Companies Act 2014 section 1037

Special provisions as to issue of shares to subscribers

Section 1037 requires that subscribers to the constitution of a PLC must pay for their initial shares, including any share premium, in cash.

• Subscribers who undertake in the PLC's constitution to take up shares must pay for those shares entirely in cash, including any premium
• This cash-only requirement applies solely to shares taken under the original undertaking in the constitution, not to any shares the subscriber may acquire later
• The rationale for this rule is to avoid the need for an expert's valuation report and the associated complex procedures that would be required if non-cash consideration were permitted
• If a PLC allows such shares to be paid up other than in cash, both the company and any officer in default commit a category 3 offence