Shares
Companies Act
Provisions as to shares transferable by delivery (general prohibition and provision for certain letters of allotment)
1019. (1) The provisions of this section shall, in relation to a PLC, have effect in place of subsections (8) to (10) of section 66 .
(2) In this section—
“bearer instrument” means an instrument, in relation to shares of a PLC, which entitles or purports to entitle the bearer thereof to transfer the shares that are specified in the instrument by delivery of the instrument, and includes a share warrant as that expression was defined by section 88 of the Act of 1963;
“expiry date”, in relation to a permissible letter of allotment, means a date no later than 30 days after the date of the instrument;
“permissible letter of allotment” means a letter of allotment by a PLC to a member of it of—
(a) bonus shares of the PLC, credited as fully paid;
(b) shares of the PLC, in lieu of a dividend, credited as fully paid; or
(c) shares of the PLC allotted provisionally, on which no amount has been paid or which are shares partly paid up, where the shares are allotted in connection with a rights issue or open offer in favour of members and the shares are issued proportionately (or as nearly as may be) to the respective number of shares held by the members of the PLC, there being disregarded for this purpose any exceptions to such proportionality, or arrangements for a deviation from such proportionality, as the directors of the PLC may deem necessary or expedient to make for the purposes of dealing with—
(i) fractional entitlements; or
(ii) problems of a legal or practical nature arising under the laws of any territory or requirements imposed by any recognised regulatory body in any territory,
which letter is expressed to be transferable by delivery during a period expiring on its expiry date.
(3) Save as provided by this section, a PLC shall not have power to issue any bearer instrument.
(4) If a PLC purports to issue a bearer instrument in contravention of subsection (3), the shares that are specified in the instrument shall be deemed not to have been allotted or issued, and the amount subscribed therefor (and in the case of a non-cash asset subscribed therefor, the cash value of that asset) shall be due as a debt of the PLC to the purported subscriber thereof.
(5) Subsection (3) shall not apply to an instrument falling within the definition of “permissible letter of allotment” in this section.
(6) Shares comprised in a permissible letter of allotment shall, until its expiry date, be transferable by renunciation and delivery of the letter, but subject to compliance with such conditions (if any) as may be specified in the letter.
(7) Where, on the commencement of this section, a PLC has in issue a bearer instrument in relation to shares of the PLC, other than a permissible letter of allotment—
(a) the PLC shall procure the entry in its register of members of the name of the holder or holders of those shares no later than the expiry of 18 months after that commencement;
(b) if and to the extent that paragraph (a) is not complied with, the PLC shall enter in its register of members the Minister for Finance as the person entitled to the share or shares concerned and thereupon the Minister for Finance shall become and be the full beneficial owner of that share or those shares.
(8) Subject to subsection (7), where on the commencement of this section a person has or is entitled to possession of a bearer instrument (other than a permissible letter of allotment), whether as owner or as encumbrancer, nothing in this section shall affect any rights which such person has by virtue of such entitlement or possession, provided that any right to transfer the shares that are specified in it by delivery of the instrument shall cease 21 days before the expiry of the period referred to in subsection (7)(a).
Capacity to make public offers of securities
1020. Save to the extent prohibited by its constitution, a PLC shall have the capacity to offer, allot and issue securities (as defined in Part 3 ) to the public subject to compliance, where applicable, with Part 23 .
Allotment of shares and other securities
1021. (1) No relevant securities may be allotted by a PLC unless the allotment is authorised, either specifically or pursuant to a general authority, by ordinary resolution or by the constitution of the PLC.
(2) Without prejudice to subsection (1), no shares may be allotted by a PLC unless those shares are comprised in the authorised but unissued share capital of the PLC.
(3) Any such authority as is referred to in subsection (1) shall state the maximum amount of relevant securities that may be allotted under it and the date on which the authority will expire, which shall be not more than 5 years after whichever is relevant of the following dates:
(a) in the case of an authority contained at the time of the original incorporation of the PLC in the articles of the PLC, 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 PLC) may be previously revoked or varied by the PLC in general meeting.
(4) Any such authority (whether or not it has been previously renewed under this subsection) may be renewed by the PLC in general meeting for a further period not exceeding 5 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) Notwithstanding that any authorisation conferred by a resolution or the constitution such as is mentioned in subsection (1) has expired, the directors of a PLC may allot relevant securities in pursuance of an offer or agreement previously made by the PLC, if that authorisation enabled the PLC to make an offer or agreement which would or might require relevant securities to be allotted after the authorisation’s expiry.
(6) A resolution of a PLC to give, vary, revoke or renew such an authority may, notwithstanding that it alters the articles of association of the PLC, be an ordinary resolution.
(7) Where a PLC allots shares, the shares shall be taken, for the purposes of this Act, to be allotted when a person acquires the unconditional right to be included in the PLC’s register of members in respect of those shares.
(8) Any director of a PLC who knowingly contravenes, or knowingly permits or authorises a contravention of, a preceding provision of this section shall be guilty of a category 3 offence.
(9) Where a PLC allots shares, it shall, within 30 days after the date of allotment, deliver particulars of the allotment in the prescribed form to the Registrar.
(10) If a PLC fails to comply with subsection (9), the PLC and any officer of it who is in default shall be guilty of a category 4 offence.
(11) Nothing in this section shall affect the validity of any allotment of relevant securities.
(12) In this section “relevant securities” means, in relation to a PLC—
(a) shares in the PLC 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 PLC other than shares so allotted,
and any reference in this section to the allotment of relevant securities includes a reference to the grant of such a right but does not include any reference to the allotment of shares pursuant to such a right.
