224

SECRETARIAL PRACTICE
may provide for a stay of the liquidation and the continuance
of the old business. It may also involve the reduction,
unification, consolidation or reorganisation of the capital
of the company, or the modification of the rights of a class of
shareholders.

Where a compromise or arrangement is proposed in con-
nection with a scheme of reconstruction or amalgamation
involving the transfer of the whole or any part of the under-
taking or property of one company to another company, the
Court is empowered to facilitate the scheme by making
provision for such matters as the transfer of property, the
allotment of shares, etc., pending legal proceedings, the
dissolution of the transferor company without a winding up
and provision for dissentients [s. 154]. Notwithstanding this
section, it would seem advisable for the scheme itself to con-
tain provisions at least as to transfer of property, allotment,
and if it is intended to confer rights on dissentients, for dis-
sentients. The powers conferred on the Court by the section
will prove particularly valuable if any unforeseen difficulty
arises in carrying out the scheme, as they can be exercised
not only by the order sanctioning the scheme but at any
subsequent time. S. 154, however, only applies to companies
within the meaning of the Act. It does not therefore apply
to unregistered companies as defined by s. 337.

In carrying out any scheme of reconstruction, whether
ander s. 234 or under s. 153 or otherwise, legal advice is
almost invariably necessary.

No order sanctioning a scheme will take effect until an
office copy thereof has been delivered to the Registrar for
registration, and a copy of every such order must be annexed
to every copy of the memorandum issued after the order has
been made [s. 153 (3)]. Any order made under s. 154 must
be delivered to the Registrar for registration within seven
days after it is made.

Compen- The Act of 1908 contained no provision affecting the pay-
sation for ment of compensation for loss of office to a director retiring as
loss of office. the result of the sale of the undertaking of a company or its
amalgamation with another company though if an agreement to
effect either of these objects contained a provision for payment
by the purchaser of such compensation and the agreement was
submitted to a general meeting of the company for ratification,
a resolution approving the agréement would not be binding
on absent or dissenting shareholders if the notice concerning
the meeting did not contain proper disclosure of the com-
pensation intended to be paid to the directors [Kaye v.
Croydon Tramways (1898), 1 Ch. 358]. This decision would