Companies Act 2014 section 1151

Divisions to which this Chapter applies — definitions and supplementary provisions

Section 1151 defines two types of corporate division — "division by acquisition" and "division by formation of new companies" — and sets out how companies in winding up may participate in such divisions.

• A "division by acquisition" occurs when two or more successor companies acquire all the assets and liabilities of a transferor company, which is then dissolved without going into liquidation, in exchange for shares (with or without cash) issued to the transferor company's shareholders.
• A "division by formation of new companies" works the same way, except the successor companies are newly formed specifically for the purpose of acquiring the transferor company's assets and liabilities.
• A company being wound up may participate in either type of division, provided the distribution of its assets to shareholders has not yet begun at the date of the common draft terms of division.
• The general provisions on schemes of arrangement and acquisitions in Part 9 and the liquidator's power under section 601 to accept shares as consideration for sale of company property do not apply to these divisions, except where a company in winding up opts to use those provisions instead.