The attention of company directors and company practitioners is being drawn to the provisions of article 73 of the Companies Act which are applicable also to cases where an amount due by a company to shareholders or third parties, as loans or other credit amount, is capitalised through the allotment of new shares.

As regards the expert’s report required in cases of allotment of shares for a consideration other than in cash, sub-article (6) of the said article states that “The report shall be delivered to the Registrar for registration before the company is registered or before the shares are issued, as the case may be; and, in default, the Registrar shall accordingly refuse to register the company or the return of the allotments of the shares so issued, and, in the latter case, the issue shall be considered null and void.”.

The Registrar is therefore precluded from registering a notice of allotment of shares (Form H) submitted by a company if the relative expert’s report, as mentioned in sub-regulation (6) of the said article 73, has not been delivered to the Registrar before the date of the allotment of shares indicated in the Form H. This applies to all share allotments for non-cash consideration, including cases of capitalisation of loans. In such cases the Registry of Companies will return the relevant documents to the company.

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