007/​2194) Sch 1 . . . 12
Sch 3, para 17 . . . 686 European Economic Interest Grouping and
Companies Act 2006 (Commencement No 5, European Public Limited-​Liability Company
Transitional Provisions and Savings) Order (Amendment) Regulations 2014 (SI 2014/​
2007 (SI 2007/​3495) 2382) . . . 12
Art 2(6) . . . 12 Financial Collateral Arrangements (No 2)
Sch . . . 5 Regulations 2003 (SI 2003/​3226) . . . 619
para 2(1) . . . 212 Financial Markets and Insolvency (Settlement
para 2(5) . . . 212 Finality) Regulations 1999 (SI 1999/​
Companies Act 2006 (Consequential Amendments 2979) . . . 869
etc) Order 2008 (SI 2008/​948) . . . 784 Insolvency Act 1986, Section 72A (Appointed
Companies Act 2006 (Strategic Report and Date) Order 2003 (SI 2003/​2095) . . . 824
Directors’ Report) Regulations 2013 Insolvency Act 1986 (Prescribed Part) Order 2003
(SI 2013/​1970) . . . 282, 757 (SI 2003/​2097)
Companies (Model Articles) Regulations 2008 Art 3 . . . 833, 867
(SI 2008/​3229) . . . 188 Insolvency (Protection of Essential Supplies)
Art 6 . . . 94 Order 2015 (SI 2015/​989) . . . 822
Sch 1 Private companies limited by
shares . . . 188 Insolvency Rules 1986 (SI 1986/​1925) . . . 206,
Art 3 . . . 90, 191 812, 850
Art 4 . . . 90, 191 r 1.5 . . . 870
Art 5 . . . 94 r 2.67 . . . 821, 822
Art 6 . . . 90 r 4.218 . . . 867
Art 8 . . . 299, 300, 305 r 7.62 . . . 834
Art 10 . . . 299 Insolvent Companies (Reports on Conduct of
Art 14 . . . 300 Directors) Rules 1996 (SI 1996/​1909)
Art 17 . . . 295 r 4 . . . 871
Art 20 . . . 295 Large and Medium-​sized Companies and Groups
Art 21 . . . 295 (Accounts and Reports) (Amendment)
Art 25 . . . 601 Regulations 2013 (SI 2013/​1981) . . . 291
Art 26(5) . . . 601
Limited Liability Partnerships (Application of
Art 37 . . . 212
Companies Act 2006) Regulations 2009
Art 44(2) . . . 203
(SI 2009/​1804) . . . 25
Art 45 . . . 212
Sch 2 Private companies limited by Limited Liability Partnerships (Transitional
guarantee . . . 188 Provisions and Savings) (Amendments)
Sch 3 Public companies . . . 188 Regulations 2009 (SI 2009/​2476)
Art 9 . . . 299 reg 2(1) . . . 27
Another random document with
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 one pace
forward.
even
numbers
one pace
step back.
—march.

number The odd numbers, with the exception of

one stand Number One, will turn to the right, the even
fast. numbers to the left.
ranks,
right and
left—
turn.

The whole will step off, the even numbers

wheeling round to the right and following the left
hand man of the odd numbers. No. 3 will form up
form two paces in rear of No. 1; No. 5 on the left of No.
company. 1; No. 7 in rear of No. 5; No. 9 on the left of No.
quick 5, and so on. The leading men of the even
march. numbers will always form in the rear rank and the
next man in the front rank. As the men arrive in
their places they will turn to the left, order arms,
and take up their dressing.

186. A Company in line saluting.[10]

fix— On the command present arms, the company
bayonets. commander will recover his sword with the first
slope— motion of the rifles, and at the third motion his
arms. sword will be smartly lowered to the salute, point
general to be twelve inches from the ground and directed
salute. to the front, edge to the left; the arm to be straight,
present hand just behind the thigh, the thumb flat on the
—arms. handle of the sword. The supernumerary rank and
 outer section commanders present arms with the
men.

