On 4 July 2016, the Investment Association
("IA") published a revised version of
its share capital management guidelines. The previous version was
published in July 2014.
Section 1 (Directors'Power to Allot
Shares) has been amended to recognise that IA members support
the Pre-Emption Group's position that there is a need for two
separate resolutions for the disapplication of pre-emption rights
and to expect a company seeking to disapply the pre-emption rights,
which in aggregate is equal to or greater than 10% of the issued
share capital to follow the Pre-Emption Group's model
resolutions in doing so. The guidance also states that IA members
have asked the Institutional Voting Information Service
("IVIS"), which provides corporate
governance research and a member of the IA, to place an 'amber
top' warning from 1 August 2016 and a 'red top' warning
from 1 January 2017 for any companies that fail to follow the
guidance's recommendations. IVIS produces reports highlighting
breaches of best practice, with amber tops raising awareness of an
issue and red tops being matters of strongest concern.
Section 4 (Issuance of Shares by Investment Trusts) has
also been amended to clarify that Treasury shares should only be
reissued at a discount that is lower than the weighted average
discount (not the average discount as before) at which all shares
held in Treasury have been repurchased.
The recent case of Dickinson v NAL Realisations (Staffordshire) Ltd is a "101" guide to how not to run a small business, providing insight into the pitfalls that can await any director or shareholder...
As the Brexit negotiations start, one direct impact is an interest from clients and advisers looking to have flexibility in their organisational structure ahead of any legislative or other changes being implemented.
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