Company Law Reform Bill [HL]

moved Amendment No. 113:"Page 50, line 15, at end insert—" ““(   )   In the case of a company limited by shares or an unlimited company having a share capital, on the registration of the company the subscribers of the company’s memorandum are deemed to have been allotted the number of shares for which they subscribed.”” The noble Lord said: This is another issue which has been brought to our attention by the Law Society. The amendment seeks to clarify whether a specific allotment of the subscribers’ shares is required following the registration of the company. In absence of any provisions to that effect in Part 2, the Bill does not make it clear whether, in the case of a company with a share capital, the shares which the subscribers agree to take up on incorporation are deemed to have been allotted to them on the registration of the company or whether a formal allotment and the filing of a return of allotments are necessary. We understand that this has been the source of much confusion under the existing Companies Acts. The opportunity should be taken to clarify matters by stating that the shares are deemed to be allotted to the subscribers on registration, which is what our amendment would achieve. I beg to move.