RECONSTRUCTION 
213 
though the completion of the winding up will be governed by 
different sections of the Act. 
The new company is frequently registered with a name 
identical with that of the old. This is permissible under s. 17 
of the Act, on the old company testifying its consent in such 
manner as the Registrar may require. Unless the objects of 
the company are being enlarged, it is often advisable to retain 
the old name. As regards the distribution of the consideration 
i.e. of the shares of the new company, amongst the share- 
holders of the old, it is always better to provide for their 
allotment direct to the persons entitled, in order to avoid the 
expense of transfer stamps and fees; but if the shares are 
partly paid it is especially desirable, in the liquidator’s 
interest, that this should be done, since he might incur 
serious liabilities by taking partly paid shares into his own 
name. 
A reconstruction of this kind is in general extremely 
simple, unless more working capital is wanted. Supposing 
that the sole object of the reconstruction is to enable the 
company to carry on a class of business which it has no 
power to carry on, then the memorandum of the new company 
will be drawn to contain the necessary power, and after 
the sale is complete a share of the new company will be 
allotted for each share of the old company of the same value 
and denomination, and, apart from the matter of dissentients, 
the result will be that a new company, exactly the same as 
the old, with the same board, the same capital, the same 
shareholders, and the same articles, and, perhaps, the same 
name, will continue to trade with enlarged powers. Or if 
the object of the reconstruction is to write off 50 per cent. 
of the capital of the company which has been lost, or is 
unrepresented by available assets, each shareholder in the 
old company will receive, say, for every fully-paid £1 share 
held by him a fully-paid 10s. share in the new company; 
and, irrespective of this reduction, the same undertaking 
will be carried on by substantially the same people. 
A scheme of reconstruction of this kind may not provide Alteration 
for the division of the shares in the new company among the of Rights. 
shareholders of the old company, otherwise than in accordance 
with their rights under the memorandum and articles. This 
was the decision in Griffith v. Paget [(1877), 5 Ch. D. 894], 
and if the rights are fixed by the memorandum, and therefore 
unalterable, this method cannot be used simpliciter where a 
distribution involving a variation of rights is desired. If, 
however, the rights are fixed by the articles, either of two 
clauses common in articles of association will get over the