Issue of shares: waiver of pre-emption rights - Preview

by Practical Law Corporate

A standard document for use by shareholders to waive their statutory pre-emption rights, also known as rights of first refusal, in relation to a proposed allotment of new shares. This document provides a practical alternative to the formal statutory procedures for disapplying or excluding these rights under the Companies Act 2006 (CA 2006). It may also be used where a company's articles contain contractual pre-emption rights which are capable of waiver by shareholders, depending on the specific terms of the relevant articles. Where this document is used to obtain a shareholder waiver of the statutory pre-emption right (or waiver of a contractual pre-emption right that is expressed to be waivable by shareholder resolution), its effectiveness relies on the common law Duomatic principle of unanimous consent from all shareholders entitled to vote. This document outlines key considerations, including the important distinction between statutory rights and any contractual pre-emption rights contained within a company's articles of association, which may require amendment if they do not permit a waiver. This waiver is drafted as a deed to ensure enforceability without the need to prove consideration has been provided.