CHAPTER 2 CHAPTER 2 MINIMUM SHARE CAPITAL REQUIREMENT FOR PUBLIC COMPANIES
699. Public company: requirement as to minimum share capital(1) A company that is a public company (otherwise than by virtue of re-registration as a public company) must not do business or exercise any borrowing powers unless the Registrar has issued it with a certificate under this section (a "trading certificate").(2) The Registrar shall issue a trading certificate if, on an application made in accordance with section 700, he is satisfied that the company's allotted share capital is not less than the authorised minimum.(3) For this purpose a share allotted in pursuance of an employees' share scheme shall not be taken into account unless paid up in full.(4) A trading certificate has effect from the date on which it is issued and is conclusive evidence that the company is entitled to do business and exercise any borrowing powers.
700. Procedure for obtaining certificate(1) An application for a certificate under section 699 must—(a) state that the company's allotted share capital is not less than the authorised minimum amount,(b) specify the amount, or estimated amount, of the company's preliminary expenses,(c) specify any amount or benefit paid or given, or intended to be paid or given, to any promoter of the company, and the consideration for the payment or benefit, and(d) be accompanied by a statement of compliance.(2) The statement of compliance is a statement that the company meets the requirements for the issue of a certificate under section 699.(3) The Registrar may accept the statement of compliance as sufficient evidence of the matters stated in it.
701. The authorised minimum(1) "The authorised minimum", in relation to a public company's allotted share capital is 50,000 US dollars.(2) The Board may make rules prescribing the amounts in other currencies that are for the time being to be treated as equivalent to the US dollar amount of the authorised minimum.(3) This power may be exercised from time to time as appears to the Board to be appropriate.(4) This section has effect subject to any exercise of the power conferred by section 702 (power to alter authorised minimum).
702. Power to alter authorised minimum(1) The Board may make rules which—(a) alter the US dollar amount of the authorised minimum, and(b) make a corresponding alteration of the prescribed equivalent amount in any other currency authorised pursuant to subsection 702(2).(2) Rules under this section that increase the authorised minimum may—(a) require a public company having an allotted share capital of which is less than the amount specified in the order to—(i) increase that value to not less than that amount, or(ii) re-register as a private company,(b) make provision in connection with any such requirement for any of the matters for which provision is made by these Regulations relating to—(i) a company's registration, re-registration or change of name,(ii) payment for shares comprised in a company's share capital, and(iii) offers to the public of shares in or debentures of a company,including provision as to the consequences (in criminal law or otherwise) of a failure to comply with any requirement of the order,(c) provide for any provision of the order to come into force on different days for different purposes.
703. Authorised minimum: application of initial requirement(1) The initial requirement for a public company to have allotted share capital of not less than the authorised minimum, that is—(a) the requirement in section 699(2) for the issue of a trading certificate, or(b) the requirement in section 77(2)(a) for re-registration as a public company,must be met either by reference to allotted share capital denominated in US dollars or by reference to allotted share capital denominated in another approved currency (but not partly in one and partly in the other).(2) Whether the requirement is met is determined in the first case by reference to the US dollar amount and in the second case by reference to the prescribed equivalent in another approved currency.(3) No account is to be taken of any allotted share capital of the company denominated in a currency other than US dollars or another currency that has been approved by the Board pursuant to subsection 702(1)(b).(4) If the company could meet the requirement either by reference to share capital denominated in US dollars or by reference to share capital denominated in another approved currency, it must elect in its application for a trading certificate or, as the case may be, for re-registration as a public company which is to be the currency by reference to which the matter is determined.
704. Authorised minimum: application where shares denominated in different currencies etc(1) The Board may make rules as to the application of the authorised minimum in relation to a public company that—(a) has shares denominated—(i) in more than one currency, or(ii) in a currency other than US dollars or another approved currency,(b) redenominates the whole or part of its allotted share capital, or(c) allots new shares.(2) The rules may make provision as to the currencies, exchange rates and dates by reference to which it is to be determined whether the company's allotted share capital is less than the authorised minimum.(3) The rules may provide that where—(a) a company has redenominated the whole or part of its allotted share capital, and(b) the effect of the redenomination is that the company's allotted share capital is less than the authorised minimum,the company must re-register as a private company.(4) Rules under subsection (3) may make provision corresponding to any provision made by sections 604 to 607 (re-registration as private company in consequence of cancellation of shares).(5) Any rules made by the Board under this section have effect subject to section 703 (authorised minimum: application of initial requirement).
705. Consequences of doing business etc without a trading certificate(1) If a company does business or exercises any borrowing powers in contravention of section 699, a contravention of these Regulations is committed by—(a) the company, and(b) every officer of the company who is in default.(2) A person who contravenes the Regulations under subsection (1) is liable to a fine of up to level 8.(3) A contravention of section 699 does not affect the validity of a transaction entered into by the company, but if a company—(a) enters into a transaction in contravention of that section, and(b) fails to comply with its obligations in connection with the transaction within 21 days from being called on to do so,the directors of the company are jointly and severally liable to indemnify any other party to the transaction in respect of any loss or damage suffered by him by reason of the company's failure to comply with its obligations.(4) The directors who are so liable are those who were directors at the time the company entered into the transaction.