Contents
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Introduction
This booklet is an
initial guide to quite
a complex subject.
It cannot replace
professional advice.
It:
- explains the
basics of share
capital;
- applies to all
companies incorporated
with share capital,
whether private
or public;
- tells you what
information must
be delivered to
Companies House;
and
- covers the
regulation of:
- authorised
share capital,
allotment
and cancellation
of shares;
- types of
shares, restructuring
share capital
and share
transfers;
- offers made
to the public
in a prospectus.
You
will find the relevant
law in the Companies
Act 1985 (as amended),
the Financial Services
and Markets Act
2000, the Public
Offers of Securities
Regulations 1995,
and in the Listing
Rules of the FSA
(Financial Services
Authority)..
Back to top
CHAPTER
1
Share capital
1. What
is share capital?
When a company is
formed, the person
or people forming
it decide whether
its members' liability
will be limited
by shares. The memorandum
of association (one
of the documents
by which the company
is formed) will
state:
- the amount of
share capital
the company will
have; and
- the division
of the share capital
into shares of
a fixed amount.
The
members must agree
to take some, or
all, of the shares
when the company
is registered. The
memorandum of association
must show the names
of the people who
have agreed to own
shares and the number
of shares each will
own. These people
are called the subscribers.
2. What
is authorised capital?
The amount of share
capital stated in
the memorandum of
association is the
company's 'authorised'
or 'nominal' capital.
3. Is there
a maximum and minimum
share capital?
There is no maximum
to any company's
authorised share
capital and no minimum
share capital for
private limited
companies. However,
a public limited
company must have
an authorised share
capital of at least
£50,000 (and, if
it is trading, issued
capital of £50,000
- see question 5).
4. Can a
company alter its
authorised share
capital?
A company can increase
its authorised share
capital by passing
an ordinary resolution
(unless its articles
of association require
a special or extraordinary
resolution). A copy
of the resolution
- and notice of
the increase on
Form 123 - must
reach Companies
House within 15
days of being passed.
A company can decrease
its authorised share
capital by passing
an ordinary resolution
to cancel shares
which have not been
taken or agreed
to be taken by any
person. Notice of
the cancellation,
on Form 122, must
reach Companies
House within one
month.
For information
about resolutions,
see our booklet,
'Resolutions'.
5. What
is issued capital?
Issued capital is
the value of the
shares issued to
shareholders. This
means the nominal
value of the shares
rather than their
actual worth. The
amount of issued
capital cannot exceed
the amount of the
authorised capital.
A company need not
issue all its capital
at once, but a public
limited company
must have at least
£50,000 of allotted
share capital. Of
this, 25% of the
nominal value of
each share and any
premium must be
paid up before it
can start business
or borrow.
|
Getting
a 'Certificate
to commence
business and
borrow'
If a new company
is incorporated
as a plc,
it must deliver
a statutory
declaration
on Form 117
confirming
that its share
capital is
at least the
statutory
minimum. The
Registrar
will then
issue a certificate
entitling
it to do business
and borrow
- see our
booklet, 'Company
Formation'
for more information. |
A company may increase
its issued capital
by allotting more
shares but only
up to the maximum
allowed by its authorised
capital. Allotments
must only be done
under proper authority
(see question 7).
-
A
public company
may allot shares
to the general
public. Share
offers to the
public are made
in a prospectus.
For more information
on prospectuses,
see chapter
3.
-
A
private company
is normally
restricted to
issuing shares
to its members,
to staff and
their families
and to debenture
holders. However,
by private arrangement,
the company
may issue shares
to anyone it
chooses.
6.
Can a company reduce
its issued capital?
A company cannot
normally reduce
its issued capital
as this is the personal
property of the
shareholders, not
of the company.
However, the following
exceptions apply:
For
more information
about shares and
share transfers,
see chapter
2.
7. What
does the allotment
of shares mean?
'Allotment' is the
process by which
people become members
of a company. Subscribers
agree to take shares
on incorporation
and the shares are
regarded as 'allotted'
to each member on
incorporation.
Later, more people
may be admitted
as members of the
company and be allotted
shares. However,
the directors must
not allot shares
without the authority
of the existing
shareholders. The
authority will either
be stated in the
company's articles
of association or
given to the directors
by resolution passed
at a general meeting
of the company.
