Companies (Amendment) Act , 1983

PART I Preliminary

1 Short title, collective citation and commencement.

1.—(1) This Act may be cited as the Companies (Amendment) Act, 1983.

(2) The collective citation “the Companies Acts, 1963 to 1983” shall include this Act.

(3) This Act shall come into operation on such day as the Minister may appoint by order.

2 Interpretation.

2.—(1) In this Act unless the context otherwise, requires—

“the appointed day” means the day appointed by the Minister under section 1 (3) for the coming into operation of this Act;

“the appropriate rate”, in relation to interest, means five per cent. per annum or such other rate as may be specified by order made by the Minister under subsection (7);

“the authorised minimum” has the meaning assigned to it by section 19;

“balance sheet date”, in relation to a balance sheet, means the date as at which the balance sheet was prepared;

“called-up share capital”, in relation to a company, means so much of its share capital as equals the aggregate amount of the calls made on its shares, whether or not those calls have been paid, together with any share capital paid up without being called and any share capital to be paid on a specified future date under the articles, the terms of allotment of the relevant shares or any other arrangements for payment of those shares, and “uncalled share capital” shall be construed accordingly;

“the Companies Acts” means the Acts which by virtue of subsection (5) shall be construed as one Act;

“employees' share scheme” means any scheme for the time being in force, in accordance with which a company encourages or facilitates the holding of shares or debentures in the company or its holding company by or for the benefit of employees or former employees of the company or of any subsidiary of the company including any person who is or was a director holding a salaried employment or office in the company or any subsidiary of the company;

“equity security” has the meaning assigned to it by section 23(13);

“the general transitional period” means the period of 18 months commencing on the appointed day;

“hire-purchase agreement” has the same meaning as in the Hire- Purchase Act, 1946;

“the Minister” means the Minister for Trade, Commerce and Tourism;

“non-cash asset” means any property or interest in property other than cash (including foreign currency);

“old public limited company” has the meaning assigned to it by section 12(1);

“the Principal Act” means the Companies Act, 1963;

“public company” means a company which is not a private company;

“public limited company” means a public company limited by shares or a public company limited by guarantee and having a share capital, being a company—

(a) the memorandum of which states that the company is to be a public limited company; and

(b) in relation to which the provisions of the Companies Acts as to the registration or re-registration of a company as a public limited company have been complied with on or after the appointed day;

“the re-registration period” has the meaning assigned to it by section 13(1);

“the transitional period for share capital” means the period of 3 years commencing on the appointed day.

(2) In relation to an allotment of shares in a company, the shares shall be taken for the purposes of the Companies Acts to be allotted when a person acquires the unconditional right to be included in the company's register of members in respect of those shares.

(3) For the purposes of the Companies Acts—

(a) a share in a company shall be taken to have been paid up (as to its nominal value or any premium on it) in cash or allotted for cash if the consideration for the allotment or the payment up is cash received by the company or is a cheque received by the company in good faith which the directors have no reason for suspecting will not be paid or is the release of a liability of the company for a liquidated sum or is an undertaking to pay cash to the company at a future date; and

(b) in relation to the allotment or payment up of any shares in a company, references in the Companies Acts, except in section 23, to consideration other than cash and to the payment up of shares and premiums on shares otherwise than in cash include references to the payment of, or an undertaking to pay, cash to any person other than the company;

and for the purposes of determining whether a share is or is to be allotted for cash or paid up in cash, “cash” includes foreign currency.

(4) For the purposes of this Act—

(a) any reference to a balance sheet or to a profit and loss account shall include a reference to any notes thereon or document annexed thereto giving information which is required by the Companies Acts and is thereby allowed to be so given;

(b) any reference to the transfer or acquisition of a non-cash asset includes a reference to the creation or extinction of an estate or interest in, or a right over, any property and also a reference to the discharge of any person's liability, other than a liability for a liquidated sum; and

(c) the net assets of a company are the aggregate of its assets less the aggregate of its liabilities;

and in paragraph (c) “liabilities” includes any provision (within the meaning of the Sixth Schedule to the Principal Act) except to the extent that that provision is taken into account in calculating the value of any asset of the company.

(5) The Companies Act, 1963, the Companies (Amendment) Act, 1977, the Companies (Amendment) Act, 1982, and this Act shall be construed together as one Act.

(6) In this Act—

(a) a reference to a Part, section or Schedule is to a Part, section or Schedule of this Act unless it is indicated that a reference to some other enactment is intended;

(b) a reference to a subsection, paragraph or subparagraph is to the subsection, paragraph or subparagraph of the provision in which the reference occurs, unless it is indicated that reference to some other provision is intended; and

(c) a reference to any other enactment shall, unless the context otherwise requires, be construed as a reference to that enactment as amended by or under any other enactment, including this Act.

(7) The Minister may by order specify that the appropriate rate of interest for the purposes of this Act shall be a rate other than five per cent. per annum.

3 Amendments, repeals and savings.

3.—(1) The provisions of the Principal Act specified in the First Schedule are hereby amended to the extent specified in that Schedule.

(2) The provisions of the Principal Act and the Companies (Amendment) Act, 1982, specified in the first column of the Third Schedule are hereby repealed to the extent specified in the second column of that Schedule.

(3) Paragraphs 24 and 25 of the First Schedule (which amend Table A and Tábla A respectively in the First Schedule to the Principal Act) and any repeal specified in the Third Schedule of anything contained in the said Table A and the said Tábla A shall not affect any company registered before the appointed day.

(4) In the Principal Act, a reference to a company registered under any specified enactment shall continue to have effect as a reference to a company registered under that enactment, notwithstanding that it has subsequently been re-registered under this Act.

PART II Name of public limited company, registration and re-registration of companies.

4 Name of a public limited company.

4.—(1) The name of a public limited company must end with the words “public limited company” or “cuideachta phoiblí theoranta” which may be abbreviated to “p.l.c.” or “c.p.t.” respectively and those words or abbreviations may not be preceded by the word “limited” or its abbreviation “ltd.” or “teoranta” or its abbreviation “teo.”.

(2) Subject to subsection (1), a resolution in accordance with section 12 that a company be re-registered as a public limited company may change the name of the company by deleting—

(a) the word “company” or the words “and company”; or

(b) the word “cuideachta” or the words “agus cuideachta”,

including any abbreviation of them, and no fee shall be payable in respect of any change of name mentioned in this subsection.

(3) The memorandum of a public limited company which is limited by shares shall be in the form set out in Part I of the Second Schedule or, if it is a company limited by guarantee and having a share capital, in the form set out in Part II of that Schedule or, in either case, as near thereto as circumstances admit; and those forms supersede in the case of a public limited company the forms of memorandum set out respectively in Tables B and D in the First Schedule to the Principal Act.

5 Registration of companies.

5.—(1) Where any memorandum is delivered for registration under section 17 of the Principal Act, the registrar shall not register the memorandum unless he is satisfied that all the requirements of the Companies Acts in respect of registration and of matters precedent and incidental thereto have been complied with.

(2) Where a memorandum which is so delivered states that the association to be registered is to be a public limited company, the amount of the share capital stated in the memorandum to be that with which the company proposes to be registered must not be less than the authorised minimum.

(3) Where the registrar registers an association's memorandum which states that the association is to be a public limited company, the certificate of incorporation given in respect of that association under section 18 of the Principal Act shall contain a statement that the company is a public limited company.

(4) A certificate of incorporation given under that section in respect of any association shall be conclusive evidence—

(a) that the requirements mentioned in subsection (1) have been complied with, and that the association is a company authorised to be registered and is duly registered under the Principal Act; and

(b) if the certificate contains a statement that the company is a public limited company, that the company is such a company.

(5) A statutory declaration in the prescribed form by a solicitor engaged in the formation of a company, or by a person named as a director or secretary of the company in the statement delivered under section 3 of the Companies (Amendment) Act, 1982 that the requirements mentioned in subsection (1) have been complied with shall be delivered to the registrar, and the registrar may accept such a declaration as sufficient evidence of compliance.

6 Restriction on commencement of business by a public limited company.

6.—(1) A company registered as a public limited company on its original incorporation shall not do business or exercise any borrowing powers unless the registrar of companies has issued it with a certificate under this section or the company is re-registered as another form of company.

