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JGM
JGM, Solicitor
Category: Law
Satisfied Customers: 11148
Experience:  30 years as a practising solicitor.
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I am considering to allot new shares of a private limited

Resolved Question:

I am considering to allot new shares of a private limited company of England and Wales to an investor from Russia. It seems that I have general understanding of the process of shares allotment, but I have not found specific provision in Companies Act 2006 regarding the question whether it is allowed to pay in foreign currency for shares nominated in pound sterling according to legislation of England and Wales? In relation to our case, I wonder whether it is possible to pay in Russian rubles to the company's Russian Ruble bank account for the company's 100 000 new shares of 1 GBP nominal value each.
Submitted: 1 year ago.
Category: Law
Customer: replied 1 year ago.
If it is possible to pay in foreign currency for the new issued shares nominated in sterling please explain and provide references for relevant legislation.
Expert:  JGM replied 1 year ago.

This is not an issue. The company or its directors can decide what currency it can be paid in. There is no company law on this, simply a decision of th company, assuming there is no provision to the contrary in the Articles of Association.

Customer: replied 1 year ago.
The answer sounds very general. The question arises from the SH01 form which provides no possibility to indicate that allotted shares were paid in currency other than shares currency. SH01 forms are below
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/298455/SH01_return_of_allotment_of_shares.pdf
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/398938/Checklist_guidance_for_SH01.pdfThe Company Law provides a requirement that shares can not be allowed for consideration less than nominal value, so if I pay in foreign currency how I can prove to Companies House using SH01 form that the consideration paid is higher than nominal value of shares.Also, given that limited company can issue shares in any currency I more that doubt about receiving payment in currency other than the new shares currency.
Expert:  JGM replied 1 year ago.

Every time I have done this I have simply used the current value and converted to sterling.

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