8. What
type of resolution
is required to allot
shares?
Any public or private
company with share
capital may give
authority by ordinary
resolution. The
authority must be
for a fixed period
of up to five years.
Any ordinary resolution
giving, varying,
revoking or renewing
an authority to
allot shares must
be delivered to
Companies House
within 15 days of
being passed.
A private company
with share capital
may instead pass
an 'elective resolution',
to give, or renew,
an authority. This
authority can be
for any fixed period,
which may be longer
than five years.
It can also be for
an indefinite period.
An elective resolution
must also be delivered
to Companies House
within 15 days of
being passed.
For more information
about resolutions,
see our booklet
'Resolutions'.
9. Must
the company notify
the Registrar when
an allotment of
shares is made?
Yes. Within one
month of the allotment
of shares, a return
on Form 88(2) must
be delivered to
Companies House.
A return of allotments
must reach Companies
House within one
month of the first
date of allotment.
If shares are allotted
over a period of
time, particularly
in a rights issue
(see question 14),
it is not acceptable
to delay delivery
until all the shares
have been allotted
if this means the
form will be late.
Instead, you should
complete consecutive
forms so that each
of them can be delivered
within one month
of the first allotment
stated on each form.
If the shares are
to be paid for in
cash, you must enter
details of the actual
amount paid (or
due to be paid)
on the form. The
amount will reflect
the nominal value
of the shares and
any premium.
Nominal
value and
share premium
A company's
authorised
share capital
is divided
into shares
of a nominal
value. The
real value
of the shares
may change
over time,
reflecting
what the
company
is worth,
but their
nominal
value remains
the same.
When the
company
sells shares
for more
than their
nominal
value, the
actual sum
paid will
be in two
parts -
the nominal
value and
a share
premium.
The share
premium
must be
recorded
separately
in the company's
books in
a 'share
premium
account'.
|
10. Must
shares be fully
paid-up at the time
of allotment?
No. Payment may
be deferred until
later. However,
shares in a public
company must be
allotted as paid-up
to at least a quarter
of their nominal
value and the whole
of any premium (except
that this does not
apply to shares
allotted under an
employees' share
scheme).
As a general rule,
a company may allot
bonus shares to
members as fully
paid-up. A company
which has funds
available for the
purpose may also
pay up any amounts
unpaid on its shares.
See question 13.
A company's shares
must not be allotted
at a discount.
11. Must
payment for shares
be in cash?
No, it can be in
goods, services,
property, good will,
know-how, or even
shares in another
company. The latter
is often used when
one company takes
over another.
Public companies
are more restricted
in what they may
accept in payment
for shares. Non-cash
payments must be
valued before shares
are allotted. A
copy of the valuation
report must be delivered
to Companies House
with Form 88(2).
Generally shares
may be allotted
for payment:
- wholly for cash;
- partly for cash
and partly for
a non-cash payment;
or
- wholly for a
non-cash payment.
12. Must I
send any more information
if allotments include
non-cash payments?
Yes. Form 88(2) must
show the extent to
which the shares are
to be treated as paid-up.
This must be stated
as a percentage.
Calculating
the extent
to which shares
are paid-up
If an allotment
is partly
for cash and
partly for
a non-cash
payment, then
the extent
to which the
shares are
treated as
paid-up must
include the
cash and non-cash
elements.
For example,
a £1 share
allotted for
50p in cash
and 50p in
services is
still 100%
paid-up. |
Form 88(2) must
also include a brief
description of the
non-cash payment
for which the shares
were allotted (for
example, '100 ordinary
shares of £1 in
XYZ limited'). It
must be accompanied
by the written contract
under which title
of the shares is
constituted. The
Registrar will accept
a certified copy
of the stamped
contract for registration.
If there is no written
contract, a stamped
Form 88(3) must
be delivered to
Companies House
with Form 88(2)
within one month
of the allotment.
Form 88(3) is not
acceptable when
there is a written
contract.
|
Stamp
duty
Acquiring
shares for
a non-cash
payment involves
the transfer
of property,
which may
amount to
a chargeable
transaction
under the
Stamp Act.
