Boyle & Birds'Company Law

8th Edition2011

Editors

John Birds LLM, FRSAEmeritus Professor in the School of Law, University ofManchester and Honorary Professor in the School of Law,University of Sheffield

Bryan Clark BA, LLM, PhDReader in Law, University of Strathclyde

Iain MacNeil LLB, PhDAlexander Stone Professor of Commercial Law, University ofGlasgow

Gerard McCormack BCL, LLM, PhDProfessor of International Business Law, University of Leeds

Christian Twigg-Flesner LLB, PCHE, PhDReader in Law, University of Hull

Charlotte Villiers LLM, SolicitorProfessor of Company Law, University of Bristol

Consultant Editor

A. J. Boyle LLM, SJD, BarristerEmeritus Professor of Law, Queen Mary, University of London

IJJORDANS

CONTENTS

Preface to the 8th Edition vTable of Cases xxviiTable of Statutes lxxviiTable of Statutory Instruments xcvii

Chapter 1The Development of the Registered Company 1Introduction 1Historical background 1The incorporation of joint-stock companies by registration 2

Legislative control 3Limited liability 4

Developments in the late nineteenth and twentieth centuries 6Other types of corporate business organisation 8The Companies Acts: consolidation and reconsolidation in the

1980s 9The Companies Act 2006 11The impact of law and economics theory 14The market for corporate control 17

Venture capital and private equity 19

Chapter 2The European Community and Company Law 21Introduction 21Fundamental freedoms: the free movement of companies 23

A fundamental problem 23The jurisprudence of the ECJ 25The impact of the ECJ's case-law 29Further developments regarding the freedom of establishment

of companies 31The harmonisation programme: company law directives 31

First Company Law Directive 32Second Company Law Directive 33Third and Sixth Directives: mergers and divisions of public

companies 34Tenth Directive: cross-border mergers 35Fourth, Seventh and Eighth Directives: accounting and audit 36Thirteenth Directive: Takeovers 37

viii Boyle & Birds' Company Law

Eleventh and Twelfth Directive: branches and single-membercompanies 38

Cross-border exercise of shareholder rights 38Abandoned Fourteenth Directive 39Other Abandoned proposals (Fifth and Ninth Directives) 39

Harmonisation of securities regulation 40The European Company Statute 41

Background 41Implementation into domestic law 42Scope 42Interaction between ECS and domestic law 43Share capital 44Registered and head offices 44Formation 45

Merger of two public companies 46Formation of holding company as SE 47Creation of subsidiary SE 48Conversion of existing public company into an SE 48

Structure 49Accounting 51Winding up, liquidation, insolvency and cessation of payments 51Employee involvement 52

Towards a European private company 53Conclusions 53

Chapter 3Legal Personality: Its Consequences and Limitations 55Introduction 55The consequences of incorporation 55The advantages of incorporation 57

Limited liability partnerships 58The principle of corporate personality 59

Corporate personality and directors' liability 60Controlling shareholders and the corporate veil 62

Lifting the veil of incorporation 62The criminal liabilities of companies 65Corporate manslaughter 67Application to civil law 68Groups of companies 71

The group relationship in the Companies Act 2006 71The treatment of groups by the courts 72

Adams v Cape Industries pic 74(1) The single economic unit argument 75(2) Piercing the corporate veil 76(3) The agency argument 77

The problem of insolvent subsidiaries 77

Contents ix

Chapter 4Registration, Formation and Promotion of Companies 81Introduction 81The classification of private and public companies 82Forming a company 83The articles of association 84Registration 84The certificate of incorporation 87Trading certificate for public companies 88Unlimited companies 90Companies limited by guarantee 90

Exemption from using 'limited' as part of the name 91The re-registration of companies 92The re-registration of private companies as public 93

Requirements as to share capital, net assets and valuation 94The effect of re-registration under s 90 95

Public companies re-registering as private 95Re-registration of private and public limited companies as

unlimited companies 97Re-registration of unlimited companies as private limited

companies 98Promoting companies 98Duties of promoters 100

To whom disclosure must be made 102The remuneration of promoters 102Underwriting commission 103Pre-incorporation contracts 104The liability of promoters or other 'agents' to third parties 106Overseas companies 108Company names 110

