Authorised share capital—continued relevance
Authorised share capital—continued relevance

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

  • Authorised share capital—continued relevance
  • Authorised share capital—position before 1 October 2009
  • Authorised share capital—position after 1 October 2009
  • Transitional provisions
  • Voluntarily provision setting a maximum amount of shares that directors have the power to allot
  • Practical issues
  • Consequences of allotment in excess of authorised share capital—position after 1 October 2009

The allotment of shares is governed by the Companies Act 2006 (CA 2006). The requirements that apply 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. In addition to the relevant statutory provisions, on a proposed allotment of shares in a company careful consideration will need to be given to:

  1. the company's articles of association, and

  2. whether the concept of authorised share capital is still relevant to the company

The concept of authorised share capital is not to be confused with the requirement for public companies to have an authorised minimum allotted share capital, as to which see Practice Note: Incorporating a company—Additional requirements for public companies.

For specific information on the allotment of shares 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 public companies. In addition, see Practice Note: Allotment and issue of shares—introductory points.

Authorised share capital—position before 1 October 2009

Prior to 1 October 2009, a company was required by the Companies Act 1985 (CA 1985) to have authorised share capital, which was stated in its memorandum of association. The authorised share capital of a company

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