Pre-emption rights
1022. (1) Subject to the provisions of this section and section 1023 , a PLC proposing to allot any equity securities—
(a) shall not allot any of those securities, on any terms—
(i) to any non-member, unless it has made an offer to each person who holds relevant shares or relevant employee shares in the PLC to allot to him or her, 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 or her of the aggregate of the relevant shares and relevant employee shares, or
(ii) to any person who holds relevant shares or relevant employee shares in the PLC, unless it has made an offer to each person who holds relevant shares or relevant employee shares in the PLC to allot to him or her, 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 or her of the aggregate of the 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 PLC has received notice of the acceptance or refusal of every offer so made.
(2) In subsection (1)(a)(i) “non-member” means a person who is not a holder of shares (as that expression is to be read by virtue of subsection (11)) in the PLC.
(3) Subsection (4) applies to any provision of the memorandum or articles of a PLC which requires the PLC, 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.
(4) If, in accordance with a provision to which this subsection applies—
(a) a PLC makes an offer to allot any securities to such a holder, and
(b) that holder or anyone in whose favour that holder has renounced his or her right to their allotment accepts the offer,
subsection (1) shall not apply to the allotment of those securities and the PLC may allot them accordingly; but this subsection is without prejudice to the application of subsection (1) in any other case.
(5) 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.
(6) Securities which a PLC has offered to allot to a holder of relevant shares or relevant employee shares may be allotted to that holder or anyone in whose favour that holder has renounced his or her right to their allotment without contravening subsection (1) (b).
(7) 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.
(8) An offer which is required by subsection (1) or by any provision to which subsection (4) applies to be made to any person shall be made by serving it on him or her in the same manner in which notices are authorised to be given by sections 180 , 181 and 218 .
(9) Any such offer as is mentioned in subsection (8) shall state a period of not less than 14 days during which the offer may be accepted; and the offer shall not be withdrawn before the end of that period.
(10) Subsections (8) and (9) shall not invalidate a provision to which subsection (4) applies by reason that that provision requires or authorises 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.
(11) In relation to any offer to allot any securities required by subsection (1) or by any provision to which subsection (4) 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 28 days ending with the day immediately preceding the date of the offer which is specified by the directors of the PLC concerned as being the record date for the purposes of the offer.
(12) Where there is a contravention of subsection (1), (8) or (9) or a provision to which subsection (4) applies, the PLC and every officer of the PLC 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.
(13) No proceedings to recover any such loss, damage, costs or expenses shall be commenced after the expiration of 2 years after the date of the delivery to the Registrar of the return of allotments in question or, where equity securities other than shares are granted, after the date of the grant.
Interpretation and supplemental provisions in relation to section 1022
1023. (1) In section 1022 and this section—
“equity security”, in relation to a PLC, means a relevant share in the PLC (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 PLC, and references to the allotment of equity securities or of equity securities consisting of relevant shares of a particular class 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 does not include references to the allotment of any relevant shares pursuant to such a right;
“relevant employee shares”, in relation to a PLC, means shares of the PLC which would be relevant shares in the PLC but for the fact that they are held by a person who acquired them in pursuance of an employees’ share scheme;
“relevant shares”, in relation to a PLC, means shares in the PLC 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 case of shares which have not been allotted, are to be allotted in pursuance of such a scheme.
(2) Any reference in section 1022 or this section to a class of shares shall be read 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.
(3) Where the directors of a PLC are generally authorised for the purposes of section 1021 , they may be given power by the articles or by a special resolution of the PLC to allot equity securities pursuant to that authority as if—
(a) subsection (1) of section 1022 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, section 1022 shall have effect accordingly.
(4) Where the directors of a PLC are authorised for the purposes of section 1021 (whether generally or otherwise), the PLC may by special resolution resolve either—
(a) that subsection (1) of section 1022 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 section 1022 shall have effect accordingly.
(5) A power conferred by virtue of subsection (3) or a special resolution under subsection (4) 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.
(6) 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 PLC, if the power or resolution enabled the PLC to make an offer or agreement which would or might require equity securities to be allotted after it expired.
(7) A special resolution under subsection (4), 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 PLC in respect of the equity securities to be allotted; and
(c) the directors’ justification of that amount.
(8) A person who authorises or permits the inclusion in a statement circulated under subsection (7) of any matter which is false or misleading in a material particular knowing it to be so false or misleading or being reckless as to whether it is so false or misleading shall be guilty of a category 3 offence.
Status of authority to allot shares conferred prior to company’s re-registration as a PLC
1024. Any authority of directors to allot shares under section 69 conferred by ordinary resolution passed by a company prior to its re-registration as a PLC shall lapse at the conclusion of its annual general meeting next held after its re-registration as a PLC.
Subscription of share capital
1025. (1) A PLC 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 she or another should do work or perform services for the PLC or any other person.
(2) Where a PLC 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 PLC 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).
(3) 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,
the first-mentioned person in this subsection also shall be liable to pay that amount (jointly and severally with any other person so liable) unless either that first-mentioned person is a purchaser for value and, at the time of the purchase, he or she did not have actual notice of the contravention or he or she 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.
(4) References in this section to a holder, in relation to any shares in a PLC, include references to any person who has an unconditional right to be included in the PLC’s register of members in respect of those shares or to have an instrument of transfer of the shares executed in his or her favour.
(5) Where a PLC contravenes any of the provisions of this section, the PLC and any officer of it who is in default shall be guilty of a category 3 offence.
Payment for allotted shares
1026. (1) Subject to subsection (4), a PLC 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 PLC 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 PLC 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) Subsection (3) of section 1025 shall apply for the purposes of this section as it applies for the purposes of section 1025 .
(6) Where a PLC contravenes any of the provisions of this section, the PLC and any officer of it who is in default shall be guilty of a category 3 offence.