Directions to change a registered name 111Company names adjudicators 112Change of name 113'Phoenix companies' 113

Trading disclosures 114

Chapter 5The Company's Constitution 117From memorandum and articles to constitution 117The articles of association 118The contents of the articles of association 119Drafting articles: adoption of model articles 119Drafting articles: examples of invalid provisions 120Statement of company's objects 121Entrenched provisions 121Provisions of memorandum to be treated as provisions of articles 123Alteration of articles: s 21 123Effect of alteration: s 25 124

x Boyle & Birds' Company Law

Notification of amendments to registrar 124Filing of amendments to the articles: enactments and orders 125Requirements as to publicity of alteration of articles 125Agreements not to alter the articles and voting agreements 127Acting on altered articles 129'Bonafide for the benefit of the company as a whole' 130A malicious alteration 131An alteration outside the bounds of reasonableness 133The discrimination test and the 'interests of the company as a

whole' 134Legal effect of constitution: contract 137Outsiders' rights and the articles as a contract 141Contracts incorporating provisions in the articles 144The character of obligations in the constitution 145

Chapter 6Company Contracts 147Introduction 147Ultra vires: a brief overview 149

The doctrine stated and its impact mitigated 149Reaffirming the doctrine 152Restating the law: Rolled Steel 153The decline of the ultra vires doctrine 155

Corporate gifts 156Pensions 158Charitable or political donations 159Redundancy payments 160

Corporate Capacity - the current law: s 39 of the CompaniesAct 2006 161

Just and equitable winding-up 163Authority to bind the company 163The protection of persons dealing with the company in good

faith: s 40 164A person dealing with a company in good faith 169

'Person dealing with a company' 169'Good faith' I 7 2

No duty to enquire 173Directors who deal with their company 173The 'internal' aspects of s 40 175A failed reform proposal 176The Turquand rule: the indoor management principle 176'Outsiders' I 7 7

General agency principles and the Turquand rule 178Usual authority 179Directors, executive directors and chairmen 180When an outsider cannot rely on usual authority 182The 'holding out' principle 183Knowledge of the articles 185

Contents xi

'Self-authorising' agents 185Forgery, the Turquand rule and agency principles 187Statutory provisions affecting appointments 188Publication in the Gazette of returns relating to the register of

directors 189The form of contracts by companies 189The execution of company documents 189Protection for purchasers 190

Chapter 7Share Capital - Allotment and Maintenance 193Introduction 193Methods of capitalising companies 193Allotment of shares 195Authority required to allot shares 196Pre-emption rights 198

When authority under s 551 overrides pre-emptive rights 200Other controls on allotments 201The contract of allotment 203Letters of allotment 203Restrictions on allotment of shares by public companies 205Return and registration of allotments 206Maintenance of capital 206Price of allotted shares 208Allotments of shares for non-cash consideration by private

companies 209Allotments of shares for non-cash consideration by public

companies 210Prohibited non-cash consideration 211Future non-cash consideration 211Valuation of non-cash consideration 212Non-cash assets acquired from subscribers and others 214

Issue of shares at a premium 215Relief from s 610 216

Acquisition by a company of rights in respect of its own shares 216The redemption or purchase of a company's own shares 217

Redeemable shares 218Purchase by a company of its own shares 219Authority required for off-market purchases 220Conditional contracts 222Authority required for market purchase 222Assignments and releases of a company's right to purchase its

own shares 223Payments other than of the purchase price 223Publicity for purchases 224The capital redemption reserve 225Private companies redeeming or purchasing shares out of

capital 225

xii Boyle & Birds' Company Law

Procedure and publicityApplications to the courtLiability of past shareholders and directorsFailure of a company to redeem or purchase its own shares

Financial assistance by a company for the acquisition of its ownshares

Prohibitions under s 678Exceptions

The holding by a subsidiary of shares in its holding companySerious loss of capital by public companiesDividends