(2) The registrar shall issue a public limited company with a certificate under this section if, on an application made to him in the prescribed form by the company, he is satisfied that the nominal value of the company's allotted share capital is not less than the authorised minimum, and there is delivered to him a statutory declaration complying with subsection (3).

(3) The statutory declaration shall be in the prescribed form and signed by a director or secretary of the company and shall state—

(a) that the nominal value of the company's allotted share capital is not less than the authorised minimum;

(b) the amount paid up, at the time of the application, on the allotted share capital of the company;

(c) the amount, or estimated amount, of the preliminary expenses of the company and the persons by whom any of those expenses have been paid or are payable; and

(d) any amount or benefit paid or given or intended to be paid or given to any promoter of the company, and the consideration for the payment or benefit.

(4) For the purposes of subsection (2), a share allotted in pursuance of an employees' share scheme may not be taken into account in determining the nominal value of the company's allotted share capital unless it is paid up at least as to one-quarter of the nominal value of the share and the whole of any premium on the share.

(5) The registrar may accept a statutory declaration delivered to him under subsection (2) as sufficient evidence of the matters stated therein.

(6) A certificate under this section in respect of any public limited company shall be conclusive evidence that the company is entitled to do business and exercise any borrowing powers.

(7) If a public limited company does business or exercises borrowing powers in contravention of this section, the company and any officer of the company who is in default shall be guilty of an offence and shall be liable on summary conviction to a fine not exceeding £500.

(8) The provisions of this section are without prejudice to the validity of any transaction entered into by a public limited company; but if a public limited company enters into a transaction in contravention of those provisions and fails to comply with its obligations in connection therewith within 21 days from being called upon to do so, the directors of the company shall be jointly and severally liable to indemnify the other party to the transaction in respect of any loss or damage suffered by him by reason of the failure of the company to comply with those obligations.

7 Prohibition on formation of public company limited by guarantee and having a share capital.

7.—On or after the appointed day, no company shall be formed as, or become, a public company limited by guarantee and having a share capital.

8 Power of registrar to strike public limited company off register.

8.—(1) Where a public limited company registered as such on its original incorporation has not been issued with a certificate under section 6 within one year from the date on which it was registered, the registrar may send to the company, by registered post, a letter stating that a notice will be published in Iris Oifigiúil with a view to striking the name of that public limited company off the register unless such a certificate has been issued to the company within one month from the date of that letter.

(2) Where a certificate referred to in section 6 has not been issued within one month from the date of the letter referred to in subsection (1), the registrar may publish such notice and may proceed to strike the name of the public limited company off the register in accordance with section 311 (5) of the Principal Act.

(3) Section 311 (6), (7) and (8) of the Principal Act shall apply to a public limited company the name of which has been struck off the register in accordance with subsection (2) as those subsections apply for the purposes of the said section 311.

9 Re-registration of private company as public limited company.

9.—(1) Subject to section 11, a private company may be re-registered as a public limited company if—

(a) a special resolution, complying with subsection (2) that it should be so re-registered is passed; and

(b) an application for the purpose, in the prescribed form and signed by a director or secretary of the company, is delivered to the registrar together with the documents mentioned in subsection (3); and

(c) the conditions specified in subsection (5)(a) and (b) (where applicable) and section 10(1) (a) to (d) are satisfied in relation to the company.

(2) The special resolution must—

(a) alter the company's memorandum so that it states that the company is to be a public limited company;

(b) make such other alterations in the memorandum as are necessary to bring it in substance and in form into conformity with the requirements of this Act with respect to the memorandum of a public limited company; and

(c) make such alterations in the company's articles as are requisite in the circumstances.

(3) The documents referred to in subsection (1) are—

(a) a printed copy of the memorandum and articles as altered in pursuance of the resolution;

(b) a copy of a written statement by the auditors of the company that in their opinion the relevant balance sheet shows that at the balance sheet date the amount of the company's net assets was not less than the aggregate of its called-up share capital and undistributable reserves;

(c) a copy of the relevant balance sheet, together with a copy of an unqualified report by the company's auditors in relation to that balance sheet;

(d) a copy of any report prepared under subsection (5)(b); and

(e) a statutory declaration in the prescribed form by a director or secretary of the company—

(i) that the special resolution mentioned in subsection (1) (a) has been passed and that the conditions specified in subsection (1)(c) have been satisfied; and

(ii) that, between the balance sheet date and the application of the company for re-registration, there has been no change in the financial position of the company that has resulted in the amount of the company's net assets becoming less than the aggregate of its called-up share capital and undistributable reserves.

(4) The registrar may accept a statutory declaration under subsection (3) (e) as sufficient evidence that the special resolution has been passed and the said conditions have been satisfied.

(5) Where shares are allotted by the company between the balance sheet date and the passing of the special resolution as fully or partly paid up as to their nominal value or any premium on them otherwise than in cash, the company shall not make an application for re-registration under this section unless before the making of the application—

(a) the consideration for that allotment has been valued in accordance with the provisions of section 30 applied by this subsection and section 31; and

(b) a report with respect to its value has been made to the company in accordance with those provisions during the six months immediately preceding the allotment of the shares;

and subsections (2) to (8) and (12) to (14) of section 30 shall apply for the purposes of this subsection as they apply for the purposes of that section and as if the references to subsection (1) of section 30 were references to this subsection.

(6) If the registrar is satisfied on an application made under subsection (1) that a company may be re-registered under this section as a public limited company, he shall—

(a) retain the application and other documents delivered to him under that subsection; and

(b) issue the company with a certificate of incorporation stating that the company is a public limited company.

(7) The registrar shall not issue a certificate of incorporation under subsection (6) if it appears to him that the court has made an order confirming a reduction of the company's capital which has the effect of bringing the nominal value of the company's allotted share capital below the authorised minimum.

(8) Upon the issue to a company of a certificate of incorporation under subsection (6)—

(a) the company shall by virtue of the issue of that certificate become a public limited company; and

(b) any alterations in the memorandum and articles set out in the resolution shall take effect accordingly.

(9) A certificate of incorporation issued to a company under subsection (6) shall be conclusive evidence—

(a) that the requirements of this Act in respect of re-registration and of matters precedent and incidental thereto have been complied with; and

(b) that the company is a public limited company.

(10) The re-registration of a private company as a public limited company pursuant to this Act shall not affect any rights or obligations of the company or render defective any legal proceedings by or against the company, and any legal proceedings which might have been continued or commenced against it in its former status may be continued or commenced against it in its new status.

(11) A qualification shall be treated for the purposes of the definition of an unqualified report in subsection (13) as being not material in relation to any balance sheet if, but only if, the person making the report states in writing that the thing giving rise to the qualification is not material for the purposes of determining, by reference to that balance sheet, whether at the balance sheet date the amount of the company's net assets was not less than the aggregate of its called-up share capital and undistributable reserves.

(12) For the purposes of the making, in relation to the balance sheet of a company, of a report falling within the definition in subsection (13) of an unqualified report, section 149 of and the Sixth Schedule to the Principal Act shall be deemed to have effect in relation to that balance sheet with such modifications as are necessary by reason of the fact that that balance sheet is prepared otherwise than in respect of a financial year.

(13) In this section—

“undistributable reserves” has the same meaning as in section 46 (2);

“relevant balance sheet” means, in relation to a company, a balance sheet prepared as at a date not more than seven months before the company's application for re-registration under this section; and

“unqualified report” means, in relation to the balance sheet of a company, a report stating without material qualification—

(a) that, in the opinion of the person making the report, the balance sheet complies with the requirements of sections 149 and 156 of the Principal Act; and

(b) without prejudice to paragraph (a) that, except where the company is entitled to avail itself, and has availed itself, of the benefit of any of the provisions of Part III of the Sixth Schedule to the Principal Act, in the opinion of that person, the balance sheet gives a true and fair view of the state of the company's affairs as at the balance sheet date.

