161. Approval of company required for issue of shares by directors Flashcards
- Approval of company required for issue of shares by directors
General overview
[161.01] Section 161(1) provides that the directors’ power to issue shares shall be subject to the company’s approval in general meeting. In practice, the approval under s 161 is usually given by a general mandate, which will expire at the next annual general meeting (“AGM”). In the Report of the Steering Committee for Review of the Companies Act, April 2011, Chapter 1, paras 106–109, the Steering Committee recommended that directors may issue shares pursuant to a specific shareholders’ approval for a particular issue of shares to continue in force notwithstanding that the approval is not renewed at the next AGM, subject to the conditions that the approval is for a maximum number of shares and that approval will expire at the end of two years. However, this recommendation was not picked up as it was felt that the existing provision is wide enough to cover the situation.
