Part 17 U.K.A company's share capital

Modifications etc. (not altering text)

C1 Pts. 1-39 modified (31.12.2020) by Regulation (EC) No. 2157/2001, Art. AAA1(3) (as inserted by The European Public Limited-Liability Company (Amendment etc.) (EU Exit) Regulations 2018 (S.I. 2018/1298), regs. 1, 97 (with regs. 140-145) (as amended by S.I. 2020/523, regs. 1(2), 5(a)-(f)); 2020 c. 1, Sch. 5 para. 1(1))

C2 Pts. 1-39 (except for Pt. 7 and ss. 662-669), 45-47 extended (12.5.2011) by The Companies Act 2006 (Consequential Amendments and Transitional Provisions) Order 2011 (S.I. 2011/1265), art. 5(1), Sch. 1 para. 2

Chapter 1 U.K.Shares and share capital of a company

Shares U.K.

540 Shares U.K.

(1) In the Companies Acts“share”, in relation to a company, means share in the company's share capital.

(2) A company's shares may no longer be converted into stock.

(3) Stock created before the commencement of this Part may be reconverted into shares in accordance with section 620.

(4) In the Companies Acts—

(a) references to shares include stock except where a distinction between share and stock is express or implied, and

(b) references to a number of shares include an amount of stock where the context admits of the reference to shares being read as including stock.

Commencement Information

I1 S. 540 wholly in force at 1.10.2009; s. 540 not in force at Royal Assent see s. 1300; s. 540(1)(4) in force for certain purposes at 1.10.2007 by S.I. 2007/2194, art. 2(3)(c) (with saving in art. 12); s. 540(1)(4) in force for certain further purposes at 6.4.2008 by S.I. 2007/3495, art. 3(3)(b) (with savings in arts. 7, 12); s. 540 otherwise in force at 1.10.2009 by S.I. 2008/2860, art. 3(k) (with arts. 5, 7, 8, Sch. 2) (as amended by S.I. 2009/1802, art. 18)

541 Nature of shares U.K.

The shares or other interest of a member in a company are personal property (or, in Scotland, moveable property) and are not in the nature of real estate (or heritage).

542 Nominal value of shares U.K.

(1) Shares in a limited company having a share capital must each have a fixed nominal value.

(2) An allotment of a share that does not have a fixed nominal value is void.

(3) Shares in a limited company having a share capital may be denominated in any currency, and different classes of shares may be denominated in different currencies.

But see section 765 (initial authorised minimum share capital requirement for public company to be met by reference to share capital denominated in sterling or euros).

(4) If a company purports to allot shares in contravention of this section, an offence is committed by every officer of the company who is in default.

(5) A person guilty of an offence under this section is liable—

(a) on conviction on indictment, to a fine;

(b) on summary conviction, to a fine not exceeding the statutory maximum.

543 Numbering of shares U.K.

(1) Each share in a company having a share capital must be distinguished by its appropriate number, except in the following circumstances.

(2) If at any time—

(a) all the issued shares in a company are fully paid up and rank pari passu for all purposes, or

(b) all the issued shares of a particular class in a company are fully paid up and rank pari passu for all purposes,

none of those shares need thereafter have a distinguishing number so long as it remains fully paid up and ranks pari passu for all purposes with all shares of the same class for the time being issued and fully paid up.

544 Transferability of shares U.K.

(1) The shares or other interest of any member in a company are transferable in accordance with the company's articles.

(2) This is subject to—

(a) the Stock Transfer Act 1963 (c. 18) or the Stock Transfer Act (Northern Ireland) 1963 (c. 24 (N.I.)) (which enables securities of certain descriptions to be transferred by a simplified process), and

(b) regulations under Chapter 2 of Part 21 of this Act (which enable title to securities to be evidenced and transferred without a written instrument).

(3) See Part 21 of this Act generally as regards share transfers.

545 Companies having a share capital U.K.

References in the Companies Acts to a company having a share capital are to a company that has power under its constitution to issue shares.

Commencement Information

I2 S. 545 wholly in force at 1.10.2009; s. 545 not in force at Royal Assent see s. 1300; s. 545 in force at 1.10.2007 for certain purposes by S.I. 2007/2194, art. 2(3)(d) (with savings in art. 12); s. 545 in force at 6.4.2008 for certain further purposes by S.I. 2007/3495, art. 3(3)(c) (with savings in arts. 7, 12); s. 545 otherwise in force at 1.10.2009 by S.I. 2008/2860, art. 3(k) (with arts. 5, 7, 8, Sch. 2) (as amended by S.I. 2009/1802, art. 18)

546 Issued and allotted share capital U.K.

(1) References in the Companies Acts—

(a) to “issued share capital” are to shares of a company that have been issued;

(b) to “allotted share capital” are to shares of a company that have been allotted.

(2) References in the Companies Acts to issued or allotted shares, or to issued or allotted share capital, include shares taken on the formation of the company by the subscribers to the company's memorandum.

Modifications etc. (not altering text)

C3 S. 546 applied (6.4.2007) by The Companies Acts (Unregistered Companies) Regulations 2007 (S.I. 2007/318), reg. 3, Sch. (with reg. 6)

Commencement Information

I3 S. 546 wholly in force at 1.10.2009; s. 546 not in force at Royal Assent see s. 1300; s. 546 in force for certain purposes at 6.4.2007 by S.I. 2007/1093, art. 2(2)(a) (with art. 11(1)); s. 546 in force for certain further purposes at 1.10.2007 and 1.11.2007 by S.I. 2007/2194, arts. 2(3)(e), 3(2)(a) (with saving in art. 12); s. 546 in force for certain further purposes at 6.4.2008 by S.I. 2007/3495, art. 3(3)(d) (with savings in arts. 7, 12); s. 546 in force otherwise at 1.10.2009 by S.I. 2008/2860, art. 3(k) (with arts. 5, 7, 8, Sch. 2) (as amended by S.I. 2009/1802, art. 18)

Share capital U.K.

547 Called-up share capital U.K.

In the Companies Acts—

• “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—

  (a)

  any share capital paid up without being called, and

  (b)

  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” is to be construed accordingly.

548 Equity share capital U.K.

In the Companies Acts“equity share capital”, in relation to a company, means its issued share capital excluding any part of that capital that, neither as respects dividends nor as respects capital, carries any right to participate beyond a specified amount in a distribution.

Commencement Information

I4 S. 548 wholly in force at 1.10.2009; s. 548 not in force at Royal Assent see s. 1300; s. 548 in force for certain purposes at 1.10.2007 by S.I. 2007/2194, art. 2(3)(f) (with saving in art. 12); s. 548 in force for certain purposes at 6.4.2008 by S.I. 2007/3495, art. 3(3)(e) (with savings in arts. 7, 12); s. 548 otherwise in force at 1.10.2009 by S.I. 2008/2860, art. 3(k) (with arts. 5, 7, 8, Sch. 2) (as amended by S.I. 2009/1802, art. 18)