The relevant accountsDetermination of profitsPublic companiesImproperly paid dividends

ReservesCapitalisation of profitsMode of distribution of profits

Chapter 8Rights and Liabilities Attached to Shares: Reorganisations ofCapitalSharesClasses of sharesOrdinary sharesPreference shares

Preferential rightsOther classes of sharesVoting rightsVariation and abrogation of the class rights of shareholders

The concept of a 'class right'The meaning of 'varying' or 'abrogating' class rightsProcedure for variationNotice for class meetings and filing requirementsProtection for minority in class

Liabilities on sharesInitial payments on sharesCallsLiens on sharesThe reorganisation of capitalReduction of capital

The solvency statementMatters incidental to a reductionMatters relevant to confirmation by the courtShareholders' class rightsReduction not in accordance with class rightsRights of creditorsProcedure on a reduction of capital

227228229229

230230234236237238239239241242243243244

247247248249249250251252254254256259260261262263263264265266267268269269271272273

Contents xiii

Forfeiture and surrender of shares 273Reissue of forfeited shares 274Treatment of forfeited and surrendered shares in public

companies 275Other capital alterations 277

Chapter 9Transfer and Transmission of Shares 281The transfer of shares 281Transferability of shares 282

Power to refuse registration 283Pre-emption clauses 285Compulsory transfer 287Restrictions not arising out of the articles 288

The mode of transfer of shares 288The Stock Transfer Act 1963 289Procedure on transfer of unlisted shares 290Procedure on transfer of listed shares 292

The position as between transferor and transferee 295Sales of shares 295Gifts of shares 297Mortgages of shares 298Priorities in England 299

Notice to the company 300Forged transfers 301Share certificates 303

Evidence of title 304Certification of transfers 305Share warrants 306The transmission of shares 307Trustees in bankruptcy 307Executors and administrators 308

Chapter 10Debentures, Charges and Registration 311Introduction 311Part 1: General Considerations 313Borrowing powers 313Borrowing on debentures 314Significance of the term 'debenture' 315Main terms of loans 316

Principal 316Interest 317

Debentures issued at a discount 317Part 2: Charges 318Fixed and floating charges 318The nature of a floating charge 323Charges on book debts 325

xiv Boyle & Birds' Company Law

Floating charges and the Bills of Sale Acts 329Crystallisation of the floating charge 330

Notices of crystallisation 332Automatic crystallisation 332Crystallisation and rights of set-off 334Priorities and the floating charge 335The effect of registration on priorities 336Further advances and subsequent charges 338Purchase money, security interests and floating charges 338Postponement and avoidance of floating charges by statute 339Priority agreements 340Retention of title clauses and floating charges 341Execution creditors and floating charges 343Part 3: The Registration of Charges 344Legislative framework 344Charges requiring registration 345Effect of failing to register a charge 347The particulars of a charge to be registered 348The 'date of creation' for purposes of registration 349The registration obligation 350The registrar's certificate as conclusive evidence 350The transfer of charges 352Property acquired subject to a charge 353Registration and priorities 353Rectification of the register of charges 353Effect of a winding-up 355Memorandum of satisfaction 356Charges over foreign property 356Charges on property in Britain created by an overseas company 357The company's register of charges: s 876 357The reform of the law of security over personal property 359

Chapter 11Corporate Governance 363Introduction 363Corporate structure 364Defining corporate governance 366How is this system to be achieved? 367The corporate governance committees 370

The Cadbury Committee 370The Greenbury Committee 371The Hampel Committee 372The Combined Code and the UK Corporate Governance

Code 373Disclosure 375Non-executive directors 377The auditors and institutional investors 380

The narrow framework of corporate governance in the UK 384

Contents xv

Chapter 12Membership of a Company 401Introduction 401The members of a company 403

Subscribers to the memorandum 403Entry in the register of members 404

The termination of membership 406Minors as members 407The register of members 408

The register, equitable interests and notice 410Inspection and copies of the register 412Rectification of the register 414

