Shareholders’ rights meaning

Procedure for amending the articles of association Matters to review or actions to undertake Refer to the pertinent section of the Companies Act 2006 (CA 2006) and/or relevant Lexis+® UK material Tick box once step is complete or issue considered Getting ready to revise the articles and initial checks Will the proposed change oblige shareholders to take up additional shares, or increase a member’s liability? If so, shareholders’ approval will be necessary for the proposed alteration...

STOP PRESS: A major overhaul of the UK listing framework took effect on 29 July 2024, removing the premium and standard segments and introducing a single listing category for equity shares in commercial companies. The commercial companies category is strongly disclosure-led, with an emphasis on transparency, and sits alongside other listing categories, such as shell companies, secondary listing and closed-ended investment fund categories. A new UK Listing Rules sourcebook came into force to deliver and implement the reforms, and the previous Listing Rules sourcebook was revoked in full. For further details, see Practice Note: Reform of the UK listing regime—fundamentals. This Checklist reflects the regime as it stood before 29 July 2024. The allotment and issue of shares are governed by statutory rules, which vary according to the type of company proposing the allotment (private or public, listed or unlisted) and whether that company has a single class or multiple classes of shares. This checklist sets out the procedure for a listed company to allot shares and to...

Parties Who are the parties involved? In particular, specify: the investor(s) the managers the investee company (newco) Conditions Are there any conditions to completing the investment? What are each party’s obligations to meet those conditions, and by what deadline? Share subscription What will the investee company’s capital structure be? Which class and how many shares will each shareholder (the investor, the managers and any other shareholders) subscribe for? Warranties Who will give the warranties? Is it limited to the managers? Will they be provided jointly, jointly and severally, or on a several basis? How wide will the warranties be? It is usual for investment agreement warranties to centre on the business plan and the managers, as the acquisition agreement generally affords the investor sufficient protection regarding the company. What restrictions will apply to warranty claims? These may include: periods within which claims must be notified caps on each warrantor’s liability and on...

In this issue: Employment contract Horizon scanning Pensions Tax Prohibited conduct (discrimination etc) Data protection and employee information Dates for your diary Trackers New Q&As Employment resources on Lexis+® Daily and weekly news alerts Employment contract Supreme Court reinstates High Court injunction preventing Tesco from ‘firing and rehiring’ employees on less favourable terms. In Tesco Stores Ltd v Union of Shop, Distributive and Allied Workers (USDAW) [2024] UKSC 28, the Supreme Court, unanimously and led by Lord Burrows and Lady Simler, upheld the High Court’s stance, reviving the injunction that bars Tesco from dismissing staff in order to strip them of a ‘permanent’ contractual entitlement to retained pay, then proposing re‑engagement without it. An implied term in the contracts curtailed Tesco’s ability to rely on dismissal rights for that end. Commentary on the ruling is provided by Neil Todd of Thompsons Solicitors; Jonathan Chamberlain and Connie Cliff of Gowling WLG; Philip Harman...

In this issue: Brexit highlights Post-Brexit transition guidance Constitutional and administrative law Judicial review Equality and human rights Subsidy control and State aid Public procurement Management and strategic planning Daily and weekly news alerts New and updated content Dates for your diary Trackers New Q&As Useful information Brexit highlights The UK Parliament has confirmed the European Scrutiny Committee has been wound up, following the House of Commons’ decision on 30 July 2024 not to re-establish it. See: LNB News 01/08/2024 97. The House of Lords European Affairs Committee has released correspondence spanning 7 November 2023 to 30 May 2024, covering scrutiny of EU papers, primary legislation (including the Illegal Migration Bill) and broader issues such as public procurement and the impacts of the UK’s EU withdrawal. See: LNB News 01/08/2024 99. Post-Brexit transition guidance Weekly roundup of HMRC import, export and...

Hilton Foods Solutions v Wright [2024] EAT 28 What are the practical implications of this case? This judgment turns on a single issue of interpretation: what must an employee do to be treated as having “sought” parental leave so as to gain protection from dismissal under the MAPLE Regulations 1999, SI 1999/3312, reg 20, as enforced by section 99 of the Employment Rights Act 1996? HHJ Tayler found that whether an individual has “sought” parental leave is a matter for the employment tribunal to decide on the facts, applying the ordinary meaning of the word “sought”, without any special gloss. Serving notice to take parental leave in accordance with paragraphs 1(b) and 3 of Schedule 2 to the MAPLE Regulations will, save in exceptional circumstances, generally show that the employee has “sought” to take parental leave; however, it is not the sole means by which it can be shown that the employee has sought to take parental leave. Accordingly, practitioners should note: employees...

