Over-allotment option meaning

Call or put option? In a call option, the purchaser holds the reins, as it may demand transfer of the asset. The seller should recognise that its intentions for the site could be curtailed by that right, and plans for the property restricted. A put option, by contrast, places control with the seller, enabling it to require the purchaser to take the property and complete the acquisition, obliging the buyer to buy. Option period For a call option, the vendor should be mindful that the land could be effectively frozen throughout the option window, potentially sterilising its use. Accordingly, the deal ought to state a clear long‑stop date to cap the period. The Perpetuities and Accumulations Act 2009 (PAA 2009) removed the rule against perpetuities for options, so those granted on or after 6 April 2010 do not need a specified long‑stop date in this context. Before PAA 2009, a call option lapsed if not exercised within 21 years. Where exercise depends on the buyer securing...

What is the capital goods scheme? The capital goods scheme (CGS) offers a method to adjust, over a defined timeframe, the VAT initially incurred on substantial capital outlay. For property, that timeframe is ten years and applies where expenditure of £250,000 or more has been made. The adjustment mirrors changes in taxable use during the relevant period. For a more detailed overview, see Practice Note: VAT—capital goods scheme (CGS). When should a property lawyer be alert to the CGS? CGS considerations can arise in the following situations: the sale or purchase of commercial property, residential property, relevant charitable property (RCP) or relevant residential property (RRP) acquiring a property that qualifies as a transfer of a going concern (TOGC) granting a lease where the option to tax has not been, cannot be, or is disapplied In each case, this concerns a property within the CGS, typically one where a VAT-registered party has incurred £250,000 or more (excluding VAT) of capital...

Call or put option? Under a ‘call’ option, the purchaser holds the reins, as it can demand a transfer of the property. By contrast, a ‘put’ option leaves the seller in charge, enabling it to compel the purchaser to complete a transfer. Accordingly, the purchaser must take particular care that the transfer provisions—especially on valuation and, where relevant, insurance—are as advantageous as possible. Seller's charges If the property is charged when the option is granted, the mortgagee might defeat the option by using its power of sale. To guard against this, ensure the mortgagee either: becomes a party to the agreement (uncommon in practice), or gives written consent to the grant of the option In both scenarios, the mortgagee should confirm that, if the purchaser exercises the option, it will take the property free of the charge; or, if the mortgagee sells under its power, it cannot dispose of the property free of the option. Is the exercise of...

A company share option plan (CSOP) A company share option plan (CSOP) enables tax-favoured options over shares with a value up to £60,000 per person, assessed as at the grant date, to be awarded at the discretion of companies that satisfy the CSOP qualifying criteria, and is commonly adopted by companies that are too large to be eligible to issue enterprise management incentive (EMI) options...

In this issue: Public company takeovers Equity capital markets Corporate governance Partnerships Private equity Members LexTalk®Corporate: a Lexis®Nexis community Daily and weekly news alerts New and updated content Dates for your diary Trackers Useful information Public company takeovers Takeover Panel publishes note on cancellation of admission to trading The Takeover Panel (Panel) has issued a new note offering advisers guidance on cancelling an admission to trading for companies caught by the Takeover Code (Code). It confirms that companies with registered offices in the UK, the Channel Islands or the Isle of Man, whose securities are traded on specified markets, remain within the Code for two years after cancellation, irrespective of where central management and control is located or whether they re-register as private companies. The Panel encourages early engagement with the Panel Executive when a cancellation is contemplated, to ensure shareholders receive suitable disclosure about the Code’s continued effect, and it outlines...

In this issue: Key developments and horizon scanning Environment, energy and buildings Transferring property Property development Property management Property taxes Property in Wales Property in Scotland Additional property updates this week Daily and weekly news alerts New and updated content Trackers Key developments and horizon scanning Government response to contractual controls on land consultation The Ministry of Housing, Communities and Local Government (MHCLG) (previously the Department for Levelling Up, Housing and Communities) has issued its reply to the consultation on contractual controls over land. The consultation sought opinions on proposals to improve openness around land held under private arrangements—such as options, conditional contracts and rights of pre-emption—by establishing a freely available dataset. MHCLG’s reply draws together respondents’ views and sets out decisions and forthcoming actions, including new duties to provide HM Land Registry (HMLR) with details of contractual control arrangements. MHCLG has also released draft regulations—The Provision of Information (Contractual Control)...

In this issue: Enfranchisement and right to manage Enforcing security and property insolvency Contractual issues Electronic communications Repairing obligations and dilapidations LexTalk®Property Disputes: a Lexis®Nexis community Additional Property disputes updates Daily and weekly news alerts Dates for your diary Trackers Latest Q&As Enfranchisement and right to manage Failure to serve claim notice did not invalidate transfer of right to manage The Supreme Court has unanimously rejected the appeal in A1 Properties (Sunderland) Ltd v Tudor Studios RTM Company Ltd [2024] UKSC 27, concluding that Tudor Studios RTM Company Ltd’s omission to serve a claim notice on A1 Properties (Sunderland) Ltd did not undermine the transfer of the right to manage. The issue concerned the consequence of not complying with section 79(6)(a) of the Commonhold and Leasehold Reform Act 2022 (CLRA 2002). Court of Appeal authority confirms that a missing claim notice does not invariably defeat an RTM company’s acquisition of management rights...

