Companies Act 2014 section 542

Supplemental provisions in relation to section 541

Section 542 deals with the practical mechanics of what happens after the court confirms (or refuses to confirm) an examiner's proposals, including effective dates, filing requirements, capital reduction safeguards, and voting thresholds.

• Once the court confirms proposals, any amendments to the company's constitution take effect from a court-fixed date, and the compromise or scheme of arrangement must generally come into effect within 21 days of confirmation unless the court sets a later date.
• A certified copy of the court order must be delivered to the Registrar by the examiner or another person directed by the court, and the court may make any orders it considers necessary to implement its decision.
• If the court refuses to confirm the proposals, or if the examiner reports that agreement could not be reached with creditors, the court may order the winding up of the company or make any other order it considers just and equitable.
• An examiner's proposals may include a reduction of the company's share capital, but the court must refuse to confirm (or must modify) any proposal that would leave the company with capital that is manifestly inadequate, having regard to the scale of the business and its likely ongoing liabilities.

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