The Inland
Revenue must
already have
stamped
the written
contract or
Form 88(3)
before it
is sent to
Companies
House, confirming
that stamp
duty has been
paid or that
none is payable. |
Please note:
The requirement
to stamp the prescribed
particulars of the
contract which a
company must send
to Companies House
has been removed
for contracts entered
into on or after
1 December 2003.
13. What
are bonus shares?
If authorised by
its articles, a
company may transfer
profits to a fund
called its 'capital
redemption reserve'
and use it to issue
'bonus' shares to
the members in proportion
to their existing
holdings. Since
the issue may reduce
the amount of money
available for paying
dividends, the term
'bonus' is not always
appropriate. The
correct term is
'capitalisation
of reserves' but
the terms 'scrip'
or 'scrip issues'
are also used to
describe such shares.
A company can also
use a capitalisation
of distributable
profits to credit
partly paid shares
with further amounts
to make them paid
up.
The allotment of
bonus shares must
be notified to Companies
House on Form 88(2).
In
addition, if a listed
public company issues
bonus shares in
respect of shares
held in treasury,
the company must
notify Companies
House on Form 169(1B).
14. What
are pre-emption
rights?
These are the rights
of existing members
to be offered new
shares on beneficial
terms by the company.
'Pre-emption' rights
give members the
opportunity to accept,
reject or renounce
a share offer in
favour of someone
else before the
company offers new
shares elsewhere.
Note:
pre-emption rights
do not apply to
allotments that
are issued as wholly
or partly paid-up
for a non-cash payment
or shares in an
employee share scheme.
(An employee share
scheme means a scheme
for encouraging
share ownership
by employees, former
employees and their
families.)
The memorandum or
articles of a private
company may exclude
pre-emption rights.
However, a public
company cannot have
such a clause.
For a particular
share issue, the
Companies Act 1985
allows a company
to pass a special
resolution not to
apply pre-emption
rights. This is
known as the 'disapplication
of pre-emption rights'.
The resolution will
apply to the one
issue only; a further
resolution is needed
if similar conditions
were to apply to
another share issue.
A copy of the special
resolution must
be delivered to
Companies House
within 15 days of
being passed.
15. What
happens if a person
refuses to pay for
shares?
A member is liable
to pay up the nominal
value of each of
his shares and the
amount owing to
the company is a
debt which can be
'called up'.
If a member refuses
to pay all or any
call on a share,
the company may
use forfeiture proceedings
if permitted by
its articles. A
typical procedure
is set out in paragraphs
18-22 of Table A
of The Companies
(Tables A to F)
Regulations 1985
(if alternative
provisions have
not been adopted).
As these proceedings
are of a penal nature
the regulations
must be followed
exactly, otherwise
the court may declare
forfeiture proceedings
void.
A forfeited share
may be sold, re-allotted
or otherwise disposed
of at the discretion
of the directors.
Companies House
need not be notified
of the forfeiture
or re-allotment
except in the list
of members on the
company's next annual
return.
If a member cannot
pay a call on shares,
and if the member
and the company
agree, the shares
may be surrendered
to the company.
This has the same
effect as forfeiture
but avoids the formal
procedure. The company
may only accept
surrender if it
could have used
its power of forfeiture.
A private company
may hold forfeited
shares indefinitely
pending re-allotment.
A public company
must cancel the
forfeited shares
if they are not
otherwise disposed
of after three years.
If the cancellation
were to reduce a
public company's
allotted capital
below the statutory
minimum, it would
have to re-register
as a private company.
A company cannot
use forfeited shares
for the purposes
of voting.
16. What
are paid-up capital,
uncalled capital,
reserve capital
and share premium?
These terms are
used to describe
the make-up of a
company's share
capital:
- paid-up capital
is the issued
capital which
has been fully
or partly paid-up
by the shareholders;
- uncalled
capital is
that part of the
issued capital
on which the company
has not requested
payment;
-
reserve
capital
is that part
of the share
capital that
the company
has decided
will only be
called up if
the company
is being wound
up and for the
purposes of
it being wound
up;
-
share
premium
is the excess
paid above a
share's nominal
value. This
excess must
be recorded
separately in
the company
books in a 'share
premium account'
and used for
the purposes
specified in
Section 130
of the Companies
Act 1985 (for
example, in
paying up unissued
shares to be
allotted to
members as fully
paid-up bonus
shares.)
