Companies Act 2014 section 1165

Preservation of rights of holders of securities

Section 1165 deals with protecting the rights of holders of non-share securities (such as debentures or bonds with special rights) when a company is divided, ensuring they receive equivalent rights in the successor companies.

• Holders of non-share securities with special rights in a transferor company must be given at least equivalent rights in one or more of the successor companies.
• This protection does not apply where the alteration of rights has been approved by a majority of the relevant security holders at a dedicated meeting, or by each holder individually.
• The protection also does not apply where the terms of the securities already entitle holders to have their securities purchased by a successor company.
• This provision mirrors the corresponding rule for mergers elsewhere in Part 17 of the Companies Act 2014.