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A company may allot new shares to the existing shareholders or to a third party. These shares can be from the existing share class or by creating a new share class.
It is a matter for the company’s directors to allot shares they may do so only to the extent that they are authorised by either a general meeting or the company’s constitution.
Section 69 Companies Act 2014 confers the authority to allot shares. This power rests with the directors unless the authority has been granted to the directors in the constitution of the company
Check list before proceeding with an allotment
- The company’s power to allot shares should be reviewed in the constitution and whether this power requires renewal
- Is there sufficient authorised but unissued Share Capital if the company has an authorised share capital.
- Does Pre-Emption rights exist where the new shares must be offered to the existing shareholders first
- Are there rights of other shares that must be considered
- Are the shares being allotted for Cash or Non-cash consideration
- Are the shares being allotted at par or Premium (No shares may be allotted at a discount)
- What are the rights of new shares
- Is there a shareholders agreement in place
How Can CLS Help
We can clarify all the appropriate matters to be considered before drafting the necessary board minutes, share certificates and CRO forms and update the statutory register of the company. If you require our assistance please contact one of the team on 059 9186776 or send us an email.
Please Note:
Our CLS Insights aims to bring you practical information and news on Company Law and Company Secretarial. We cover the topics that matter to your business and give practical tips and also the benefit our experiences. Please remember this article is a guide and legal advice should always be obtained. If you have any queries please contact one of the team and we would be happy to help.
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