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The consent of the Financial Services Commission is required for the issue of shares by an existing company unless the amount raised by that transaction and by all the transactions by the same company in the previous twelve months does not exceed o500,000.
The authorised capital can be split into different classes with different rights as to voting, participation in profits, etc, or different denominations and can be issued in any currency. It is also possible to create redeemable preference shares.
Shares may be issued at a premium in which case the uses of the resulting share premium account are restricted. However, one such use is the payment of any premium due on the redemption of redeemable preference shares. With the sanction of the court, shares may also be issued at a discount. A reduction of share capital is permitted only where the company has passed a special resolution and the court approval has been obtained.
Proposals exist to allow companies in Guernsey to repurchase their own shares.
Under local company law the regulation of prospectuses (other than for unit trusts and open-ended investment vehicles) is minimal. However, the consent of the Financial Services Commission is required for the offer for subscription or sale of any securities in the Island of any company incorporated outside Guernsey. Such consent is not required if the company is incorporated in Great Britain and a public offer in the same terms is being, or has been within the preceding twelve months, circulated in Great Britain. The desired form of a prospectus is not specified, but it would normally be expected to follow the pattern of those prepared under UK law and will have to comply with the requirements of any stock exchange on which the securities are to be quoted.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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