Company Law Reform Bill [HL]

moved Amendment No. 10:"Page 7, line 10, at end insert—" ““(   )   In the case of a company having a share capital, the subscribers to the memorandum become holders of the shares specified in the statement of capital and initial shareholdings.”” The noble Lord said: My Lords, in Grand Committee, the noble Lord, Lord Hodgson, raised the question of the status of the shares that the subscribers to a company’s memorandum take when it is formed and registered. The noble Lord pointed out that there is at present some confusion as to whether such shares should be considered as being allotted to the subscribers and, if so, whether it is necessary for the company to make a return of allotments to the registrar in respect of them. We are extremely grateful to the noble Lord for raising this issue with us, and the amendments to Clause 17, Clause 538, the new clause after Clause 552 and the new clause before Clause 553 are the result of our deliberations on this point. Taken together, these amendments make it clear that the subscribers become the holders of the shares that are taken by them on formation and that the Bill’s provisions on share allotments subsequent to registration, including the requirement for a return of allotments, and the Bill’s provisions on pre-emption rights do not apply to the shares taken by the subscribers. The remaining amendments in this group are largely consequential. We have also taken the opportunity to clarify when references to shares in the context of Part 15 are references to allotted shares. I beg to move. On Question, amendment agreed to. [Amendments Nos. 11 and 12 not moved.] Clause 19 [Articles of association]: