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A simple issue of shares

1st Mar 2010
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Recently I had to issue some additional shares in a company which would involve increasing the authorised share capital - the sort of thing pre CA2006 I can do with my hands tied behind my back (sorry to brag) but no longer is it so simple......what does one do about increasing authorised share capital and issuing shares when there is no authorised share capital anymore!

Answers on a postcard please!

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By worsleym
03rd Mar 2010 15:56

A simple issue of shares

Whilst there is no authorised share capital for new companies, any Company that already has a statement of its authorised share capital is limited to issuing only up to the number of shares that that clause permits. And it ois perfectly OK to retain and amend such a clause so as to 'effectively' create new authorised shares.

The method is simply to change clause 5 of the Mem by special resolution which is now considered to be a provision of the articles. You stil need to consider a section 551 authority to allot if the new shares are of a different class to those alrewady in issue.

However, as any issue of shares involves filing an SH01 which sets out the rights/restrictions attaching to the shares being issued, is there much of a point to retaining good old reliable and understandable authorised share capital. Probably not.

We have, since October 2009, updated a great many sets of articles by deleting the Memorandum entirely, authorising the directors to take advantage of s550 or authorising them to allot under s551 and we've created many new classes of shares too so get in touch if you need a chat.

Hope this helps

Martin

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