508. Exercise by directors of power to allot shares etc

(1) The directors of a company must not exercise any power of the company—
(a) to allot shares in the company, or
(b) to grant rights to subscribe for, or to convert any security into, shares in the company,
except in accordance with section 509 (private company with single class of shares) or section 510 (authorisation by company).
(2) Subsection (1) does not apply—
(a) to the allotment of shares in pursuance of an employees' share scheme, or
(b) to the grant of a right to subscribe for, or to convert any security into, shares so allotted.
(3) Subsection (1) does not apply to the allotment of shares pursuant to a right to subscribe for, or to convert any security into, shares in the company.
(4) A director who knowingly contravenes, or permits or authorises a contravention of, this section commits a contravention of these Regulations.
(5) A person who commits a contravention of this section is liable to a level 2 fine.
(6) Nothing in this section affects the validity of an allotment or other transaction.