Section 40 — Companies Act 1993: Contracts for issue of shares

40 Contracts for issue of shares A contract or deed under which a company is or may be required to issue shares, whether on the exercise of an option or on the conversion of securities or otherwise, is an illegal contract for the purposes of the Illegal Contracts Act 1970 unless— (a) the board is entitled to issue the shares; and (b) either— (i) the board has complied with section 47 or section 49 ; or (ii) all entitled persons agree or concur with the issue of the shares under section 107(2) ; or (iii) the contract or deed expressly provides that the contract or deed is subject to— (A) the board complying with section 47 or section 49 ; or (B) all entitled persons agreeing to or concurring with the issue of the shares under section 107(2) . Section 40 was substituted, as from 3 May 2001, by section 4 Companies Act 1993 Amendment Act 2001 (2001 No 18).