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A Review of the Companies Act 2006

A Review of the Companies Act 2006. Shane C Morris Solicitor – Corporate Commercial Law S ILVERMAN S HERLIKER LLP SOLICITORS. Topics. Statements of Capital Pre-emption Rights Reductions of Capital Share Buybacks Financial Assistance Other Changes. Statements of capital.

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A Review of the Companies Act 2006

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  1. A Review of the Companies Act 2006 Shane C Morris Solicitor – Corporate Commercial Law SILVERMAN SHERLIKERLLP SOLICITORS

  2. Topics • Statements of Capital • Pre-emption Rights • Reductions of Capital • Share Buybacks • Financial Assistance • Other Changes

  3. Statements of capital • A snapshot of a company’s share capital at the time it is filed. • Rights Attaching to shares • How much detail do you need to provide? • The following will usually suffice: • “each share is entitled to one vote in any circumstances” • “each share is entitled pari passu to dividend payments or any other distribution” • “each share is entitled pari passu to participate in a distribution arising from a winding up of the company”

  4. Amount paid up on each class of share including any premium • BIS - Adopt a practical approach • ICSA - Divide the total amount in their share premium account by the number of shares in issue

  5. Pre-emption Rights • Prevent dilution of existing shareholders and give a right of first refusal • There are two types of pre-emption rights: 1. Statutory rights on an issue of new shares 2. Rights on a transfer of existing shares - Usually in the Articles or a shareholders’ agreement

  6. Reduction of Capital • Reasons why a company may choose to reduce its capital • Preliminary Considerations • Procedure for Reducing Share Capital Supported by a Directors’ Statement • Maintenance of Capital

  7. Share Buybacks for Private Companies • Reasons for Buyback • Preliminary considerations • Limitations • Procedure for Buyback Out of Profit • Procedure for Buyback Out of Capital

  8. Financial Assistance • Position under the 1985 Act • Prohibited, except if whitewash procedure used • Position under the 2006 Act • Prohibition repealed • Considerations

  9. Other Changes • Authorised Share Capital • Memorandum • Model Articles • Natural Person – 1st October 2010 • Directors’ Addresses

  10. Contact Details Shane C Morris Email: scm@silvermansherliker.co.uk Tel: 020 7749 2700 SILVERMAN SHERLIKERLLP SOLICITORS

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