The following Corporate practice note provides comprehensive and up to date legal information covering:
This document provides accessible practical guidance and links to more comprehensive content in relation to the class tests used to classify a transaction by a listed company under the Listing Rules.
The class tests (also referred to as percentage ratios) are a series of tests used to classify the size and importance of a transaction undertaken by a listed company or its subsidiary undertakings. The results of the class tests determine how significant the transaction is and what action in relation to the transaction, if any, the listed company needs to take. These rules are primarily aimed at ensuring that shareholders are kept fully informed and, in some cases, have the opportunity to vote on transactions which may affect their investment in the company. The class tests are set out in LR 10 Annex 1 of the Listing Rules and are used to assess three categories of transactions:
substantial transactions under Chapter 10 of the Listing Rules
transactions with related parties under Chapter 11 of the Listing Rules, and
reverse takeovers under Chapter 5 of the Listing Rules
There are four class tests in the Listing Rules and these are:
the assets test
the profits test
the gross capital test
the consideration test
The first three of these class tests compare the gross
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