10 Requirements as to share capital of private company applying to re-register as public limited company.

10.—(1) Subject to subsection (2), a private company shall not be re-registered under section 9 as a public limited company unless, at the time the special resolution referred to in that section is passed—

(a) the nominal value of the company's allotted share capital is not less than the authorised minimum;

(b) each of its allotted shares is paid up at least as to one-quarter of the nominal value of that share and the whole of any premium on it;

(c) where any share in the company or any premium payable on it has been fully or partly paid up by an undertaking given by any person that he or another should do work or perform services for the company or another, the undertaking has been performed or otherwise discharged; and

(d) where shares have been allotted as fully or partly paid up as to their nominal value or any premium payable on them otherwise than in cash and the consideration for the allotment consists of or includes an undertaking (other than one to which paragraph (c) applies) to the company, either—

(i) that undertaking has been performed or otherwise discharged; or

(ii) there is a contract between the company and any person pursuant to which that undertaking must be performed within five years from that time.

(2) Subject to subsection (3), any share allotted by the company—

(a) which was allotted before the end of the general transitional period; or

(b) which was allotted in pursuance of an employees' share scheme and by reason of which the company would, but for this subsection, be precluded under subsection (1) (b), but not otherwise, from being re-registered as a public limited company,

may be disregarded for the purpose of determining whether subsection (1) (b) to (d) is complied with in relation to the company, and a share so disregarded shall be treated for the purposes of subsection (1) (a) as if it were not part of the allotted share capital of the company.

(3) A share shall not be disregarded by virtue of subsection (2) (a) if the aggregate in nominal value of that share and the other shares which it is proposed so to disregard is more than one-tenth of the nominal value of the company's allotted share capital (not including any share disregarded by virtue of subsection (2) (b)).

11 Re-registration of unlimited company as public limited company.

11.—(1) An unlimited company may be re-registered as a public limited company and for the purposes of such re-registration sections 9 and 53 (6) and (7) shall have effect subject to the modifications contained in this section.

(2) The special resolution required by section 9 (1) must, in addition to the matters mentioned in section 9 (2)—

(a) state that the liability of the members is to be limited by shares and what the share capital of the company is to be; and

(b) make such alterations in the company's memorandum as are necessary to bring it in substance and in form into conformity with the requirements of the Companies Acts with respect to the memorandum of a company limited by shares.

(3) The certificate of incorporation issued under section 9 (6) shall, in addition to containing the statement required by paragraph (b) of that subsection, state that the company has been incorporated as a company limited by shares and—

(a) the company shall by virtue of the issue of that certificate become a public limited company so limited; and

(b) the certificate shall be conclusive evidence of the fact that it is such a public limited company.

(4) Section 53 (6) and (7) shall have effect as if any reference to the re-registration of a company in pursuance of that section included a reference to the re-registration of an unlimited company as a public limited company in accordance with subsection (1), but except as aforesaid the said section 53 shall not apply in relation to the re-registration of an unlimited company as a public limited company.

12 Old public limited companies.

12.—(1) In this Act “old public limited company” means a public company limited by shares or a public company limited by guarantee and having a share capital in respect of which the following conditions are satisfied, that is to say—

(a) the company either existed on the appointed day or was incorporated after that day pursuant to an application made before that day; and

(b) the company has not since the appointed day or the day of the company's incorporation, as the case may be, either been re-registered as a public limited company or become another form of company.

(2) The references in the Principal Act to a company other than a private company and, after the end of the general transitional period, in this Act other than this Part to a public limited company shall, unless the context otherwise requires, include references to an old public limited company.

(3) An old public limited company may (either before or after the end of the general transitional period) be re-registered as a public limited company if—

(a) the directors pass a resolution, complying with subsection (4), that it should be so re-registered; and

(b) an application for the purpose in the prescribed form and signed by a director or secretary of the company is delivered to the registrar, together with the documents mentioned in subsection (5); and

(c) at the time of the resolution, the conditions specified in subsection (9) are satisfied.

(4) The resolution referred to in subsection (3) must alter the company's memorandum so that it states that the company is to be a public limited company and make such other alterations in it as are necessary to bring it in substance and in form into conformity with the requirements of this Act with respect to the memorandum of a public limited company.

(5) The documents referred to in subsection (3) are—

(a) a printed copy of the memorandum as altered in pursuance of the resolution; and

(b) a statutory declaration in the prescribed form by a director or secretary of the company that the resolution mentioned in subsection (3) (a) has been passed and that the conditions specified in subsection (9) were satisfied at the time of the resolution.

(6) The registrar may accept a declaration under subsection (5) (b) as sufficient evidence that the said resolution has been passed and that the said conditions were so satisfied.

(7) Subsections (6) to (9) of section 9 shall apply on an application for re-registration under this section as they apply on an application for re-registration under that section and as if the reference to subsection (1) of that section were a reference to subsection (3) of this section.

(8) If an old public limited company applies for re-registration as a public limited company in accordance with subsection (3) and at the time of making that application delivers to the registrar a statutory declaration in the prescribed form by a director or secretary of the company that the company does not at the time of the declaration satisfy the conditions specified in subsection (9), the registrar shall re-register the company as a public limited company but shall notify it that if, within the transitional period for share capital, it has not satisfied the aforesaid conditions it must re-register as another form of company or wind up voluntarily under section 251 of the Principal Act. Failure so to re-register or wind up shall constitute grounds for a winding-up by the court under section 213(i) of the Principal Act.

(9) The conditions referred to in subsections (3)(c) and (8) are that, at the time of the resolution, the nominal value of the company's allotted share capital is not less than the authorised minimum and that in the case of all the shares of the company or all those of its shares which are comprised in a portion of that capital which satisfies that condition—

(a) each share is paid up at least as to one-quarter of the nominal value of that share and the whole of any premium on it;

(b) where any of the shares in question or any premium payable on them has been fully or partly paid up by an undertaking given by any person that he or another should do work or perform services for the company or another, the undertaking has been performed or otherwise discharged; and

(c) where any of the shares in question has been allotted as fully or partly paid up as to its nominal value or any premium payable on it otherwise than in cash and the consideration for the allotment consists of or includes an undertaking (other than one to which paragraph (b) applies) to the company, either—

(i) that undertaking has been performed or otherwise discharged; or

(ii) there is a contract between the company and any person pursuant to which that undertaking must be performed within five years from the time of the resolution.

(10) The re-registration of an old public limited company as a public limited company pursuant to this Act shall not affect any rights or obligations of the company or render defective any legal proceedings by or against the company, and any legal proceedings which might have been continued or commenced against it in its former status may be continued or commenced against it in its new status.

13 Failure by an old public limited company to re-register as public limited company.

13.—(1) If, at any time after the end of the period of fifteen months from the appointed day (in this Act referred to as “the re-registration period”), a company which is an old public limited company has not re-registered as a public limited company under section 12, the company and any officer of the company who is in default shall be guilty of an offence unless at that time the company—

(a) has applied to be re-registered under section 12 and the application has not been refused or withdrawn; or

(b) has applied to be re-registered as another form of company.

(2) A person guilty of an offence under subsection (1) shall be liable on summary conviction to a fine not exceeding £250 together with, in the case of a continuing offence, a fine not exceeding £25 for every day on which the offence continues, but not exceeding £500 in total.

14 Re-registration of public limited company as private company.

14.—(1) A public limited company may be re-registered as a private company if—

(a) a special resolution complying with subsection (2) that it should be so re-registered is passed and has not been cancelled by the court under section 15(6);

(b) an application for the purpose in the prescribed form and signed by a director or secretary of the company is delivered to the registrar, together with a printed copy of the memorandum and articles of the company as altered by the resolution; and

(c) the period during which an application for the cancellation of the resolution under section 15(2) may be made has expired without any such application having been made; or

(d) where such an application has been made, the application has been withdrawn or an order has been made under section 15(6) confirming the resolution and a copy of that order has been delivered to the registrar.

(2) The resolution must—

(a) alter the company's memorandum so that it no longer states that the company is to be a public limited company and must make such other alterations in the company's memorandum as are requisite in the circumstances; and

(b) make such alterations in the company's articles as are requisite in the circumstances and in such a manner that they include the provisions which, under section 33 of the Principal Act, are required to be included in the articles of a company in order to constitute it a private company.

