12(1)M1Scheme shares must be—U.K.
(a)fully paid up;
(b)not redeemable; and
(c)not subject to any restrictions [F1other than those permitted by sub-paragraph (1A) below.]
Sub-paragraph (b) above does not apply, in the case of a profit sharing scheme, in relation to shares in a workers’ cooperative.
[F2(1A)Subject to sub-paragraph (1B) below, scheme shares may be subject to—
(a)restrictions which attach to all shares of the same class, or
(b)a restriction authorised by sub-paragraph (2) below.
(1B)In the case of a profit sharing scheme, scheme shares must not be subject to any restrictions affecting the rights attaching to those shares which relate to—
(a)dividends, or
(b)assets on a winding-up of the company,
other than restrictions which attach to all other ordinary shares in the same company.]
(2)Except as provided below, the shares may be subject to a restriction imposed by the company’s articles of association—
(a)requiring all shares held by directors or employees of the company or of any other company of which it has control to be disposed of on ceasing to be so held; and
(b)requiring all shares acquired, in pursuance of rights or interests obtained by such directors or employees, by persons who are not (or have ceased to be) such directors or employees to be disposed of when they are acquired.
(3)A restriction is not authorised by sub-paragraph (2) above unless—
(a)any disposal required by the restriction will be by way of sale for a consideration in money on terms specified in the articles of association; and
(b)the articles also contain general provisions by virtue of which any person disposing of shares of the same class (whether or not held or acquired as mentioned in sub-paragraph (2) above) may be required to sell them on terms which are the same as those mentioned in paragraph (a) above.
(4)In the case of a profit sharing scheme, except in relation to redeemable shares in a workers’ cooperative, nothing in sub-paragraph (2) above authorises a restriction which would require a person, before the release date, to dispose of his beneficial interest in shares the ownership of which has not been transferred to him.
Textual Amendments
F1Words in Sch. 9 para. 12(1)(c) substituted (21.3.2000) by Finance Act 2000 (c. 17), s. 52(4)(a)(5) (with s. 52(6))
F2Sch. 9 para. 12(1A)(1B) inserted (21.3.2000) by Finance Act 2000 (c. 17), s. 52(4)(b)(5) (with s. 52(6))
Marginal Citations
M1Source—1978 Sch.9 7; 1980 Sch.10 17; 1984 Sch.10 9; 1986 s.22, 24(2)