As
an example, if a
company issues 1,000
shares at £1 each,
paid-up to 20% of
their value with
a 10% reserve and
a share premium
of 50p, the capital
is:
| paid-up capital |
= |
£200 |
(1,000
x £0.20) |
| reserve capital |
= |
£100 |
(1,000
x £0.10) |
| uncalled capital |
= |
£700 |
(1,000
x £0.70) |
| share premium |
= |
£500 |
(1,000
x £0.50) |
Back to top
CHAPTER
2
Shares
1. Are there
different types
of shares?
A company may have
as many different
types of shares
as it wishes, all
with different conditions
attached to them.
Generally share
types are divided
into the following
categories:
-
Ordinary
As the name
suggests these
are the ordinary
shares of the
company with
no special rights
or restrictions.
They may be
divided into
classes of different
value.
-
Preference
These shares
normally carry
a right that
any annual dividends
available for
distribution
will be paid
preferentially
on these shares
before other
classes.
-
Cumulative
preference
These shares
carry a right
that, if the
dividend cannot
be paid in one
year, it will
be carried forward
to successive
years.
-
Redeemable
These shares
are issued with
an agreement
that the company
will buy them
back at the
option of the
company or the
shareholder
after a certain
period, or on
a fixed date.
A company cannot
issue redeemable
shares only.
2.
Can shares be in
any currency?
Yes, and different
types of share may
be in different
currencies. However,
a public limited
company must have
at least £50,000
of its issued capital
in sterling, irrespective
of what other currency
it uses.
3. Can a
company change the
currency of its
shares
No, not directly.
However, a company
may purchase its
own shares (see
questions 7 and
8) and allot shares
in a different currency
or it may seek a
court order to reduce
its issued capital
to zero, cancel
its authorised capital,
and simultaneously
create capital and
allot shares on
a proportional basis
in the new currency.
Remember that a
public limited company
must always have
a sterling share
capital of at least
£50,000.
4. Can a
company change its
shares?
If authorised by
its articles of
association, a company
may pass an ordinary
resolution to:
-
consolidate
and divide its
share capital
into shares
of larger amounts
than its existing
shares, for
example 200
shares of £1
may be consolidated
and divided
into 100 shares
of £2;
-
sub-divide
its shares,
or any of them,
into shares
of smaller amounts,
for example,
a £1 share may
be divided into
10 shares of
10p;
-
convert
all or any of
its paid-up
shares into
stock or re-convert
stock into shares.
A company cannot
issue stock
in the first
instance. It
can only convert
issued shares
into stock.
(Converting
shares into
stock means
treating them
as one merged
fund equivalent
to the nominal
value of the
individual shares.
For example,
100 shares of
£1 each would
convert to £100
stock.)
In
all the above cases,
the total authorised
and issued share
capital remains
unaltered. Notice
of the change must
reach Companies
House on Form 122
within one month.
For more information
about resolutions,
see our booklet
'Resolutions'.
5. Can class
rights be amended?
Yes. A company may
alter the rights
attached to any
class of shares.
How this can be
done depends on
whether the rights
stem from the memorandum
or articles or elsewhere.
However, a company
cannot convert non-redeemable
shares into redeemable
shares.
Dissenting shareholders
who hold at least
15% of the issued
shares of that class
may apply to the
court to have the
variation cancelled.
They must do this
within 21 days after
consent was given
or a resolution
passed to vary the
rights. The company
must deliver a copy
of the court order
to Companies House
within 15 days of
it being made.
Special
rights attached
to shares
and newly
created class
rights
The following
forms must
be delivered
to Companies
House within
one month
in the circumstances
described:
- When
a company
allots
shares
with rights
that are
not stated
in the
memorandum
or articles
or in
a resolution
or agreement
that must
be sent
to Companies
House:
use Form
128(1).
- When
a company
varies
the rights
attached
to shares
except
by amending
the memorandum
or articles
or by
a resolution
or agreement
that must
be sent
to Companies
House:
use Form
128(3).
