Companies Act 2014 section 1028

Expert's report on non-cash consideration before allotment of shares

Section 1028 sets out the requirements for obtaining an independent expert's valuation report before a public limited company (PLC) can allot shares in exchange for non-cash consideration.

• A PLC must obtain an independent valuation report on any non-cash consideration before allotting shares paid up otherwise than in cash, with the report delivered to the proposed allottee within six months before allotment
• The valuation requirement does not apply where shares are allotted under a share-for-share arrangement with another company, provided the arrangement is open to all holders of the relevant class of shares in that other company
• The report must be prepared by an independent person qualified to act as the PLC's statutory auditor, who may rely on valuations by other suitably qualified persons provided they are not officers, employees, partners, or connected persons of the PLC or its group companies
• The report must state the nominal value and any premium on the shares, describe the consideration and valuation method used, and confirm that the value of the consideration is not less than the amount being treated as paid up on the shares