Payment of non-cash consideration
1027. (1) A PLC 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 5 years after the date of the allotment.
(2) Where a PLC allots shares in contravention of subsection (1), the allottee of the shares shall be liable to pay the PLC 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 PLC of the terms of a contract entered into before the company was registered or re-registered as a PLC.
(5) Where a PLC allots shares for a consideration which consists of or includes (in accordance with subsection (1)) an undertaking which is to be performed within 5 years after the date of the allotment but that undertaking is not performed within the period allowed by the contract for the allotment of the shares, the following subsection applies.
(6) The allottee of the shares in question shall be liable to pay the PLC at the end of the period secondly referred to in subsection (5) the following:
(a) 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; and
(b) interest at the appropriate rate on the amount payable under paragraph (a).
(7) Subsection (3) of section 1025 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 section 1025 .
(8) 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.
(9) Where a PLC contravenes any of the provisions of this section, the PLC and any officer of it who is in default shall be guilty of a category 3 offence.
Expert’s report on non-cash consideration before allotment of shares
1028. (1) Subject to subsection (2) and sections 1029 and 1031 to 1033 , a PLC 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 PLC by a person appointed by the PLC in accordance with those provisions during the 6 months immediately preceding the date of 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 PLC in connection with an arrangement providing for the allotment of shares in that PLC on terms that the whole or part of the consideration for the shares allotted is to be provided by the transfer to that PLC 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 PLC of shares, or of shares of any particular class, in that other company).
(3) Subsection (2) does not exclude the application of subsection (1) to the allotment of shares by a PLC in connection with any such arrangement as is there mentioned unless the following condition is satisfied, namely, 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.
(4) In determining whether the foregoing condition is satisfied, shares held by, or by a nominee of, the PLC proposing to allot the shares in connection with the arrangement, or by, or by a nominee of, a company which is that PLC’s holding company or subsidiary or a company which is a subsidiary of that PLC’s holding company, shall be disregarded.
(5) Subject to subsections (6) and (7), 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 the statutory auditor of the PLC.
(6) Where it appears to the independent person referred to in subsection (5) 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 that independent person to have the requisite knowledge and experience to value the consideration or that part of the consideration; and
(b) is not—
(i) an officer or employee of the PLC or any other body corporate which is that PLC’s subsidiary or holding company or a subsidiary of that PLC’s holding company;
(ii) a partner or employee of an officer or employee referred to in subparagraph (i); or
(iii) a person otherwise connected (within the meaning of section 220 as adapted by section 1029 (7)) with an officer or employee referred to in subparagraph (i);
that independent person may arrange for or accept such a valuation, together with a report which will enable the independent person to make his or her own report under subsection (1) and provide a note in accordance with subsection (11).
(7) Where the allotment of shares by a PLC is in connection with—
(a) a proposed merger, where that company was formed as a successor company for the purpose of the proposed merger, the merger being a merger by formation of a new company within the meaning of Chapter 16 or the European Communities (Cross-Border Mergers) Regulations 2008 ( S.I. No. 157 of 2008 );
(b) a proposed merger of that company with another company; or
(c) a proposed division of that company;
the valuation and report required by subsection (1) may be made by the person appointed pursuant to section 1133 or 1155 or an expert within the meaning of Regulation 7 of the foregoing Regulations, in which case the person so appointed shall be deemed to be an independent person for the purposes of subsection (5).
(8) For the purposes of subsection (7) there is a proposed merger of a PLC with a company 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.
(9) The report of the independent person 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 the independent person himself or herself 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.
(10) 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 that other person 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.
(11) The report of the independent person made under subsection (1) shall contain a note by the independent person, or be accompanied by such a note—
(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) irrespective of whether the valuation has been by that person or the independent person, 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.
Supplemental provisions in relation to section 1028
1029. (1) Subsection (2) applies where a PLC allots any share in contravention of section 1028 (1) and either—
(a) the allottee has not received a report under section 1028 ; or
(b) there has been some other contravention of that section and the allottee knew or ought to have known that it amounted to a contravention.
(2) Where this subsection applies, the allottee shall be liable to pay the PLC 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.
(3) Subsection (3) of section 1025 shall apply for the purposes of section 1028 as it applies for the purposes of section 1025 .
(4) Where the consideration referred to in section 1028 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 that section and this section shall apply as if references to the consideration accepted by the PLC 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 or her to determine that proportion, and
(b) the independent person’s report under section 1028 (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.
(5) It is declared for the avoidance of doubt that section 1028 (1) does not apply by reference to the application of an amount for the time being standing to the credit of any of the PLC’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 PLC or any premiums on any shares so allotted; and in relation to any such allotment references in section 1028 or this section to the consideration for the allotment do not include any such amount so applied.
(6) In section 1028 and this section—
(a) “arrangement” means any agreement, scheme or arrangement (including an arrangement sanctioned in accordance with section 453 , 541 or 601 ),
(b) any reference to a company, except where it is or is to be read as a reference to a PLC, 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 employee shall not include a reference to a statutory auditor.
(7) For the purposes of the provision made by section 1028 (6)(b)(iii) concerning a person’s being connected with an officer or employee there referred to (which officer or employee is, in this subsection, subsequently referred to as the “relevant person”), section 220 applies as if—
(a) for each reference in subsections (1), (2), (3) and (8) to a director of a company there were substituted a reference to the relevant person;
(b) for the first reference and the third reference in subsection (5) to a director of a company there were substituted a reference to the relevant person;
(c) the references in subsection (5) to another director or directors included references to one or more other relevant persons; and
(d) the reference in subsection (6)(b) to a director included a reference to a relevant person.
(8) Where a PLC contravenes any of the provisions of section 1028 or this section, the PLC and any officer of it who is in default shall be guilty of a category 3 offence.