(3) If the registrar is satisfied that a public limited company may be re-registered under subsection (1), he shall—

(a) retain the application and other documents delivered to him under that subsection; and

(b) issue the company with a certificate of incorporation appropriate to a private company.

(4) Upon the issue of a certificate of incorporation under subsection (3)—

(a) the company shall by virtue of the issue of that certificate become a private company; and

(b) the alterations in the memorandum and articles set out in the resolution shall take effect accordingly.

(5) A certificate of incorporation issued to a company under subsection (3) shall be conclusive evidence—

(a) that the requirements of this section in respect of re-registration and of matters precedent and incidental thereto have been complied with; and

(b) that the company is a private company.

(6) The re-registration of a public limited company as a private company pursuant to this Act shall not affect any rights or obligations of the company or render defective any legal proceedings by or against the company, and any legal proceedings which might have been continued or commenced against it in its former status may be continued or commenced against it in its new status.

15 Provisions supplementary to section 14.

15.—(1) This section applies to a special resolution by a public limited company to be re-registered under section 14 as a private company.

(2) Where a special resolution to which this section applies has been passed, an application may be made to the court for the cancellation of that resolution.

(3) An application under subsection (2) may be made—

(a) by the holders of not less in the aggregate than five per cent. in nominal value of the company's issued share capital or any class thereof;

(b) if the company is not limited by shares, by not less than five per cent. of the company's members; or

(c) by not less than 50 of the company's members;

but any such application shall not be made by any person who has consented to or voted in favour of the resolution.

(4) Any such application must be made within 28 days after the passing of the resolution and may be made on behalf of the persons entitled to make the application by such one or more of their number as they may appoint in writing for the purpose.

(5) If an application is made under subsection (2), the company—

(a) shall forthwith give notice of that fact to the registrar; and

(b) where on the hearing of that application an order canceling or confirming the resolution is made under subsection (6), shall, within 15 days from the making of that order, or within such longer period as the court may at any time by order direct, deliver an office copy of the order to the registrar.

(6) On the hearing of an application under subsection (2) the court shall make an order either cancelling or confirming the resolution and—

(a) may make that order on such terms and conditions as it thinks fit, and may, if it thinks fit, adjourn the proceedings in order that an arrangement may be made to the satisfaction of the court for the purchase of the interests of dissentient members; and

(b) may give such directions and make such orders as it thinks expedient for facilitating or carrying into effect any such arrangement.

(7) An order under this section may, if the court thinks fit, provide for the purchase by the company of the shares of any members of the company and for the reduction accordingly of the company's capital and may make such alterations in the memorandum and articles of the company as may be required in consequence of that provision.

(8) Where an order under this section requires the company not to make any, or any specified, alteration in its memorandum or articles, then, notwithstanding anything in the Companies Acts, the company shall not have power without the leave of the court to make any such alteration in breach of that requirement.

(9) Any alteration in the memorandum or articles of the company made by virtue of an order under this section, other than one made by resolution of the company, shall be of the same effect as if duly made by resolution of the company, and the provisions of the Companies Acts shall apply to the memorandum or articles as so altered accordingly.

(10) A company which fails to comply with subsection (5) and any officer of the company who is in default shall be guilty of an offence and shall be liable on summary conviction to a fine not exceeding £250 together with, in the case of a continuing offence, a fine not exceeding £25 for every day on which the offence continues, but not exceeding £500 in total.

16 Failure by old public limited company to re-register as another form of company.

16.—(1) Where an old public limited company has within the re-registration period applied for re-registration as a form of company other than a public limited company, and the registrar has notified the company that it has failed to fulfil the requirements for such re-registration, the company and any officer of the company who is in default shall be guilty of an offence unless within a period of 12 months from the end of the re-registration period—

(a) those requirements have been fulfilled and the re-registration has taken place; or

(b) the company has been re-registered in a form other than that for which application was made; or

(c) the company has been wound up voluntarily under section 251 of the Principal Act.

(2) A person guilty of an offence under subsection (1) shall be liable on summary conviction to a fine not exceeding £250 together with, in the case of a continuing offence, a fine not exceeding £25 for every day on which the offence continues, but not exceeding £500 in total.

17 Limitation on reduction by a public limited company of its allotted share capital.

17.—(1) Subject to subsections (2) and (3), a public limited company may not reduce its allotted share capital below the authorised minimum and section 72(1) of the Principal Act shall be construed accordingly.

(2) Subsection (1) shall not apply to an old public limited company which has been re-registered as a public limited company until expiry of the transitional period for share capital.

(3) Where the court makes an order confirming a reduction of the capital of a public limited company which has the effect of bringing the nominal value of the company's allotted share capital below the authorised minimum, the registrar shall not register the order under section 75(1) of the Principal Act unless the court otherwise directs or the company is first re-registered as another form of company.

(4) A court making any such order in respect of a public limited company may authorise the company to be re-registered as another form of company without its having passed a special resolution and, where the court so authorises a public limited company, the court shall specify in the order the alterations in the company's memorandum and articles to be made in connection with that re-registration.

(5) In its application to a public limited company that applies to be re-registered as a private company in pursuance of an authority given under subsection (4), section 14 shall have effect with the following modifications—

(a) references to the special resolution of the company shall have effect as references to the order of the court under the said subsection (4);

(b) section 14(1) (a), (c) and (d) and (2) shall not apply; and

(c) section 14(3) shall be read as if the words—“If the registrar is satisfied that a public limited company may be re-registered under subsection (1) he shall” were deleted and the following words substituted therefor “On receipt of an application for re-registration under this section made in pursuance of an order of the court under section 17, the registrar shall”.

18 Registration of joint stock companies.

18.—(1) A joint stock company (within the meaning of section 329 of the Principal Act) applying to be registered in pursuance of Part IX of that Act as a company limited by shares may, subject to satisfying the conditions specified in section 9(5) (a) and (b) (where applicable) and section 10 (1) (a) to (d), as applied by this section, and to complying with the requirements of subsection (4), apply to be so registered as a public limited company.

(2) The said sections 9(5) and 10 shall apply to a joint stock company applying to register under the said Part IX as they apply to a private company applying to be re-registered under section 9, but as if any reference to the special resolution referred to in section 9 were a reference to the resolution referred to in subsection (4) (a).

(3) In the following provisions of this section an application by a company made in pursuance of the said Part IX to register as a public company limited by shares is referred to as a relevant application.

(4) A relevant application shall be made in the prescribed form and shall be delivered to the registrar together with the following documents (as well as with the documents referred to in section 330 of the Principal Act), namely—

(a) a copy of the resolution that the company be a public limited company;

(b) a copy of a written statement by a person, who would be qualified under section 162 of the Principal Act for appointment as auditor of the company if it were a company registered under that Act, that in his opinion a relevant balance sheet shows that at the balance sheet date the amount of the company's net assets was not less than the aggregate of the called-up share capital of the company and its undistributable reserves;

(c) a copy of the relevant balance sheet together with a copy of an unqualified report by such a person in relation to that balance sheet;

(d) a copy of any report prepared under section 9 (5) (b) as applied by this section; and

(e) a statutory declaration in the prescribed form by a director or secretary of the company—

(i) that the conditions specified in section 9 (5) (a) and (b) (where applicable) and section 10(1) (a) to (d) have been satisfied; and

(ii) that, between the balance sheet date referred to in paragraph (b) and the date of the relevant application, there has been no change in the financial position of the company that has resulted in the amount of the company's net assets becoming less than the aggregate of its called-up share capital and undistributable reserves.

(5) The registrar may accept a declaration under subsection (4) (e) as sufficient evidence that the conditions referred to in subparagraph (i) of that paragraph have been satisfied.

(6) Where on a relevant application the registrar is satisfied that the company may be registered as a public company limited by shares, the certificate of incorporation given by him under section 336 of the Principal Act shall state that the company is a public limited company; and such a statement shall be conclusive evidence that the requirements of this section have been complied with and that the company is a public company so limited.

(7) The registration of a joint stock company as a public limited company shall not affect any rights or obligations of the company or render defective any legal proceedings by or against the company, and any legal proceedings which might have been continued or commenced against it in its former status may be continued or commenced against it in its new status.

