Section 711 CAMA 2020
Section 711 Companies and Allied Matters Act is about Arrangement or compromise between two or more companies. It is under Chapter 27 (Arrangements and compromise) of the Act.
(1) Where under a scheme proposed for a compromise,arrangement or reconstruction between two or more companies or the merger of any two or more companies, the whole or any part of the undertaking or the property of any company concerned in the scheme (in this section referred toas “the transfer of company”) is to be transferred to another company, the Court may, on the application in summary of any of the companies to be affected, order separate meetings of the companies to be summoned in such manner as the Court may direct.
(2) If a majority representing at least three-quarter in value of the share of members being present and voting either in person or by proxy at each of the separate meetings, agree to the scheme, an application maybe made to the Court by one or more of the companies, and the Court shall sanction the scheme.
(3) When the scheme is sanctioned by the Court, it becomes binding on the companies, and the Court may, by the order sanctioning the scheme or by any subsequent order, make provision for—
(a) the transfer to the transferee company of the whole or any part of the undertaking and of the property or liabilities of any transferor company ;
(b) the allotting or appropriation by the transferee company of shares,debentures, policies or other like interests in that company which under the compromise or arrangement are to be allotted or appropriated by that company to or for any person ;
(c) the continuation by or against the transferee company of legal proceedings pending by or against any transfer or company ;
(d) the dissolution, without winding-up, of any transferor company ;
(e) the provision to be made for any persons who in such manner as the court may direct, dissent from the compromise or arrangement ; and
(f ) such incidental, consequential and supplemental matters as are necessary to secure that the reconstruction or merger shall be fully and effectively carried out.
(4) An order under subsection (3) (d) shall not be made unless—(a) the whole of the undertaking and the property, assets and liabilities of the transferor company are being transferred into the transferee company ; and
(b) the Court is satisfied that adequate provision by way of compensation or otherwise have been made with respect to the employees of the company to be dissolved.
(5) Where an order under this section provides for the transfer of property or liabilities, that property or liabilities shall, by virtue of the order, be transferred to and become the property or liabilities of the transferee company, and in the case of any property, if the order so directs, freed from any charge which is by virtue of the compromise or arrangement to cease to have effect.
(6) Where an order is made under this section, every company in relation to which the order is made shall cause an office copy of the order to be delivered to the Commission for registration within seven days after the making of the order, and a notice of the order shall be published in the Federal Government Gazette and in at least one national newspaper and if in default shall be liable to a fine in such amount as may be prescribed by the Commission in its regulations.
(7) In this section—
(a) “property” includes property rights and powers of every description ;
(b) “liabilities” includes rights, powers and duties of every description notwithstanding that such rights, powers and duties are of a personal character which could not generally be assigned or performed vicariously ; and
(c)”company” where used in this section does not include any company other than a company within the meaning of this Act.
