Dis-application of Pre-emption Rights

Under the Companies Act 2006, existing shareholders have the right to be offered shares pro rata to their existing shareholdings before any new shares are allotted. This is referred to as a 'pre-emption right'.

The directors of a company may be given the power to allot shares as if the pre-emption rights did not apply by the shareholders passing a special resolution. This can be either in a general meeting or by written resolution. A copy of the resolution must be sent to Companies House within 15 days. The authority granted to the directors will expire on a date 5 years after the passing of the special resolution.

Where pre-emption rights were dis-applied under the Companies Act 1985 and the disapplication was in force immediately before 1 October 2009, the disapplication continues to have effect as if it had been made under the Companies Act 2006 and so a further resolution will not be required.