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BLP > 2.5 Companies: Equity Finance > Flashcards

2.5 Companies: Equity Finance Flashcards

1
Q

Two sections which shows if SR/OR has to be filed at CH

A

29 + 30

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2
Q

Example of offer being exempt from prospectus under s.85 FSMA

A

Offer directed at fewer than 150

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3
Q

What must ‘85 company pass to rely on 550

A

OR

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4
Q

What does it mean if preferential shares are cumulative

A

If no dividend declared, right is carried forward to the next year

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5
Q

Who can apply to court to cancel variation of class rights + provision

A

M w/ 15% of relevant shares who did not agree (633(2))

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6
Q

How are equity securities defined in 560

A

Ordinary shares, or rights to convert into OS

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7
Q

Where are equity securities defined

A

560

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8
Q

771(1) requires what

A

If Ds refuse transfer, must give reasons

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9
Q

When might prior authority to allot no longer be good

A

If 5 years have passed, or authority cap reached

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10
Q

Two provisions on updating M reg (generally)

A

112 + 113

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11
Q

How does PrivC w/ one share class disapply pre-emption

A

SR/AoA

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12
Q

Under what section can PrivC w/ one share class, issuing for same class, disapply pre-emption

A

569(1)

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13
Q

What is the effect of a stock transfer form on M’s title

A

M gets equitable title

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14
Q

580

A

Shares can only be issued at a premium

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15
Q

How does D get authority to allot + provision

A

By OR (551(1))

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16
Q

Are participating preference shares still OSs under 561?

A

Yes

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17
Q

If Ds refuse to transfer shares under MA 26(5), what must they do

A

Give reasons per 771(2)

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18
Q

What section says cannot allot if no authority

A

549(1)

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19
Q

561 + 573 apply to what kind of shares, despite them being a transfer

A

Treasury

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20
Q

558 defines what

A

Allotment

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21
Q

542?

A

Shares must have fixed NV or void

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22
Q

Two normal ways transfer of shares restricted

A

Ds power to refuse + pre-emption

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23
Q

Provision on shares must have fixed NV or void

A

542

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24
Q

Two ways class rights are altered + provision

A

AoA, or if AoA silent, by SR (630)

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25
Q

If pre-emption rights disapplied, what are PMM

A

File SR with 15 days after passed

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26
Q

What is issuing

A

Once reg + title complete

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27
Q

What does the mnemonic for procedure to allot and issue stand for

A

Cap, Authority, Disapply, New class, BR

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28
Q

What are treasury shares

A

Shares bought back by the compant

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29
Q

How does Ms title become complete

A

By registering on M reg (112(2))

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30
Q

When are shares transmitted

A

If M dies or goes bankrupt

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31
Q

Are the conditions for NOT being an ‘ordinary share’ under 560 (capped right to dividend and capital payments) cumulative? I.e. do you have to satisfy both for the shares not to be ‘OS’

A

Yes

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32
Q

What is an exception to needing to get authority + provision

A

PrivC w/ one class of shares allotting for the same class (550)

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33
Q

What provision says shares can only be issued at a premium, never at a discount

A

580

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34
Q

If new class of rights created, what are PMM

A

File SR + amended AoA within 15 days

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35
Q

630?

A

Alter class rights of shares by SR

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36
Q

Which LSE market is not a UK market for s.85 FSMA

A

AIM

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37
Q

Which kind of class of share is not presumed to be cumulative unless in AoA

A

Participating preference

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38
Q

What are called up shares

A

Balance on NV of shares demanded (when not fully paid)

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39
Q

The rights of pre-emption under 561 only apply to what

A

Equity securities paid for in cash

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40
Q

How is a preferential dividend usually expressed

A

% of NV, or based on subscription price

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41
Q

Definition of offering shares to UK public under s.85 FSMA is wide or narrow?

A

Wider, beyond 755

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42
Q

How many tests complied w/ in s.85 FSMA = prospectus needed

A

just 1/2

43
Q

How is any cap on allotting shares removed for non ‘85 companies + provision

A

By SR (21(1))

44
Q

What two sections apply to treasury shares, despite it being a transfer

A

561 + 573

45
Q

MA 26(5)

A

Ds have power to refuse transfer of shares

46
Q

If authority arises to allot under 550, what are PMM

A

CA ‘85 files OR w/ CH within 15 days

47
Q

Time to send share certificates to new Ms + provision

A

2 months, 769(1)

48
Q

If authority granted to allot under 551, what are PMM

A

File OR within 15 days

49
Q

If shares allotted, what are PMM

A

Form SH01, statement of capital, M reg updated, share certificates sent, and consider if PSC position changed

50
Q

Is pre-emption included in MA for transfer of shares?

