Issue of Shares Flashcards
What are the five steps?
Check cap
Authority to allot?
Need to disapply pre-emption rights?
New class rights?
BR to allots shares
What should you check for 1985 companies in relation to a potential cap?
Since 1/10/2009, deemed restriction in their articles due to former ASC (s.28(1)).
Ordinary resolution to remove cap.
06 Companies and cap?
NO ASC, but check for cap in articles.
If there is a cap, need SR to remove it (s.21(1)).
What ss of the CA are relevant to authority to allot?
s.549 - to allot shares directors must rely on either s.550 or s.551.
In terms of authority to allot, what if the company has more than one class of share?
s.551(1) - authority can be conferred by company’s articles or OR.
s.550?
Private company with one class of share, issuing same class of share - automatic. For Ca 1985, OR required to rely on s.550.
What is the general rule as concerns pre-emption rights?
s. 561 can’t allot equity securities to a person unless one has made an offer to each person who holds ordinary shares in a company.
s. 560: ES shares other than those with dividend and capital rights with a cap.
What are the two methods of disapplying pre-emption rights?
s. 570(1) - SR to disapply, attaches to a pre-existing s.551 authority.
s. 569: as long as company has shares of one class, disapplied where authority to allot derives from s.550.
How can one create a new class of shares?
SR: s.21 CA 2006.
What are the post-meeting matters relevant to removing cap on shares?
File new articles (s.26(1)).
File SR to amend articles (s.29(1)(a) and 30(1)).
CA ‘85: File OR to remove cap (ss.29(1)(e) and 30(1)).
Post-meeting matters for authority to allot?
551: file OR at Companies House (s.551(9), 29(1)(e) and 30(1).
550: if ‘85 file OR granting directors authority to rely on s.550 (s.29(1)(e) and 30(1).
Post meeting disapplication of pre-emption rights matters?
FIle SR (s.29(1)(a) and 30(1)).
Post meeting matters for creation of class rights?
File SR (s.30(1)). File amended articles (s.26(1)).
Post meeting matters for allotment of shares by BR?
SH01 (s.552(2)).
Statement of Capital (s.555(3)(b)).
Update register of members (s.112 & 113 / s.554).
Send share certificate to new members (s.769).
Form PSC02 and PSC07 if appropriate / update PSC register (s.790M).
when would a GM not be required?
When all the following apply:
No limit on shares
relying on s.550
Issuing shares in proportion to existing shareholdings (s.562)
relevant class rights in articles of association.
