|
| |
|
Disapplication of pre-emption rights |
| |
583 | Disapplication of pre-emption rights: private company with only one class of |
| |
| |
(1) | The directors of a private company that has only one class of shares may be |
| |
given power by the articles, or by a special resolution of the company, to allot |
| 5 |
equity securities of that class as if section 575 (existing shareholders’ right of |
| |
| |
(a) | did not apply to the allotment, or |
| |
(b) | applied to the allotment with such modifications as the directors may |
| |
| 10 |
(2) | Where the directors make an allotment under this section, the provisions of this |
| |
Chapter have effect accordingly. |
| |
584 | Disapplication of pre-emption rights: directors acting under general |
| |
| |
(1) | Where the directors of a company are generally authorised for the purposes of |
| 15 |
section 565 (power of directors to allot shares etc: authorisation by company), |
| |
they may be given power by the articles, or by a special resolution of the |
| |
company, to allot equity securities pursuant to that authorisation as if section |
| |
575 (existing shareholders’ right of pre-emption)— |
| |
(a) | did not apply to the allotment, or |
| 20 |
(b) | applied to the allotment with such modifications as the directors may |
| |
| |
(2) | Where the directors make an allotment under this section, the provisions of this |
| |
Chapter have effect accordingly. |
| |
(3) | The power conferred by this section ceases to have effect when the |
| 25 |
authorisation to which it relates— |
| |
| |
(b) | would (if not renewed) expire. |
| |
| But if the authorisation is renewed the power may also be renewed, for a |
| |
period not longer than that for which the authorisation is renewed, by a special |
| 30 |
resolution of the company. |
| |
(4) | Notwithstanding that the power conferred by this section has expired, the |
| |
directors may allot equity securities in pursuance of an offer or agreement |
| |
previously made by the company if the power enabled the company to make |
| |
an offer or agreement that would or might require equity securities to be |
| 35 |
allotted after it expired. |
| |
585 | Disapplication of pre-emption rights by special resolution |
| |
(1) | Where the directors of a company are authorised for the purposes of section |
| |
565 (power of directors to allot shares etc: authorisation by company), whether |
| |
generally or otherwise, the company may by special resolution resolve that |
| 40 |
section 575 (existing shareholders’ right of pre-emption)— |
| |
(a) | does not apply to a specified allotment of equity securities to be made |
| |
pursuant to that authorisation, or |
| |
|
| |
|
| |
|
(b) | applies to such an allotment with such modifications as may be |
| |
specified in the resolution. |
| |
(2) | Where such a resolution is passed the provisions of this Chapter have effect |
| |
| |
(3) | A special resolution under this section ceases to have effect when the |
| 5 |
authorisation to which it relates— |
| |
| |
(b) | would (if not renewed) expire. |
| |
| But if the authorisation is renewed the resolution may also be renewed, for a |
| |
period not longer than that for which the authorisation is renewed, by a special |
| 10 |
resolution of the company. |
| |
(4) | Notwithstanding that any such resolution has expired, the directors may allot |
| |
equity securities in pursuance of an offer or agreement previously made by the |
| |
company if the resolution enabled the company to make an offer or agreement |
| |
that would or might require equity securities to be allotted after it expired. |
| 15 |
(5) | A special resolution under this section, or a special resolution to renew such a |
| |
resolution, must not be proposed unless— |
| |
(a) | it is recommended by the directors, and |
| |
(b) | the directors have complied with the following provisions. |
| |
(6) | Before such a resolution is proposed, the directors must make a written |
| 20 |
| |
(a) | their reasons for making the recommendation, |
| |
(b) | the amount to be paid to the company in respect of the equity securities |
| |
| |
(c) | the directors’ justification of that amount. |
| 25 |
(7) | The directors’ statement must— |
| |
(a) | if the resolution is proposed as a written resolution, be sent or |
| |
submitted to every eligible member at or before the time at which the |
| |
proposed resolution is sent or submitted to him; |
| |
(b) | if the resolution is proposed at a general meeting, be circulated to the |
| 30 |
members entitled to notice of the meeting with that notice. |
| |
586 | Liability for false statement in directors’ statement |
| |
(1) | This section applies in relation to a directors’ statement under section 585 |
| |
(special resolution disapplying pre-emption rights) that is sent, submitted or |
| |
circulated under subsection (7) of that section. |
| 35 |
(2) | A person who knowingly or recklessly authorises or permits the inclusion of |
| |
any matter that is misleading, false or deceptive in a material particular in such |
| |
a statement commits an offence. |
| |
(3) | A person guilty of an offence under this section is liable— |
| |
(a) | on conviction on indictment, to imprisonment for a term not exceeding |
| 40 |
two years or a fine (or both); |
| |
(b) | on summary conviction— |
| |
(i) | in England and Wales, to imprisonment for a term not |
| |
exceeding twelve months or to a fine not exceeding the |
| |
statutory maximum (or both); |
| 45 |
|
| |
|
| |
|
(ii) | in Scotland or Northern Ireland, to imprisonment for a term not |
| |
exceeding six months, or to a fine not exceeding the statutory |
| |
| |
587 | Disapplication of pre-emption rights: sale of treasury shares |
| |
(1) | This section applies in relation to a sale of shares that is an allotment of equity |
| 5 |
securities by virtue of section 574(2)(b) (sale of shares held by company as |
| |
| |
(2) | The directors of a company may be given power by the articles, or by a special |
| |
resolution of the company, to allot equity securities as if section 575 (existing |
| |
shareholders’ right of pre-emption)— |
| 10 |
(a) | did not apply to the allotment, or |
| |
(b) | applied to the allotment with such modifications as the directors may |
| |
| |
(3) | The provisions of section 584(2) and (4) apply in that case as they apply to a |
| |
case within subsection (1) of that section. |
