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Companies Act 2006

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Companies Act 2006, Cross Heading: Existing shareholders' right of pre-emption is up to date with all changes known to be in force on or before 19 July 2018. There are changes that may be brought into force at a future date. Changes that have been made appear in the content and are referenced with annotations. Help about Changes to Legislation

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  • Act amendment to earlier affecting provision S.I. 2008/373 reg. 11(1) by S.I. 2013/1971 reg. 9(a) (This amendment not applied to legislation.gov.uk. Amending Regulations revoked (1.10.2013) without ever being in force by S.I. 2013/2224, reg. 2)
  • Act amendment to earlier affecting provision S.I. 2008/373 reg. 3(4) by S.I. 2013/1971 reg. 4 (This amendment not applied to legislation.gov.uk. Amending Regulations revoked (1.10.2013) without ever being in force by S.I. 2013/2224, reg. 2)

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Existing shareholders' right of pre-emptionE+W+S+N.I.

561Existing shareholders' right of pre-emptionE+W+S+N.I.

(1)A company must not allot equity securities to a person on any terms unless—

(a)it has made an offer to each person who holds ordinary shares in the company to allot to him on the same or more favourable terms a proportion of those securities that is as nearly as practicable equal to the proportion in nominal value held by him of the ordinary share capital of the company, and

(b)the period during which any such offer may be accepted has expired or the company has received notice of the acceptance or refusal of every offer so made.

(2)Securities that a company has offered to allot to a holder of ordinary shares may be allotted to him, or anyone in whose favour he has renounced his right to their allotment, without contravening subsection (1)(b).

(3)F1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4)Shares held by the company as treasury shares are disregarded for the purposes of this section, so that—

(a)the company is not treated as a person who holds ordinary shares, and

(b)the shares are not treated as forming part of the ordinary share capital of the company.

(5)This section is subject to—

(a)sections 564 to 566 (exceptions to pre-emption right),

(b)sections 567 and 568 (exclusion of rights of pre-emption),

(c)sections 569 to 573 (disapplication of pre-emption rights), and

(d)section 576 (saving for certain older pre-emption procedures).

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Amendments (Textual)

562Communication of pre-emption offers to shareholdersE+W+S+N.I.

(1)This section has effect as to the manner in which offers required by section 561 are to be made to holders of a company's shares.

(2)The offer may be made in hard copy or electronic form.

(3)If the holder—

(a)has no registered address in an EEA State and has not given to the company an address in an EEA State for the service of notices on him, or

(b)is the holder of a share warrant,

the offer may be made by causing it, or a notice specifying where a copy of it can be obtained or inspected, to be published in the Gazette.

(4)The offer must state a period during which it may be accepted and the offer shall not be withdrawn before the end of that period.

(5)The period must be a period of at least [F214 days] beginning—

(a)in the case of an offer made in hard copy form, with the date on which the offer is sent or supplied;

(b)in the case of an offer made in electronic form, with the date on which the offer is sent;

(c)in the case of an offer made by publication in the Gazette, with the date of publication.

(6)The Secretary of State may by regulations made by statutory instrument—

(a)reduce the period specified in subsection (5) (but not to less than 14 days), or

(b)increase that period.

(7)A statutory instrument containing regulations made under subsection (6) is subject to affirmative resolution procedure.

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Annotations are used to give authority for changes and other effects on the legislation you are viewing and to convey editorial information. They appear at the foot of the relevant provision or under the associated heading. Annotations are categorised by annotation type, such as F-notes for textual amendments and I-notes for commencement information (a full list can be found in the Editorial Practice Guide). Each annotation is identified by a sequential reference number. For F-notes, M-notes and X-notes, the number also appears in bold superscript at the relevant location in the text. All annotations contain links to the affecting legislation.

Amendments (Textual)

Commencement Information

I1S. 562 wholly in force at 1.10.2009; s. 562 not in force at Royal Assent, see s. 1300; s. 562 in force for specified purposes at 20.1.2007 by S.I. 2006/3428, art. 3(3) (subject to art. 5, Sch. 1 and with arts. 6, 8, Sch. 5); s. 562 otherwise in force at 1.10.2009 by S.I. 2008/2860, art. 3(k) (with arts. 5, 7, 8, Sch. 2) (as amended by S.I. 2009/1802, art. 18)

563Liability of company and officers in case of contraventionE+W+S+N.I.

(1)This section applies where there is a contravention of—

  • section 561 (existing shareholders' right of pre-emption), or

  • section 562 (communication of pre-emption offers to shareholders).

(2)The company and every officer of it who knowingly authorised or permitted the contravention are jointly and severally liable to compensate any person to whom an offer should have been made in accordance with those provisions for any loss, damage, costs or expenses which the person has sustained or incurred by reason of the contravention.

(3)No proceedings to recover any such loss, damage, costs or expenses shall be commenced after the expiration of two years—

(a)from the delivery to the registrar of companies of the return of allotment, or

(b)where equity securities other than shares are granted, from the date of the grant.

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