Equity finance SGS 8 Flashcards
What does s.542(1) say?
Shares in a limited company having a share capital must have a fixed nominal value
What does s.542(2) say?
Any allotment of a share that does not have a fixed nominal value is void.
What does s.580 say?
A share may not be allotted/issued by a company at a discount to its nominal value.
But, it may be allotted/issued for more than its nominal value, and the excess over nominal value is known as the ‘premium’.
Which section confirms a person’s full legal title to shares?
s.112(2) confirms that full legal title to shares is only achieved once a person’s name is entered in the company’s register of members.
What does s.549 say?
Directors’ authority to allot shares.
How do you remove aggregated shares of a company?
- OR s.551 (1)
- CA 2006 (Commencement No 8, Transitional Provisions and Savings) Order 2008 (SI 2008/2860)
- SR to adopt new articles
How does a company disapply pre-emption rights?
Where the directors are generally authorised for the purposes of s.551 CA by passing a special resolution or by including the disapplication in its articles, both under s.570(1) CA.
How does private companies with one class of share disapply pre-emption rights on allotment?
Special resolution
s.569 provides for disapplication for pre-emption rights for private companies with only one class of share by special resolution.
Such a disapplication presupposes the directors’ authority to allot the shares derives from s.550 and therefore can apply for so long as the company has in issue, and allots, shares of only one class.
What issues do not need a GM in advance of a board meeting to allot shares?
- has no limit in its constitution on the number of shares which can be issued by the company
- does not require directors’ authorisation - a private company with one class of shares and no restriction in the company’s articles
- is issuing the shares to existing shareholders in proportion to their existing shareholdings and follows the procedure in s.562
- already disapplied s.561
- has the relevant class rights in its article of association
Where do you find the definition of allotment
s.558 CA 2006
Shares are to be allotted when a person acquires the unconditional right to be included in the company’s register of members in respect of those shares.
What are the post-meeting matters for removing the cap on the number shares that can be issued?
- file new articles - s.26(1)
- for CA 2006 companies, file resolution (SR to amend articles - s.29(1)(a) and s.30(1)
- for CA 1985 companies, file OR to remove cap SI 2008/2860, Sch 2, para 42(3); s.29(1)(e) and s.30(1)
What are the post-meeting matters for granting directors’ authority to allot?
• Authority given under s.551
A company must file any OR granting directors authority to allot the shares at Companies House
s.551(9), s.29(1)(e) and s.30(1) within 15 days
What are the post-meeting matters for granting directors’ authority to allot?
• Authority arising under s.550 CA 2006
Must file any OR granting directors of CA 1985 companies authority to rely on s.550 CA 2006 at Companies House within 15 days.
What are the post-meeting matters for disapplying pre-emption rights?
Must file the SR disapplying pre-emption rights at Companies House s.29(1) and s.30(1) within 15 days after it is passed
What are the post-meeting matters if you are creating a class right?
A company must file the following at Companies House:
- SR amending articles of association s.30(1) within 15 days after it is passed
- amended articles of association s.26(1) within 15 days after it is passed.