Single member companies 415The annual return 415

The contents of the annual return 416Disclosure of interests in voting rights in public companies 417The company's right to investigate who has an interest in its

shares 418Notification of major shareholdings 420Disclosing use of votes 423Exercise of members' rights by beneficial owners 425

Information rights 426Voting rights 426Status of information rights 427Formalities 427Exercise of rights in different ways 428Special rights 428

Chapter 13Shareholders' Meetings and Resolutions 431Introduction 431Informal agreement 433Resolutions 436Written Resolutions of Private Companies 437

Agreement to a written resolution 439Written resolution proposed by directors 440Written resolution proposed by members 440Electronic means 441

Meetings 442General Meetings 443

Nature of a meeting 444General Meeting Requisitioned by Members 445Annual General Meetings of Public and Traded Companies 447

Members' resolutions at annual general meetings 448Rights of members of traded companies 450Court's power to order a meeting 451

Class Meetings 453Court's powers in respect of meetings 453

xvi Boyle & Birds' Company Law

Notice of Meetings 453Notices of meetings of traded companies 455Form of notice 456Accidental failure to give notice 457Length of notice 458Short notice 459Notice of adjourned meeting 460Misleading notices 461

Notices and Amendments 462Special notice 463Members' statements 464

Electronic Communications and Meetings 465Conduct of Meetings 466

General meetings of traded companies 469Quorum at General Meetings 469Quorum at Class Meetings 470

Abuse of quorum provisions and the court's power to order ameeting 471

Adjourned Meetings 472Votes and Polls 475

Right to demand a poll 478Conduct of a poll 479

Representatives of Corporate Members 482Proxies 483

Proxies at meetings of traded companies 487Proxy votes 488Solicitation of proxies 490Records of Meetings, Resolutions and Polls 491Right to inspect records of resolutions and meetings 493

Publication of Reports of Meetings 494Polls of Quoted and Traded Companies 494

Website publication of poll results 495Independent report on a poll 496Independent assessor's report 498Website publication 499Disclosing use of votes by institutional investors 500

Chapter 14Accounts and Reports 501Introduction 501The small companies regime 504

Qualification as a small company 505Exclusion from the small company regime 506

Quoted companies 507Accounting records 508

The duty to keep accounting records 508The custody of accounting records 508

Financial years and accounting periods 509

Contents xvii

Annual accounts 510Individual accounts: applicable accounting framework 511Group accounts 512

Group accounts: applicable accounting framework 514Companies Act group accounts 515IAS group accounts 515Consistency of financial reporting within group 516Individual profit and loss account where group accounts

prepared 516Information to be provided in accounts 517

Related undertakings 517Employee numbers and costs 518Directors' benefits: remuneration 518Information about directors' benefits: advances, credit and

guarantees 520Approval and signing of accounts 521

The directors' report 521Contents of directors' report: general 521Business review 522Statement on disclosure to auditors 524Approval and signing of directors' report 524

Quoted companies: directors' remuneration report 525Contents of the directors' remuneration report 525Information in the directors' remuneration report not subject

to audit 525Information in the directors' remuneration report subject to

audit 527Approval and signing of the directors' remuneration report 532Members' approval of the directors' remuneration report 532

Publication of reports and accounts 532Option to provide summary financial statements 534

Form and content of summary financial statement 535Form and content of summary financial statement: quoted

companies 536Quoted companies: annual reports and statements to be made

available on website 537Rights of members or debenture holders to copies of accounts

and reports 537Requirements in connection with publication of reports and

accounts 538Publication of accounts 538

Public companies: laying of accounts before general meeting 539Filing of accounts and reports 539Filing obligations: companies subject to the small companies

regime 541Filing obligations: medium-sized companies 542Filing obligations: unquoted and quoted companies 543Filing requirements for unlimited companies 544

xviii Boyle & Birds' Company Law

Abbreviated accounts: special auditors' report 544Approval and signing 544

Failure to file accounts and reports 545Defective accounts 545

Directors' voluntary revision 545Secretary of State's notice 546Application to the court 546Disclosure of information by tax authorities 548Power of authorised persons to require documents,

information and explanations 548Restrictions on disclosure of information obtained under

compulsory powers 549Permitted disclosure of information obtained under

compulsory powers 550False or misleading statements in reports 551Power to make further provisions about accounts and reports 551Auditors 552

