RECONSTRUCTION 
221 
shareholders, there is nothing to prevent such a scheme going 
through, illegal though it may be, and plenty of such schemes 
have been carried out even since Bisgood's Case. 
As regards amalgamations, it is only necessary to state that 
they are in general effected either by means of proceedings 
under s. 234 or by a purchase of shares. Where the amalgama- 
tion is effected under s. 234, the process where Company A 
is absorbed by Company B will be a single sale; or where a new 
company acquires the undertakings of both Company A and 
Company B, there will, of course, be an independent sale by 
cach. The law is the same, and the difficulties are the same 
as in simple reconstructions, and need not be further com- 
mented on. 
As regards amalgamation by a purchase of shares, this 
amounts simply to the acquisition of all, or, if it is merely 
desired to be able to pass an extraordinary resolution, at 
least three-fourths of the shares of the company. 
Sometimes, however, the acquisition is limited to those 
classes of shares which carry full voting rights. This method 
of amalgamation has become increasingly popular, both 
because it preserves the names and thus the goodwill of the 
original companies and, at any rate prior to the coming into 
force of s. 55 of the Finance Act, 1927, because it avoided 
the duty under s. 112 of the Stamp Act, 1891 involved in the 
formation of a new company. A common method of procedure 
is for an agreement to be entered into with the directors of the 
company the shares of which it is desired to acquire on behalf 
of themselves and all other members of that company who 
ratify the agreement, the agreement being made conditional 
on ratification within a fixed period by an agreed majority. 
The directors then circularise the shareholders and if the 
requisite majority ratify within the time limited, the agree- 
ment becomes absolute. This form of amalgamation is 
recognised by s. 155 of the Act of 1929, under which if a 
scheme or contract involving the transfer of shares or any 
class of shares in a company (called ‘the transferor company’) 
to another company, whether a company within the meaning 
of the Act or not (called ‘the transferee company’), has 
within four months of the offer being made been approved 
by the holders of at least nine-tenths in value of the shares 
affected, the transferee company may, on notice given in the 
prescribed manner to any dissenting shareholder within two 
months, after the expiration of the above period of four 
months, purchase the shares held by any dissenting share- 
holder upon the terms specified in the scheme or contract. 
The expression ‘dissenting shareholder’ includes any share- 
Amalgama- 
tions. 
Amalgama- 
{ion by share 
purchase.