PART VISHARE CAPITAL, ITS INCREASE, MAINTENANCE AND REDUCTION
CHAPTER IGENERAL PROVISIONS ABOUT SHARE CAPITAL
Public company share capital requirements127
1
A company registered as a public company on its original incorporation shall not do business or exercise any borrowing powers unless the registrar has issued it with a certificate under this Article or the company is re-registered as a private company.
2
The registrar shall issue a company with such a certificate if, on an application made to him by the company in the prescribed form, 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 paragraph (3)F2 This paragraph is subject to paragraph (3A).
3
The statutory declaration must be in the prescribed form and be signed by a director or secretary of the company; and it must—
a
state that the nominal value of the company's allotted share capital is not less than the authorised minimum;
b
specify the amount paid up, at the time of the application, on the allotted share capital of the company;
c
specify the amount, or estimated amount, of the company's preliminary expenses and the persons by whom any of those expenses have been paid or are payable; and
d
specify 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.
F23A
In place of the statutory declaration referred to in paragraph (2), there may be delivered to the registrar using electronic communications a statement made by a director or secretary of the company complying with the requirements of paragraph (3)(a) to (d).
4
For the purposes of paragraph (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 declarationF2 or statement delivered to him under this Article as sufficient evidence of the matters stated in it.
6
A certificate under this Article in respect of a company is conclusive evidence that the company is entitled to do business and exercise any borrowing powers.
7
If a company does business or exercises borrowing powers in contravention of this Article, the company and any officer of it who is in default is liable to a fine.
F27A
Any person who makes a false statement under paragraph (3A) which he knows to be false or does not believe to be true is liable to imprisonment or a fine, or both.
8
Nothing in this Article affects the validity of any transaction entered into by a company; but, if a company enters into a transaction in contravention of this Article and fails to comply with its obligations in that connection within 21 days from being called upon to do so, the directors of the company are 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 company's failure to comply with those obligations.