RECONSTRUCTION

211

Under the Act of 1908, this method of reconstruction was
only possible if the transferee company was a company
within the meaning of the Act [Thomas v. United Butter
Companies of France (1909), 2 Ch. 484]; but this limitation
is removed by the new Act and the usefulness of the section
is thus increased.

The effect of s. 234 is to enable the liquidator of a company
in a members’ voluntary liquidation (see p. 231) with the
sanction of a special resolution (which may be passed either
before or concurrently with or after the resolution for winding-
up), to sell the whole or any part of its business or property
to another company (whether a company within the meaning
of the Act or not), the consideration for the sale being either
wholly or in part shares policies or other like interests in the
purchasing company for distribution among the members of
the selling company, or the right for the shareholders of the
old company to participate in the profits of or receive any
other benefit from the new company, subject however, to
the right of a shareholder who has not voted in favour of the
resolution at the meeting at which the resolution was passed,
to leave a notice of dissent, addressed to the liquidator,
at the office of the company, within seven days of the passing
of the resolution, requiring the liquidator purchase the
interest of the dissentient. Accordingly, a three-fourths
majority may effectively resolve upon this form of reconstruc-
tion, subject only to the liability to purchase the rights of a
dissentient minority.

By s. 243 the provisions of s. 234 are applicable, also in
the case of a creditors’ voluntary winding up (see p. 231), with
the modification that any powers conferred on the liquidator
under that section can be exercised only with the sanction
either of the Court or of the committee of inspection.

[t is to be observed that the liquidator may be authorised
to sell the whole or part of the business or property of the
company. Property means the assets at the time of liquida-
tion; and although it has been held that capital, then uncalled,
cannot be included in the sale [Clinch v. Financial Corporation
1868), 4 Ch. App. 117], yet it is exceedingly doubtful whether
that decision would now be followed; and if it is desired to
include the uncalled capital, there is nothing to prevent a call
being made just before the winding up, in order that the
proceeds, though unpaid, may be included in the sale [New
Zealand Gold Extraction Co. v. Peacock (1894), 1 Q.B. 622].

The section only authorises the sale to another company;
accordingly a sale to an individual, who is to form the new
company, making what profit he can, is invalid [Bird v