Allotment and issue of shares—introductory points

The following Corporate practice note provides comprehensive and up to date legal information covering:

  • Allotment and issue of shares—introductory points
  • Definitions of ‘allotment’ and ‘issue’
  • Allotments that do not fall within the statutory restrictions on allotment in the CA 2006
  • Preliminary considerations on an allotment in accordance with the CA 2006
  • Company incorporated under the CA 1985 or under the CA 2006?
  • Restrictions on the number of shares that can be allotted
  • Authority to allot
  • Pre-emption rights
  • Payment for shares allotted
  • Post-allotment actions
  • More...

Allotment and issue of shares—introductory points

The allotment of shares and issue of shares is governed by statute and the applicable statutory provisions differ according to the type of company that is proposing the allotment and whether that company has a single class of shares or multiple classes.

For specific information on allotments by different types of companies, see Practice Notes: Allotment and issue of shares—private companies with one class of shares, Allotment and issue of shares—private companies with more than one class of share and public unlisted companies and Allotment and issue of shares—listed companies.

The additional rules, regulations and guidance relating to the allotment of shares that are applicable to a listed company, an AIM company or a company with securities that are listed on the AQSE Main Market, AQSE Growth Market or AQSE Trading (formerly NEX Exchange Main Board, NEX Exchange Growth Market and NEX Exchange Secondary Market) are outside the scope of this Practice Note.

Definitions of ‘allotment’ and ‘issue’

The terms 'allotment' and 'issue' are often used interchangeably in relation to new shares in the capital of a company, however, the terms do have distinct legal meanings that it is important to understand.

Shares in a company are allotted when a person acquires the unconditional right to be included in the register of members in respect of those shares.

The subsequent issue of those shares is when

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