| Commentary

12 Allotment of shares

| Commentary

C: OVERVIEW OF COMPANY LAW

1: SHARES

12 Allotment of shares

Most takeovers and company reorganisations will involve the allotment of new shares, and possibly debentures. Issues to be addressed before the allotment is made include the authority of the board of directors to make the allotment, pre-emption rights and the impact of any shareholders’ agreement.

Authority to allot: Unless the company is a private company with only one class of shares, the directors cannot allot shares in the company or grant rights to subscribe for, or to convert any security into, shares in the company, unless they have been authorised to do

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