Expert’s report: supplemental provisions in relation to section 1028
1030. (1) Any person carrying out a valuation or making a report under section 1028 with respect to any consideration proposed to be accepted or given by a PLC shall be entitled to require from the officers of the PLC such information and explanation as the person thinks necessary to enable him or her to carry out the valuation or to make the report and provide a note required by that section.
(2) A PLC 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 at the same time that it delivers particulars of the allotments of those shares under section 1021 (9).
(3) Section 1021 (10) shall apply to a default in complying with subsection (2) as it applies to a default in complying with section 1021 (9).
(4) Any person who makes a statement—
(a) that is a statement to which this subsection applies; and
(b) which is false or misleading in a material particular;
knowing it to be so false or misleading or being reckless as to whether it is so false or misleading, shall be guilty of a category 2 offence.
(5) Subsection (4) applies to any statement made (whether orally or in writing) to any person carrying out a valuation or making a report under section 1028 , 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).
Dispensation from section 1028 — certain securities or money-market instruments constituting consideration for allotment
1031. (1) In this section—
“relevant assets” means securities or instruments (or, as the case may be, both) referred to in the definition of “securities based consideration” in this subsection;
“securities based consideration” means consideration consisting of—
(a) transferable securities as defined in point 18 of Article 4(1) of Directive 2004/39/ EC of the European Parliament and of the Council of 21 April 2004 on markets in financial instruments;
(b) money-market instruments as defined in point 19 of Article 4(1) of that Directive; or
(c) both such transferable securities and such money-market instruments.
(2) Where this section applies then either—
(a) the requirements of section 1028 do not apply; or
(b) those requirements only apply if the contingency specified in subsection (4)(b) arises.
(3) This section applies where the consideration for the allotment of the shares consists wholly, or together with cash consideration, of securities based consideration and—
(a) the conditions specified in subsection (4) are satisfied with respect to the securities based consideration; and
(b) the value of the securities based consideration is not less than the value of the relevant assets as determined in accordance with paragraph (a) of that subsection.
(4) The following are the conditions with respect to the securities based consideration—
(a) the relevant assets are valued at the weighted average price at which they have been traded on one or more regulated markets during a period of 5 consecutive days (any break arising on account of closure of such market on one or more days being disregarded) immediately preceding the date on which those assets are treated as consideration given for the allotment of the shares in question; and
(b) the foregoing price has not been affected by exceptional circumstances that would significantly change the value of the asset at the foregoing date, including situations where the market for the securities or instruments concerned has become illiquid.
(5) If exceptional circumstances or a situation as mentioned in subsection (4)(b) arise, a valuation under section 1028 of the relevant assets shall be caused to be carried out by the PLC and the relevant provisions of sections 1028 to 1030 shall apply accordingly.
(6) Where this section applies and shares are proposed to be allotted by a PLC without a report of an independent expert as otherwise required by sections 1028 to 1030 , the PLC shall, no later than the date of allotment, deliver, in the prescribed form, notice of the proposed allotment to the Registrar, which notice shall contain—
(a) a description of the consideration other than in cash at issue;
(b) the value of that consideration, the source of its valuation and, where appropriate, the method of valuation;
(c) a statement whether the value arrived at corresponds at least to the number and nominal value of, and (where appropriate) to the premium on, the shares to be issued for that consideration.
(7) Where shares have been allotted as mentioned in subsection (6), the notice of the allotment delivered under section 1021 (9) to the Registrar in respect of those shares shall—
(a) contain—
(i) a description of the consideration other than in cash at issue;
(ii) the value of that consideration, the source of its valuation and, where appropriate, the method of valuation; and
(iii) a statement whether the value arrived at corresponds at least to the number and nominal value of, and (where appropriate) to the premium on, the shares issued for that consideration;
which may be by reference to the particulars delivered in accordance with subsection (6); and
(b) contain a statement that no exceptional circumstances or a situation as mentioned in subsection (4)(b) with regard to the original valuation arose prior to the allotment.
Dispensation from section 1028 — consideration for allotment other than securities and money-market instruments referred to in section 1031
1032. (1) In this section—
“non-securities based consideration” means consideration other than that falling within the definition of “securities based consideration” in section 1031 (1);
“relevant assets” means assets other than those falling within that definition of “securities based consideration”.
(2) Where this section applies then either—
(a) the requirements of section 1028 do not apply; or
(b) those requirements only apply if—
(i) the contingency specified in subsection (4)(e) arises; or
(ii) a request of the kind referred to in subsection (6) is made by one or more members of the PLC, being a request that, as provided therein, must be acceded to by the PLC.
(3) This section applies where the consideration for the allotment of the shares consists wholly, or together with cash consideration, of non-securities based consideration and—
(a) the conditions specified in subsection (4) are satisfied with respect to the non-securities based consideration; and
(b) the value of the non-securities based consideration is not less than the value of the relevant assets as determined in accordance with paragraph (a) of that subsection.
(4) The following are the conditions with respect to the non-securities based consideration:
(a) the relevant assets are valued by reference to an opinion as to their fair value by an expert who, in the opinion of the PLC, possesses the requisite degree of independence from the interests concerned in the transaction and holds an appropriate qualification;
(b) that fair value was determined for a date not more than 6 months before the date on which the relevant assets are treated as consideration given for the allotment of the shares in question;
(c) that valuation as to fair value has been performed in accordance with generally accepted valuation standards and principles in the State (or such standards and principles in another Member State as are equivalent to them) and, in either case, which are applicable to the class of assets concerned;
(d) the giving of such consideration is approved—
(i) by ordinary resolution of the PLC; or
(ii) following 14 days’ notice by the board of directors (of the PLC’s intention to give that consideration) to the members, by a resolution of the board of directors of the PLC,
and, in either case, that approval is granted not more than 30 days before the date on which the agreement to allot the shares in question is entered into or, where such agreement is subject to conditions that required fulfilment before the agreement can be carried into effect, on the date of those conditions’ fulfilment;
(e) no exceptional circumstances arise that would significantly change the fair value of the asset at the date secondly referred to in paragraph (b); and
(f) in a case where paragraph (d)(ii) applies, the resolution there referred to includes a statement by the board of directors that they are satisfied that there are no exceptional circumstances known to them that, in their opinion, have significantly changed the fair value of the assets at the date secondly referred to in paragraph (b).
