Procedure for allotment

Question 1

When will there be a cap on the number of shares that can be allotted?

Answer 1

• 85 CA - share capital had to be limited. This will now be a provision in the articles. Must be removed by ordinary resolution
• 06 - no limit unless put into the articles. If so, must alter this by special resolution

Question 2

What is the process for allotment?

Answer 2

1. Cap?
2. Do directors need authority?
3. Disapply pre-emption rights
4. New class rights
5. BR

Camilla And Diana Never Bonded.

Question 3

Do directors need authority to allot shares?

Answer 3

Yes, for private companies with one class of shares, directors have automatic authority; otherwise, shareholders may grant authorization by ordinary resolution (s551)

Question 4

What are pre-emption rights?

Answer 4

Rights of first refusal for shareholders when new shares are issued, allowing them to protect their percentage shareholding

Question 5

What do pre-emption rights apply to?

Answer 5

Ordinary shares - any share that is not capped on both dividends and capital

Question 6

How can pre-emption rights be disapplied?

Answer 6

By passing a special resolution or including disapplication in its articles

Question 7

How must new class rights be created?

Answer 7

By special resolution to insert the new class into the articles.

Question 8

What must directors do to allot shares?

Answer 8

Pass a board resolution

Question 9

What must be sent to Companies House if new shares are allotted?

Answer 9

• Copies of any SRs to Companies House within 15 days
• Return of alltoment form and statement of capital within 1 month
• Update register of members and PSCs within 2 months
• Issue share certificate within 2 months

Question 10

What is the time limit for existing resolutions granting directors authority to issue new shares?

Answer 10

5 years