The company commander will recover his

slope— sword with the first, carry with the second motion
arms. of the rifles. Swords will be sloped when the men
order arms.
Arms will then be ordered and bayonets unfixed.

187. A Company marching past.

For this practice the company will be formed as a company in line;
arms will be at the Order.
Four points, numbered 1, 2, 3, and 4 (Plate VIII), will be placed
marking the angles of an oblong, of which the long sides will be one
hundred paces in length, and the short sides forty.
The company will be in the centre of one of the long sides; the
side opposite to the saluting base.
A point, termed the saluting point, will be placed ten paces outside
the centre of the saluting base, turned towards the company; and a
point, lettered “A,” turned in like manner, on the saluting base, at ten
paces to the left of the saluting point. As a rule all these points
should be marked by camp colours.
 PLATE VIII.

A Company Marching Past.

fix— The company will step off, and will change
bayonets. direction to the left round the first point.
slope—
arms.
march
past.
form—
fours,
right. by
the left,
quick—
march,
left—
wheel.

company When the right of the company arrives on the

—halt, saluting base, the commander will order it to halt,
left left turn, and right dress, when it will be
turn. dressed by the right section commander.
right—
dress,
eyes—
front.

The commander, posted as in line, i.e., three

paces in front of the centre of the company, will
then give the command by the right, quick—
march. On reaching the point “A” he will give
eyes—right, upon which all, except the right
section commander, will turn their heads and eyes
by the well to the right, looking the inspecting officer in
right, the face, and the commander will salute in four
quick— paces, thus:—The sword is raised by extending
march. the arm to the right, and by a circular motion
eyes— brought to the Recover; then continuing the
right. motion to the right shoulder, from whence the
sword is lowered to the same position as for the
salute when the men present arms. These four
motions are to be combined into one easy
movement, the salute being completed in four
paces. The head will be turned towards the
reviewing officer.

When the company is ten paces beyond the

saluting point the commander will give eyes—
eyes— front upon which all will turn their heads and
front. eyes to the front, and the commander will Recover
his sword, make a pause of a pace, and then
come to the Carry.
 Officers will never salute more than once in marching past, except
when practising the salute.
The company, if required to resume its position on the original
alignment, will be moved there from the second or third point in any
convenient formation.

Reviews.
188. Formations to be practised.
Battalions that do not execute the formations for savage warfare
will, before taking part in reviews, practise forming line from quarter
column, S. 109 (1), quarter column from line, S. 112 (1), also
advancing in line, S. 110.

189. The Colours.

1. On all ceremonial parades the following rules as to the carrying
of Colours will be observed. When at the halt, Colours will never be
sloped; they will be carried at the Carry or the Order, according as
the troops are at the Slope or the Order.
When on the move Colours will always be carried at the Slope,
except when on the saluting base, when advancing in review order,
and when marching in slow time down the ranks whilst trooping the
Colour, they will then be at the Carry.
At the Carry the Colour staff will be carried perpendicularly in the
belt, which will be worn over the left shoulder; the corner of the
Colour will be held in the right hand, which will also grasp the staff
level with the forehead.
When at the Order the Colours will then be placed perpendicularly
on the ground at the right side.
2. The Colours will be let fly:—
As the caution is given for a Royal or general salute, and in marching
past on reaching point “A.”
The Colours will be lowered:—
 To those entitled to the compliment, as the men present arms. (See K.
R. 45.)
3. Mounted officers, with swords drawn, in passing uncased
Colours, will remain at the Carry, turning the head, and glancing
towards the Colours until they have passed them. If at the Slope they
will Carry while passing the Colours, returning afterwards to the
Slope. Officers whose swords are not drawn will salute the Colours
with the right hand. Cased Colours will not be saluted.