(8) In this section—

“relevant balance sheet” means, in relation to a company, a balance sheet prepared as at a date not more than seven months before the relevant application;

“undistributable reserves” has the same meaning as in section 46 (2); and

“unqualified report” has the same meaning as in section 9 (13);

and section 9 (11) applies to the making in pursuance of this section of an unqualified report such as is mentioned in that subsection as it applies to the making of such a report in pursuance of the said section 9.

PART III The capital of a company

Authorised share capital and the issue of share capital

19 Meaning of “authorised minimum”.

19.—(1) In this Act “the authorised minimum” means £30,000 or such greater sum as may be specified by order made by the Minister under subsection (2).

(2) The Minister may by order specify that the authorised minimum for the purposes of this Act shall be an amount other than £30,000 and such an order may—

(a) require any public limited company having an allotted share capital of which the nominal value is less than the amount specified in the order as the authorised minimum to increase that value to not less than that amount or make an application to be re-registered as another form of company;

(b) make, in connection with any such requirement, provision for any of the matters for which provision is made by any enactment in the Companies Acts relating to a company's registration, re-registration or change of name, to payment for any share comprised in a company's capital and to offers of shares in or debentures of a company to the public, including provision as to the consequences (whether in criminal law or otherwise) of a failure to comply with any requirement of the order; and

(c) contain such supplemental and transitional provision as the Minister thinks appropriate, make different provision for different cases and, in particular, provide for any provision of the order to come into operation on different days for different purposes.

20 Authority of company required for allotment of certain securities by directors.

20.—(1) The directors of a company shall not exercise any power of the company to allot relevant securities, unless the directors are, in accordance with this section, authorised to do so by—

(a) the company in general meeting; or

(b) the articles of the company.

(2) Authority for the purposes of this section may be given for a particular exercise of that power or for the exercise of that power generally, and may be unconditional or subject to conditions.

(3) Any such authority shall state the maximum amount of relevant securities that may be allotted thereunder and the date on which the authority will expire, which shall be not more than five years from whichever is relevant of the following dates—

(a) in the case of an authority contained at the time of the original incorporation of the company in the articles of the company, the date of that incorporation; and

(b) in any other case, the date on which the resolution is passed by virtue of which that authority is given;but any such authority (including an authority contained in the articles of the company) may be previously revoked or varied by the company in general meeting.

(4) Any such authority (whether or not it has been previously renewed under this subsection) may be renewed by the company in general meeting for a further period not exceeding five years; but the resolution must state (or restate) the amount of relevant securities which may be allotted under the authority or, as the case may be, the amount remaining to be allotted thereunder, and must specify the date on which the renewed authority will expire.

(5) The directors may allot relevant securities, notwithstanding that any authority for the purposes of this section has expired, if the relevant securities are allotted in pursuance of an offer or agreement made by the company before the authority expired and the authority allowed it to make an offer or agreement which would or might require relevant securities to be allotted after the authority expired.

(6) A resolution of a company to give, vary, revoke or renew such an authority may, notwithstanding that it alters the articles of the company, be an ordinary resolution but section 143 of the Principal Act shall apply to it.

(7) Any director who knowingly and wilfully contravenes, or permits or authorises a contravention of, this section shall be guilty of an offence.

(8) Nothing in this section shall affect the validity of any allotment of relevant securities.

(9) This section does not apply to any allotment of relevant securities by a company, other than a public limited company registered as such on its original incorporation, if it is made in pursuance of an offer or agreement made before the date on which the earlier of the following events occurs, that is to say, the holding of the first general meeting of the company after its re-registration or registration as a public limited company and the end of the general transitional period; but any resolution to give, vary or revoke an authority for the purposes of this section shall have effect for those purposes if it is passed at any time after the passing of this Act.

(10) In this section “relevant securities” means, in relation to a company,—

(a) shares in the company other than shares shown in the memorandum to have been taken by the subscribers thereto or shares allotted in pursuance of an employees' share scheme; and

(b) any right to subscribe for, or to convert any security into, shares in the company other than shares so allotted;

and any reference to the allotment of relevant securities shall include a reference to the grant of such a right but shall not include any reference to the allotment of shares pursuant to such a right.

21 Shares and debentures of private company not to be offered to public.

21.—(1) A private company and any officer of the company who is in default shall be guilty of an offence if the company—

(a) offers to the public (whether for cash or otherwise) any shares in or debentures of the company; or

(b) allots, or agrees to allot, (whether for cash or otherwise) any shares in or debentures of the company with a view to all or any of those shares or debentures being offered for sale to the public.

(2) Sections 51(2) and 61 of the Principal Act shall apply for the purposes of this section as they apply for the purposes of that Act.

(3) Nothing in this section shall affect the validity of any allotment or sale of shares or debentures or of any agreement to allot or sell shares or debentures.

(4) A person guilty of an offence under subsection (1) shall be liable on summary conviction to a fine not exceeding £500.

22 Document containing offer to state whether shares will be allotted where issue not fully subscribed.

22.—(1) Without prejudice to section 53 of the Principal Act no allotment shall be made of any share capital of a public limited company offered for subscription unless—

(a) that capital is subscribed for in full; or

(b) the offer states that, even if the capital is not subscribed for in full, the amount of that capital subscribed for may be allotted in any event or in the event of the conditions specified in the offer being satisfied;

and, where conditions are so specified, no allotment of the capital shall be made by virtue of paragraph (b) unless those conditions are satisfied.

(2) Section 53 (4) and section 55 of the Principal Act shall apply where shares are prohibited from being allotted by subsection (1) as they apply where the conditions mentioned in subsection (1) of the said section 53 are not complied with; and subsection (5) of the said section 53 shall apply to this section as it applies to that section.

(3) The provisions of this section shall apply in the case of shares offered as wholly or partly payable otherwise than in cash as they apply in the case of shares offered for subscription and—

(a) in subsection (1), the word “subscribed” shall be construed accordingly; and

(b) in the said section 53 (4), as it applies by virtue of subsection (2) to the former case, references to the repayment of money received from applicants for shares shall include references to the return of any other consideration so received (including, if the case so requires, the release of the applicant from any undertaking) or, if it is not reasonably practicable to return the consideration, the payment of money equal to the value of the consideration at the time it was so received, and references to interest shall have effect accordingly.

Pre-emption rights

23 Pre-emption rights.

23.—(1) Subject to the following provisions of this section and sections 24 and 25, a company proposing to allot any equity securities—

(a) shall not allot any of those securities on any terms to any person unless it has made an offer to each person who holds relevant shares or relevant employee shares to allot to him on the same or more favourable terms a proportion of those securities which is as nearly as practicable equal to the proportion in nominal value held by him of the aggregate of relevant shares and relevant employee shares; and

(b) shall not allot any of those securities to any person unless the period during which any such offer may be accepted has expired or the company has received notice of the acceptance or refusal of every offer so made.

(2) Subsection (3) applies to any provision of the memorandum or articles of a company which requires the company, when proposing to allot equity securities consisting of relevant shares of any particular class, not to allot those securities on any terms unless it has complied with the condition that it makes such an offer as is described in subsection (1) to each person who holds relevant shares or relevant employee shares of that class.

(3) If, in accordance with a provision to which this subsection applies—

(a) a company makes an offer to allot any securities to such a holder; and

(b) he or anyone in whose favour he has renounced his right to their allotment accepts the offer,

subsection (1) shall not apply to the allotment of those securities and the company may allot them accordingly; but this subsection is without prejudice to the application of subsection (1) in any other case.

(4) Subsection (1) shall not apply in relation to a particular allotment of equity securities if the securities are, or are to be, wholly or partly paid up otherwise than in cash.

(5) Securities which a company has offered to allot to a holder of relevant shares or relevant employee shares may be allotted to him or anyone in whose favour he has renounced his right to their allotment without contravening subsection (1) (b).

(6) Subsection (1) shall not apply in relation to the allotment of any securities which would apart from a renunciation or assignment of the right to their allotment be held under an employees' share scheme.

(7) An offer which is required by subsection (1) or by any provision to which subsection (3) applies to be made to any person shall be made by serving it on him in the manner in which notices are authorised to be given by regulations 133, 134 and 135 of Table A; but where he is the holder of a share warrant the offer may instead be made by causing the offer, or a notice specifying where a copy of the offer can be obtained or inspected, to be published in Iris Oifigiúil.