- When
a company
assigns
a name
or new
name to
any class
of its
shares
except
by amending
the memorandum
or articles
or by
a resolution
or agreement
that must
be sent
to Companies
House:
use Form
128(4).
|
6. Can redeemable
shares be used to
reduce issued capital?
Yes. A company which
has issued redeemable
shares may reduce
its issued share
capital by redeeming
them in accordance
with the agreement
under which they
were issued. However,
if the shares are
not returned to
the company in accordance
with the agreement
- for example, if
they are returned
earlier than stated
in the agreement
- then the transaction
must be dealt with
as a purchase of
the company's own
shares - see question
7.
Notification of
redemption of shares
must be delivered
to Companies House
within one month
on Form 122.
7. Can a
company purchase
its own shares?
Yes, if permitted
by its articles,
a company may pass
a special resolution
to buy some of its
shares. But it cannot
do so if this would
leave only redeemable
shares in issue.
The terms of the
resolution will
depend on whether
it is a 'market
purchase' - that
is, made on a recognised
stock market - or
an 'off-market purchase'.
An off-market purchase
may only be made:
Generally,
when a company purchases
its own shares,
the shares are cancelled
on their return
to the company and
the purchase must
be notified to Companies
House on Form 169
within 28 days.
However, a listed
public company may
hold the shares
‘in treasury’
for resale or transfer
to an employees’
shares scheme at
a later date, in
which case the purchase
must be notified
to Companies House
on
Form 169(1B). For
more information
on holding shares
in treasury, see
question 8.
Purchase
of own shares
out of capital
(private companies
only)
If a purchase
by a private
company is
financed by
payment out
of its capital,
the directors
must also
have made
a statutory
declaration
on Form 173
about the
solvency of
the company
immediately
after the
purchase and
in the next
financial
year. A report
by the company's
auditor confirming
the directors'
opinion must
be attached
to the form
and delivered
to Companies
House no later
than the day
on which notice
of the proposed
payment out
of capital
is first published.
(Requirements
for publishing
the notice
are covered
by section
175 of the
Companies
Act 1985.) |
The purchase by
a company of its
own shares is a
chargeable transaction
under the Finance
Act 1986 .Stamp
Duty is payable
on the aggregate
amount of the re-purchase
price at ½% rounded
up to the nearest
multiple of £5.
Stamp
duty
Before sending
Form 169 or
Form 169(1B)
to Companies
House, they
must be stamped
by the Inland
Revenue. |
8. Do transfer
documents need to
be completed for
redemption and purchase
of own shares?
A transfer document
is not necessary
when a company redeems
its shares, or buys
its own shares and
cancels them. None
of these events
qualifies as a transfer
of shares, and the
company’s
issued share capital
must be reduced
on the return of
the shares to the
company.
A
transfer document
is also not necessary
when a listed public
company buys its
own shares and holds
them in treasury
for later disposal.
Although this type
of purchase does
not reduce the company’s
issued share capital
- the company becomes
a shareholder and
is entered as such
in the register
of members - a stamped
Form 169(1B) must
be completed and
delivered to Companies
House within 28
days of the purchase.
If
a listed public
company is buying
some shares to hold
in treasury and
some to be cancelled,
then Form 169 must
be completed for
the shares that
are to be cancelled
and Form 169(1B)
must be completed
for the shares that
are to be held in
treasury.
If the company
subsequently decides
to cancel treasury
shares, or sell
treasury shares,
or transfer treasury
shares to an employees’
shares scheme, Companies
House must be notified
within 28 days on
Form 169A(2).
Please
note:
A sale of
shares from
treasury is
not
an allotment
of new shares.
Please do
not
send Form
88(2) to Companies
House |
9. Can I
buy shares from
someone else?
Shares in a public
company are normally
transferred through
a broker dealing
in the market appropriate
to those shares,
that is, the Stock
Exchange or the
Alternative Investment
Market. However,
shares may be transferred
directly from seller
to buyer and the
company informed
accordingly.
Shares in a private
company are usually
transferred by private
agreement between
the seller and the
buyer. In both cases,
a transfer document
must be completed.
The transfer of
shares is normally
a chargeable transaction
under the Stamp
Act. Stamp Duty
is payable to the
Inland Revenue on
the aggregate amount
at ½% rounded up
to the nearest multiple
of £5.
