Companies Act 2014 section 499

Purchase of minority shares

Section 499 sets out the rules allowing minority shareholders in a transferor company to require the successor companies to buy out their shares for cash when a company division takes place.

• Minority shareholders in the transferor company may request in writing that the successor companies purchase their shares for cash, within 15 days of the relevant date
• The successor companies must buy the shares at a price based on the share exchange ratio in the common draft terms of division, and the purchased shares are treated as treasury shares
• The court retains full power to make any order necessary to protect the interests of a dissenting minority in a company involved in a division
• A minority shareholder is defined either as any shareholder other than a successor company already holding 90% or more of the voting shares, or as a shareholder who voted against the special resolution