(1) The directors of a company must not exercise any power of the company -

(a) to allot shares in the company, or

(b) to grant rights to subscribe for, or to convert any security into, shares in the company,

except in accordance with section 550 (private company with single class of shares) or section 551 (authorisation by company).

(2) Subsection (1) does not apply -

(a) to the allotment of shares in pursuance of an employees' share scheme, or

(b) to the grant of a right to subscribe for, or to convert any security into, shares so allotted.

(3) Subsection (1) does not apply to the allotment of shares pursuant to a right to subscribe for, or to convert any security into, shares in the company.

(3A) Subsection (1) does not apply to anything done for the purposes of a compromise or arrangement sanctioned in accordance with Part 26A (arrangements and reconstructions: companies in financial difficulty).