Allotment and issue of shares

by Practical Law Corporate

A practice note that provides an overview of the legal framework governing the allotment and issue of shares under the Companies Act 2006 (CA 2006). This practice note examines the requirement for directors to obtain authority to allot shares, distinguishing between the power available to certain private companies under section 550 and the member resolution process required under section 551 for public and other private companies. It addresses key topics including statutory pre-emption rights and the procedures for their disapplication, alongside the rules governing payment for shares, such as the use of non-cash consideration and the prohibition on issuing shares at a discount. It also details post-allotment obligations, including in relation to persons with significant control (PSCs), issuing share certificates and fulfilling filing requirements with Companies House. It considers the additional obligations for listed companies under the UK Listing Rules (UKLR), relevant investor protection guidelines, and the potential impact of the National Security and Investment Act 2021 (NSI Act).