Appointment of auditors in private companies 552Public companies 555Qualifications 555Auditors' remuneration 556Disclosure of terms of audit appointment 557Disclosure of services by the auditor or associates and related

remuneration 557Removal or resignation 558Resignation of auditor 560Statement by auditor on ceasing to hold office 561Duty of auditor to notify appropriate audit authority 562

The rights and duties of an auditor 564Right to information 565Attendance at meetings 566The auditors' report 566The contents of the auditors' report 566The auditor as an officer of the company 569

Liability for negligence 569Liability in contract 569Liability in tort for negligent misstatement 570Duty of auditor valuing shares 572The limitation or exclusion of liability 573

Chapter 15Management of a Company 577Introduction 577The meaning of director 578

Shadow directors 580Appointment of directors 582

Statutory requirements 582Remuneration of directors 584

Contents xix

Directors' service contracts and the articles 586Disclosure of directors' service contracts 588Retirement and termination of appointment of directors 589Resignation 590Removal by ordinary resolution 590Alternate directors 592Directors' meetings 592

Quorum 592Notice 593Directors' decision-making under the model articles 594Minutes of directors' meetings 595

A director's right to inspect company books 596Delegation and the validity of directors' acts 596The registers of directors and of directors' residential addresses 597

Non-disclosure of directors' residential addresses 598The relationship between board and general meeting 600The officers of a company 602

The manager or managing director 603The secretary 605The register of secretaries 606

Disqualification and other sanctions against miscreant directorsand others involved in company management 606

Disqualification of directors and others 607The meaning of disqualification 607Application for disqualification 608Grounds for disqualification 609Disqualification for unfitness 610Register of disqualification orders 614

Liability of directors (and others) to contribute to the assets orfor the debts of their companies 614

Fraudulent trading 615Wrongful trading 617Liability for acting while disqualified 623Summary remedy 624

Chapter 16The Duties of Directors - General 625Introduction 625

The legal nature of the office of director 626The scope of directors' duties 627Introduction to directors' general duties 629Duty to act within powers 631Duty to promote the success of the company 634

Interests other than those of the members 637Interests of creditors 638

Duty to exercise independent judgment 639Duty to exercise reasonable care, skill and diligence 641

xx Boyle & Birds' Company Law

Duties to avoid conflicts of interest and not to accept benefitsfrom third parties 644

Conflicts of Interest and Secret Profits 646Consequences of a breach of the no conflict duty 650

Duty not to accept benefits from third parties 651Consequences of a breach of the no benefits rule 652

Duty to declare interest in proposed transaction or arrangement 653Interest 655

Relationship between the general duties and other rules 656Statutory duties supplementing the general duties 657

Declarations of interest in existing transactions orarrangements 657

Companies with a sole director 659Directors' trusteeship of the company's assets 660

The scope of the trusteeship 660Further examples of misapplications 662

Chapter 17The Duties of Directors - Specific Duties, Reh'ef from Liabilityand Consequences of Breach 665Introduction 665Specific rules regarding directors' interests in transactions and

arrangements 665Persons connected with a director 666

Directors' service contracts 667Substantial property transactions 668

Exceptions 669Approval 670Remedies 671

Loans to directors and others 672Requirements applying to all companies 673Requirements applying to public companies 674Exceptions 675Remedies 676

Payments for loss of office 678Exceptions 680Remedies 681

Power to provide for employees 681Liability for false and misleading statements in reports 682Factors relieving a director from liability for breach of duty 682

Ratification 682Provisions in the articles 686Discretionary relief from liability by the court 689

Enforcement of civil liabilities against directors 689

Chapter 18Shareholders' Remedies 691Introduction 691

Contents xxi

Part 1: Minority Shareholders'Claims 692Common law claims 692Permitted common law claims 693Non-ratifiable breaches of directors' duties 695