| 15 |
(4) | The company may by special resolution resolve that section 575— |
| |
(a) | shall not apply to a specified allotment of securities, or |
| |
(b) | shall apply to the allotment with such modifications as may be |
| |
specified in the resolution. |
| |
(5) | The provisions of section 585(2) and (4) to (7) apply in that case as they apply |
| 20 |
to a case within subsection (1) of that section. |
| |
| |
588 | References to holder of shares in relation to offer |
| |
(1) | In this Chapter, in relation to an offer to allot securities required by— |
| |
(a) | section 575 (existing shareholders’ right of pre-emption), or |
| 25 |
(b) | any provision to which section 582 applies (articles conferring |
| |
| |
| a reference (however expressed) to the holder of shares of any description is to |
| |
whoever was the holder of shares of that description at the close of business on |
| |
a date to be specified in the offer. |
| 30 |
(2) | The specified date must fall within the period of 28 days immediately before |
| |
| |
589 | Saving for other restrictions on offer or allotment |
| |
(1) | The provisions of this Chapter are without prejudice to any other enactment by |
| |
virtue of which a company is prohibited (whether generally or in specified |
| 35 |
circumstances) from offering or allotting equity securities to any person. |
| |
(2) | Where a company cannot by virtue of such an enactment offer or allot equity |
| |
securities to a holder of ordinary shares of the company, those shares are |
| |
disregarded for the purposes of section 575 (existing shareholders’ right of pre- |
| |
| 40 |
(a) | the person 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 |
| |
| |
590 | Saving for certain older pre-emption requirements |
| |
(1) | In the case of a public company the provisions of this Chapter do not apply to |
| |
an allotment of equity securities that are subject to a pre-emption requirement |
| 5 |
in relation to which section 96(1) of the Companies Act 1985 (c. 6) or Article |
| |
106(1) of the Companies (Northern Ireland) Order 1986 applied immediately |
| |
before the commencement of this Chapter. |
| |
(2) | In the case of a private company a pre-emption requirement to which section |
| |
96(3) of the Companies Act 1985 or Article 106(3) of the Companies (Northern |
| 10 |
Ireland) Order 1986, Order applied immediately before the commencement of |
| |
this Chapter shall have effect, so long as the company remains a private |
| |
company, as if it were contained in the company’s articles. |
| |
(3) | A pre-emption requirement to which section 96(4) of the Companies Act 1985 |
| |
or Article 106(4) of the Companies (Northern Ireland) Order 1986 applied |
| 15 |
immediately before the commencement of this section shall be treated for the |
| |
purposes of this Chapter as if it were contained in the company’s articles. |
| |
591 | Provisions about pre-emption 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 |
| 20 |
| |
| |
Public companies: allotment where issue not fully subscribed |
| |
592 | Public companies: allotment where issue not fully subscribed |
| |
(1) | No allotment shall be made of shares of a public company offered for |
| 25 |
| |
(a) | the issue is subscribed for in full, or |
| |
(b) | the offer is made on terms that the shares subscribed for may be |
| |
| |
| 30 |
(ii) | if specified conditions are met (and those conditions are met). |
| |
(2) | If shares are prohibited from being allotted by subsection (1) and 40 days have |
| |
elapsed after the first making of the offer, all money received from applicants |
| |
for shares must be repaid to them forthwith, without interest. |
| |
(3) | If any of the money is not repaid within 48 days after the first making of the |
| 35 |
offer, the directors of the company are jointly and severally liable to repay it, |
| |
with interest at the rate for the time being specified under section 17 of the |
| |
Judgments Act 1838 (c. 110) from the expiration of the 48th day. |
| |
| A director is not so liable if he proves that the default in the repayment of the |
| |
money was not due to any misconduct or negligence on his part. |
| 40 |
|
| |
|
| |
|
(4) | This section applies in the case of shares offered as wholly or partly payable |
| |
otherwise than in cash as it applies in the case of shares offered for |
| |
| |
| |
(a) | the references in subsection (1) to subscription shall be construed |
| 5 |
| |
(b) | references in subsections (2) and (3) to the repayment of money |
| |
received from applicants for shares include— |
| |
(i) | the return of any other consideration so received (including, if |
| |
the case so requires, the release of the applicant from any |
| 10 |
| |
(ii) | if it is not reasonably practicable to return the consideration, the |
| |
payment of money equal to its value at the time it was so |
| |
| |
(c) | references to interest apply accordingly. |
| 15 |
(6) | Any condition requiring or binding an applicant for shares to waive |
| |
compliance with any requirement of this section is void. |
| |
593 | Public companies: effect of irregular allotment where issue not fully |
| |
| |
(1) | An allotment made by a public company to an applicant in contravention of |
| 20 |
section 592 (public companies: allotment where issue not fully subscribed) is |
| |
voidable at the instance of the applicant within one month after the date of the |
| |
allotment, and not later. |
| |
(2) | It is so voidable even if the company is in the course of being wound up. |
| |
(3) | A director of a public company who knowingly contravenes, or permits or |
| 25 |
authorises the contravention of, any provision of section 592 with respect to |
| |
allotment is liable to compensate the company and the allottee respectively for |
| |
any loss, damages, costs or expenses that the company or allottee may have |
| |
sustained or incurred by the contravention. |
| |
(4) | Proceedings to recover any such loss, damages, costs or expenses may not be |
| 30 |
brought more than two years after the date of the allotment. |
| |
| |
| |
| |
594 | Shares not to be allotted at a discount |
| 35 |
(1) | A company’s shares must not be allotted at a discount. |
| |
(2) | If shares are allotted in contravention of this section, the allottee is liable to pay |
| |
the company an amount equal to the amount of the discount, with interest at |
| |
| |
|
| |
|