§ Amendments made: No. 54, in page 65, leave out from beginning of line 25 to end of line 16 on page 66 and insert—
- Where on or after the appointed day a company—
- issues shares on terms that they are or are liable to be redeemed; or
- agrees to purchase any of its own shares; the following provisions of this section shall apply in relation thereto.
- A company shall not be liable in damages in respect of any failure on its part to redeem or purchase any of the shares.
- Subsection (2) above is without prejudice to any right of the holder of any of the shares other than his right to sue the company for damages in respect of its failure; but the court shall not grant an order for specific performance of the terms of redemption or purchase if the company shows that it is unable to meet the cost of redeeming or purchasing the shares in question out of distributable profits.
- Where the company is wound up and at the commencement of the winding up any of the shares have not been redeemed or purchased then subject to the following provisions of this section the terms of redemption or purchase may be enforced against the company; and when shares are redeemed or purchased under this subsection they shall be treated as cancelled.
- Subsection (4) above shall not apply if—
- the terms of redemption or purchase provided for the redemption or purchase to take place at a date later than the date of the commencement of the winding up; or
- during the period beginning with the date on which the redemption or purchase was to have taken place and ending with the commencement of the winding up the company could not at any time have lawfully made a distribution equal in value to the price at which the shares were to have been redeemed or purchased.
- There shall be paid in priority to any amount which the company is liable by virtue of subsection (4) above to pay in respect of any shares—
- all other debts and liabilities of the company (other than any due to members in their character as such);
- if other shares carry rights whether as to capital or as to income which are preferred to the rights as to capital attaching to the first mentioned shares, any amount due in satisfaction of those preferred rights; but, subject to that, any such amount shall be paid in priority to any amounts due to members in satisfaction of their rights (whether as to capital or income) as members.'.
§ No. 55, in page 66, line 23, leave out '(5)' and insert '(6)'.
§ No. 56, in page 66, leave out lines 24 and 25.—[Mr. Eyre.]