(1)The directors of a company shall not exercise any power of the company to allot relevant securities, unless they are, in accordance with this section [F1or section 80A], authorised to do so by—
(a)the company in general meeting; or
(b)the company’s articles.
(2)In this section “relevant securities” means—
(a)shares in the company other than shares shown in the memorandum to have been taken by the subscribers to it or shares allotted in pursuance of an employees’ share scheme, and
(b)any right to subscribe for, or to convert any security into, shares in the company (other than shares so allotted);
and a reference to the allotment of relevant securities includes the grant of such a right but (subject to subsection (6) below), not the allotment of shares pursuant to such a right.
(3)Authority under this section may be given for a particular exercise of the power or for its exercise generally, and may be unconditional or subject to conditions.
(4)The authority must state the maximum amount of relevant securities that may be allotted under it and the date on which it will expire, which must be not more than 5 years from whichever is relevant of the following dates—
(a)in the case of an authority contained in the company’s articles at the time of its original incorporation, the date of that incorporation; and
(b)in any other case, the date on which the resolution is passed by virtue of which the authority is given;
but such an authority (including an authority contained in the articles) may be previously revoked or varied by the company in general meeting.
(5)The authority may be renewed or further renewed by the company in general meeting for a further period not exceeding 5 years; but the resolution must state (or restate) the amount of relevant securities which may be allotted under the authority or, as the case may be, the amount remaining to be allotted under it, and must specify the date on which the renewed authority will expire.
(6)In relation to authority under this section for the grant of such rights as are mentioned in subsection (2)(b), the reference in subsection (4) (as also the corresponding reference in subsection (5)) to the maximum amount of relevant securities that may be allotted under the authority is to the maximum amount of shares which may be allotted pursuant to the rights.
(7)The directors may allot relevant securities, notwithstanding that authority under this section has expired, if they are allotted in pursuance of an offer or agreement made by the company before the authority expired and the authority allowed it to make an offer or agreement which would or might require relevant securities to be allotted after the authority expired.
(8)A resolution of a company to give, vary, revoke or renew such an authority may, notwithstanding that it alters the company’s articles, be an ordinary resolution; but it is in any case subject to section 380 of this Act (copy to be forwarded to registrar within 15 days).
(9)A director who knowingly and wilfully contravenes, or permits or authorises a contravention of, this section is liable to a fine.
(10)Nothing in this section affects the validity of any allotment.
(11)This section does not apply to any allotment of relevant securities by a company, other than a public company registered as such on its original incorporation, if it is made in pursuance of an offer or agreement made before the earlier of the following two dates—
(a)the date of the holding of the first general meeting of the company after its registration or re-registration as a public company, and
(b)22nd June 1982;
but any resolution to give, vary or revoke an authority for the purposes of section 14 of the M1Companies Act 1980 or this section has effect for those purposes if passed at any time after the end of April 1980.
Textual Amendments
F1Words inserted (subject to the transitional and savings provisions in S.I. 1990/355, arts. 4, 10, Sch. 4) by Companies Act 1989 (c. 40, SIF 27), ss. 115(1), 213(2)
Marginal Citations