190. Review of a battalion.

1. Formation.—The battalion will be drawn up in line as in Plate
IX; bayonets will be fixed and arms sloped.
When the colonel of the regiment is present he will be ten paces
in front of the officer commanding the battalion. Should the colonel-
in-chief be also present, he will be ten paces in front of the former.

2. Receiving the reviewing officer.

When the reviewing officer reaches a point about
sixty paces in advance of the centre of the battalion,
he will be received with a salute, the men
general
presenting arms, the band playing the first part of a
salute.
slow march, and the drums beating. Mounted
present
officers will salute in the same manner and time as
—arms.
the company commanders, except that at the
Salute the blade of the sword will be kept in line
with the knee, hand directly under the shoulder.

slope—
arms.
 PLATE IX.

A Battalion in Line.
 A Battalion in Column.

3. Receiving the Sovereign, or a Royal Personage.

royal As in preceding paragraph (see also S. 189),
salute. but the band will play the National Anthem, or
present— the first six bars of it (see K. R. 45).
arms.

slope—
arms.
 4. Inspection in line.
The reviewing officer, accompanied by the commanding officer of
the battalion, who will ride on the side further from the troops, will
then pass down the line from right to left, returning along the rear,
the men standing with sloped arms.
The band will play a march until he returns to the right of the line.
The reviewing officer will then give orders for the march past.

5. Inspection in column. (Plate X.)

When a battalion is reviewed in column, the reviewing officer will
be received as in S. 190 (2) or (3); he will then inspect the companys
in column, each company commander receiving him with a salute,
and following him during the inspection of his company, the men
standing with sloped arms and bayonets fixed. After the inspection of
the company, the commander will unfix bayonets and stand at ease.

191. Battalion marching past.

1. Points will be placed on the principles described in S. 187; the
points marking the saluting base will be covered in a line at a
convenient distance from the saluting point.
2. In Column.—Bayonets having been fixed, and quarter column
by the right having been formed on No. 1, the battalion will move to
the right in fours; on reaching the first point it will wheel a quarter
circle to the left, moving on as soon as the change is completed; it
will be halted and turned to the left on the saluting base by the
commanding officer. The right section commanders will turn about
and be covered by the adjutant, and on the commanding officer’s
order battalion, right—dress, they will dress their companies,
and give the word Eyes—Front.
advance in
The commanding officer will give the caution
column by
to advance in column.
the right.

