|
| |
|
565 | Power of directors to allot shares etc: authorisation by company |
| |
(1) | The directors of a company may exercise a power of the company— |
| |
(a) | to allot shares in the company, or |
| |
(b) | to grant rights to subscribe for or to convert any security into shares in |
| |
| 5 |
| if they are authorised to do so by the company’s articles or by resolution of the |
| |
| |
(2) | Authorisation may be given for a particular exercise of the power or for its |
| |
exercise generally, and may be unconditional or subject to conditions. |
| |
| 10 |
(a) | state the maximum amount of shares that may be allotted under it, and |
| |
(b) | specify the date on which it will expire, which must be not more than |
| |
| |
(i) | in the case of authorisation contained in the company’s articles |
| |
at the time of its original incorporation, the date of that |
| 15 |
| |
(ii) | in any other case, the date on which the resolution is passed by |
| |
virtue of which the authorisation is given. |
| |
| |
(a) | be renewed or further renewed by resolution of the company for a |
| 20 |
further period not exceeding five years, and |
| |
(b) | be revoked or varied at any time by resolution of the company. |
| |
(5) | A resolution renewing authorisation must— |
| |
(a) | state (or restate) the maximum amount of shares that may be allotted |
| |
under the authorisation or, as the case may be, the amount remaining |
| 25 |
to be allotted under it, and |
| |
(b) | specify the date on which the renewed authorisation will expire. |
| |
(6) | In relation to rights to subscribe for or to convert any security into shares in the |
| |
company, references in this section to the maximum amount of shares that may |
| |
be allotted under the authorisation are to the maximum amount of shares that |
| 30 |
may be allotted pursuant to the rights. |
| |
(7) | The directors may allot shares, or grant rights to subscribe for or to convert any |
| |
security into shares, after authorisation has expired if— |
| |
(a) | the shares are allotted, or the rights are granted, in pursuance of an |
| |
offer or agreement made by the company before the authorisation |
| 35 |
| |
(b) | the authorisation allowed the company to make an offer or agreement |
| |
which would or might require shares to be allotted, or rights to be |
| |
granted, after the authorisation had expired. |
| |
(8) | A resolution of a company to give, vary, revoke or renew authorisation under |
| 40 |
this section may be an ordinary resolution, even though it amends the |
| |
| |
|
| |
|
| |
|
Prohibition of commissions, discounts and allowances |
| |
566 | General prohibition of commissions, discounts and allowances |
| |
(1) | Except as permitted by section 567 (permitted commission), a company must |
| |
not apply any of its shares or capital money, either directly or indirectly, in |
| |
payment of any commission, discount or allowance to any person in |
| 5 |
| |
(a) | subscribing or agreeing to subscribe (whether absolutely or |
| |
conditionally) for shares in the company, or |
| |
(b) | procuring or agreeing to procure subscriptions (whether absolute or |
| |
conditional) for shares in the company. |
| 10 |
(2) | It is immaterial how the shares or money are so applied, whether by being |
| |
added to the purchase money of property acquired by the company or to the |
| |
contract price of work to be executed for the company, or being paid out of the |
| |
nominal purchase money or contract price, or otherwise. |
| |
(3) | Nothing in this section affects the payment of such brokerage as has previously |
| 15 |
| |
| |
(1) | A company may, if the following conditions are satisfied, pay a commission to |
| |
a person in consideration of his subscribing or agreeing to subscribe (whether |
| |
absolutely or conditionally) for shares in the company, or procuring or |
| 20 |
agreeing to procure subscriptions (whether absolute or conditional) for shares |
| |
| |
| |
(a) | the payment of the commission is authorised by the company’s articles; |
| |
(b) | the commission paid or agreed to be paid does not exceed— |
| 25 |
(i) | 10% of the price at which the shares are issued, or |
| |
(ii) | the amount or rate authorised by the articles, |
| |
| |
(3) | A vendor to, or promoter of, or other person who receives payment in money |
| |
or shares from, a company may apply any part of the money or shares so |
| 30 |