Why do companies have reorganisations? Groups of companies carry out reorganisations for numerous and varied reasons. These steps will frequently have implications for existing share plans and other employee equity arrangements. In some instances, the consequences are commercial in nature. Examples include: the reorganisation prompting early vesting, exercise and/or lapse of awards because the relevant provisions in the share plan rules on a change in control of the parent company, or on the participant’s employment ending, have been engaged; and a requirement for awards over shares in the current parent to be swapped for awards over shares in a newly formed parent company. In certain situations, if the right steps are not taken within a defined period, valuable tax advantages may ultimately be lost entirely. Common types of reorganisation The most frequent forms of reorganisation include the following: placing a new group holding or parent entity above an existing company or group, often to enable an initial...

Meaning of ‘non-executive director’ The broad definition of ‘director’ is not closed. Under the Companies Act 2006 (CA 2006), a director is any person who occupies the office of director, whatever title they hold. Accordingly, this covers both executive and non-executive directors (NEDs). Executive directors are typically authorised, either by the company’s constitution or by authority delegated from the board, to manage the company’s day-to-day affairs, and they usually have a full-time service contract. NEDs generally: have no executive powers play a pivotal role in the company’s corporate governance are not employees of the company There are a number of challenges around granting shares to NEDs. This Practice Note considers the issues to assess when offering shares or share-based remuneration to NEDs, including: the potential impact on the NED’s independence the share dealing provisions of Assimilated Regulation (EU) 596/2014 for the UK, and the Market Abuse Regulation (Regulation (EU) 596/2014) previously and for the EU ...

This Practice Note sets out the guidance to the FCA Free Carrier Incoterm within the Incoterms® 2020 rules, reproduced here with permission from ICC Publishing SA. Incoterms® 2020 rules and other ICC publications are available from ICC Publishing SA, 33–43 avenue du Président Wilson, 75116 Paris, France, from ICC United Kingdom, 1st Floor, 1–3 Staple Inn, London, WC1V 7QH, United Kingdom, and at www.iccwbo.org. The Incoterms® 2020 rules took effect on 1 January 2020, revising the Incoterms® 2010 rules to reflect market developments over the last decade. For the FCA Incoterm that applied until then, see Practice Note: Incoterms® 2010 Rules—FCA Free Carrier [Archived]. FCA (insert named place of delivery) Incoterms® 2020 Explanatory notes for users 1. Delivery and risk ‘Free Carrier (named place)’ indicates that the seller provides the goods to the buyer in one of two ways: First, where the named place is the seller’s premises, delivery takes place when the goods are loaded onto the means of transport arranged by...

STANDARD SECURITY by [ INSERT THE GRANTOR’S NAME ] in favour of [ INSERT GRANTEE’S NAME ] Security Subjects: [ INSERT DETAILS OF PROPERTY ] 1 [ I OR We ], being [ insert name of Seller under Option Agreement ] [ of [ insert address ] OR incorporated in [ Scotland OR England and Wales ] with company registration number [ insert company registration number ] and registered office at [ insert address ] ] (the ‘Grantor’), as the present heritable proprietors of the aftermentioned Security Subjects, ACKNOWLEDGING that [ I OR we ] have assumed certain obligations under the option agreement entered into between (1) [ me OR us ], the said Grantor, and (2) [ insert name of Buyer under Option Agreement ] [ of [ insert address ] OR incorporated in [ Scotland OR England and Wales ] with company registration number [ insert company registration number ] whose registered office is at [ insert address ] ] (the ‘Grantee’ and which expression includes successors...

This [ Agreement OR DEED ] is entered into on [ insert day and month ] 20[ insert year ] Parties [ insert name of buyer ] [ of [ insert address ] OR trading as [ insert trading name ] of [ insert address ] OR a firm with its principal place of business at [ insert address of firm ] OR [ an LLP OR a company ] incorporated in [ insert place of incorporation, eg England and Wales ] with registered number [ insert registered number ] whose registered office is at [ insert address ] ] (the Buyer); and [ insert name of seller ] [ of [ insert address ] OR trading as [ insert trading name ] of [ insert address ] OR a firm with its principal place of business at [ insert address of firm ] OR [ an LLP OR a company ] incorporated in [ insert place of incorporation, eg England and Wales ] with...

Rules of the [ insert name of company granting EMI options ] enterprise management incentives Scheme FORTHCOMING CHANGE: On 26 November 2025, within Budget 2025, it was confirmed that from 6 April 2026 a number of EMI limits will be uplifted: The gross assets threshold will rise from £30 million to £120 million. The cap on full-time equivalent employees will increase from 250 to 500. The overall limit on the value of unexercised EMI options that a company or group can have at any time will go from £3 million to £6 million. The permitted exercise period will also extend from 10 to 15 years. Existing EMI options can be varied to adopt this longer exercise window without forfeiting tax advantages, so long as the changes comply with legislation to be included in Finance Bill 2025-26. In addition, from April 2027 the requirement to notify HMRC of EMI option grants for them to qualify will be abolished, with this measure to...

Section 2 of the Mental Health Act 1983 (MeHA 1983) Under MeHA 1983, s 2 permits a person to be taken into hospital and kept there once an application for admission for assessment has been properly and lawfully made, the aim being to evaluate their mental health. MeHA 1983, s 3 in turn authorises admission to hospital and continued detention where an application for admission for treatment has been successfully made. The Mental Capacity Act 2005 (MCA 2005) sets out a number of governing principles which are to be appropriately applied for the purposes of that Act, in connection with its application...