Reconstruction, in law, is the transfer of a company's (or several companies') business to a new company. The old company will get put into liquidation, and shareholders will agree to take shares of equivalent value in the new company.
In UK company law, the governing provisions are in the Insolvency Act 1986, ss. 110–111. The sanction of a court is not required (unlike under a so-called "scheme of arrangement", which could or creditors). Yet if a shareholder objects, he or she may require a cash payment instead of shares. Creditors who object to have their debts transferred to a new company can demand satisfactions during the old company's liquidation.
Small private companies, family companies and investment trusts often use the procedure. The purposes can vary, from changing the objects of the business, varying share class rights, or reorganize before a demerger takes place.
Len Sealy and Sarah Worthington (2007) Cases and Materials in Company law, 8th Ed., Oxford University Press
Paul Davies (2008) Gower's Modern Company Law, 8th Ed., Sweet and Maxwell
January 01, 1970
reconstruction, this, article, includes, list, references, related, reading, external, links, sources, remain, unclear, because, lacks, inline, citations, please, help, improve, this, article, introducing, more, precise, citations, august, 2011, learn, when, r. This article includes a list of references related reading or external links but its sources remain unclear because it lacks inline citations Please help improve this article by introducing more precise citations August 2011 Learn how and when to remove this message Not to be confused with Restructuring Reconstruction in law is the transfer of a company s or several companies business to a new company The old company will get put into liquidation and shareholders will agree to take shares of equivalent value in the new company In UK company law the governing provisions are in the Insolvency Act 1986 ss 110 111 The sanction of a court is not required unlike under a so called scheme of arrangement which could or creditors Yet if a shareholder objects he or she may require a cash payment instead of shares Creditors who object to have their debts transferred to a new company can demand satisfactions during the old company s liquidation Small private companies family companies and investment trusts often use the procedure The purposes can vary from changing the objects of the business varying share class rights or reorganize before a demerger takes place See also editBankruptcy Mergers and acquisitionsReferences editLen Sealy and Sarah Worthington 2007 Cases and Materials in Company law 8th Ed Oxford University Press Paul Davies 2008 Gower s Modern Company Law 8th Ed Sweet and Maxwell Retrieved from https en wikipedia org w index php title Reconstruction law amp oldid 941975536, wikipedia, wiki, book, books, library,