received in payment of any commission the payment of which directly by the |
| |
company would be permitted by this section. |
| |
Registration of allotment |
| |
568 | Registration of allotment |
| |
(1) | A company must register an allotment of shares as soon as practicable and in |
| 35 |
any event within two months after the date of the allotment. |
| |
(2) | This does not apply if the company has issued a share warrant in respect of the |
| |
shares (see section 789). |
| |
(3) | If a company fails to comply with this section, an offence is committed by— |
| |
| 40 |
(b) | every officer of the company who is in default. |
| |
|
| |
|
| |
|
(4) | A person guilty of an offence under this section is liable on summary |
| |
conviction to a fine not exceeding level 3 on the standard scale and, for |
| |
continued contravention, a daily default fine not exceeding one-tenth of level |
| |
| |
(5) | For the company’s duties as to the issue of share certificates etc, see Part 22 |
| 5 |
(certification and transfer of securities). |
| |
| |
569 | Return of allotment by limited company |
| |
(1) | This section applies to a company limited by shares and to a company limited |
| |
by guarantee and having a share capital. |
| 10 |
(2) | The company must, within one month of making an allotment of shares, |
| |
deliver to the registrar for registration a return of the allotment. |
| |
| |
(a) | contain the prescribed information, and |
| |
(b) | be accompanied by a statement of capital. |
| 15 |
(4) | The statement of capital must state with respect to the company’s share capital |
| |
at the date to which the return is made up— |
| |
(a) | the total number of shares of the company, |
| |
(b) | the aggregate nominal value of those shares, |
| |
(c) | for each class of shares— |
| 20 |
(i) | prescribed particulars of the rights attached to the shares, |
| |
(ii) | the total number of shares of that class, and |
| |
(iii) | the aggregate nominal value of shares of that class, and |
| |
(d) | the amount paid up and the amount (if any) unpaid on each share |
| |
(whether on account of the nominal value of the share or by way of |
| 25 |
| |
570 | Return of allotment by unlimited company allotting new class of shares |
| |
(1) | This section applies to an unlimited company that allots shares of a class with |
| |
rights that are not in all respects uniform with shares previously allotted. |
| |
(2) | The company must, within one month of making such an allotment, deliver to |
| 30 |
the registrar for registration a return of the allotment. |
| |
(3) | The return must contain the prescribed particulars of the rights attached to the |
| |
| |
(4) | For the purposes of this section shares are not to be treated as different from |
| |
shares previously allotted by reason only that the former do not carry the same |
| 35 |
rights to dividends as the latter during the twelve months immediately |
| |
following the former’s allotment. |
| |
571 | Offence of failure to make return |
| |
(1) | If a company makes default in complying with— |
| |
section 569 (return of allotment of shares by limited company), or |
| 40 |
|
| |
|
| |
|
section 570 (return of allotment of new class of shares by unlimited |
| |
| |
| an offence is committed by every officer of the company who is in default. |
| |
(2) | A person guilty of an offence under this section is liable— |
| |
(a) | on conviction on indictment, to a fine; |
| 5 |
(b) | on summary conviction, to a fine not exceeding the statutory maximum |
| |
and, for continued contravention, a daily default fine not exceeding |
| |
one-tenth of the statutory maximum. |
| |
(3) | In the case of default in delivering to the registrar within one month after the |
| |
allotment the return required by section 569 or 570— |
| 10 |
(a) | any person liable for the default may apply to the court for relief, and |
| |
(b) | the court, if satisfied— |
| |
(i) | that the omission to deliver the document was accidental or due |
| |
| |
(ii) | that it is just and equitable to grant relief, |
| 15 |
| may make an order extending the time for delivery of the document for |
| |
such period as the court thinks proper. |
| |
| |
572 | When shares are allotted |
| |
For the purposes of the Companies Acts shares in a company are taken to be |
| 20 |
allotted when a person acquires the unconditional right to be included in the |
| |
company’s register of members in respect of the shares. |
