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46: Consideration for issue of shares
or “How you can pay for shares when a company issues them”
You could also call this:

“How you might need to pay for shares when a company is first set up”

When a company is registered, you might get shares in it. Usually, you don’t have to pay for these shares or give anything in return. However, there are two situations where you might need to pay or provide something for the shares:

  1. If the company’s constitution says you need to pay or give something for the shares.

  2. If you agreed to pay or give something for the shares in a contract. This could be a contract made before the company was registered (called a pre-incorporation contract) or a contract made after the company was registered.

If neither of these apply to you, you don’t have to pay or give anything for the shares you get when the company is registered.

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Next up: 47: Consideration to be decided by board

or “Board decides share price and terms for new or existing shares”
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Part 6 Shares and debentures
Issue of shares

46AConsideration for issue of shares on registration

  1. A shareholder is not liable to pay or provide any consideration in respect of an issue of shares under section 41(a) unless—

  2. the constitution of the company specifies the consideration to be paid or provided for those shares; or
    1. the shareholder is liable to pay or provide consideration for those shares pursuant to either a pre-incorporation contract (within the meaning of section 182) or a contract entered into after the registration of the company.

      Notes
      • Section 46A: inserted, on , by section 4 of the Companies Act 1993 Amendment Act 1997 (1997 No 27).