(5) If either—
(a) exceptional circumstances as mentioned in paragraph (e) of subsection (4) arise; or
(b) notwithstanding that the conditions specified in that subsection are satisfied, a request of the kind referred to in subsection (6) is made by one or more members of the PLC, being a request that, as provided therein, must be acceded to by the PLC;
a valuation under section 1028 of the relevant assets shall be caused to be carried out by the PLC and the relevant provisions of sections 1028 to 1030 shall apply accordingly.
(6) One or more members who hold, or together hold, not less than 5 per cent of the issued shares of the PLC on the date of the passing of the ordinary resolution or the notification by the directors, as the case may be, referred to in subsection (4)(d) may, by notice in writing served on the PLC before the date secondly referred to in subsection (4)(b), request a valuation under section 1028 of the relevant assets to be carried out; unless, on the date of service of that notice, the percentage of the issued shares of the PLC held by the requester or, as appropriate, the requesters has fallen below 5 per cent, the request shall be acceded to by the PLC.
(7) Where this section applies and shares are proposed to be allotted by a PLC without a report of an independent expert as otherwise required by sections 1028 to 1030 , the PLC shall, no later than the earliest of the dates specified in subsection (8), deliver, in the prescribed form, notice of the proposed allotment to the Registrar, which notice shall contain—
(a) a description of the consideration other than in cash at issue;
(b) the value of that consideration, the source of its valuation and, where appropriate, the method of valuation; and
(c) a statement whether the value arrived at corresponds at least to the number and nominal value of, and (where appropriate) to the premium on, the shares to be issued for that consideration.
(8) The dates referred to in subsection (7) are—
(a) the date of the allotment;
(b) where the allotment is to be authorised by ordinary resolution, as appropriate—
(i) the date of the notice of the general meeting at which the ordinary resolution is to be passed; or
(ii) where the ordinary resolution is to be passed by written resolution, the date on which the written resolution is deemed to be passed;
(c) where the allotment is to be authorised by the board of directors only, the date of the notification by the directors referred to in subsection (4)(d).
(9) Where shares have been allotted as mentioned in subsection (7), the notice of the allotment delivered under section 1021 (9) to the Registrar in respect of those shares shall—
(a) contain—
(i) a description of the consideration other than in cash at issue;
(ii) the value of that consideration, the source of its valuation and, where appropriate, the method of valuation; and
(iii) a statement whether the value arrived at corresponds at least to the number and nominal value of, and (where appropriate) to the premium on, the shares issued for that consideration;
which may be by reference to the particulars delivered in accordance with subsection (7); and
(b) contain a statement that no exceptional circumstances with regard to the original valuation arose prior to the allotment.
Dispensation from section 1028: cases in which consideration for allotment falls into both section 1031 and section 1032
1033. (1) If the consideration for the allotment of the shares consists of both—
(a) securities based consideration; and
(b) non-securities based consideration;
(whether in addition to cash or not), the provisions of sections 1031 and 1032 shall apply, respectively, to the securities based consideration and the non-securities based consideration, but with the modification that the notice of the proposed allotment, as provided for in sections 1031 (6) and 1032 (7), may be combined in the one document as long as that document is delivered to the Registrar no later than the earliest of the dates specified in section 1032 (8).
(2) In this section—
“non-securities based consideration” has the same meaning as it has in section 1032 ;
“securities based consideration” has the same meaning as it has in section 1031 .
Expert’s report on non-cash assets acquired from subscribers, etc.
1034. (1) A PLC shall not, unless the conditions specified in subsection (3) have been satisfied, enter into an agreement with a relevant person for the transfer by him or her, during the initial period, of one or more non-cash assets to the PLC or another for a consideration to be given by the PLC equal in value at the time of the agreement to at least one-tenth of the nominal value of the PLC’s share capital issued at that time.
(2) In this section—
(a) in relation to a company formed as a PLC—
(i) “relevant person” means any subscriber to the memorandum of the company; and
(ii) “initial period” means the period of 2 years beginning after the date on which the company is issued with a certificate under section 1010 that it is entitled to do business;
(b) in relation to a company re-registered or registered in accordance with Part 20 or 22 as a PLC—
(i) “relevant person” means any person who was a member of the company on the date of the re-registration or registration; and
(ii) “initial period” means the period of 2 years beginning after that date.
(3) The conditions referred to in subsection (1) are that—
(a) the consideration to be received by the PLC (that is to say, the asset to be transferred to the PLC or the advantage to the PLC of its transfer to another person) and any consideration other than cash to be given by the PLC have been valued under the following provisions of this section (without prejudice to any requirement to value any consideration under sections 1028 to 1030 );
(b) a report with respect to the consideration to be so received and given has been made to the PLC in accordance with those provisions during the 6 months immediately preceding the date of the agreement;
(c) the terms of the agreement have been approved by an ordinary resolution of the PLC; and
(d) not later than—
(i) the date of the giving of the notice of the meeting at which the resolution is proposed; or
(ii) where the means under section 193 (unanimous written resolutions) for passing the resolution is used, 21 days before the date of the signing of the resolution by the last member to sign;
copies of the resolution and report have been circulated to the members of the PLC entitled to receive that notice or sign the resolution and, if the relevant person is not then such a member, to that person, but, in a case falling within subparagraph (ii), compliance with this paragraph may be waived in writing by such members and the relevant 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 PLC, that is to say—
(a) where it is part of the ordinary business of the PLC to acquire or arrange for other persons to acquire assets of a particular description, an agreement entered into by the PLC 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 PLC under the supervision of the court, or an officer authorised by the court for the purpose, for the transfer of an asset to the PLC or to another.
