222 SECRETARIAL PRACTICE
holder who has not assented to or has failed to carry out the
scheme. The dissenting shareholder has a right of appeal to
the Court exefciseable at any time within one month after the
notice was given to him; if a notice is given and no order is
made by the Court to the contrary, the purchase of the
interest of the dissentient shareholder will be carried out
through the transferor company as provided by sub-sections
(2) and (3) of the section. For the provisions of s. 55 of the
Finance Act, 1927, as amended by s. 31 of the Finance Act,
1928, see Appendix L.

It should be observed that where all the shares are being
acquired, it is necessary to take care not to acquire the
qualifying shares of the directors, until by the machinery of
the articles a fresh board of properly qualified persons has
been appointed, after which the old qualifying shares can be
transferred, thus completing the matter. Further, care
should be taken that the shares acquired are in the case of a
public company, put into the names of not less than seven
persons or, in the case of a private company, two persons.

Schemes of Turning now to the remaining common form of recon-

Avangs. q struction, more properly described as a scheme of arrange-

s 153. Unger ment, s. 153 of the Act, stated shortly, provides that when a
compromise or arrangement is proposed between a company
and its creditors, or any class of creditors, or between the
company and its members, or any class of members, the Court
may, ‘on the application of the company, or any creditor or
member, or, in the case of winding up, of the liquidator,
direct that a meeting of the creditors or class of creditors, or
of the members or class of members, as the case may be, be
convened, and if a majority representing three-fourths in
value of those present and voting agrees to the compromise
it is, when sanctioned by the Court, to be binding on the
creditors or class of creditors, or the members or class of
members, as well as on the company, or, if there is a liquidation
then on the liquidator and the contributories. The chief
advantages of a scheme of arrangement are that a majority
of creditors may bind the minority, for example, to accept
debentures or shares in lieu of cash, or foregoing arrears oi
interest ; and that (unless as part of the scheme a new company
is formed to purchase the undertaking and is not in a position
to take advantage of s. 55 of the Finance Act, 1927), the ex-
pense of registration and the stamp duty on the transfer of
assets 1s avoided. It will be remembered that under s. 234
creditors are not bound until a year has elapsed from the pass-
ing of the special resolution.

It should be noted that under the new Act persons present,