10. How
are shares transferred
to new owners?
The transfer of
shares in a public
limited company
is dealt with through
the Stock Exchange's
'Crest' system.
To transfer shares
in a private or
unlimited company,
a seller must complete
and sign the appropriate
section of a 'stock
transfer form',
available from law
stationers, and
pass it, together
with the share certificate,
to the new owner.
The new owner must
then complete their
section of the stock
transfer form, pay
any stamp duty to
the Inland Revenue
and pass the completed
form and share certificate
to the company.
The company secretary
will then arrange
for the directors
to authorise the
change to the members'
register and issue
a share certificate
in the new name.
Do
not
send stock
transfer forms
to Companies
House. They
should be
kept with
the company's
own records. |
11. What
is a transmission
of shares?
In some instances
shares may be transmitted
by operation of
law. The main examples
of this are when
a registered shareholder
dies or becomes
bankrupt.
On death, shares
held in the sole
name of the deceased
are vested in the
personal representative
or executor of the
deceased. This person
should inform the
company and provide
all necessary evidence
that the company
might need so that
the fact can be
registered and the
personal representative
receive all notices
and dividends relating
to the shares. On
the winding up of
the deceased's estate,
the personal representative
must inform the
company of the beneficiary
(or beneficiaries)
of the shares so
that the necessary
alterations to the
register of members
may be made and
new certificates
issued.
If a share is jointly
held, the survivor(s)
will be the only
person(s) recognised
as having title
to the share. The
company should be
informed immediately
and be given any
necessary evidence
of the death in
order to alter the
register of members
and issue a new
share certificate.
The position of
a bankrupt shareholder
is similar. Until
a new member is
registered, the
rights to dividends
are vested in the
trustee in bankruptcy.
The bankrupt may
remain a member
and be able to vote,
but only in accordance
with the directions
of the trustee.
This is so where
the name of the
bankrupt shareholder
remains on the register,
but the trustee
generally has a
right under the
company's articles
to be registered
as a member in respect
of the bankrupt's
shares.
12. What
are share warrants?
If authorised by
its articles, a
company may convert
any fully paid shares
to 'share warrants'.
These warrants are
easily transferable
without any need
for a transfer document,
that is, they can
simply be passed
from hand to hand.
When share warrants
are issued, the
company must strike
out the name of
the shareholder
from its register
of members and state
the date of issue
of the warrant and
the number of shares
to which it relates.
Subject to the articles,
a share warrant
can be surrendered
for cancellation.
If so, the holder
is entitled to be
re-entered into
the register of
members. Vouchers
are usually issued
with the share warrants
in order that any
dividends may be
claimed.
The holder of a
share warrant remains
a shareholder but
whether they are
a member of the
company depends
on the articles
of the company.
A company which
converts all its
shares to share
warrants should
be careful: it could
become a memberless
company and therefore
cease to exist.
13. What
happens if a share
certificate is lost?
This will be dealt
with in the company's
articles. For example,
a typical provision
is set out in paragraph
7 of Table A of
The Companies
(Tables A to F)
Regulations 1985
which allows for
a replacement share
certificate to be
issued when the
directors are assured
that the old certificate
has been lost, worn
out, defaced, or
destroyed.
The directors will
normally require
the holder to give
up any defaced or
worn-out certificate
and to sign an indemnity
about the use of
any lost certificate.
They may also require
the holder to pay
any reasonable expenses
for investigating
any evidence of
loss.
14. Can
a share be cancelled
if the holder cannot
be traced?
No. The share belongs
to the registered
holder, not the
company. If a person
is eventually declared
legally dead, then
the share should
be transmitted to
the beneficiary
(or beneficiaries)
- see question 11.
If authorised by
its articles, a
company may retain
any dividends that
remain unclaimed
after a certain
period.
Back to top
CHAPTER
3
Prospectuses and
listing particulars
The law relating
to the official
listing of securities
is set out in Part
VI of the Financial
Services and Markets
Act 2000 (the "FSMA"),
the Public Offers
of Securities Regulations
1995 (SI No. 1995/1537)
(the "POS Regulations"),
and in the Listing
Rules of the FSA
(Financial Services
Authority). Public
Offers of securities
that are not, and
in respect of which
no application has
been made for them
to be, listed on
the London Stock
Exchange are governed
by the POS Regulations.