(5) Subsections (5), (6) and (10) of section 1028 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 section 1028 .
(6) The report of the independent person under this section shall—
(a) state the consideration to be received by the PLC, describing the asset in question, specifying the amount to be received in cash and the consideration to be given by the PLC, specifying the amount to be given in cash;
(b) state the method and date of valuation;
(c) contain a note by the independent person, or be accompanied by such a note, as to the matters mentioned in section 1028 (11)(a) to (c); and
(d) contain a note by the independent person, or be accompanied by such a note, that, on the basis of the valuation, the value of the consideration to be received by the PLC is not less than the value of the consideration to be given by it.
(7) If a PLC enters into an agreement with any relevant person in contravention of subsection (1) and either the relevant person has not received a report under this section or there has been some other contravention of this section or section 1028 (5), (6) or (10) which he or she knew or ought to have known amounted to a contravention, then, subject to subsection (8)—
(a) the PLC shall be entitled to recover from the relevant person, any consideration given by the PLC 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 PLC enters into an agreement in contravention of subsection (1) and that agreement is or includes an agreement for the allotment of shares in that PLC, then whether or not the agreement also contravenes section 1028 —
(a) subsection (7) shall not apply to the agreement in so far as it is an agreement for the allotment of shares; and
(b) sections 1025 (3) and 1029 (2) shall apply in relation to the shares as if they had been allotted in contravention of section 1028 .
(9) Where a PLC contravenes any of the provisions of this section, the PLC and any officer of it who is in default shall be guilty of a category 3 offence.
Supplemental provisions in relation to section 1034
1035. (1) Any person carrying out a valuation or making a report under section 1034 shall be entitled to require from the officers of the PLC such information and explanation as the person thinks necessary to enable him or her to carry out the valuation or make the report and provide the note required by that section.
(2) Section 1030 (4) shall apply in relation to any such valuation and report as it applies in relation to a valuation and report under section 1028 with the substitution of a reference to this subsection for the reference in section 1030 (5) to section 1030 (1).
(3) A PLC which has passed a resolution under section 1034 with respect to the transfer of an asset shall, within 15 days after the date of the passing of the resolution, deliver to the Registrar a copy of the resolution together with the report required by that section and, if the PLC fails to do so, the PLC and any officer of it who is in default shall be guilty of a category 4 offence.
(4) Any reference in section 1034 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 or her to determine that proportion; and
(c) his or her report under section 1034 shall state what valuation has been made by virtue of paragraph (b) and also the reason for and method and date of any such valuation and any other matters which may be relevant to that determination.
Relief
1036. (1) Where any person is liable to a PLC under section 1025 , 1027 , 1028 , 1029 or 1034 in relation to payment in respect of any shares in the PLC or is liable by virtue of any undertaking given to the PLC 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 the foregoing 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 the foregoing 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 or she is liable to pay to the PLC under any of the foregoing sections.
(3) Where the liability mentioned in subsection (1) arises by virtue of an undertaking given to the PLC in or in connection with, payment for any shares in the PLC, the court may, on an application under that subsection, exempt the applicant from that liability only if and to the extent that it appears to the court just and equitable to do so having regard to the following, namely:
(a) whether the applicant has paid or is liable to pay any amount in respect of any liability arising in relation to those shares under section 1025 , 1027 , 1028 , 1029 or 1034 ; and
(b) 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.
(4) In determining in pursuance of an application under subsection (1) whether it should exempt the applicant in whole or in part from any liability, the court shall have regard to the following overriding principles, namely:
(a) that a PLC which has allotted shares should receive money or money’s worth at least equal in value to the aggregate of the nominal value of those shares and the whole of any premium or, if the case so requires, so much of that aggregate as is treated as paid up; and
(b) subject to paragraph (a), that where such a PLC would, if the court did not grant that exemption, have more than one remedy against a particular person, it should be for the PLC to decide which remedy it should remain entitled to pursue.
(5) Where a person brings any proceedings against another (the “contributor”) for a contribution in respect of any liability to a company arising under any of sections 1025 to 1029 and 1034 and it appears to the court that the contributor is liable to make such a contribution, the court may, if and to the extent that it appears to the court, having regard to the respective culpability in respect of the liability to the PLC of the contributor and the person bringing the proceedings, that it is just and equitable to do so—
(a) exempt the contributor in whole or in part from his or her liability to make such a contribution, or
(b) order the contributor to make a larger contribution than, but for this subsection, he or she would be liable to make.
(6) Where a person is liable to a PLC by virtue of subsection (7)(a) of section 1034 the court may, on an application under this subsection, exempt that person in whole or in part from that liability if and to the extent that it appears to the court just and equitable to do so having regard to any benefit accruing to the PLC by virtue of anything done by that person towards the carrying out of the agreement mentioned in that subsection (7)(a).
Special provisions as to issue of shares to subscribers
1037. (1) Any shares taken by a subscriber to the constitution of a PLC in pursuance of an undertaking of his or hers in the constitution and any premium on the shares shall be paid up in cash.
(2) If a PLC permits any such share to be paid up otherwise than in cash, the PLC and any officer of it who is in default shall be guilty of a category 3 offence.
