Companies Act 2014 section 1026

Payment for allotted shares

Section 1026 sets out the minimum payment requirements when a public limited company allots shares, including the consequences of non-compliance and the liability of allottees and subsequent holders.

• A PLC must not allot a share unless at least one-quarter of its nominal value, plus the whole of any share premium, has been paid up
• Where shares are allotted in breach of this rule, the allottee must pay the shortfall plus interest, though the share is treated as if the minimum amount had been received
• Recipients of bonus shares are only liable for the shortfall if they knew or ought to have known the shares were allotted in contravention of the rules
• Shares allotted under an employees' share scheme are exempt from these minimum payment requirements