A key innovation under the Companies Act 2014 (the "Act") is the summary approval procedure ("SAP"). This is a new streamlined process for the authorisation of up to seven different types of restricted activities that would otherwise be prohibited or, in some cases, require High Court approval. The seven restricted activities are outlined below.
Restricted Activities
- Variation of company capital on reorganisations
- Share capital reduction
- Financial assistance for the acquisition of shares
- Prohibition on pre-acquisition profits or losses being treated in a holding company's financial statements as profits available for distribution
- Loans to directors and connected persons
- Domestic merger
- Members' voluntary winding up
Variation of company capital on reorganisations using the SAP
Variation of company capital on reorganisation is when a company varies its capital by entering into a transaction to dispose of assets, undertakings or liabilities or a combination of both to another corporate body in return for shares or securities being allotted to the members of the company.
This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.