Allotment and issue of shares—listed companies
Allotment and issue of shares—listed companies

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

  • Allotment and issue of shares—listed companies
  • Distinction between ‘allotment’ and ‘issue’
  • Requirement for authority to allot
  • Failure to comply
  • Initial considerations on a proposed allotment
  • Form and scope of an authority to allot
  • Authority in articles or shareholders’ resolution
  • Scope of authority to allot
  • Maximum amount of shares
  • Duration of authority to allot
  • More...

The allotment and issue of shares is governed by statutory rules, which differ according to the type of company which is proposing the allotment (private or public, listed or unlisted) and whether that company has a single class or multiple classes of shares.

This Practice Note covers the issues relating to allotment and issue of shares by listed companies. A listed company must comply with the provisions in the CA 2006 relating to the allotment of shares by public companies. However, unlike other public companies, a listed company has additional obligations, eg pursuant to the Listing Rules (the LRs). In addition, it should observe the guidelines issued by institutional investor bodies, such as the Investment Association (IA), the Pensions and Lifetime Savings Association (PLSA) (formerly the National Association of Pension Funds (NAPF)), Pensions & Investment Research Consultants Ltd (PIRC) and Institutional Shareholder Services, Inc. (ISS).

For information on the allotment and issue of shares for other types of companies, see Practice Notes: Allotment and issue of shares—private companies with one class of shares and Allotment and issue of shares—private companies with more than one class of share and public unlisted companies.

Distinction between ‘allotment’ and ‘issue’

The terms 'allotment' and 'issue' are often used interchangeably in relation to the creation of new shares in the capital of a company. However, the terms do have distinct legal meanings.

At common

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