238 5 Equity and Shareholders’ Capital
Fourth, the Second Directive lays down minimum requirements as to when the
shares must be paid up.^508
Fifth, before the company issues shares for a consideration other than in cash, a
report must usually^509 be drawn up by one or more independent experts appointed
or approved by an administrative or judicial authority.^510 The Second Directive
provides that the experts’ report “shall contain at least a description of each of the
assets comprising the consideration as well as of the methods of valuation used
and shall state whether the values arrived at by the application of these methods
correspond at least to the number and nominal value or, where there is no nominal
value, to the accountable par and, where appropriate, to the premium on the shares
to be issued for them”.^511 The expert’s report must be made public.^512
There are three main exceptions to this requirement. First, Member States may
decide not to require a report “in the event of an increase in subscribed capital
made in order to give effect to a merger or a public offer for the purchase or ex-
change of shares and to pay the shareholders of the company which is being ab-
sorbed or which is the object of the public offer for the purchase or exchange of
shares”.^513 In those cases, similar information will be disclosed under the Directive
on takeover bids^514 or the Merger Directive^515 or both. Second, Member States
may decide not to require the report where the consideration consists of transfer-
able securities admitted to trading on a regulated market.^516 In this case, there is
market price. Third, Member States may decide not to require a report in some
cases where all the shareholders (for example, the sole shareholder) in the com-
pany that receives the consideration have agreed not to have an experts’ report
drawn up.^517
The five core constraints will influence all transactions where the company uses
its shares as a means of payment. There are also case-specific constraints depend-
ing on the nature of the transaction.
(^508) See Articles 26 and 27(1) of Directive 77/91/EEC (Second Company Law Directive).
(^509) See Articles 10(4), 27(3) and 27(4) of Directive 77/91/EEC (Second Company Law Di-
rective).
(^510) Articles 10(1) and 27(2) of Directive 77/91/EEC (Second Company Law Directive).
(^511) Article 10(2) of Directive 77/91/EEC (Second Company Law Directive).
(^512) Article 10(3) of Directive 77/91/EEC (Second Company Law Directive).
(^513) Article 27(3) of Directive 77/91/EEC (Second Company Law Directive).
(^514) Article 6 of Directive 2004/25/EC (Directive on takeover bids).
(^515) Articles 9 and 10 of Directive 78/855/EEC (Third Company Law Directive).
(^516) Articles 10a and 10b of Directive 77/91/EEC (Second Company Law Directive).
(^517) Article 27(4) of Directive 77/91/EEC (Second Company Law Directive).