Allotment of equity securities meaning

Pre-emption rights on allotment Pre-emption rights on allotment provide every shareholder in a company with a means to guard against dilution of their percentage stake where this could result from a share allotment, the issue of rights to subscribe for shares, the conversion of securities into shares, or a disposal of treasury shares by that company. This Practice Note addresses the pre-emption rights applicable to an allotment of equity securities by a public company that is neither a listed company nor an AIM company (that is, an unlisted public company), as prescribed in the Companies Act 2006 (CA 2006). Close attention should be paid to the breadth of those statutory pre-emption rights, because an unlisted public company must observe them to the extent that they have not been disapplied, varied, waived, or excluded and ensure that it complies with them to that extent...

Introduction This Practice Note sets out the principal UK tax and legal issues that can arise where an end user intends to provide shares, share options or other forms of equity to an individual in another jurisdiction who is engaged under an arrangement with an employer of record or a professional employer organisation. It looks at both perspectives: a UK end user offering equity to people overseas, and a non-UK end user granting equity to individuals situated in the UK. In every case, the particular rules and regimes of the relevant overseas territories must also be assessed. For a template that an end user can use to grant a share option to an individual engaged via an employer of record arrangement, see Precedent: Standalone unapproved share option agreement for a worker engaged via an employer of record. What is an employer of record structure? ...

Post-acquisition benefits This Practice Note addresses the provisions in sections 447–450 of the Income Tax (Earnings and Pensions) Act 2003 (ITEPA 2003) (Part 7, Chapter 4), which impose income tax on employees or directors for post-acquisition benefits received in connection with employment-related securities. For these purposes, benefits are interpreted broadly and can include, for instance, enhancements to share rights, the provision of travel or accommodation, and an allotment of bonus shares. For the meaning of employment-related securities, see Practice Note: What is an employment-related security? Following the Court of Appeal’s judgment in PA Holdings, HMRC may contend that dividend payments are simply taxable as earnings (or emoluments) under (what is now) ITEPA 2003, s 62 rather than under the specific post-acquisition benefits charge (see News Analysis: Employee remuneration and special purpose vehicles). Nevertheless, the post-acquisition benefits rules continue to operate as a sweeping-up charge where an employee or director benefits in connection with employment-related securities and is not otherwise chargeable to income tax...

SPECIAL RESOLUTION[S] 1 THAT, if [ insert reference to the resolution granting authority to allot ] is approved, the Board shall be empowered to issue equity securities (as defined in the Companies Act 2006) for cash under the authority conferred by that resolution and/or to dispose of ordinary shares held by the Company in treasury for cash, as though section 561 of the Companies Act 2006 did not apply to any such issue or sale, such power to be restricted as follows: [ insert wording to limit the authority to disapply pre-emption rights to allotments for rights issues and other pre-emptive issues ]; to the issue of equity securities or the disposal of treasury shares (other than pursuant to paragraph (A) above) up to an aggregate nominal amount of £[ insert amount, to be not more than 10 per cent of the issued ordinary share capital (excluding treasury shares) of the Company as at the latest practicable date prior to publication of the notice of...

DISAPPLICATION OR MODIFICATION OF PRE-EMPTION RIGHTS—ALLOTMENT OF EQUITY SECURITIES GENERALLY 1 [ Without affecting the article [ insert cross-reference to any article disapplying or varying the statutory pre-emption rights in accordance with CA 2006, s 569 ] ] [ , in OR In ] pursuant to sections 570 and 573 of...

SPECIAL RESOLUTION That, if [ insert reference to the resolution granting authority to allot ] is approved, the Board is authorised to allot equity securities (as defined in the Companies Act 2006) for cash under that authority and/or to sell ordinary shares held by the Company as treasury shares for cash, as though section 561 of the Companies Act 2006 did not apply to any such allotment or sale, such authority being limited to [ insert wording to limit the authority to the specified allotment of equity securities and/or sale of treasury shares ]. This authority will expire at the end of the Company’s next AGM (or, if earlier, at close of business on [ insert date (day, month and year) to be a date that is no later than fifteen months after the date of the current AGM ]); however, prior to expiry the Company may make offers and enter into agreements which would, or might, require equity securities to be allotted (and treasury shares to be sold)...