Enforceability of undertakings made in contravention of certain provisions of Chapter
1038. Subject to section 1036 —
(a) an undertaking given by any person in or in connection with payment for shares in a PLC to do work or perform services or to do any other thing shall, if it is enforceable by the PLC apart from this Part, be so enforceable notwithstanding that there has been a contravention in relation thereto of section 1025 , 1027 , 1028 or 1029 ; and
(b) where such an undertaking is given in contravention of section 1034 or 1035 in respect of the allotment of any shares it shall be so enforceable notwithstanding that contravention.
Adaptation of section 102 (1) and (2) in relation to a PLC
1039. Section 102 (1) and (2) shall apply in relation to a PLC as if references in them to Chapter 3 or 4 of Part 9 were references to Chapter 16 or, as the case may be, Chapter 17 of this Part.
Treatment of own shares held by or on behalf of a PLC
1040. (1) Subject to section 1041 (5), this section applies to a PLC—
(a) where shares in the PLC are forfeited, or are surrendered to the PLC in lieu of forfeiture, in pursuance of Part 3 or its constitution for failure to pay any sum payable in respect of those shares,
(b) where shares in the PLC are acquired by the PLC otherwise than by any of the methods mentioned in section 102 (1) and the company has a beneficial interest in those shares,
(c) where the nominee of the PLC acquires shares in the PLC from a third person without financial assistance being given directly or indirectly by the PLC and the PLC has a beneficial interest in those shares, or
(d) where any person acquires shares in the PLC with financial assistance given to him or her directly or indirectly by the PLC for the purpose of the acquisition and the PLC has a beneficial interest in those shares.
(2) In determining for the purposes of subsection (1)(b) or (c) whether a PLC has a beneficial interest in any shares, there shall be disregarded, in any case where the PLC is a trustee (whether as personal representative or otherwise), any right of the PLC (as trustee) to recover its expenses or be remunerated out of the trust property.
(3) Unless the shares or any interest of the PLC in them are previously disposed of, the PLC shall, not later than the end of the relevant period after the date of their forfeiture or surrender or, in a case to which subsection (1)(b), (c) or (d) applies, their acquisition—
(a) cancel them and reduce the amount of the share capital by the nominal value of the shares, and
(b) where the effect of cancelling the shares will be that the nominal value of the PLC’s allotted share capital is brought below the authorised minimum, apply for re-registration as another type of company, stating the effect of the cancellation,
and the directors may take such steps as are requisite to enable the PLC to carry out its obligations under this subsection without complying with sections 84 and 85 , including passing a resolution in accordance with subsection (5).
(4) The PLC and, in a case falling within subsection (1)(c) or (d), the PLC’s nominee or, as the case may be, the other shareholder, shall not exercise any voting rights in respect of the shares and any purported exercise of those rights shall be void.
(5) The resolution authorised by subsection (3) may alter the PLC’s constitution so that it no longer states that the company is to be a PLC and may make such other alterations in the constitution as are requisite in the circumstances.
(6) Without prejudice to the generality of subsection (5), where the resultant company type is a private company limited by shares, the alteration referred to in that subsection shall include the replacement of the memorandum and articles of the re-registering company by a constitution in conformity with section 19 and Schedule 1 (but nothing in this section authorises the alteration of the rights and obligations of members of the re-registering company, or of other persons, as set out in its memorandum and articles and, accordingly, where necessary, the foregoing replacement constitution shall include such supplemental regulations as will secure those rights and obligations).
(7) The application for re-registration required by subsection (3)(b) shall be in the prescribed form and signed by a director or secretary of the PLC and shall be delivered to the Registrar together with a copy of the constitution of the PLC as altered by the resolution.
(8) If a PLC required to apply to be re-registered as another type of company under this section, fails to do so before the end of the relevant period, section 68 shall apply to it as if it were a private company limited by shares, but, subject to that, the company shall continue to be treated for the purposes of this Act as a PLC until it is re-registered as another form of company.
(9) If a PLC, when required to do so by subsection (3), fails to cancel any shares in accordance with paragraph (a) of that subsection or to make an application for re-registration in accordance with paragraph (b) of that subsection, the PLC and any officer of it who is in default shall be guilty of a category 3 offence.
(10) In addition to the resolutions which subsection (4) of that section provides that that section applies to, section 198 shall apply to resolutions of the directors of a PLC passed by virtue of subsection (3).
Supplemental provisions in relation to section 1040 (including definition of “relevant period”)
1041. (1) If the Registrar is satisfied that a PLC is required to be re-registered in accordance with section 1040 , the Registrar shall—
(a) retain the application and other documents delivered to him or her under subsection (7) of that section; and
(b) issue to the company an appropriate certificate of incorporation.
(2) Upon the issue of a certificate of incorporation under subsection (1)—
(a) the company shall, by virtue of the issue of that certificate, become the type of company stated in the certificate; and
(b) the alterations in the constitution set out in the resolution shall take effect accordingly.
(3) A certificate of incorporation issued to a company under subsection (1) shall be conclusive evidence—
(a) that the requirements of section 1040 and this section in respect of re-registration and of matters precedent and incidental thereto have been complied with; and
(b) that the company is the type of company stated in the certificate.
(4) Section 1285 (9) shall apply to a re-registration pursuant to section 1040 as it applies to a re-registration pursuant to Part 20 .