No. 1. By The commander of No. 1 will then march it

 the Right, off, the remaining companies following in
Quick— succession at company distance, and acting as
March. in S. 187.
3. In quarter column.—If the battalion be required to march past in
quarter column, the leading company will be halted when it has
moved to forty-five paces beyond the third point. Quarter column will
be formed by order of the second in command, who will superintend
the covering.
The column will change ranks, order arms, and on the command
left dress, the directing section commanders will step back two
paces, aligning themselves with the rear rank, and the company
commanders will take post on the left of the front rank, and the
companies will dress by the left.
The battalion will then be ordered to slope arms and march past in
quarter column. The commanding officer will give the word eyes—
left when at ten paces from the saluting point, and eyes—front
when the rear company has passed the inspecting officer. Company
commanders will not look to the left.
If required to resume its position on the original alignment, the
battalion will be moved there from the second or third point in the
most convenient and quickest formation. As the battalion moves off
the saluting base, company commanders and section commanders
will resume their respective posts in quarter column.
4. Mounted Officers.—When marching past the inspecting officer,
the Commanding officer will be ten paces in front of the centre
section of the leading company nearer the saluting base, the second
in command in front of the other centre section in line with the
commanding officer. If the colonel of the regiment be present he will
be twenty paces in front of the centre of the leading company.
Should the colonel-in-chief be also present, he will be ten paces in
front of the colonel. The adjutant will follow ten paces behind the
centre of the rear company, if a third field officer is present he will be
ten paces behind the second section of the rear company, and the
adjutant ten paces in rear of the third section. All mounted officers
will commence their salute when they arrive at point “A.” The
commanding officer, after he has saluted, will move out and place
himself on the right of the inspecting officer, and remain there till the
battalion has passed; the second in command assuming command.
5. Mounted officers salute in marching past.—The salute will be
performed in four slow motions as follows:—
First: Carry the sword direct to the right to the full extent of the
arm, hand as high as the shoulder, back of the hand to the rear,
blade perpendicular.
Second: Bring the sword by a circular motion to the Recover,
keeping the elbow as high as the shoulder.
Third: Still keeping the elbow the height of the shoulder, bring the
hilt to the right shoulder, hand as high as the elbow; during this
motion let the finger nails come in line with the edge of the sword.
Fourth: Lower the sword to the front to the full extent of the arm,
the blade in line with the knee, edge to the left, thumb extended in
the direction of the point, hand directly under the shoulder.
The above four motions should be gradually and slowly combined
into one easy movement.
The head should be turned well towards the reviewing officer
whilst passing him, and ten paces beyond that officer, the sword is
Recovered, carrying it well to the front in doing so, and then brought
to the Carry.
When the sword is at the Carry, the position is with the hilt resting
on the right thigh, the blade perpendicular, the wrist rounded so as to
incline the edge slightly to the left, the grasp of the lower fingers
slightly relaxed, the little finger in rear of the hilt.
6. Officers to salute once only.—Officers, whether mounted or
dismounted, will salute only on the first occasion of marching past;
mounted officers only will salute when marching past in quarter
column.
7. Battalion staff officers.—The staff officers, excepting the
adjutant, do not march past, and will place themselves in rear of the
saluting point; but the assistant adjutant will march past with the
company to which he belongs.
8. Warrant officers and staff serjeants.—The serjeant-major will be
two paces in column, and one pace in quarter column, in rear of the
centre of the colour party; the staff serjeants will not be required to
march past. The bandmaster and serjeant drummer (carrying his
staff at the Trail, as he passes the saluting point), will salute with the
outer hand on the first occasion of marching past.
9. Drums and band.—For marching past, the band and drums (or
bugles) will move up to fifty paces in advance of the leading
company, both formed in two or more ranks. The band will
commence playing as soon as the leading company advances on
the saluting base. When it arrives in front of the saluting point it will
turn to the left, change direction to the right, and halt and turn to the
right opposite to the saluting point, continuing to play until the rear of
the battalion has passed. The band master will face the saluting
point.
10. In marching past signallers, who will be in the supernumerary
rank of their companies, will carry their flags at the Trail and their
rifles slung.
11. Machine guns, cyclist sections, and stretcher bearers will
march past five paces in rear of the battalion. Cyclist section nearest
the saluting base and on foot on the left of their cycles. Machine
guns in the centre, stretcher bearers on the outer flank. Should there
be more than one section, cyclists will march past in column of
sections ten paces behind the machine guns, &c.
12. Regimental transport.—Will march past twenty paces in rear
of the battalion, carts nearest the saluting base, mules in centre,
transport wagons on the outer flank.

192. A battalion advancing in review order.

If required, the battalion will be formed in line with bayonets fixed
and arms sloped, and on the command advance in review order,
quick—march, it will advance by the centre, the band and drums
playing till within thirty paces of the inspecting officer, when it will be
halted and ordered to salute in the same manner as when receiving
him; after which it will be directed to order arms, and will wait for
orders (see also S.] 189).

