New Clause 88

Company Law Reform Bill [Lords] – in a Public Bill Committee at 1:45 pm on 20th July 2006.

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Meaning of payment in cash

‘(1) The following provisions have effect for the purposes of the Companies Acts.

(2) A share in a company is deemed paid up (as to its nominal value or any premium on it) in cash, or allotted for cash, if the consideration received for the allotment or payment up is—

(a) cash received by the company,

(b) a cheque received by the company in good faith that the directors have no reason for suspecting will not be paid,

(c) a release of a liability of the company for a liquidated sum, or

(d) an undertaking to pay cash to the company at a future date.

(3) In relation to the allotment or payment up of shares in a company—

(a) the payment of cash to a person other than the company, or

(b) an undertaking to pay cash to a person other than the company,

counts as consideration other than cash.

This does not apply for the purposes of Chapter (allotment of equity securities: existing shareholders’ right of pre-emption) (allotment of equity securities: existing shareholders’ right of pre-emption).

(4) For the purpose of determining whether a share is or is to be allotted for cash, or paid up in cash, “cash includes foreign currency.’. —[Margaret Hodge.]

Brought up, and added to the Bill.