Share cancellation and disposal rules require transferee companies to deal with pre-commencement holdings within a prescribed period. New section 233A requires a transferee company holding shares in its own name or in the name of a trust, arising from a pre-commencement compromise or arrangement, to deal with or dispose of those shares within three years in the prescribed manner. If the company fails to do so, the shares are to be cancelled and extinguished, and that cancellation is deemed a reduction of share capital. Non-compliance with this requirement attracts a daily penalty on the company and every defaulting officer.