Companies (Amendment) Act, 1983

Restriction on commencement of business by a public limited company.

6.—(1) A company registered as a public limited company on its original incorporation shall not do business or exercise any borrowing powers unless the registrar of companies has issued it with a certificate under this section or the company is re-registered as another form of company.

(2) The registrar shall issue a public limited company with a certificate under this section if, on an application made to him in the prescribed form by the company, he is satisfied that the nominal value of the company's allotted share capital is not less than the authorised minimum, and there is delivered to him a statutory declaration complying with subsection (3).

(3) The statutory declaration shall be in the prescribed form and signed by a director or secretary of the company and shall state—

(a) that the nominal value of the company's allotted share capital is not less than the authorised minimum;

(b) the amount paid up, at the time of the application, on the allotted share capital of the company;

(c) the amount, or estimated amount, of the preliminary expenses of the company and the persons by whom any of those expenses have been paid or are payable; and

(d) 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.

(4) For the purposes of subsection (2), a share allotted in pursuance of an employees' share scheme may not be taken into account in determining the nominal value of the company's allotted share capital unless it is paid up at least as to one-quarter of the nominal value of the share and the whole of any premium on the share.

(5) The registrar may accept a statutory declaration delivered to him under subsection (2) as sufficient evidence of the matters stated therein.

(6) A certificate under this section in respect of any public limited company shall be conclusive evidence that the company is entitled to do business and exercise any borrowing powers.

(7) If a public limited company does business or exercises borrowing powers in contravention of this section, the company and any officer of the company who is in default shall be guilty of an offence and shall be liable on summary conviction to a fine not exceeding £500.

(8) The provisions of this section are without prejudice to the validity of any transaction entered into by a public limited company; but if a public limited company enters into a transaction in contravention of those provisions and fails to comply with its obligations in connection therewith within 21 days from being called upon to do so, the directors of the company shall be jointly and severally liable to indemnify the other party to the transaction in respect of any loss or damage suffered by him by reason of the failure of the company to comply with those obligations.