AT A GLANCE
Basic rulePLC shares for non-cash consideration only after independent valuation (s593)
Timingvaluation report made no more than 6 months before allotment
Valuermust be eligible as statutory auditor and independent (s1150)
Authoritydirectors need authority to allot, valid for up to 5 years (s551)
Filingcopy of the report goes to Companies House with the return of allotment
UpdatedNovember 2026

What a non-cash contribution to a PLC is

In a non-cash contribution, new shares are paid for not in money but with another asset: shares in another company, a property, a patent, a business. The Companies Act speaks of shares paid up otherwise than in cash.

For a PLC a strict rule applies. Under section 593 it may allot shares for non-cash consideration only if the consideration has been independently valued, the report was made to the company in the six months before the allotment, and the allottee has received a copy. The aim is simple: a PLC's capital should really be there, not just on paper. How much capital a PLC needs at minimum is under minimum share capital.

Who may value, and what goes in the report

The valuer must be eligible for appointment as statutory auditor and meet the independence requirements. For parts that call for specialist knowledge, such as a property or a patent, the valuer may rely on a valuation by another person who has that knowledge and is not an officer or employee of the company. The report must then say so.

The report states the nominal value of the shares, any premium, a description of the consideration with the valuation method and date, and how far the shares are paid up by the consideration and how far in cash. The valuer also confirms that the value of the consideration, together with any cash, is not less than the nominal value and premium it is meant to pay up.

And if the rule is ignored: where section 593 is breached, the allottee can be liable to pay the nominal value and premium again, with interest. That is the moment a supposedly clever contribution becomes very expensive.

Exceptions: share-for-share exchanges and bonus issues

Section 594 carves out an important group of cases. Where the PLC allots shares in exchange for shares in another company and the offer is open to all the holders of shares in that company, no valuation under section 593 is needed. This is the classic route for putting a holding company above an existing group. What such an exchange means for tax in your home country is a question of its own, covered in share exchange into a UK PLC.

A bonus issue is not a non-cash contribution either: where shares are paid up out of profits or other reserves, that does not count as consideration, and section 593 does not bite.

How a non-cash share issue in a PLC runs

This is how a share issue for non-cash consideration works in practice, from the company secretary's side.

  1. 1

    Check the authority

    Directors may allot shares only where the articles or a resolution authorise them. The authority states the maximum number of shares and runs for no more than five years. An ordinary resolution is enough, even where it amends the articles.

  2. 2

    Settle pre-emption

    Existing shareholders' statutory pre-emption right under section 561 does not apply to shares allotted wholly or partly for non-cash consideration. The articles and any shareholders' agreement may still contain rules of their own, which we read first.

  3. 3

    Commission the valuation

    Instruct the independent valuer once the asset, price and timetable are fixed. The report must not be more than six months old at allotment.

  4. 4

    Report to the allottee

    The incoming shareholder receives a copy of the report before the shares are allotted.

  5. 5

    Allot and register the shares

    Board resolution, entry in the register of members, share certificates or electronic entry. Each share must be paid up to at least a quarter of its nominal value plus the whole of any premium.

  6. 6

    File with Companies House

    A copy of the valuation report goes to the registrar with the return of allotment. If the PSC details change as a result, those are filed too.

A special case: the Ltd on its way to becoming a PLC

If you want to convert a Ltd into a PLC and have issued shares for non-cash consideration shortly before, you run into section 93. For allotments between the balance sheet date used for re-registration and the resolution to re-register, Companies House requires the same valuation as for a PLC, unless the allotment was part of a share exchange or a merger. The whole road is described under converting a Ltd into a PLC.

FAQ

Common questions about non-cash consideration in a PLC

Can I put a property into a PLC in exchange for shares?

Yes, but only with an independent valuation report under section 593 that is no more than six months old at allotment. For tax, the contribution also needs checking in your country of residence.

May my own auditor carry out the valuation?

The valuer must be eligible as statutory auditor and independent. Whether your existing auditor fits depends on the independence rules and is checked case by case.

Do the other shareholders have pre-emption rights?

The statutory pre-emption right under section 561 does not apply to shares issued for non-cash consideration. The articles or a shareholders' agreement may provide rights of their own, though.

Sources: legislation.gov.uk: Companies Act 2006, section 593; legislation.gov.uk: Companies Act 2006, section 594; legislation.gov.uk: Companies Act 2006, section 596; legislation.gov.uk: Companies Act 2006, section 597; legislation.gov.uk: Companies Act 2006, section 1150; legislation.gov.uk: Companies Act 2006, section 551; legislation.gov.uk: Companies Act 2006, section 565; legislation.gov.uk: Companies Act 2006, section 586; legislation.gov.uk: Companies Act 2006, section 93