Chapter 22 Self-test Questions

. A scheme of reconstruction is available under which piece of legislation?

Part 26 of the Companies Act 2006

Section 110 of the Insolvency Act 1986

Part 28 of the Companies Act 1986

The Takeover Code

. A scheme of reconstruction is sanctioned by passing an ordinary resolution.

True

False

. A three-stage process exists to implement a scheme of arrangement. Which one of the following is not one of these three stages?

Meetings of creditors and members are held to approve the scheme

An application to the court is made to sanction the scheme

A board resolution is tabled to determine if the company should enter into a scheme of arrangement

An application is made to the court to summon meetings of members and creditors affected by the scheme

. Identify which of the following parties can apply to the court to summon meetings of members and creditors affected by a scheme of arrangement.

The company

The directors of the company

Any creditor of the company

The liquidator

The administrator

Any member of the company

. In order to approve a scheme of arrangement, at least 75 per cent in value of persons present and voting must vote in favour of the scheme.

True

False

. When does a scheme of arrangement become binding?

When it is approved by the relevant members and creditors

When it is sanctioned by the court

When a copy of the court order sanctioning the scheme is sent to Companies House

When the company has notified the members and creditors that the scheme has been sanctioned

. Which one of the following is not a function of the Takeover Panel?

To provide rulings on the interpretation, application or effect of the Takeover Code

To provide directions to restrain breaches of the Takeover Code

To determine whether a takeover or merger constitutes a breach of competition law

To make rules giving effect to the Takeover Directive

. The Takeover Code only applies to takeover bids in relation to listed companies?

True

False

. What is the mandatory offer?

If a person acquires 90 per cent of a company's shares, he must offer to buy the remaining shares

If a person acquires 90 per cent of the company's shares, the remaining shareholders can compel that person to make an offer for their shares

If a person acquires shares that carry at least 30 per cent of the company's voting rights, that person must make an offer to any class of equity shares and holders of shares with voting rights

If a person acquires over 50 per cent of a company's shares, he must make a takeover bid

. When will squeeze-out and sell-out rights be triggered?

When a person acquires at least 30 per cent of the voting rights in a company

When a person acquires at least 50 per cent of the voting rights in a company

When a person acquires a majority of the voting rights in a company

When a person acquires at least 90 per cent of the shares in question and those shares carry at least 90 per cent of the voting rights

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