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CS Professional · Corporate Restructuring, Valuation and Insolvency · Fast Track Mergers

Gamma Ltd and Delta Ltd, both small companies, plan a fast track merger. Delta Ltd's members holding 88% of its total shares approve the scheme at a general meeting after considering objections. What is the position?

The approval is not valid. Under section 233(1)(b), the scheme must be approved at a general meeting by members or a class of members holding at least ninety per cent of the total number of shares, and 88% is below that threshold.

  1. AValid, since a simple majority of members present suffices
  2. BValid, since 75% in value of those voting is enough
  3. CNot valid, since approval must be by members holding at least ninety per cent of the total number of sharesCorrect
  4. DValid, provided the Registrar later ratifies it

Explanation

Section 233(1)(b) requires approval at a general meeting by members or class of members holding at least ninety per cent of the total number of shares. 88% falls short, so the scheme is not validly approved by Delta's members.

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