(5) Where, after shares in a company—
(a) are forfeited, or are surrendered to the company in lieu of forfeiture, in pursuance of Part 3 or its constitution or are otherwise acquired by the company;
(b) are acquired by a nominee of the company in the circumstances mentioned in section 1040 (1)(c) (and the references in that provision to a PLC shall, for the purposes of this paragraph, be read as references to a company); or
(c) are acquired by any person in the circumstances mentioned in section 1040 (1)(d) (and the references in that provision to a PLC shall, for the purposes of this paragraph, be read as references to a company);
the company is re-registered as a PLC, section 1040 and the foregoing provisions of this section shall apply to the company as if it had been a PLC at the time of the forfeiture, surrender or acquisition and as if for any reference to the relevant period after the date of the forfeiture, surrender or acquisition there were substituted a reference to the relevant period after the date of the re-registration of the company as a PLC.
(6) Section 104 (1) shall not apply to shares acquired otherwise than by subscription by a nominee of a PLC in a case falling within section 1040 (1)(d).
(7) In section 1040 and this section “relevant period”, in relation to any shares, means—
(a) in the case of shares forfeited or surrendered to the company in lieu of forfeiture or acquired as mentioned in section 1040 (1)(b) or (c) — 3 years;
(b) in the case of shares acquired as mentioned in section 1040 (1)(d) — one year.
Charges taken by PLC on own shares
1042. (1) A mortgage, charge, lien or pledge of a PLC on its own shares (whether taken expressly or otherwise), except a mortgage or charge permitted by subsection (2), is void.
(2) The following are permitted mortgages and charges, that is to say:
(a) in the case of every description of PLC, a mortgage or charge on its own shares (not being fully paid) for any amount payable in respect of the shares;
(b) in the case of a PLC whose ordinary business includes the lending of money or consists of the provision of credit or the bailment or hiring of goods under a hire-purchase agreement, or both, a mortgage or charge of the PLC on its own shares (whether fully paid or not) which arises in connection with a transaction entered into by the company in the ordinary course of its business;
(c) in the case of a company which is re-registered under Part 20 as a PLC, a mortgage or charge on its own shares which was in existence immediately before its application for re-registration.
Application of certain provisions of section 82 (6) in relation to PLCs
1043. (1) Without prejudice to subsections (2) to (4), in its application to a PLC giving financial assistance, section 82 (6) shall apply—
(a) as if, in paragraph (k), “of it or its holding company” were substituted for “of its holding company”;
(b) as if, in paragraph (m), “by an offeree (within the meaning of the Irish Takeover Panel Act 1997 ) or a private limited subsidiary of an offeree” were substituted for “by a private limited subsidiary of an offeree (within the meaning of the Irish Takeover Panel Act 1997 )”; and
(c) as if the following paragraph were substituted for paragraph (n):
“(n) in connection with an allotment of shares by a company or its holding company, the payment by the company of commissions, not exceeding 10 per cent of the money received in respect of such allotment, to intermediaries, and the payment by the company of professional fees;”.
(2) Subject to subsection (3), section 82 (6)(a) shall not apply to a PLC.
(3) In either of the following 2 cases, namely:
(a) a case in which the giving of particular financial assistance by a company (not being a PLC) has been authorised by the company’s use of the Summary Approval Procedure; or
(b) a case in which, before the commencement of this section, the giving of particular financial assistance by an existing company (not being a PLC) has been authorised by the company’s use of the procedure contained in subsection (2) of section 60 of the Act of 1963 (and that subsection and subsections (3) to (11) of that section shall remain in force for the purposes of the particular transaction and for the purposes of, and incidental to, the court’s jurisdiction to cancel the special resolution concerned);
and—
(i) following such authorisation, the company has applied to re-register, and has re-registered (whether under the prior Companies Acts or Part 20 ), as a PLC; and
(ii) save where, by reason of the operation of Chapter 7 of Part 4 or, as the case may be, the foregoing subsections (3) to (11), the particular transaction may not be proceeded with;
then the giving by the PLC of the financial assistance (pursuant to the foregoing authority) shall be lawful.
(4) A PLC may, in accordance with paragraph (e), (f) or (g) of section 82 (6), give financial assistance to any person only if the PLC’s net assets are not thereby reduced or, to the extent that those assets are thereby reduced, if the financial assistance is provided out of profits which are available for distribution.
(5) In subsection (4) “net assets” means the aggregate of the PLC’s assets less the aggregate of its liabilities; and “liabilities” includes—
(a) where the PLC prepares Companies Act entity financial statements, any provision for liabilities (within the meaning of paragraph 82 of Schedule 3 ) that is made in those financial statements;
(b) where the PLC prepares IFRS entity financial statements, any provision that is made in those financial statements;
except to the extent that that provision is taken into account in calculating the value of any asset to the PLC.
Variation of rights attached to special classes of shares
1044. Section 982 shall apply to a PLC as if—
(a) each reference in it to a DAC were a reference to a PLC; and
(b) in subsection (3)(c)—
(i) the reference to the giving, variation, revocation or renewal of an authority for the purposes of section 69 (1) were a reference to the giving, variation, revocation or renewal of an authority for the purposes of section 1021 (1); and
(ii) “by the means referred to in section 84 (2)(b)” were substituted for “by either of the means referred to in section 84 ”.
Restriction on transfer of shares
1045. Section 95 (2) shall not apply in respect of a transfer of shares in a PLC where those shares fall within a class of securities the evidencing and transfer of title to which is for the time being governed by, as appropriate—
(a) regulations under section 1086 , or
(b) for so long as they remain in force (including for any period as they may stand amended by regulations under section 1086 ), the Companies Act 1990 (Uncertificated Securities) Regulations 1996 ( S.I. No. 68 of 1996 ).
The text in italics on this page is sourced from the Irish Statute Book and is re-published under the Licence for Re-Use of Public Sector Information made pursuant to Directive 2003/98/EC Directive 2013/37/EU of the European Parliament and of the Council on the re-use of public sector information transposed into Irish law by the European Communities (Re-Use of Public Sector Information) Regulations 2005 to 2015.