(8) Any such offer as is mentioned in subsection (7) must state a period of not less than 21 days during which the offer may be accepted; and the offer shall not be withdrawn before the end of that period.

(9) Subsections (7) and (8) shall not invalidate a provision to which subsection (3) applies by reason that that provision requires or author-ises an offer thereunder to be made in contravention of one or both of those subsections, but, to the extent that the provision requires or authorises such an offer to be so made, it shall be of no effect.

(10) Subsection (1), (7) or (8) may, in its application in relation to allotments by a private company of equity securities or to such allotments of a particular description, be excluded by a provision contained in the memorandum or articles of that company; and a requirement or authority contained in the memorandum or articles of a private company shall, if it is inconsistent with any of those subsections, have effect as a provision excluding that subsection, but a provision to which subsection (3) applies shall not be treated as being inconsistent with subsection (1).

(11) Where there is a contravention of subsections (1), (7) or (8) or of a provision to which subsection (3) applies, the company, and every officer of the company who knowingly authorised or permitted the contravention, shall be jointly and severally liable to compensate any person to whom an offer should have been made under the subsection or provision contravened for any loss, damage, costs or expenses which that person has sustained or incurred by reason of the contravention; but no proceedings to recover any such loss, damage, costs or expenses shall be commenced after the expiration of two years from the delivery to the registrar of companies of the return of allotments in question or, where equity securities other than shares are granted, from the date of the grant.

(12) In relation to any offer to allot any securities required by subsection (1) or by any provision to which subsection (3) applies, references in this section (however expressed) to the holder of shares of any description shall be read as including references to any person who held shares of that description on any day within the period of twenty-eight days ending with the day immediately preceding the date of the offer.

(13) In this section and sections 24 and 25—

“equity security”, in relation to a company, means a relevant share in the company (other than a share shown in the memorandum to have been taken by a subscriber thereto or a bonus share) or a right to subscribe for, or to convert any securities into, relevant shares in the company, and references to the allotment of equity securities or of equity securities consisting of relevant shares of a particular class shall include references to the grant of a right to subscribe for, or to convert any securities into, relevant shares in the company or, as the case may be, relevant shares of a particular class, but shall not include references to the allotment of any relevant shares pursuant to such a right;

“relevant employee shares”, in relation to a company, means shares of the company which would be relevant shares in the company but for the fact that they are held by a person who acquired them in pursuance of an employees' share scheme; and

“relevant shares”, in relation to a company, means shares in the company other than—

(a) shares which as respects dividends and capital carry a right to participate only up to a specified amount in a distribution; and

(b) shares which are held by a person who acquired them in pursuance of an employees' share scheme, or, in the caseof shares which have not been allotted, are to be allotted in pursuance of such a scheme;

and any reference to a class of shares shall be construed as a reference to shares to which the same rights are attached as to voting and as to participation, both as respects dividends and as respects capital, in a distribution.

24 Further provisions relating to pre-emption rights.

24.—(1) Where the directors of a company are generally authorised for the purposes of section 20, they may be given power by the articles or by a special resolution of the company to allot equity securities pursuant to that authority as if—

(a) section 23 (1) did not apply to the allotment;

or

(b) that subsection applied to the allotment with such modifications as the directors may determine;

and where the directors make an allotment under this subsection, the said section 23 shall have effect accordingly.

(2) Where the directors of a company are authorised for the purposes of section 20 (whether generally or otherwise), the company may by special resolution resolve either—

(a) that section 23 (1) shall not apply to a specified allotment of equity securities to be made pursuant to that authority; or

(b) that that subsection shall apply to the allotment with such modifications as may be specified in the resolution;

and where such a resolution is passed the said section 23 shall have effect accordingly.

(3) A power conferred by virtue of subsection (1) or a special resolution under subsection (2) shall cease to have effect when the authority to which it relates is revoked or would, if not renewed, expire, but if that authority is renewed, the power or, as the case may be, the resolution may also be renewed, for a period not longer than that for which the authority is renewed, by a special resolution of the company.

(4) Notwithstanding that any such power or resolution has expired, the directors may allot equity securities in pursuance of an offer or agreement previously made by the company, if the power or resolution enabled the company to make an offer or agreement which would or might require equity securities to be allotted after it expired.

(5) A special resolution under subsection (2), or a special resolution to renew such a resolution, shall not be proposed unless it is recommended by the directors and there has been circulated, with the notice of the meeting at which the resolution is proposed, to the members entitled to have that notice a written statement by the directors setting out—

(a) their reasons for making the recommendation;

(b) the amount to be paid to the company in respect of the equity securities to be allotted; and

(c) the directors' justification of that amount.

(6) A person who knowingly or recklessly authorises or permits the inclusion in a statement circulated under subsection (5) of any matter which is misleading, false or deceptive in a material particular shall be guilty of an offence.

25 Transitional provisions relating to pre-emption rights.

25.—(1) Sections 23 and 24 shall not apply—

(a) to any allotment of equity securities made by a company, other than a public limited company registered as such on its original incorporation, before the date on which the earlier of the following events occurs, that is to say, the holding of the first general meeting of the company after its re-registration or registration as a public limited company and the end of the general transitional period; or

(b) where subsection (2) applies, to an allotment of the equity securities which are subject to the requirement mentioned in that subsection.

(2) This subsection applies where any company which is re-registered or registered as a public limited company is or, but for the provisions of this Act, would be subject at the time of re-registration or, as the case may be, registration to a requirement imposed (whether by the company's memorandum or articles or otherwise) before the relevant time by virtue of which it must, when making an allotment of equity securities, make an offer to allot those securities or some of them in a manner which (otherwise than by virtue of its involving a contravention of section 23 (7) or (8)) is inconsistent with section 23.

(3) Any requirement which—

(a) is imposed on a private company before the relevant time otherwise than by the company's memorandum or articles; and

(b) if contained in the memorandum or articles of the company, would have effect by virtue of section 23 (10) to the exclusion of any provision of that section,

shall have effect, so long as the company remains a private company, as if it were contained in the memorandum or articles of the company.

(4) If at the relevant time a company, other than a public limited company registered as such on its original incorporation, is subject to a requirement such as is mentioned in section 23 (2) and which was imposed otherwise than by the company's memorandum or articles, the requirement shall be treated for the purposes of that section as if it were contained in the company's memorandum or articles.

(5) In this section “the relevant time” means—

(a) except in a case falling within paragraph (b), the end of the general transitional period;

and

(b) in the case of a company which is re-registered or registered as a public limited company in pursuance of an application made before the end of that period, the time at which the application is made.

Payment for share capital

26 Subscription of share capital.

26.—(1) Subject to the following provisions of this Part, shares allotted by a company and any premium payable on them may be paid up in money or money's worth (including goodwill and expertise).

(2) A public limited company shall not accept at any time in payment up of its shares or any premium on them, an undertaking given by any person that he or another should do work or perform services for the company or any other person.

(3) Where a public limited company accepts such an undertaking as payment up of its shares or any premium payable on them, the holder of the shares when they or the premium are treated as paid up, in whole or in part, by the undertaking—

(a) shall be liable to pay the company in respect of those shares an amount equal to their nominal value, together with the whole of any premium or, if the case so requires, such proportion of that amount as is treated as paid up by the undertaking; and

(b) shall be liable to pay interest at the appropriate rate on the amount payable under paragraph (a).

(4) Where any person becomes a holder of any shares in respect of which—

(a) there has been a contravention of this section; and

(b) by virtue of that contravention, another is liable to pay any amount under this section,

that person also shall be liable to pay that amount (jointly and severally with any other person so liable) unless either he is a purchaser for value and, at the time of the purchase, he did not have actual notice of the contravention or he derived title to the shares (directly or indirectly) from a person who became a holder of them after the contravention and was not so liable.

(5) Subsection (1) shall not prevent a company from allotting bonus shares in the company to its members or from paying up, with sums available for the purpose, any amounts for the time being unpaid on any of its shares (whether on account of the nominal value of the shares or by way of premium).

