Commentary on Sections Overview Part 6: Company reorganisations Paragraph 42: Period within which replacement option must be granted
3537.This paragraph outlines the time limit on granting the replacement option mentioned in the preceding paragraph. That time limit depends on the circumstances under which the new company acquires control of the old company. The various possibilities are covered in sub-paragraphs (2) to (4).
3538.In sub-paragraphs (2) and (3) there is a six-month period time limit. The wording in the source legislation does not make it clear whether or not the six months start running on the day that the change in control occurs, or on the day after. Sub-paragraphs (2) and (3) clarify this by referring to “6 months after the date on which…”. So if, for example, the new company acquires control of the old company at 2pm on 1 January 2004, the replacement option must be granted before 2 July 2004.
3539.This paragraph derives from paragraph 62 of Schedule 14 to FA 2000.