RECONSTRUCTION

21Q

Then when the new company has allotted, and proposes to
deliver the return as to allotments to the Registrar, the con-
tract, which in ordinary circumstances, would have to set out
the names and particulars of the allottees, can be made with a
trustee, and can state that the shares were allotted to the
parties and in the proportions set out on the return as to
allotments ‘ presented for registration herewith.” This course
results in a considerable saving in labour.

[f, as is usual, the liquidator has to sell all the shares not
taken up by shareholders in the old company, he will, when
sending out his circular, send out also a form of tender and
application form combined, for such shares as are not taken
up, and it is desirable to have this form of tender printed on a
different coloured paper, so as to avoid confusion. He
should also advertise the fact that such shares are for sale,
and that forms of tender can be obtained at his office. Having
regard to s. 35 (3) of the Act it appears now to be necessary that
the application form should be accompanied also by a pros-
pectus complying with s. 35 (1). It will be necessary to fix a
time within which shareholders can claim their shares in the
new company, but it will also be found desirable considerably
to extend this time in the case of shareholders resident abroad.

After the time within which shareholders can apply has
=xpired, the new company will allot the shares on the nomina-
tion of the liquidator, but the liquidator should not definitely
accept tenders for excess shares until after the expiry of the
time allowed within which foreign applications can be received.
The agreement will usually provide that the proceeds received
on sale of shares not taken up by shareholders, shall be divided
amongst the shareholders (other than dissentients) who do
not come into the scheme, but the expenses of advertising
the shares for sale will first be deducted. If the liquidator
has to sell a substantial number of shares, the same difficulty
may arise in satisfying the Commissioners of Inland Revenue
that the conditions of s. 55 (1) of the Finance Act, 1927,
have been fulfilled in the reconstruction as actually carried
out as may ensue from the case of letters of renunciation in
connection with a scheme of reconstruction (see above p. 210.)

As regards reconstruction under the powers in the memo-
randum of association, this method of reconstruction, which
was formerly common, is not often possible, owing to the
decision of the Court of Appeal in Bisgood v. Henderson's
Transvaal Estates [(1908), 1 Ch. 743].

The effect of that decision, as stated in the head-note ix
the Law Reports, is this: ‘The sale of all a company’s assets.
and all its undertaking, and the distribution of the proceeds.

Reconstruct-
ion under
powers in
Memoran-
dum.