F898For the purposes of the Companies Acts shares in a company are taken to be allotted when a person acquires the unconditional right to be included in the company's register of members ... in respect of the shares.
Definitions used in section 558
- the Companies Acts
(1) In this Act “the Companies Acts” means—
(a)the company law provisions of this Act,
(b)Part 2 of the Companies (Audit, Investigations and Community Enterprise) Act 2004 (c. 27) (community interest companies), and
(c)the provisions of the Companies Act 1985 (c. 6) and the Companies Consolidation (Consequential Provisions) Act 1985 (c. 9) that remain in force.
Defined in s.2(1) · see it in the full Act- share
(1) In the Companies Acts “share”, in relation to a company, means share in the company's share capital.
Defined in s.540(1) · see it in the full Act- company
“company” means a company formed and registered under this Act, that is—
Defined in s.1(1) · see it in the full Act(a)a company so formed and registered after the commencement of this Part, or
(b)a company that immediately before the commencement of this Part—
(i)was formed and registered under the Companies Act 1985 (c. 6) or the Companies (Northern Ireland) Order 1986 (S.I. 1986/1032 (N.I. 6)), or
(ii)was an existing company for the purposes of that Act or that Order,
(which is to be treated on commencement as if formed and registered under this Act).
(4) In this section and that Schedule “company” includes any body corporate.
Defined in s.1159(4) · see it in the full Act- the register
(2) The records relating to companies are referred to collectively in the Companies Acts as “the register”.
Defined in s.1080(2) · see it in the full Act- member
(2) In sub-paragraph (1) “member” has the same meaning as it has by virtue of section 7(1) of that Act .
Defined in Sch.2 Pt.1 · see it in the full Act
Cases considering section 558 (4)
John Palmer & Anor v P1 Pit Stop Limited & Ors
The court used the allotment rule to conclude that an allotment takes effect when the incoming member has acquired an unconditional right to have their name entered in the register. Magna had acquired no such right. (see paras [66]-[68])
Joanne Brierley v Christopher Howe & Anor (Re 36 Bourne Street Ltd)
The court uses the statutory concept of allotment to distinguish acquisition of an unconditional right to registration from a transfer of existing shares. The distinction supports the conclusion that allotment and issue involve company affairs, whereas transfer ordinarily does not. (see para [170])
Yiannakis Chambi (also known as John Chambi) v Aristos Aristodemou (also known as Ari Aristodemou) & Anor
Interprets allotment as occurring when a person acquires an unconditional right to be included in the register of members. The provision supported the distinction between allotment and issue and the finding that the purported 2013 allotment was invalid. (see paras [6]; [10]; [121])
What each judgment says about section 558 is in the case-law panel in the full Act.
Amendments and notes
3 notes from legislation.gov.uk
Amendments
- F898Words in s. 558 omitted (26.10.2023 for specified purposes, 26.1.2026 in so far as not already in force) by virtue of Economic Crime and Corporate Transparency Act 2023 (c. 56), s. 219(1)(2)(b), Sch. 1 para. 9; S.I. 2026/57, reg. 2
Modifications
- C1093S. 558 applied (6.4.2007) by The Companies Acts (Unregistered Companies) Regulations 2007 (S.I. 2007/318), reg. 3, Sch. (with reg. 6)
Commencement
- I216S. 558 wholly in force at 1.10.2009; s. 558 not in force at Royal Assent see s. 1300; s. 558 in force for specified purposes at 6.4.2007 by S.I. 2007/1093, art. 2(2)(b) (with art. 11(1)); s. 558 in force otherwise at 1.10.2009 by S.I. 2008/2860, art. 3(k) (with arts. 5, 7, 8, Sch. 2) (as amended by S.I. 2009/1802, art. 18) text for certain specified purposes only, see the commentary.