1. What
are a prospectus
and listing particulars?
As a condition of
admission to the
Official List, the
Listing Rules require
the publication
of a document known
either as a prospectus
or listing particulars:
-
If
securities are
to be offered
to the public
in the UK for
the first time
before admission,
the Listing
Rules require
that a prospectus
is submitted
to, and approved
by, the London
Stock Exchange
and that the
prospectus is
published.
-
If
the Listing
Rules require
a document to
be submitted
for approval
and published
otherwise than
on an offer
to the public
in the UK for
the first time,
the document
is referred
to as 'listing
particulars'.
Details
of what the relevant
offering documents
must include are
set out in the Listing
Rules.
In relation to unlisted
securities that
are offered to the
public in the UK
for the first time,
a prospectus must
be published containing
the matters set
out in Parts II
to X of Schedule
1 to the POS Regulations.
2. When
must a prospectus
be issued?
As mentioned above,
a prospectus must
be issued when securities
that are not already
listed in London
are offered to the
public in the UK
for the first time.
An offer will be
treated as being
made to the public
if it is made to
any section of the
public, whether
chosen as already
being members or
debenture holders
of the company,
or as clients of
the person issuing
the prospectus,
or in any other
manner. There are
exceptions to the
rule - in relation
to securities to
be listed, see Schedule
11 to the FSMA.
In relation to other
securities, see
section 7 of the
POS Regulations.
3. Who can
issue a prospectus
or listing particulars?
Section 81 of the
Companies Act prohibits
a private limited
company (unless
limited by guarantee
and without share
capital) from making
public offers. Generally,
therefore, only
a public limited
company can issue
a prospectus.
Listing particulars
can only be issued
by a listed
public limited company.
4. Must
a prospectus or
listing particulars
be registered at
Companies House?
Yes. On or before
the day of its publication,
a copy of the prospectus
or listing particulars
must be delivered
to the Registrar.
The law requires
only one copy to
be delivered, but
the Registrar would
prefer to receive
two copies of a
prospectus or listing
particulars. This
is because he has
a duty to make a
copy available to
the general public
as from the date
of issue.
Any supplementary
prospectus or listing
particulars issued
to change, add to
or correct the information
in the original
document must also
be delivered immediately
to the Registrar.
5. Oversea
companies
Companies incorporated
outside the United
Kingdom which offer
securities within
the UK must also
send a copy of their
prospectus or listing
particulars to the
Registrar.
Back to top
CHAPTER
4
Further information
1. Where
can I get further
information?
You should consult
your professional
advisers on all
share capital matters.
You may also telephone
Companies House
on 0870 3333636.
2. How do
I send information
to the Registrar?
You may deliver
documents to the
Registrar by hand
(personally or by
courier), including
outside office hours,
bank holidays and
weekends to Cardiff,
London and Edinburgh.
You may also send
documents by post
or by the Hays Document
Exchange service
(DX). If you send
documents, please
address them to:
For companies
incorporated
in
England & Wales: |
For companies
incorporated
in
Scotland: |
The Registrar
of Companies
Companies House
Crown Way
Cardiff CF14
3UZ
DX33050 Cardiff
|
The Registrar
of Companies
Companies House
37 Castle Terrace
Edinburgh EH1
2EB
DX ED235 Edinburgh
1 |
We will only acknowledge
receipt of documents
at Companies if you
provide a stamped
addressed envelope.
| Please
note: Companies
House does not
accept accounts
or any other
statutory documents
by fax. |
3. Where
do I get forms
and guidance booklets?
This is one of
a series of Companies
House booklets
which provide
a simple guide
to the Companies
Act.
Statutory forms
and guidance booklets
are available,
free of charge
from Companies
House. The quickest
way to get them
is through this
website or by
telephoning 0870
3333636.
If you prefer
you can write
to our stationery
sections in Cardiff
or Edinburgh.
Forms can also
be obtained from
legal stationers,
accountants, solicitors
and company formation
agents - addresses
in business phone
books.
Back to top
|
