Co-operative and Community Benefit Societies Act 2014

Conversion of company into society

115 Conversion of company into a registered society

(1) A company registered under the Companies Acts may by special resolution determine to convert itself into a registered society.

(2) The resolution must—

(a) be accompanied by a copy of the society’s rules, and

(b) appoint 3 members of the company (“the appointed members”) to perform the functions mentioned in subsections (3) and (4).

(3) The appointed members and the company’s secretary (or, if it has no secretary, a director of the company) must sign the rules.

(4) The resolution must provide either—

(a) that the appointed members are authorised to accept any alterations to the rules made by the FCA without further consulting the company, or

(b) that the appointed members must lay any such alterations before the company in general meeting for acceptance.

(5) A copy of the special resolution and the society’s rules must be sent to the FCA.

(6) On registering the society under this Act, the FCA must (in addition to giving it an acknowledgement of registration under section 3) give it a certificate similarly sealed or signed that the society’s rules have been registered.

(7) The name under which the company is registered as a registered society must not include the word “company”.

(8) A copy of the special resolution and the FCA’s certificate must be sent to the registrar of companies, for registration by the registrar.

(9) The conversion takes effect on the registrar registering the resolution and certificate.

(10) On the conversion taking effect, the company’s registration under the Companies Acts becomes void and the registrar must cancel the registration.

116 Conversion of company into a society: member’s shareholding in company exceeds maximum permitted amount

(1) This section applies in relation to a resolution under section 115 where the nominal value of the company’s shares held by a member other than a registered society exceeds the amount specified in section 24(1) (maximum shareholding).

(2) The resolution may provide for the conversion of the shares representing that excess into a transferable loan stock—

(a) bearing such rate of interest as may be fixed, and

(b) repayable on such conditions as are determined by the resolution.

117 Conversion of company into a society: no effect on liabilities

(1) Registration of a company as a registered society does not affect—

(a) any right or claim for the time being subsisting against the company, or

(b) any penalty for the time being incurred by the company.

(2) For the purpose of enforcing any such right, claim or penalty, the company may be sued and proceeded against in the same way as if it had not been registered as a society.

(3) Any such right or claim, and the liability to any such penalty, has priority as against the society’s property over all other rights or claims against, or liabilities of, the society.