Issue & Allotment of Redeemable Shares

Shareholder Resolutions – Authority to Allot Redeemable Shares

CO.ITA.05

These Shareholder Resolutions – Authority to Allot Redeemable Shares give the directors the authority to allot redeemable shares as well as dis-apply any pre-emption rights in conjunction with the allotment.

Redeemable shares constitute a separate class of share capital. The authority for a limited company to issue redeemable shares is set out in section 684 Companies Act 2006.

Redeemable shares can only be issued by a company if it has at least one non-redeemable share in issue, this will usually be an ordinary share. In addition shares which are to be redeemed must be issued as redeemable shares at the outset. You should check a company’s articles of association to make sure that the issue of redeemable shares is not prohibited or limited.

Authority to allot redeemable shares can be given either by ordinary resolution or by the articles. If authority is sought by way of ordinary resolution, it must be carried out in accordance with section 551 Companies Act 2006. Pre-emption rights will also need to be considered before allotment of redeemable shares.

This template document contains both an ordinary resolution to approve the allotment of redeemable shares as well as a special resolution to dis-apply pre-emption rights. The ordinary resolution also allows you to include the terms on which the redeemable shares will be issued.

These Shareholder Resolutions – Authority to Allot Redeemable Shares are in open format. The requisite details should be inserted into the highlighted fields or the wording can be adjusted to suit your purposes. Wording in square brackets is optional. If it is required, then the brackets should be deleted and the wording within them retained. If the wording is not required, then it can be deleted.

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