193. Review of a Brigade.

1. Formation.—The brigade may be formed with battalions in line
at any ordered interval, and proceed in the same manner as a single
battalion, or, in line of quarter columns, as in Plate XI, at any ordered
interval with bayonets fixed.
2. Receiving the reviewing officer in line of quarter columns.—
On the word March from their commanders,
officers colours will be brought to the Slope, the officers of
and each battalion will slope swords and will place
colours themselves three paces in front of the front rank of
will the leading company, sized from flanks to centre, at
take equal distances from each other, Colours in the
post in centre; officers of right companies moving out by
review the right flank, and of left companies by the left
order. flank, Colours by the directing flank. The second in
Officers command will be on their right, and the adjutant
and (and third field officer) on their left. The line of
Colours. officers will be dressed by the second in command
—Quick of the right battalion of the brigade. The
—March. commanding officer will be ten paces in front of the
leading company.
The brigadier will place himself forty paces in front of the centre of
his brigade; the brigade staff will be ten paces in rear of the
brigadier, the brigade major ten paces on the right, the a.d.c. or
orderly officer ten paces on the left.
As the reviewing officer approaches, the infantry will slope arms,
and he will be saluted, the men presenting arms the officers saluting,
Colours flying, and the bands playing. After the salute the infantry
will be ordered to slope arms, and the inspecting officer will go down
the line, accompanied by the brigadier on his outer hand.
officers and On the word Post, the officers of each
colours will take battalion will turn outwards from the
post. Officers and centre, the officers carrying the Colours
Colours take Post. turning to the directing flank, and on the
Quick —March. word March, the whole will move to their
places.

3. Inspection of a Brigade in line.

When troops are drawn up in line for review by an officer superior
to the brigadier, after the salute has been given, the brigadier,
accompanied by his staff, will post himself on that flank of his
command to which the inspecting officer repairs; he will receive him
and accompany him to the limit of his command; the brigade staff,
while passing down the line, will precede the brigadier by two horses’
length.

4. Drums and band.

When drums and bands are massed they will each be in four
ranks.
 PLATE XI.

Review of a Brigade.

