Scottish Court of Session Decisions

By section 10 of the Companies Act 1867, it is enacted “The Company shall, after the date of the passing of any special resolution for reducing its capital, add to its name, until such date as the Court may fix, the words “and reduced,” as the last words in its name, and those words shall, until such date, be deemed to be part of the name of the Company within the meaning of the principal Act.”

By section 4 of the Companies Act 1877, it is enacted—“The provisions of the Companies Act 1867, as amended by this Act, shall apply to any company reducing its capital in pursuance of this Act and of the Companies Act 1867, as amended by this Act: Provided that where the reduction of the capital of a company does not involve either the diminution of any liability in respect of unpaid capital or the payment to any shareholder of any paid-up capital—(1) The creditors of the Company shall not, unless the Court otherwise direct, be entitled to object or required to consent to the reduction; and (2) it shall not be necessary before the presentation of the petition for confirming the reduction to add, and the Court may, if it thinks it expedient so to do, dispense altogether with the addition of the words ‘and reduced,’ as mentioned in the Companies Act 1867.

At an extraordinary meeting of the Albany Shipping Company, Limited, held on 3rd October 1895, and confirmed at a subsequent extraordinary general meeting held on 22nd October 1895, a special resolution was passed that the capital of the Company should be reduced from £250,000, divided into 25,000 shares of £10 each to £125,000 divided into 25,000 of £5 each. The reduction of capital resolved upon by the Company was a reduction of paid-up capital which was lost, or was unrepresented by available assets, and did not involve either the diminution of any liability in respect of unpaid capital, or the payment to any shareholder of any paid-up capital, and did not in any way affect the rights of creditors of the Company.

Thereafter, on 10th December 1895, the Company presented a petition to the Second Division to pronounce an order confirming the proposed reduction of capital.

On moving for intimation and advertisement counsel for petitioners moved the Court for leave to dispense with the addition of the words “and reduced” to the name of the Company from the date of the presentation of the petition till the disposal thereof. He referred to the English cases of Langdale Chemical Manure Company, Limited, 1878, 26 W.R. 434, and River Plate Fresh Meat Company, 1885, W.N. 14.