The enforcement of statutory 'fiduciary' duties 697The statutory derivative claim 698

Nature of a derivative claim 698The criteria to guide the court: s 263 699

Two stage procedure 700Authorisation or ratification 701

Authorisation 701Ratification 702Members with no personal interest 702

Comment 703Remedies in derivative claims 704

Power to amend s 263 704Transitional provisions 705

Overlapping personal and corporate claims 705Minority shareholders' right to an indemnity in a derivative

action 707Shareholders' actions to enforce rights against the company 709Proceedings in the company's name 710Part 2: Unfair Prejudice Remedy for Minorities 711Power of the court to grant relief on a petition alleging unfair

prejudice 711The concept of unfair prejudice 711O'Neill v Phillips 712Breach of directors'duties 715'Legitimate expectations' 717

Meaning of 'quasi-partnership' 718'Member qua member' 719The 'alternative remedy' 722

The offer to buy as a bar to a winding-up 723The offer to buy as a bar to an unfair prejudice petition 725

The remedies available to the court: s 996 727Just and equitable winding up as a minority shareholder's remedy 731Earlier cases consistent with Westbourne 134Loss of 'substratum' 734Fraudulent and illegal companies 735Part 3: The Business Department's Powers to Investigate

Companies and Their Securities 736Introduction 736Investigation of the affairs of the company 736

Informal investigations under s 447 738The conduct of proceedings by inspectors 739

The role of the Secretary of State in inspections 740The inspectors' report and subsequent proceedings 741The power to examine on oath and obtain documents 742

xxii Boyle & Birds' Company Law

Proceedings by the Department 742Expenses in investigations and proceedings by the Department 744The Department's power to investigate the ownership of shares 745Power to impose restrictions on shares or debentures 746

Chapter 19The Public Issue of Securities 749Legislative background 749The regulatory framework 755Private and public companies 756The UK Listing Authority and the London Stock Exchange 758Criteria for admission to listing 760Criteria for admission to trading on the London Stock Exchange 762Offers of securities otherwise than through the London Stock

Exchange 763'Offers for subscription' and 'offers for sale' 764Placings, intermediaries offers, rights issues and open offers 764Convertible issues 766The function of the sponsor 767Underwriting and bookbuilding 767Official listing: the function of the 'competent authority' 768Application for listing 769Part VI prospectuses and listing particulars 770The issuer's general duty to disclose 773Supplementary Part VI listing particulars 774Approval of Part VI prospectuses and listing particulars 774Power to control information 775Public offers of unlisted securities 776An 'offer to the public' of 'securities' 777Form and content of prospectuses 779Supplementary prospectuses 780Regulation of invitations to engage in investment activity under

the Financial Services and Markets Act 2000 780Mutual recognition of prospectuses and listing particulars in

member states of the European Community 781Remedies for false, misleading or incomplete statements in

connection with prospectuses or listing particulars 782The statutory remedy for false, misleading or incomplete

statements 783Who may be sued and who may sue under the statutory remedy? 785Defences available to persons responsible 787The relationship of the statutory remedy to the common-law

remedies 787The common-law remedies: the right to rescind a contract of

allotment for material misrepresentation 788Responsibility for statements 789Loss of the right to rescind 790An action for deceit 792

Contents xxiii

Misleading omissions 795The Misrepresentation Act 1967 797The measure of damages 798An action for negligent misstatement 798Criminal liability for false or misleading statements in

prospectuses 799Section 19 of the Theft Act 1968 801

Chapter 20Takeovers and Mergers 803Introduction 803The Takeover Panel and its administration of the Code 804The sanctions available to the Panel 807Impediments to takeovers 809The scope and form of the Code 815The Principles of the Code 818The Rules 820Partial offers 822Restrictions on dealings 823The mandatory offer to the remaining shareholders 824Assessing the Code's effectiveness 826Reconstruction and amalgamation under s 110 of the Insolvency

