C2C1Part 17A company's share capital

Annotations:
Modifications etc. (not altering text)
C2

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))

Chapter 7Share premiums

The share premium account

I1610Application of share premiums

1

If a company issues shares at a premium, whether for cash or otherwise, a sum equal to the aggregate amount or value of the premiums on those shares must be transferred to an account called “the share premium account”.

2

Where, on issuing shares, a company has transferred a sum to the share premium account, it may use that sum to write off—

a

the expenses of the issue of those shares;

b

any commission paid on the issue of those shares.

3

The company may use the share premium account to pay up new shares to be allotted to members as fully paid bonus shares.

4

Subject to subsections (2) and (3), the provisions of the Companies Acts relating to the reduction of a company's share capital apply as if the share premium account were part of its paid up share capital.

5

This section has effect subject to—

  • section 611 (group reconstruction relief);

  • section 612 (merger relief);

  • section 614 (power to make further provisions by regulations).

6

In this Chapter “the issuing company” means the company issuing shares as mentioned in subsection (1) above.