Shares taken by a subscriber to the memorandum of a public company in pursuance of an undertaking of his in the memorandum, and any premium on the shares, must be paid up in cash.
Definitions used in section 584
- 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- undertaking
(1) In the Companies Acts“undertaking” means—
(a)a body corporate or partnership, or
(b)an unincorporated association carrying on a trade or business, with or without a view to profit.
Defined in s.1161(1) · see it in the full Act- cash
For this purpose “cash” includes foreign currency.
Defined in s.1163(1) · see it in the full Act
Cases considering section 584 (5)
Zavarco Plc v Ranjeet Singh Sidhu
Section 584 prescribes that the subscriber’s contractual obligation to pay for the shares taken on formation must be discharged in cash. It operates on that existing obligation and need not create a separate statutory civil liability (see paras [91]-[93]; [103]).
Zavarco PLC v Tan Sri Syed Mohd Yusof Bin Tun Syed Nasir
Interprets section 584 as operating directly on the subscriber’s existing contractual obligation to pay in cash for shares taken on incorporation. The obligation therefore arises on registration rather than on a later call or demand. (see paras [35]; [41]-[42])
Zavarco Plc v Tan Sri Syed Mohd Yusof Bin Tun Syed Nasir
Section 584 requires shares taken by a subscriber to the memorandum of a public company pursuant to the subscriber’s undertaking to be paid up in cash. The requirement applied to all 360 million shares taken by the subscriber, not merely one share. (see paras [76]-[81])
What each judgment says about section 584 is in the case-law panel in the full Act.
Amendments and notes
2 notes from legislation.gov.uk
Modifications
- C1096Ss. 584-587 applied (1.10.2009) by The Companies Act 2006 (Consequential Amendments, Transitional Provisions and Savings) Order 2009 (S.I. 2009/1941), art. 12(1), Sch. 3 para. 9 (with art. 10)
- C1097Ss. 584-587 applied (12.5.2011) by The Companies Act 2006 (Consequential Amendments and Transitional Provisions) Order 2011 (S.I. 2011/1265), art. 5(1), Sch. 1 para. 9