(6) References in this section to a holder, in relation to any shares in a company, include references to any person who has an unconditional right to be included in the company's register of members in respect of those shares or to have an instrument of transfer of the shares executed in his favour.

27 Prohibition on allotment of shares at a discount.

27.—(1) Subject to subsection (4) the shares of a company shall not be allotted at a discount.

(2) Where shares are allotted in contravention of subsection (1), the allottee shall be liable to pay the company an amount equal to the amount of the discount and shall be liable to pay interest thereon at the appropriate rate.

(3) Section 26(4) shall apply for the purposes of this section as it applies for the purposes of that section.

(4) The repeal of section 63 of the Principal Act effected by section 3(2) shall not affect an application for an order sanctioning the issue of shares at a discount which has been made to the court under that section and which has not been withdrawn or disposed of before the appointed day, or an order made on or after that day in pursuance of any such application, and—

(a) any such application may be proceeded with and any such order, if not made before the appointed day, may be made as if that section had not been repealed; and

(b) shares may be allotted at a discount in accordance with any such order (whether made, before, on or after the appointed day) accordingly.

28 Payment for allotted shares.

28.—(1) Subject to subsection (4), a public limited company shall not allot a share except as paid up at least as to one-quarter of the nominal value of the share and the whole of any premium on it.

(2) Where a public limited company allots a share in contravention of subsection (1), the share shall be treated as if one-quarter of its nominal value together with the whole of any premium had been received, but the allottee shall be liable to pay the company the minimum amount which should have been received in respect of the share under that subsection less the value of any consideration actually applied in payment up (to any extent) of the share and any premium on it, and interest at the appropriate rate on the amount payable under this subsection.

(3) Subsection (2) shall not apply in relation to the allotment of a bonus share in contravention of subsection (1) unless the allottee knew or ought to have known the share was so allotted.

(4) Subsections (1) to (3) shall not apply to shares allotted in pursuance of an employees' share scheme.

(5) Section 26(4) shall apply for the purposes of this section as it applies for the purposes of that section.

29 Payment of non-cash consideration.

29.—(1) A public limited company shall not allot shares as fully or partly paid up (as to their nominal value or any premium payable on them) otherwise than in cash if the consideration for the allotment is or includes an undertaking which is to be or may be performed more than five years after the date of the allotment.

(2) Where a public limited company allots shares in contravention of subsection (1), the allottee of the shares shall be liable to pay the company an amount equal to their nominal value, together with the whole of any premium, or, if the case so requires, such proportion of that amount as is treated as paid up by the undertaking and shall be liable to pay interest at the appropriate rate on the amount payable under this subsection.

(3) Where a contract for the allotment of shares does not contravene subsection (1), any variation of the contract which has the effect that the contract would have contravened that subsection if the terms of the contract as varied had been its original terms shall be void.

(4) Subsection (3) shall apply to the variation by a public limited company of the terms of a contract entered into before the company was registered or re-registered as a public limited company.

(5) Where a public limited company allots shares for a consideration which consists of or includes (in accordance with subsection (1)) an undertaking which is to be performed within five years of the allotment but that undertaking is not performed within the period allowed by the contract for the allotment of the shares, the allottee of the shares in question shall be liable to pay the company at the end of that period an amount equal to the nominal value of the shares, together with the whole of any premium, or, if the case so requires, such proportion of that amount as is treated as paid up by the undertaking, together with interest at the appropriate rate on the amount payable under this subsection.

(6) Section 26 (4) shall apply in relation to a contravention of this section and to a failure to carry out a term of a contract as mentioned in subsection (5) as it applies in relation to a contravention of that section.

(7) Any reference in this section to a contract for the allotment of shares includes a reference to an ancillary contract relating to payment in respect of those shares.

30 Experts' reports on non-cash consideration before allotment of shares.

30.—(1) Subject to subsection (2), a public limited company shall not allot shares as fully or partly paid up (as to their nominal value or any premium payable on them) otherwise than in cash unless—

(a) the consideration for the allotment has been valued in accordance with the following provisions of this section;

(b) a report with respect to its value has been made to the company by a person appointed by the company in accordance with those provisions during the six months immediately preceding the allotment of the shares; and

(c) a copy of the report has been sent to the proposed allottee of the shares.

(2) Subject to subsection (3), subsection (1) shall not apply to the allotment of shares by a company in connection with—

(a) an arrangement providing for the allotment of shares in that company on terms that the whole or part of the consideration for the shares allotted is to be provided by the transfer to that company or the cancellation of all or some of the shares, or of all or some of the shares of a particular class, in another company (with or without the issue to that company of shares, or of shares of any particular class, in that other company); or

(b) a proposed merger of that company with another company.

(3) Subsection (2) (a) does not exclude the application of subsection (1) to the allotment of shares by a company in connection with any such arrangement as is there mentioned unless it is open to all the holders of the shares in the other company in question or, where the arrangement applies only to shares of a particular class, to all the holders of shares in that other company of that class, to take part in the arrangement. In determining whether that is the case, shares heldby or by a nominee of the company proposing to allot the shares in connection with the arrangement, or by or by a nominee of a company which is that company's holding company or subsidiary or a company which is a subsidiary of its holding company, shall be disregarded.

(4) For the purposes of subsection (2) (b) there is a proposed merger of two companies when one of them proposes to acquire all the assets and liabilities of the other in exchange for the issue of shares or other securities in that one to shareholders of the other, with or without any cash payment to those shareholders.

(5) The valuation and report required by subsection (1) shall be made by an independent person, that is to say, a person qualified at the time of the report to be appointed or to continue to be auditor of the company, except that where it appears to him to be reasonable for the valuation of the consideration, or a valuation of part of the consideration, to be made, or to accept such a valuation made, by any person who—

(a) appears to him to have the requisite knowledge and experience to value the consideration or that part of the consideration; and

(b) is not an officer or servant of the company or any other body corporate which is that company's subsidiary or holding company or a subsidiary of that company's holding company or a partner or employee of such an officer or servant,

that independent person may arrange for or accept such a valuation, together with a report which will enable him to make his own report under that subsection and provide a note in accordance with subsection (8).

(6) The independent person's report under subsection (1) shall state—

(a) the nominal value of the shares to be wholly or partly paid for by the consideration in question;

(b) the amount of any premium payable on those shares;

(c) the description of the consideration and, as respects so much of the consideration as he himself has valued, a description of that part of the consideration, the method used to value it and the date of the valuation; and

(d) the extent to which the nominal value of the shares and any premium are to be treated as paid up—

(i) by the consideration;

(ii) in cash.

(7) Where any consideration is valued under this section by a person other than the independent person, the latter's report under subsection (1) shall state that fact and shall also—

(a) state the former's name and what knowledge and experience he has to carry out the valuation; and

(b) describe so much of the consideration as was valued by that other person, the method used to value it and state the date of valuation.

(8) The report of the independent person made under subsection (1) shall contain or be accompanied by a note by him—

(a) in the case of a valuation made by another person, that it appeared to the independent person reasonable to arrange for it to be so made, or to accept a valuation so made;

(b) whoever made the valuation, that the method of valuation was reasonable in all the circumstances;

(c) that it appears to the independent person that there has been no material change in the value of the consideration in question since the valuation; and

(d) that on the basis of the valuation the value of the consideration, together with any cash by which the nominal value of the shares or any premium payable on them is to be paid up, is not less than so much of the aggregate of the nominal value and the whole of any such premium as is treated as paid up by the consideration and any such cash.

(9) Subsection (10) applies where a public limited company allots any share in contravention of subsection (1) and either—

(a) the allottee has not received a report under this section; or

(b) there has been some other contravention of this section and the allottee knew or ought to have known that it amounted to a contravention.

(10) Where this subsection applies, the allottee shall be liable to pay the company an amount equal to the nominal value of the shares, together with the whole of any premium or, if the case so requires, such proportion of that amount as is treated as paid up by the consideration, and shall be liable to pay interest at the appropriate rate on the amount payable under this subsection.

(11) Section 26 (4) shall apply for the purposes of this section as it applies for the purposes of that section.

