Section 588 | Liability of subsequent holders of shares

(1)If a person becomes a holder of shares in respect of which—

(a)there has been a contravention of any provision of this Chapter, and

(b)by virtue of that contravention another is liable to pay any amount under the provision contravened,

that person is also liable to pay that amount (jointly and severally with any other person so liable), subject as follows.

(2)A person otherwise liable under subsection (1) is exempted from that liability if either—

(a)he is a purchaser for value and, at the time of the purchase, he did not have actual notice of the contravention concerned, or

(b)he derived title to the shares (directly or indirectly) from a person who became a holder of them after the contravention and was not liable under subsection (1).

(3)References in this section to a holder, in relation to shares in a company, include any person who has an unconditional right—

(a)to be included in the company's register of members ... in respect of those shares, or^F1

(b)to have an instrument of transfer of the shares executed in his favour.

(4)This section applies in relation to a failure to carry out a term of a contract as mentioned in section 587(4) (public companies: payment by long-term undertaking) as it applies in relation to a contravention of a provision of this Chapter.