Companies Act 2014 section 832

Allotment of share not fully paid up by company that has a restricted person

Section 832 deals with the consequences when a company with a restricted director allots shares that have not been fully paid up in accordance with the capitalisation requirements imposed under section 819(3)(b).

• Where a company with a restricted person allots a share that is not fully paid up as required, the share is treated as if the full nominal value plus any premium has been received, but the allottee remains personally liable to make up the shortfall plus interest
• The allottee must pay the company the full amount that should have been received, less any consideration already applied towards payment and any premium on the share, together with interest at the appropriate rate
• The section does not apply to bonus shares (unless the allottee knew or ought to have known of the non-compliance) or to shares allotted under an employees' share scheme
• Any subsequent holder of the shares is jointly and severally liable for the outstanding amount, unless they purchased the shares for value without actual notice of the non-compliance, or they derived title from someone who was not themselves liable