A

No

51
Q

Common feature of ordinary shares

A

1 vote/share, right to dividend and surplus on wind up

52
Q

What are convertible shares

A

Option to convert into different class

53
Q

What section excludes 561 for securities paid for otherwise than in cash

A

565

54
Q

What must be in a prospectus

A

Sufficient info for informed assessment

55
Q

If issuing new share class, what must happen

A

Amend AoA to deal w/ new rights

56
Q

Common features of participating preference shares

A

Participate w/ Ms in surplus dividends (after fixed dividend), and surplus assets

57
Q

What are redeemable shares

A

Company intends to buy back/cancel in future

58
Q

Must CA ‘06 file anything to do with authority to allot under 550? Why

A

No - no need to pass OR to use 550

59
Q

Mnemonic for procedure to allot + issue

A

Cats And Dogs Nibble Bones

60
Q

What are the tests for when s.85 FSMA applies?

A

Offering shares to UK public or shares admitted to trading on UK market

61
Q

How are shares actually allotted

A

By BR, after any required GM

62
Q

560 defines what

A

Equity securities

63
Q

If it is a specific allotment which allows them to display 561 under 571, what must Ds do

A

Give written consent + reasons + amount to be paid w/ justification

64
Q

Four possible company record PMM for allotting shares

A

Board + GM minutes, sending share certificates, updating M reg, and updating PSC reg

65
Q

Common features of preference shares

A

Priority on payment of dividend/surplus, and presumed to be cumulative

66
Q

Form to file w/ CH if shares allotted

A

SH01

67
Q

For what companies was there a cap on allotting shares

A

Companies under ‘85

68
Q

Why are participating preference shares OSs under 561

A

Right to participate in dividend WITHOUT a fixed amount - varies year to year

69
Q

Provision on updating PSC reg if new PSC

A

790M

70
Q

Can authority to allot be revoked, even if given in AoA? provision

A

Yes - 551(8)

71
Q

When is a prospectus not required, despite s.85 complied w//?

A

Offer exempt, or securities exempt

72
Q

What are paid up shares

A

Full price paid

73
Q

What two kinds of offers are not offers to the public for 755

A

Private concern (e.g. to family members), or direct offers to individuals

74
Q

Two considerations on allotment

A

Offer to the public + prospectus

75
Q

If cap has been removed, what are the two PMM

A

File new AoA, and file SR/OR (depending on if CA ‘85 or ‘06)

76
Q

Where are the rights of pre-emption for allotting equity securities

A

561

77
Q

What restriction on transfer of shares is in MA

A

Ds power to refuse under MA 26(5)

78
Q

Is a cap on allotting shares still required

A

No

79
Q

What kind of company cannot use 550 w/o OR first

A

‘85 company

80
Q

Common features of deferred shares

A

No voting rights nor dividend, sometimes surplus profits after dividend, but usually no rights at all

81
Q

Provision on filing statement of capital if shares allotted

A

555(3)

82
Q

How is 561 generally disapplied (provision too)

A

By SR/AoA per 570(1)

83
Q

What is allotment

A

Person unconditionally entitled to be registered as M

84
Q

What kind of C and per what provision cannot offer to the public

A

Priv, 755

85
Q

What happened to the cap on allotting shares for companies under ‘85 when ‘06 came in (+ provision)

A

Deemed to be included in AoA (28(a))

86
Q

Which kind of shares usually has no rights at all

A

Deferred shares

87
Q

How is cap on allotting shares removed for ‘85 companies

A

By OR

88
Q

Time to update M reg when shares allotted + provision

A

2 months (554(1))

89
Q

How are ordinary shares defined in 560

A

Those OTHER THAN shares w/ capped right to dividends AND capital payments

90
Q

Time to file SH01 w/ CH + provision

A

One month - 555(2)

91
Q

Where is specific allotment, which diapplies 561?

A

571

92
Q

Where are the tests for if prospectus needed and approved by FCA before shares can be allotted

A

s.85 FSMA

93
Q

s.85 FSMA has how many tests and for what

A

Two tests for if prospectus required to allot shares

94
Q

What two sections must not have been triggered if there is a new share class

A

550 + 569

95
Q

565

A

561 does not apply to securities paid for otherwise than in cash

96
Q

Why do rights of pre-emption exist

A

As allotment = diluting existing shares

97
Q

What two things are required to transfer shares

A

Stock transfer form + stamp duty

98
Q

When does M get legal title from transfer of shares

A

Once registered

99
Q

What is transferring

A

C between S + purchaser, and company is NOT a party

100
Q

What is the disapplication of pre-emption under 570 attached to?

A

General authority under 551

101
Q

Provision on telling CH of new PSC + time

A

790VA, within 14 days of change

102
Q

What to check for ‘cap’ in allotting shares’

A

Is there a cap, has it been removed/changed, and have shares been issued up to the cap

103
Q

What are the restrictions on transfer of shares

A

Subject to AoA

104
Q

551(1) gives what

A

General authority by OR for Ds to allot§

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