Companies (Amendment) Act, 1983
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Acquisition of shares in a company by company's nominee. |
42.—(1) Subject to subsections (5) and (6), where shares are issued to a nominee of a company referred to in section 41 (1) or are acquired by a nominee of such a company from a third party as partly paid up, then, for all purposes the shares shall be treated as held by the nominee on his own account and the company shall be regarded as having no beneficial interest in them. | |
(2) Subject to subsection (6), if a person is called on to pay any amount for the purpose of paying up, or paying any premium on, any shares in any such company which were issued to him, or which he otherwise acquired, as the nominee of the company and he fails to pay that amount within 21 days from being called on to do so, then— | ||
(a) if the shares were issued to him as a subscriber to the memorandum by virtue of an undertaking of his in the memorandum, the other subscribers to the memorandum; or | ||
(b) if the shares were otherwise issued to or acquired by him, the directors of the company at the time of the issue or acquisition, | ||
shall be jointly and severally liable with him to pay that amount. | ||
(3) If in proceedings for the recovery of any such amount from any such subscriber or director under this section it appears to the court that he is or may be liable to pay that amount, but that he has acted honestly and reasonably and that, having regard to all the circumstances of the case, he ought fairly to be excused from liability, the court may relieve him, either wholly or partly, from his liability on such terms as the court thinks fit. | ||
(4) Where any such subscriber or director has reason to apprehend that a claim will or might be made for the recovery of any such amount from him, he may apply to the court for relief and on the application the court shall have the same power to relieve him as it would have had in proceedings for the recovery of that amount. | ||
(5) Subsection (1) shall not apply to shares acquired otherwise than by subscription by a nominee of a public limited company in a case falling within section 43 (1) (d). | ||
(6) Subsections (1) and (2) shall not apply— | ||
(a) to shares acquired by a nominee of a company where the company has no beneficial interest in those shares (disregarding any right which the company itself may have as trustee, whether as personal representative or otherwise, to recover its expenses or be remunerated out of the trust property); or | ||
(b) to shares issued in consequence of an application made before the appointed day or transferred in pursuance of an agreement to acquire them made before that day. |