194. A Brigade marching past.

1. Points will be placed on the principles prescribed for a battalion,
and the brigade will march past as the general officer commanding
may direct.
In column, from line of quarter columns.—On the
march caution from the brigadier, commanding officers will
past. order their battalions to form fours to the right, and
they will move off on his signal.
Each battalion in succession, when it reaches the first point, will
wheel to the left at the double by order of its commander, moving
forward and changing the time when it has advanced sufficiently not
to check the battalion in rear; when the leading battalion reaches the
saluting base, it will be halted, turned to the left, and dressed by the
right. The remaining battalions will form mass in rear of the leading
battalion, moving by the shortest lines.
The march past will be performed on the principles described in S.
191 (2).
2. In double companies.—When a brigade drawn up in line of
quarter columns is to march past in double companies, the following
method will be adopted:—The battalions will move to the right in
fours, and wheel to the left at the double, in succession, as they
reach the first point, receiving the word forward followed by quick
—march, when that pace will not check the battalion in rear. When
about half way to the second point, the first battalion will form double
companies, thus:—The commanding officer having given the
command quarter column of double companies, left
companies, mark time, left—incline, the left companies will mark
time, and the right companies will close when clear to quarter
column on No. 1, the left companies receiving the word Forward,
Right—Incline from their commanders so as to join the right. The
remaining battalions having formed double companies will move into
mass.
Each battalion will march past as directed for a battalion in
column, the word of command to each double company being given
by the company commander on the right. The double companies will
march off at company distance.
When the rear double company is twenty-five paces beyond the
saluting point the second in command will give the words left
companies, mark—time, right—incline, double, the officers
commanding those companies giving Left Incline, Quick—March By
the Right, when in column. The column will then be closed on the
march to quarter column; and the brigade will be closed to mass on
the leading battalion, which will have changed ranks, ordered arms
and dressed; each of the remaining battalions will act in like manner.
If the brigade is to return in mass, sufficient distance will be allowed
for the rear company of the rear battalion to reach the third point.
In mass of quarter columns.—If required, the brigade may then
return in mass.
When marching past in column or in column of double companies,
or in mass, thirty paces’ distance will be preserved between
battalions, &c., such distance to be reckoned from the last item of a
preceding battalion to the head of the commanding officer’s horse of
a following one.
In line of quarter columns.—The brigade may be formed into line
of quarter columns, with intervals of eight paces between battalions,
as follows: The leading battalion will advance till its rear company
reaches the required point on the saluting base, it will then be
ordered to halt, change ranks, order arms, and dress. As the rear of
each succeeding battalion arrives at twenty-five paces beyond the
saluting point, it will be moved by the diagonal march to its position
on the outer flank of the leading battalion in the new alignment.
Great care must be taken that the line of quarter columns is
dressed exactly at right angles to the saluting base before moving
off; the commanders of companies of the outer battalions looking
inwards and dressing on the corresponding companies of the
battalion nearest the saluting base.
In a brigade composed of battalions with an unequal number of
companies, the rear companies and Colour parties of the weaker
battalions are to be aligned with the rear companies and Colour
parties of the stronger.
Commanding officers will be ten paces in front of the centre of
their leading companies, all other mounted officers ten paces in rear
of their respective battalions, the whole dressing by the directing
flank.
In this march past the brigadier will give the executive word to
move off, i.e., brigade, by the—, quick—march.
3. Supply column, field hospital and bearer company will not
march past in mass or line of quarter columns.
 4. Brigadiers, staffs &c.—When a brigade marches past an
inspecting officer superior to the brigadier, the latter officer
(accompanied by his aide-de-camp or orderly officer) will fall out
after saluting, and will place himself on the right of the inspecting
officer.
The brigadier will be twenty paces in front of the mounted officers
of the leading battalion, or in line of quarter columns in front of the
centre of the brigade, preceded at a distance of ten paces by his
staff, who will be in line; ten paces apart, the brigade major next the
saluting base.
5. Drums and bands, &c.—Before marching past, the massed
drums and bands will move to the head of the brigade.
When marching past in column, or in column of double
companies, the massed drums and bands preceding the brigade
staff will, on arriving in front of the saluting point, form opposite to it,
and play till the rear of the brigade has passed. They must be moved
off at such a distance in front of the brigade staff as will allow of their
clearing the front when opposite the saluting point, without checking
the mounted officers following them.
When marching past in mass, the massed drums and bands will
advance on the outer flank of the mass parallel with the leading
company, halting opposite the saluting point; they will play the mass
past, and move on again opposite the centre of the rear battalion.
The wagons and machine guns will be massed twenty paces in rear
of the rear battalion, machine guns nearer the saluting base. Mules,
cyclists, and stretcher bearers will not be massed.
When marching past in line of quarter columns, the massed
drums and bands will be in front of the centre of the brigade,
preceding the brigade staff by ten paces. In marching past in this
formation, drums and bands will move straight on, the bands ceasing
to play when the rear of the brigade has passed the saluting point.
The machine guns will be massed twenty paces in rear of the
battalion nearest the saluting base. Wagons, mules, cyclist and
stretcher bearers will not be massed.
 195. A brigade advancing in review order.
If required to advance in review order by the inspecting officer,
battalions may be formed in line of quarter columns at any interval,
arms at the Slope, and the officers and Colours in front, as described
in S. 193 (2).
The line of quarter columns will then advance, the bands and
drums playing, and when at a convenient distance from the
reviewing officer it will be halted and ordered to salute, after which it
will be directed to order arms, and will wait for orders.
Supply columns, field hospitals, and bearer-companies will not
advance in review order.

196. Review of a division.

1. Formation.—A division may be formed up for review as in Plate
XII, and proceed as described in S. 193.
 PLATE XII.

Review of a Division.
2. Position of the general, the staff, &c.—The general will be in
front of the centre of his division, thirty paces from the brigadiers; the
brigadiers being posted as in S. 193 (2); and officers commanding
artillery and engineers at similar distances in front of their
commands; the divisional staff will be drawn up in three lines, ten
paces in rear of the general officer commanding the division,
distances and intervals ten paces, thus:—
g.o.c.
a.d.c.
d.a.a. and officer,
q.m.g. general staff.