Shareholder resolution: pre-emption disapplication

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This resolution provides for the disapplication of the statutory pre-emption rights in the Companies Act 2006 for shares allotted by a company with a single class of share.

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Frequently Bought Together

Shareholder resolutions: template written resolutions

This template is for one or more shareholders written resolutions which have been proposed by the directors of a private limited company.

Board minutes: share issue

These minutes are for a meeting of the board of directors at which one or more subscriptions for shares in the company will be approved.  They are on the basis that any provisions of the Articles of Association or Shareholders Agreement which either restrict or regulate the allotment of shares in the company have first been complied with.

Subscription letter: shares

This form of subscription assumes that the company and the subscriber have agreed the amount which the subscriber will pay for the new shares and the number of new shares to be issued.  It includes alernative forms of subscription letter, depending on whether the subscriber for the new shares is an individual or a company.

Shareholder resolution: pre-emption disapplication

Shareholder resolution to disapply statutory pre-emption rights for a company with a single class of shares

Background

An allotment of new shares may be subject to pre-emption rights in favour of existing shareholders.  Pre-emption rights give existing shareholders first refusal on an issue of new shares – the new shares must be offered to existing shareholders before they can be taken up by new investors or shareholders.

When do pre-emption rights apply?

Under the Companies Act 2006, pre-emption rights will apply on the issue of new shares by a private limited company unless:

  • the pre-emption rights have been disapplied either in the company’s Articles of Association or by a special resolution of shareholders, or
  • the issue of new shares is under an employee share scheme, wholly or partly for non-cash consideration or a bonus issue

In addition, the company’s Shareholders Agreement may contain its own pre-emptive procedure or shareholder consent requirement applicable to the issue of new shares.

What are the options if there are pre-emption rights?

If there are applicable pre-emption rights, a company wishing to issue new shares has the choice either to follow the pre-emption procedure or to seek shareholder approval to disapply them.

About this shareholder resolution

This resolution provides for the disapplication of the statutory pre-emption rights in the Companies Act 2006 for shares allotted by a company with a single class of share

Document features

  • Shareholder written resolution – single special resolution
  • Special resolution to disapply statutory pre-emption rights generally on the issue of new shares by a company with a single class of share

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