605Liability of subsequent holders of sharesU.K.
(1)If a person becomes a holder of shares in respect of which—
(a)there has been a contravention of section 593 (public company: valuation of non-cash consideration for shares), and
(b)by virtue of that contravention another is liable to pay any amount under the provision contravened,
that person is also liable to pay that amount (jointly and severally with any other person so liable), unless he is exempted from liability under subsection (3) below.
(2)If a company enters into an agreement in contravention of section 598 (public company: agreement for transfer of non-cash asset in initial period) and—
(a)the agreement is or includes an agreement for the allotment of shares in the company,
(b)a person becomes a holder of shares allotted under the agreement, and
(c)by virtue of the agreement and allotment under it another person is liable to pay an amount under section 604,
the person who becomes the holder of the shares is also liable to pay that amount (jointly and severally with any other person so liable), unless he is exempted from liability under subsection (3) below.
This applies whether or not the agreement also contravenes section 593.
(3)A person otherwise liable under subsection (1) or (2) is exempted from that liability if either—
(a)he is a purchaser for value and, at the time of the purchase, he did not have actual notice of the contravention concerned, or
(b)he derived title to the shares (directly or indirectly) from a person who became a holder of them after the contravention and was not liable under subsection (1) or (2).
(4)References in this section to a holder, in relation to shares in a company, include any person who has an unconditional right—
(a)to be included in the company's register of members [F1[F2(or, as the case may be, to have his name and other particulars delivered to the registrar under Chapter 2A of Part 8 and registered by the registrar)]] in respect of those shares, or
(b)to have an instrument of transfer of the shares executed in his favour.
Textual Amendments
F1Words in s. 605(4)(a) omitted (26.10.2023 but only so far as it confers a power to make regulations or relates to the exercise of the power, otherwise prosp.) by virtue of Economic Crime and Corporate Transparency Act 2023 (c. 56), s. 219(1)(2)(b), Sch. 1 para. 11
F2Words in s. 605(4)(a) inserted (30.6.2016) by Small Business, Enterprise and Employment Act 2015 (c. 26), s. 164(1), Sch. 5 para. 22; S.I. 2016/321, reg. 6(c)