Explanatory Notes

Companies Act 2006

2006 CHAPTER 46

8 November 2006

Commentary

Part 17: a Company’s Share Capital

Chapter 3: Allotment of Equity Securities: Existing Shareholders’ Right of Pre-Emption
Section 560: Meaning of “equity securities” and related expressions

865.This section sets out a definition of “equity securities” for the purposes of Chapter 3 of this Part (which is concerned with the allotment of equity securities and existing shareholders’ right of pre-emption). It partially restates section 94(2), (3), (3A) and (5) of the 1985 Act. The exception for shares taken by a subscriber to the memorandum and for bonus shares provided in section 94(2) of the 1985 Act is contained in sections 577 and 564. The exclusion of the allotment of shares pursuant to the grant of a right to subscribe for such shares contained in section 93(3) of the 1985 Act is contained in section 561(3).