Section 57 Companies and Allied Matters Act 2020

Section 57 CAMA 2020

Section 57 Companies and Allied Matters Act is about Requirements as to share capital. It is under Chapter 2 (Re-registration Of Companies) of PART B (INCORPORATION OF COMPANIES AND INCIDENTAL MATTERS) of the Act.

Requirements as to share capital

(1) The following requirements shall be met at the time the special resolution is passed that the company should be re-registered as a public company—

(a) the nominal value of the company’s allotted share capital shall be not less than the minimum specified in section 27 (2) ;

(b) the company’s allotted shares shall be paid up at least one-quarter of the nominal value of that share and the whole of any premium on it ;
(c) if any share in the company or any premium on it has been fully or partly paid up by an undertaking given by any person that he or another should work or perform services (whether for the company or any other person), the undertaking shall have been performed or otherwise discharged ; or

(d) if shares have been allotted as fully or partly paid up as to their nominal value or any premium on them otherwise than in cash, and the consideration for the allotment consists of, or includes, an undertaking to the company (other than one to which paragraph (c) applies), then either—
(i) the undertaking shall have been performed or otherwise discharged, or
(ii) there shall be a contract between the company and some person pursuant to which the undertaking is to be performed within five years from the time the special resolution is passed.

See also  Section 71 Companies and Allied Matters Act 2020

(2) Shares allotted in pursuance of an employees’ share scheme, by reason of which the company would, but for this subsection, be precluded under subsection (1) (b) from being re-registered as a public company, shall not be regarded for the purpose of determining whether the requirements in subsection (1) (b), (c) and (d) are met.

(3) No more than one-tenth of the nominal value of the company’s allotted share capital is to be disregarded under subsection (2) and for this purpose the allotted share capital is treated as not including shares disregarded under the subsection.

(4) Shares disregarded under subsection (2) are treated as not forming part of the allotted share capital for the purposes of subsection (1) (a).

(5) A company shall not be re-registered as a public company if it appears to the Commission that—
(a) the company has resolved to reduce its share capital ;
(b) the reduction is supported by a solvency statement in accordance with regulations made by the Minister ; and
(c) the effect of the reduction is, or will be, that the nominal value of the company’s allotted share capital is below the minimum specified in section 27 (2).

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