| |
573 | Provisions about allotment not applicable to shares taken on formation |
| |
The provisions of this Chapter have no application in relation to the taking of |
| |
shares by the subscribers to the memorandum on the formation of the |
| 25 |
| |
| |
Allotment of equity securities: existing shareholders’ right of pre-emption |
| |
| |
574 | Meaning of “equity securities” and related expressions |
| 30 |
| |
“equity securities” means— |
| |
(a) | ordinary shares in the company, or |
| |
(b) | rights to subscribe for, or to convert securities into, ordinary |
| |
| 35 |
“ordinary shares” means shares other than shares that as respects |
| |
dividends and capital carry a right to participate only up to a specified |
| |
amount in a distribution. |
| |
(2) | References in this Chapter to the allotment of equity securities include— |
| |
|
| |
|
| |
|
(a) | the grant of a right to subscribe for, or to convert any securities into, |
| |
ordinary shares in the company, and |
| |
(b) | the sale of ordinary shares in the company that immediately before the |
| |
sale are held by the company as treasury shares. |
| |
Existing shareholders’ right of pre-emption |
| 5 |
575 | Existing shareholders’ right of pre-emption |
| |
(1) | A company must not allot equity securities to a person on any terms unless— |
| |
(a) | it has made an offer to each person who holds ordinary shares in the |
| |
company to allot to him on the same or more favourable terms a |
| |
proportion of those securities that is as nearly as practicable equal to the |
| 10 |
proportion in nominal value held by him of the ordinary share capital |
| |
| |
(b) | the period during which any such offer may be accepted has expired or |
| |
the company has received notice of the acceptance or refusal of every |
| |
| 15 |
(2) | Securities that a company has offered to allot to a holder of ordinary shares |
| |
may be allotted to him, or anyone in whose favour he has renounced his right |
| |
to their allotment, without contravening subsection (1)(b). |
| |
(3) | If subsection (1) applies in relation to the grant of such a right, it does not apply |
| |
in relation to the allotment of shares in pursuance of that right. |
| 20 |
(4) | Shares held by the company as treasury shares are disregarded for the |
| |
purposes of this section, so that— |
| |
(a) | the company is not treated as a person who holds ordinary shares, and |
| |
(b) | the shares are not treated as forming part of the ordinary share capital |
| |
| 25 |
(5) | This section is subject to— |
| |
(a) | sections 578 to 580 (exceptions to pre-emption right), |
| |
(b) | sections 581 and 582 (exclusion of rights of pre-emption), |
| |
(c) | sections 583 to 587 (disapplication of pre-emption rights), and |
| |
(d) | section 590 (saving for certain older pre-emption procedures). |
| 30 |
576 | Communication of pre-emption offers to shareholders |
| |
(1) | This section has effect as to the manner in which offers required by section 575 |
| |
are to be made to holders of a company’s shares. |
| |
(2) | The offer may be made in hard copy or electronic form. |
| |
(3) | If the holder is the holder of a share warrant, the offer may be made by causing |
| 35 |
it, or a notice specifying where a copy of it can be obtained or inspected, to be |
| |
published in the Gazette. |
| |
(4) | The offer must state a period of not less than 21 days during which it may be |
| |
accepted and the offer shall not be withdrawn before the end of that period. |
| |
(5) | The Secretary of State may by regulations made by statutory instrument— |
| 40 |
(a) | reduce the period specified in subsection (4) (but not to less than 14 |
| |
| |
|
| |
|
| |
|
(b) | increase that period. |
| |
(6) | A statutory instrument containing regulations made under subsection (5) is |
| |
subject to affirmative resolution procedure. |
| |
577 | Liability of company and officers in case of contravention |
| |
(1) | This section applies where there is a contravention of— |
| 5 |
section 575 (existing shareholders’ right of pre-emption), or |
| |
section 576 (communication of pre-emption offers to shareholders). |
| |
(2) | The company and every officer of it who knowingly authorised or permitted |
| |
the contravention are jointly and severally liable to compensate any person to |
| |
whom an offer should have been made in accordance with those provisions for |
| 10 |
