Section 368 of The Companies Act No. 17 of 2015: Restrictions on public company allocating shares for non-cash consideration

    

(1) A public company shall not allot shares as fully or partly paid up (as to their nominal value or any premium on them) otherwise than in cash unless—
(a) the consideration for the allotment has been independently valued in accordance with the provisions of this Division;
(b) the valuer's report has been made to the company during the six months immediately preceding the allotment of the shares; and (c) a copy of the report has been sent to the proposed allottee.
(2) For the purpose of subsection (1), the application of an amount standing to the credit of—
(a) any of a company's reserve accounts; or
(b) its profit and loss account, in paying up (to any extent) shares allotted to members of the company; or premiums on shares so allotted, does not count as consideration for the allotment, and that subsection does not apply in that case.
(3) If a company allots shares in contravention of subsection (1) and either—
(a) the allottee has not received the valuer's report required to be sent to the allottee; or
(b) there has been some other contravention of the requirements of this section or section 371 that the allottee knew or ought to have known amounted to a contravention, the allottee is liable to pay the company an amount equal to the aggregate of the nominal value of the shares and the whole of any premium (or, if the case so requires, so much of that aggregate as is treated as paid up by the consideration), with interest at the appropriate rate.
(4) This section has effect subject to sections 369 and 370.


Disclaimer: This document is not to be taken as legal advise.

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