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Prohibition on certain provisions in constitution, etc. and issuing of shares
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1181. (1) Any provision in the memorandum or articles of a CLG, or in any resolution of a CLG, purporting to give any person a right to participate in the divisible profits of the company, otherwise than as a member, shall be void.
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(2) Nothing in subsection (1) invalidates any distribution by a company limited by guarantee registered before 1 January 1901, on foot of a provision or resolution referred to in that subsection, if the distribution was made before the commencement of this section.
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(3) For the purposes of the provisions of this Part stipulating that a characteristic of a CLG is that it does not have a share capital and of this section, the following has effect—
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(a) every provision in the constitution, or in any resolution, of a CLG purporting to divide the undertaking of the CLG into shares or interests, shall be treated as a provision for a share capital, notwithstanding that the nominal amount or number of the shares or interests is not specified thereby, and
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(b) every such provision or resolution shall be void.
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(4) A CLG shall not purport to issue shares.
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(5) If a CLG contravenes subsection (4), the CLG and any officer of it who is in default shall be guilty of a category 3 offence.
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