any loss, damage, costs or expenses which the person has sustained or incurred |
| |
by reason of the contravention. |
| |
(3) | No proceedings to recover any such loss, damage, costs or expenses shall be |
| |
commenced after the expiration of two years— |
| |
(a) | from the delivery to the registrar of companies of the return of |
| 15 |
| |
(b) | where equity securities other than shares are granted, from the date of |
| |
| |
Exceptions to right of pre-emption |
| |
578 | Exception to pre-emption right: bonus shares |
| 20 |
Section 575(1) (existing shareholders’ right of pre-emption) does not apply in |
| |
| |
(a) | the allotment of bonus shares, or |
| |
(b) | the grant of a right to subscribe for, or to convert securities into, bonus |
| |
| 25 |
579 | Exception to pre-emption right: issue for non-cash consideration |
| |
Section 575(1) (existing shareholders’ right of pre-emption) does not apply to a |
| |
particular allotment of equity securities if these are, or are to be, wholly or |
| |
partly paid up otherwise than in cash. |
| |
580 | Exception to pre-emption right: securities held under employees’ share |
| 30 |
| |
Section 575 (existing shareholders’ right of pre-emption) does not apply to the |
| |
allotment of securities that would, apart from any renunciation or assignment |
| |
of the right to their allotment, be held under an employees’ share scheme. |
| |
Exclusion of right of pre-emption |
| 35 |
581 | Exclusion of requirements by private companies |
| |
(1) | All or any of the requirements of— |
| |
(a) | section 575 (existing shareholders’ right of pre-emption), or |
| |
|
| |
|
| |
|
(b) | section 576 (communication of pre-emption offers to shareholders) |
| |
| may be excluded by provision contained in the articles of a private company. |
| |
(2) | They may be excluded— |
| |
(a) | generally in relation to the allotment by the company of equity |
| |
| 5 |
(b) | in relation to allotments of a particular description. |
| |
(3) | Any requirement or authorisation contained in the articles of a private |
| |
company that is inconsistent with either of those sections is treated for the |
| |
purposes of this section as a provision excluding that section. |
| |
(4) | A provision to which section 582 applies (exclusion of pre-emption right: |
| 10 |
corresponding right conferred by articles) is not to be treated as inconsistent |
| |
| |
582 | Exclusion of pre-emption right: articles conferring corresponding right |
| |
(1) | The provisions of this section apply where, in a case in which section 575 |
| |
(existing shareholders’ right of pre-emption) would otherwise apply— |
| 15 |
(a) | a company’s articles contain provision (“pre-emption provision”) |
| |
prohibiting the company from allotting ordinary shares of a particular |
| |
class unless it has complied with the condition that it makes such an |
| |
offer as is described in section 575(1) to each person who holds ordinary |
| |
shares of that class, and |
| 20 |
(b) | in accordance with that provision— |
| |
(i) | the company makes an offer to allot shares to such a holder, and |
| |
(ii) | he or anyone in whose favour he has renounced his right to |
| |
their allotment accepts the offer. |
| |
(2) | In that case, section 575 does not apply to the allotment of those shares and the |
| 25 |
company may allot them accordingly. |
| |
(3) | The provisions of section 576 (communication of pre-emption offers to |
| |
shareholders) apply in relation to offers made in pursuance of the pre-emption |
| |
provision of the company’s articles. |
| |
| This is subject to section 581 (exclusion of requirements by private companies). |
| 30 |
(4) | If there is a contravention of the pre-emption provision of the company’s |
| |
articles, the company, and every officer of it who knowingly authorised or |
| |
permitted the contravention, are jointly and severally liable to compensate any |
| |
person to whom an offer should have been made under the provision for any |
| |
loss, damage, costs or expenses which the person has sustained or incurred by |
| 35 |
reason of the contravention. |
| |
(5) | No proceedings to recover any such loss, damage, costs or expenses may be |
| |
commenced after the expiration of two years— |
| |
(a) | from the delivery to the registrar of companies of the return of |
| |
| 40 |
(b) | where equity securities other than shares are granted, from the date of |
| |
| |
|
| |
|