This Practice Note forms part of the Lexis+® UK Corporate private equity buyout transaction toolkit. Beyond choosing between a share sale and an asset sale structure, a range of matters should be weighed at the outset of a private equity buyout (MBO), before due diligence begins and the principal transaction documents are negotiated. These matters can influence the core commercial and legal terms, so each side is well advised to address them before settling any headline terms (and before executing heads of terms for both the acquisition and equity elements) and before fixing the transaction timetable. The topics outlined below (and in the Practice Notes referenced in this sub‑phase) may remain relevant throughout the deal, particularly during negotiation of the formal documentation, but they are highlighted early because lawyers for all interested parties ought to consider them and brief their clients as soon as possible. Corporate issues to consider Selected corporate law points are outlined below; applicability will vary with the nature of the deal and the parties...

When considering entry into a joint venture, participants should carefully scrutinise the identity of the other intended parties and the experience and resources they expect to bring to the venture. They are, therefore, likely to want to ensure those parties remain engaged in the joint venture (at least for a pre‑agreed period of time) and to retain controls over to whom they may transfer their shares. The nature of any share transfer constraints adopted will also depend on, among other things, the anticipated duration of the joint venture, how the parties propose to realise their investments, the cash‑flow and fundraising requirements of the parties, and any share transfer restrictions contained in other transaction documents, e.g. financing documents. Restrictions on transfer For these reasons, most joint venture agreements (JVA) (also known as shareholders’ agreements) and/or the articles of association will include a series of restrictions governing the transfer of shares by the joint venture parties...

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 Agreement is dated [ insert date ] Parties [ Insert name of investee company ], a company incorporated in England and Wales with number [ insert company number ], whose registered office is at [ insert address ], with brief particulars set out in Schedule 1 (the Company) The several persons whose names and addresses appear in Part A of Schedule 2 (together, the Founders) [ The several persons whose names and addresses appear in Part B of Schedule 2 (together, the Other Shareholders) and ] [ Insert name of investor ] [ incorporated in England and Wales under number [ insert company number ] whose registered office is at OR of ] [ insert address ] (the Investor) [ (each of the Company, the Founders, the Other Shareholders and the Investor is a Party and, together, the Company, the Founders, the Other Shareholder and the Investor are the Parties). ] BACKGROUND The Investor has agreed to...

[ insert name of company ] plc (Registered in [ insert country of incorporation ] with number [ insert company number ]) [ insert description of rights issue, eg Proposed [ insert offer ratio, eg 5 for 8 ] rights issue of [ insert total number new shares to be issued ] new ordinary shares of [ insert nominal value ] each at [ insert offer price ] per ordinary share ] This notice is issued, in accordance with section 562(3) of the Companies Act 2006, to every person whose name appears on the register at the close of business on [ insert date ] (the Rights Issue Record Date) as a holder of ordinary shares of [ insert nominal value ] each (the Ordinary Shares) in [ insert name of company ] plc (the Company) who does not have a registered address in the UK or an EEA State and has...

Company number: [ insert number ] [ insert company name ] Limited (the Company) Payment out of capital for redemption of shares in the company In accordance with section 719 of the Companies Act 2006, the Company hereby gives notice that: On [ insert date ], the shareholders sanctioned a payment out of capital under section 716 of the Companies Act 2006 to enable the Company to redeem [ insert number of shares ] [ redeemable ] shares of £[ insert nominal amount ] each; The permissible capital payment, as defined by section 710 of the Companies Act 2006, for the relevant shares is £[ insert amount ]; The directors’ statement and the auditors’ report required by section 714 of the Companies Act 2006 in relation to the proposed out-of-capital payment are available for inspection at [ [ the registered office of the Company ] OR [ insert details of relevant address ] ] ; and Any creditor of the Company...

Immigration Rules, Appendix ECAA: Extension Of Stay Pursuant to the current Immigration Rules (Immigration Rules, Appendix ECAA: Extension Of Stay) and the applicable guidance (Turkish ECAA guidance: Appendix ECAA extension of stay), holders of the Turkish Worker visa who have been lawfully employed in the UK for at least four years may, from that point, take up any role with any employer. This Appendix took effect at 11pm GMT on 31 December 2020, to encompass those who previously enjoyed rights under Decision 1/80 of the Association Council connected to the ECAA Association Agreement (concluded on 12 September 1963 in Ankara, and later supplemented on 23 November 1970 by the Brussels Protocol). See: Turkey-EEC Association Agreement: Macdonald’s Immigration Law and Practice [6.193]. Immigration Rules Appendix ECAA: Extension Of Stay, paragraphs ECAA 3.1–ECAA 3.2 set out, amongst other matters, that: ECAA 3.1...