Section 549(1) of the Companies Act 2006 (CA 2006) provides that the directors of a company must not exercise any power of the company to allot shares or grant rights to subscribe for, or to convert any security into, such shares, except in accordance with CA 2006, s 550 (private company with single class of shares) or CA 2006, s 551 (authorisation by company). This Q&A assumes that a company is seeking to allot shares in accordance with CA 2006, s 551. Under CA 2006, s 551(1), the directors of a company may exercise a power of that company to allot shares or grant rights to subscribe for, or to convert any security into, shares only if they have authority to do so. That authority must be given by shareholders’ resolution