(12) Where the consideration is accepted partly in payment up of the nominal value of the shares and any premium and partly for some other consideration given by the company, the provisions of this section shall apply as if references to the consideration accepted by the company included references to the proportion of that consideration which is properly attributable to the payment up of that value and any premium; and

(a) the independent person shall carry out or arrange for such other valuations as will enable him to determine that proportion; and

(b) his report under subsection (1) shall state what valuations have been made by virtue of this subsection and also the reason for and method and date of any such valuation and any other matters which may be relevant to that determination.

(13) It is hereby declared for the avoidance of doubt that subsection (1) does not apply by reference to the application of an amount for the time being standing to the credit of any of the company's reserve accounts or to the credit of its profit and loss account in paying up (to any extent) any shares allotted to members of the company or any premiums on any shares so allotted; and in relation to any such allotment references in this section to the consideration for the allotment do not include any such amount so applied.

(14) In this section—

(a) “arrangement” means any agreement, scheme or arrangement (including an arrangement sanctioned in accordance with section 201 or 260 of the Principal Act);

(b) any reference to a company, except where it is or is to be construed as a reference to a public limited company, includes a reference to any body corporate and any body to which letters patent have been issued under the Chartered Companies Act, 1837; and

(c) any reference to an officer or servant shall not include a reference to an auditor.

31 Experts' reports: supplementary.

31.—(1) Any person carrying out a valuation or making a report under section 30 with respect to any consideration proposed to be accepted or given by a company shall be entitled to require from the officers of the company such information and explanation as he thinks necessary to enable him to carry out the valuation or to make the report and provide a note, under that section.

(2) A company to which such a report is made as to the value of any consideration for which, or partly for which, it proposes to allot shares shall deliver a copy of the report to the registrar of companies for registration at the same time that it files the return of the allotments of those shares under section 58 of the Principal Act, and subsections (3) and (4) of that section shall apply to a default in complying with this subsection as they apply to a default in complying with that section.

(3) Any person who knowingly or recklessly makes a statement which—

(a) is misleading, false or deceptive in a material particular, and

(b) is a statement to which this subsection applies,

shall be guilty of an offence.

(4) Subsection (3) applies to any statement made (whether orally or in writing) to any person carrying out a valuation or making a report under section 30, being a statement which conveys or purports to convey any information or explanation which that person requires, or is entitled to require, under subsection (1).

32 Experts' reports on non-cash assets acquired from subscribers, etc.

32.—(1) A public limited company, other than a company re-registered under section 12, shall not, unless the conditions mentioned in subsection (3) have been complied with, enter into an agreement with a relevant person for the transfer by him during the initial period of one or more non-cash assets to the company or another for a consideration to be given by the company equal in value at the time of the agreement to at least one-tenth of the nominal value of the company's share capital issued at that time.

(2) In this section—

(a) in relation to a company formed as a public limited company, “relevant person” means any subscriber to the memorandum of the company and “initial period” means the period of two years beginning with the date on which the company is issued with a certificate under section 6 that it is entitled to do business;

(b) in relation to a company re-registered, or registered in accordance with section 18, as a public limited company, “relevant person” means any person who was a member of the company on the date of the re-registration or registration and “initial period” means the period of two years beginning with that date.

(3) The conditions referred to in subsection (1) are that—

(a) the consideration to be received by the company (that is to say, the asset to be transferred to the company or the advantage to the company of its transfer to another person) and any consideration other than cash to be given by the company have been valued under the following provisions of this section (without prejudice to any requirement to value any consideration under section 30);

(b) a report with respect to the consideration to be so received and given has been made to the company in accordance with those provisions during the six months immediately preceding the date of the agreement;

(c) the terms of the agreement have been approved by an ordinary resolution of the company; and

(d) not later than the giving of the notice of the meeting at which the resolution is proposed, copies of the resolution and report have been circulated to the members of the company entitled to receive that notice and, if the relevant person is not then such a member, to that person.

(4) Subsection (1) shall not apply to the following agreements for the transfer of an asset for a consideration to be given by the company, that is to say—

(a) where it is part of the ordinary business of the company to acquire or arrange for other persons to acquire assets of a particular description, an agreement entered into by the company in the ordinary course of its business for the transfer of an asset of that description to it or such a person, as the case may be; or

(b) an agreement entered into by the company under the supervision of the court or an officer authorised by the court for the purpose, for the transfer of an asset to the company or to another.

(5) Section 30 (5) and (7) shall apply to a valuation and report of any consideration under this section as those subsections apply to a valuation of and report on any consideration under subsection (1) of that section.

(6) The report of the independent person under this section shall—

(a) state the consideration to be received by the company, describing the asset in question, specifying the amount to be received in cash, and the consideration to be given by the company, specifying the amount to be given in cash;

(b) state the method and date of valuation;

(c) contain or be accompanied by a note as to the matters mentioned in section 30 (8) (a) to (c); and

(d) contain or be accompanied by a note that on the basis of the valuation the value of the consideration to be received by the company is not less than the value of the consideration to be given by it.

(7) If a public limited company enters into an agreement with any relevant person in contravention of subsection (1) and either he has not received a report under this section or there has been some other contravention of this section or section 30 (5) or (7) which he knew or ought to have known amounted to a contravention, then, subject to subsection (8)—

(a) the company shall be entitled to recover from the relevant person any consideration given by the company under the agreement or an amount equivalent to its value at the time of the agreement; and

(b) the agreement, so far as not carried out, shall be void.

(8) Where a company enters into an agreement in contravention of subsection (1) and that agreement is or includes an agreement for the allotment of shares in that company, then, whether or not the agreement also contravenes section 30—

(a) subsection (7) shall not apply to the agreement insofar as it is an agreement for the allotment of shares; and

(b) section 26 (4) and section 30 (10) shall apply in relation to the shares as if they had been allotted in contravention of section 30.

33 Provisions supplementary to section 32.

33.—(1) Any person carrying out a valuation or making a report under section 32 shall be entitled to require from the officers of the company such information and explanation as he thinks necessary to enable him to carry out the valuation or make the report and provide the note required by that section; and section 31(3) shall apply in relation to any such valuation and report as it applies in relation to a valuation and report under section 30 (1) with the substitution of a reference to this subsection for the reference in section 31(4) to section 31 (1).

(2) A company which has passed a resolution under section 32 with respect to the transfer of an asset shall, within 15 days of the passing of the resolution, deliver to the registrar of companies a copy of the resolution together with the report required by that section and, if it fails to do so, the company and every officer of the company who is in default shall be liable on summary conviction to a fine not exceeding £250 together with, in the case of a continuing offence, a fine not exceeding £25 for every day on which the offence continues, but not exceeding £500 in total.

(3) Any reference in section 32 or this section to consideration given for the transfer of an asset includes a reference to consideration given partly for its transfer but—

(a) the value of any consideration partly so given shall be taken to be the proportion of that consideration properly attributable to its transfer;

(b) the independent person shall carry out or arrange for such valuations of anything else as will enable him to determine that proportion; and

(c) his report under that section shall state what valuation has been made by virtue of this paragraph and also the reason for and method and date of any such valuation and any other matters which may be relevant to that determination.

34 Relief.

34.—(1) Where any person is liable to a company under section 26, 29, 30 or 32 in relation to payment in respect of any shares in the company or is liable by virtue of any undertaking given to the company in, or in connection with, payment for any such shares, the person so liable may make an application to the court under this subsection to be exempted in whole or in part from that liability.

(2) Where the liability mentioned in subsection (1) arises under any of those sections in relation to payment in respect of any shares, the court may, on an application under that subsection, exempt the applicant from that liability only—

(a) if and to the extent that it appears to the court just and equitable to do so having regard to the following, namely—

(i) whether the applicant has paid, or is liable to pay, any amount in respect of any other liability arising in relation to those shares under any of those sections or of any liability arising by virtue of any undertaking given in or in connection with payment for those shares;

(ii) whether any person other than the applicant has paid or is likely to pay (whether in pursuance of an order of the court or otherwise) any such amount; and

(iii) whether the applicant or any other person has performed, in whole or in part, or is likely so to perform any such undertaking or has done or is likely to do any other thing in payment or part payment in respect of those shares;

(b) if and to the extent that it appears to the court just and equitable to do so in respect of any interest which he is liable to pay to the company under any of those sections.