Act 1986 828Procedure under ss 110 and 111 829Rights of dissenting shareholders 830The protection of creditors 832Duties of the liquidator under ss 110-111 832Procedure under Part 26 of the Companies Act 2006 834The information required by s 897 836The court's powers under s 900 839Mergers and divisions of public companies 841Composition with debenture-holders and other creditors 842The rights of dissenting shareholders and creditors 844Compulsory acquisition of shares under Part 28 of the

Companies Act 2006 847The power of compulsory acquisition 847The 'price' payable to those whose shares are compulsorily

acquired 851Applications to the court by dissenting shareholders 852The right of minority shareholders to be bought out 855

Chapter 21Corporate Reconstruction and Insolvency 857Part 1: General 857

Introduction 857The definition of insolvency 859The regulation of insolvency practitioners 861

xxiv Boyle & Birds' Company Law

Part 2: Voluntary arrangements 863The use of voluntary arrangements 863CVA without a moratorium - Part I of the Insolvency

Act 1986 as amended 864Outline of the procedure 865The effect of the approval of the voluntary arrangement 866Implementation of the proposal 867Challenging the approval of a voluntary arrangement or the

supervisor's decisions 867Terminating a voluntary arrangement 869Reinforcing the integrity of the law 870CVAs with a moratorium - Insolvency Act 1986 Sch Al 870

Part 3: Administration 874The role of administration 874The Rescue Culture and US comparisons 876Purposes of administration 878Entry routes into administration 881Out-of-court appointments by qualified floating charge

holders 882Out-of-court appointments by the company or its directors 883Effect of the appointment of an administrator 884The statutory moratorium 886Relaxation of the moratorium 887Power to deal with charged property 891Status of the administrator 893Duties of the administrator 893The administrator's proposals 894The meeting of creditors 895The committee of creditors 897Cases where urgent action is required 897Protection of the interests of creditors and members 898Replacing an administrator and vacation of office 899Exit routes from administration 900Expenses of administration and remuneration of the

administrator 902The administrator as an 'office-holder' 904Pre-packaged administrations 905Post-administration financing 907An overview of the administration procedure 910

Part 4: The compulsory liquidation of companies 911Compulsory winding-up 911

Special Rules for Financial institutions 912Grounds for a compulsory winding-up order 913Persons who may present a petition 915The hearing of the petition 916Commencement of the winding-up 916

The effect of a winding-up order on dispositions of assets 917

Contents xxv

Appointment of the liquidator 920The liquidator's status 920Duties and powers of a liquidator 922The liquidation committee 924

Ceasing to act as liquidator 925Part 5: The voluntary liquidation of companies 926

Introduction 926Resolutions for voluntary winding-up 926

Commencement of a voluntary liquidation 927Consequences of resolution to wind up 927

The declaration of solvency 928Appointment of a liquidator 929The liquidation committee 930Powers and duties of a voluntary liquidator 930Ceasing to act as a voluntary liquidator 931The relationship between voluntary liquidation and other

insolvency-related procedures 932Part 6: The conduct of liquidations 934

Introduction 934Creditors' claims 934Proof of debts and rights of set-off 936The company's assets 938The order of payment of debts and liabilities and the pari

passu rule 940Preferential debts 941Liquidation expenses 942Deferred debts and subordinated debts 943

Contributories 944Distribution of remaining assets 945

Part 7: Special powers of liquidators and other office holders ininsolvency proceedings 945

A liquidator's ability to disclaim property 945Office-holders 947

Utilities 947Transactions at an undervalue 947Voidable preferences 949Court orders in respect of transactions at an undervalue

and preferences 951Extortionate credit transactions 952Avoidance of floating charges 953

Other powers 955Dissolution of companies 956Defunct companies 958International Insolvency 959EU insolvency regulation 963

What constitutes the opening of insolvency proceedings 964Jurisdiction to open main insolvency proceedings 965Jurisdiction to open secondary insolvency proceedings 969

xxvi Boyle & Birds' Company Law

Applicable law 969Referrals to legal orders other than the law of the

insolvency forum 970Recognition of insolvency proceedings 971Liquidators' powers 972Relationship between main and secondary liquidations 972An assessment of the Regulation 973

Index 975