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GAZETTE
SEPTEMBER1983
that it shall not do business or exercise any borrowing
powers unless the Registrar has issued it with a certificate
that the Company's allotted share capital is not less than
"the authorised minimum". Section 19 of the Act defines
"the authorised minimum" as £30,000 or such greater
sum as may be specified by order made by the Minister of
Trade, Commerce and Tourism.
Section 6(3) of the Act prescribes matters which must
be stated in a statutory declaration by a director or
secretary of a company in support of an application for
such a certificate.
It should be noted that a share allotted in pursuance of
an employees' share scheme (as defined in Section 2) may
not be taken into account in calculating the authorised
minimum unless the share is paid up at least to one-
quarter of the nominal value of the share and the whole of
any premium of the share.
A certificate under Section 6 shall be conclusive
evidence that the company is entitled to do business and
exercise any borrowing powers.
There are provisions in the Act making the doing of
business or the exercising of borrowing powers without a
certificate an offence for the company and any officer of
the company in default. Further, although the provisions
of Section 6 are without prejudice to the validity of any act
of a public limited company, if a public limited company
enters into a transaction in contravention of the Section
but fails to comply with its obligations thereunder within
21 days of being called upon to do so, the directors of the
company shall be jointly and severally liable to indemnify
the other party to the transaction in respect of any loss or
damage suffered by him by reason of such failure.
The Registrar may take steps to strike a public limited
company off the Register if it has not been issued with a
certificate under Section 6 within one year of its
registration.
(2) Re-registration of private companies
Section 9 of the Act sets out the requirements for the re-
registration of a private company as a public limited
company. This will from now on represent "going public"
and, as we shall see, no "old public limited companies"
may be created after the appointed day.
The requirements are —
(a) a special resolution that the company be so re-
registered be passed which resolution must also
(i) alter the company's memorandum so that it
states that the company is to be a public
limited company;
(ii) ma ke such o t h er a l t e r a t i o ns in the
memorandum as are necessary to bring it in
substance and in form into conformity with
the requirements of the Act, and
(iii) make such alterations in the company's
articles as are requisite. (This will invariably
involve adopting a new long form set of
articles appropriate to a public company);
(b) An application for re-registration in the prescribed
form must be delivered signed by a director or
secretary together with the following documents:
(i) a printed copy of the memorandum and
articles as altered. (As previously "printed"
will be interpreted as including all modern
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electrical forms of typing and also photo-
copying);
(ii) a copy of a written statement by the auditors
of the company that in their opinion the
relevant balance sheet (see below) shows that
at the balance sheet date the amount of the
company's net" assets was not less than the
aggregate of its called-up share capital and
"undistributable reserves" (see below);
(iii) a copy of the relevant balance sheet together
with a copy of an unqualified report (as
defined) by the auditors in relation thereto;
(iv) where shares have been allotted between the
balance sheet date and the date of the special
resolution as fully or partly paid up otherwise
than in cash, an expert's report as required by
Section 30 of the Act as to the value of such
non-cash consideration; and
(v) a statutory declaration in prescribed form
(Form F2) by a director or secretary that the
special resolution referred to at (a) above has
been passed and that the conditions referred
to at (c) below have been satisfied and that
between the balance sheet date and the date of
the application there has been no change in
the financial position of the company that has
resulted in the amount of the company's net
assets becoming less than the aggregate of its
called up share capital and undistributable
reserves;
(c) the conditions specified in Section 19(5Xa) and (b)
(where applicable — dealing with non-cash
consideration for shares) and in Section 10(lXa) to
(d) (see below) are satisfied in relation to the
company.
"undistributable reserves" is defined by Section
46(2) of the Act.
"relevant balance sheet" means a balance sheet
prepared as at a date not more than seven months
before the application for re-registration.
Section 10 of the Act sets out the requirements as to
share capital of a private company applying to re-register
as a public limited company. Principally, the nominal
value of the allotted share capital must not be less than the
authorised minimum and each allotted share must be paid
up at least as to one quarter of its nominal value and the
whole of any premium. There are also provisions dealing
with the valuation of non-cash consideration for shares.
If the Registrar is satisfied with the application made
under Section 9, he shall issue the company with a
certificate of incorporation on re-registration as a public
limited company and upon the issue of such certificate the
company by virtue of such issue becomes a public limited
company and any alterations to its memorandum and
articles take effect accordingly.
A certificate of incorporation on re-registration is
conclusive evidence that the requirements of the Act in
respect of re-registration and of matters precedent and
incidental thereto have been complied with and that the
company is a public limited company.
Section 35 of the 1963 Act has been amended to
dispense with the need for private limited companies