Business

Question 1

Good phrasing for pre-emption advice

(getting shareholders to pass)

on email/letter

Answer 1

(nb going internally)

It would be sensible to ask the shareholders to pass a special resolution under s 569 Companies Act 2006, authorising the board to allot the shares without giving the existing shareholders their statutory right of first refusal.

Without this special resolution, the board will have to offer each current shareholder a right of pre-emption over the new shares in proportion to their existing shareholding. This would be a convoluted process and an unnecessary one if, as seems to be the case, the existing shareholders are in agreement with the allotment proceeding in accordance with the current plan.