Q&As

Can a company capitalise profits to pay up new shares to be allotted to people who are not shareholders?

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Published on LexisPSL on 15/08/2018

The following Corporate Q&A provides comprehensive and up to date legal information covering:

  • Can a company capitalise profits to pay up new shares to be allotted to people who are not shareholders?

It is not possible for a company to capitalise profits to pay up new shares that are then to be allotted to individuals who are not currently shareholders in the company, as the company would effectively be issuing fully-paid shares to those individuals for no consideration, ie at a discount.

It is a fundamental princi

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