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

Chapter 5U.K.Payment for shares

585Public companies: must not accept undertaking to do work or perform servicesU.K.

(1)A public company must 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.

(2)If a public company accepts such an undertaking in payment up of its shares or any premium 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 is liable—

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

(3)The reference in subsection (2) to the holder of shares includes a person who has an unconditional right—

(a)to be included in the company's register of members in respect of those shares, or

(b)to have an instrument of transfer of them executed in his favour.