UK Offence Report

Registration of resolution and supporting documents for purchase of own shares for the purposes of or…

regulation 720B(7) of The Companies Act 2006 (Amendment of Part 18) Regulations 2013

This offence was read from the text as made, and no revised version was available, so a later revocation could not be ruled out. Check the current text at legislation.gov.uk.

What the provision says

7 If the company delivers to the registrar

a solvency statement that was not provided to members in accordance with section 720A(3) or (4), an offence is committed by every officer of the company who is in default.

Text as made, from legislation.gov.uk. © Crown copyright, reused under the Open Government Licence v3.0. This is the text as originally made; later amendments are not shown here.

Who it binds, and what has to be proved

Binds
a company
Conduct
breaching the provision
Fault element
Strict liability
Burden of proof
No statutory defence — prosecution proves everything

The prosecution must prove that the conduct happened. This is a strict liability offence as drafted: the provision uses no word of intention, knowledge, recklessness or negligence, so there is no need to show that a company meant to do it, knew about it, or was careless.

Intention, knowledge and carelessness are irrelevant to guilt. They may still matter a great deal to sentence.

The provision states no defence, so the prosecution bears the burden on every element of the offence.

Classifier’s reasoning: no word of intention, knowledge, recklessness or negligence in the offence or its provision.

What would breach regulation 720B(7)?

These are illustrations, not law. They are generated from the provision’s own words to show the shape of the offence. Whether any particular conduct is caught depends on the full text, on any amendment since, and on the facts.

  1. Doing what the provision prohibits, or failing to do what it requires under the Companies Act 2006 (Amendment of Part 18) Regulations 2013.

Penalty

Mode of trial
Either way — magistrates’ court or Crown Court
Maximum fine
£5,000
Maximum prison (summary)
Not determined

expressed as the statutory maximum (the prescribed sum): the same words mean £5,000 in England and Wales and £10,000 in Scotland.

Sentencing

Offences of this kind are usually sentenced under the guidelines below. This is a mapping by subject, not a finding about this provision, and the links go to a search of the Sentencing Council’s own site.

Prosecution figures

No published per-offence figure was found for this provision, and it could not be matched to a Ministry of Justice offence code. Offences created by statutory instrument very largely do not have one. Absence of a figure is not evidence that the offence is unused.

Status and lifecycle

Current status
Status not determined
Made
24 April 2013
In force from
30 April 2013
Extent
Not stated

How this was established: read from the text as made; no revised version available, so later revocation could not be ruled out.

What the instrument is for

(This note is not part of the Regulations) — the explanatory note published with the instrument, © Crown copyright.

These Regulations come into force on 30th April 2013 and extend to the whole of the United Kingdom, reflecting the extent of the Companies Act 2006 (c.46). These Regulations amend Part 18 (Acquisition by limited company of its own shares) of the Companies Act 2006. Regulation 3 removes the requirement on private limited companies to pay on purchase the price of shares in full in cases where the buy back is for an employees’ share scheme; this will allow a private company to pay for its shares by instalments. Regulation 4 permits private companies to use cash without having to identify it as distributable reserves to finance the buyback of its own shares, up to the value of £15,000 or 5% of the share capital of the company in each financial year. Regulation 5 changes the requirements for shareholder authorisations concerning contracts for share buyback to be passed; instead of the authorisation being given by special resolution (a majority of 75% of shareholders), it may be given by ordinary resolution (being a simple majority, i.e. over 50% of shareholders). Regulations 6 to 9 amend the Companies Act 2006 to allow a company to make off-market purchases of its own shares without having each buyback contract approved by shareholder resolution, as long as the company has a resolution from the shareholders authorising this. Regulations 10 to 13 amend the requirements that a company must fulfil when buying back its own shares using capital in cases where the buy back is for the purposes of or pursuant to an employees’ share scheme. The amendments reduce the requirement to a statement by the directors that the company is solvent and a special resolution by the shareholders. Regulations 14 and 15 allow a company limited by shares to hold its own shares in treasury and to deal with such shares as treasury shares. The change also allows shares bought back with cash to be held as treasury shares. A full regulatory impact assessment of the effect that this instrument will have on the costs of business and the voluntary sector is available from the Business Environment Directorate, Department for Business, Innovation and Skills, 1 Victoria Street, London SW1H 0ET or from www.gov.uk/bis and is annexed to the Explanatory Memorandum which is available alongside the instrument at www.legislation.gov.uk.

Read the full note and every offence in this instrument

What Parliament said

Mentions of this instrument in Hansard. Parliamentary material is reused under the Open Parliament Licence v3.0.

Other offences in the same instrument

How this was identified as an offence

Everything above rests on the judgement that this provision creates a criminal offence, rather than mentioning one. That judgement is made by rule, from the words of the provision, and this is the rule that made it — with a confidence of 0.55.

Basis
c06_offence_committed
Confidence
0.55 of 1.00

A provision that states a penalty for an offence created elsewhere can read very like one that creates an offence, and the rules can mistake the one for the other. If the text quoted above sets a penalty for something made an offence by another provision, treat the classification on this page with that in mind, and read the instrument.

Check the source