Companies Act 1993

If you need more information about this Act, please contact the administering agency: Ministry of Business, Innovation, and Employment
  • Warning: Some amendments have not yet been incorporated
  • Section 405(7) and Schedule 15 Part 1 paragraphs (h), (p), and (q): editorial changes made, on 19 January 2023, under sections 86(1) and 87(l)(i), (ii), (iii), and (iv) of the Legislation Act 2019 (2019 No 58).
221 Approval of amalgamation proposal

(1)

The board of each amalgamating company must resolve that—

(a)

in its opinion the amalgamation is in the best interest of the company; and

(b)

it is satisfied on reasonable grounds that the amalgamated company will, immediately after the amalgamation becomes effective, satisfy the solvency test.

(2)

The directors who vote in favour of a resolution required by subsection (1) must sign a certificate stating that, in their opinion, the conditions set out in that subsection are satisfied, and the grounds for that opinion.

(3)

The board of each amalgamating company must send to each shareholder of the company, not less than 20 working days before the amalgamation is proposed to take effect,—

(a)

a copy of the amalgamation proposal:

(b)

copies of the certificates given by the directors of each board:

(c)

a summary of the principal provisions of the constitution of the amalgamated company, if it has one:

(d)

a statement that a copy of the constitution of the amalgamated company will be supplied to any shareholder who requests it:

(e)

a statement setting out the rights of shareholders under section 110:

(f)

a statement of any material interests of the directors in the proposal, whether in that capacity or otherwise:

(g)

such further information and explanation as may be necessary to enable a reasonable shareholder to understand the nature and implications for the company and its shareholders of the proposed amalgamation.

(4)

The board of each amalgamating company must, not less than 20 working days before the amalgamation is proposed to take effect,—

(a)

send a copy of the amalgamation proposal to every secured creditor of the company; and

(b)

give public notice of the proposed amalgamation, including a statement that—

(i)

copies of the amalgamation proposal are available for inspection by any shareholder or creditor of an amalgamating company or any person to whom an amalgamating company is under an obligation at the registered offices of the amalgamating companies and at such other places as may be specified during normal business hours; and

(ii)

a shareholder or creditor of an amalgamating company or any person to whom an amalgamating company is under an obligation is entitled to be supplied free of charge with a copy of the amalgamation proposal upon request to an amalgamating company.

(5)

The amalgamation proposal must be approved—

(a)

by the shareholders of each amalgamating company, in accordance with section 106; and

(b)

if a provision in the amalgamation proposal would, if contained in an amendment to an amalgamating company’s constitution or otherwise proposed in relation to that company, require the approval of an interest group, by a special resolution of that interest group.

(6)

A director who fails to comply with subsection (2) commits an offence and is liable on conviction to the penalty set out in section 373(1).