Companies Act 2014 section 487

Divisions to which this Chapter applies — definitions and supplementary provisions

Section 487 defines the two types of company division permitted under this Chapter: a "division by acquisition" and a "division by formation of new companies", and sets out when a company already in winding up may participate in such a division.

• 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 is the same as a division by acquisition, except that the successor companies are specifically created for the purpose of acquiring the transferor company's assets and liabilities.
• One or more of the successor companies in a division by acquisition may be a new company, but not all of them can be new — at least one must already exist.
• A company that is already being wound up may participate in either type of division, provided that the distribution of its assets to shareholders has not yet begun at the date of the common draft terms of division.