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Section 549: Exercise by directors of power to allot shares etc

Companies Act 2006 · 2006 c. 46View on legislation.gov.uk

Part 17: A company's share capital — Chapter 2: Allotment of shares: general provisions

The directors of a company must not exercise any power of the company—

to allot shares in the company, or
to grant rights to subscribe for, or to convert any security into, shares in the company,

except in accordance with section 550 (private company with single class of shares) or section 551 (authorisation by company).

Subsection (1) does not apply—

to the allotment of shares in pursuance of an employees' share scheme, or
to the grant of a right to subscribe for, or to convert any security into, shares so allotted.

Subsection (1) does not apply to the allotment of shares pursuant to a right to subscribe for, or to convert any security into, shares in the company.

Subsection (1) does not apply to anything done for the purposes of a compromise or arrangement sanctioned in accordance with Part 26A (arrangements and reconstructions: companies in financial difficulty).

A director who knowingly contravenes, or permits or authorises a contravention of, this section commits an offence.

A person guilty of an offence under this section is liable—

on conviction on indictment, to a fine;
on summary conviction, to a fine not exceeding the statutory maximum.

Nothing in this section affects the validity of an allotment or other transaction.

About this text

This legislation text comes from legislation.gov.uk. Contains public sector information licensed under the Open Government Licence v3.0. These source and reuse terms cover the legislation text, not Remedy's commentary.

Reuse reviewed 21 August 2026 under Open Government Licence v3.0.