2.5 Companies: Equity Finance Flashcards
(104 cards)
1
Q
Two sections which shows if SR/OR has to be filed at CH
A
29 + 30
2
Q
Example of offer being exempt from prospectus under s.85 FSMA
A
Offer directed at fewer than 150
3
Q
What must ‘85 company pass to rely on 550
A
OR
4
Q
What does it mean if preferential shares are cumulative
A
If no dividend declared, right is carried forward to the next year
5
Q
Who can apply to court to cancel variation of class rights + provision
A
M w/ 15% of relevant shares who did not agree (633(2))
6
Q
How are equity securities defined in 560
A
Ordinary shares, or rights to convert into OS
7
Q
Where are equity securities defined
A
560
8
Q
771(1) requires what
A
If Ds refuse transfer, must give reasons
9
Q
When might prior authority to allot no longer be good
A
If 5 years have passed, or authority cap reached
10
Q
Two provisions on updating M reg (generally)
A
112 + 113
11
Q
How does PrivC w/ one share class disapply pre-emption
A
SR/AoA
12
Q
Under what section can PrivC w/ one share class, issuing for same class, disapply pre-emption
A
569(1)
13
Q
What is the effect of a stock transfer form on M’s title
A
M gets equitable title
14
Q
580
A
Shares can only be issued at a premium
15
Q
How does D get authority to allot + provision
A
By OR (551(1))
16
Q
Are participating preference shares still OSs under 561?
A
Yes
17
Q
If Ds refuse to transfer shares under MA 26(5), what must they do
A
Give reasons per 771(2)
18
Q
What section says cannot allot if no authority
A
549(1)
19
Q
561 + 573 apply to what kind of shares, despite them being a transfer
A
Treasury
20
Q
558 defines what
A
Allotment
21
Q
542?
A
Shares must have fixed NV or void
22
Q
Two normal ways transfer of shares restricted
A
Ds power to refuse + pre-emption
23
Q
Provision on shares must have fixed NV or void
A
542
24
Q
Two ways class rights are altered + provision
A
AoA, or if AoA silent, by SR (630)
25
If pre-emption rights disapplied, what are PMM
File SR with 15 days after passed
26
What is issuing
Once reg + title complete
27
What does the mnemonic for procedure to allot and issue stand for
Cap, Authority, Disapply, New class, BR
28
What are treasury shares
Shares bought back by the compant
29
How does Ms title become complete
By registering on M reg (112(2))
30
When are shares transmitted
If M dies or goes bankrupt
31
Are the conditions for **_NOT_** being an 'ordinary share' under **560** (capped right to dividend and capital payments) cumulative? I.e. do you have to satisfy **_both_** for the shares not to be 'OS'
Yes
32
What is an exception to needing to get authority + provision
PrivC w/ one class of shares allotting for the same class (550)
33
What provision says shares can only be issued at a premium, never at a discount
580
34
If new class of rights created, what are PMM
File SR + amended AoA within 15 days
35
630?
Alter class rights of shares by SR
36
Which LSE market is not a UK market for s.85 FSMA
AIM
37
Which kind of class of share is not presumed to be cumulative unless in AoA
Participating preference
38
What are called up shares
Balance on NV of shares demanded (when not fully paid)
39
The rights of pre-emption under 561 only apply to what
Equity securities paid for in cash
40
How is a preferential dividend usually expressed
% of NV, or based on subscription price
41
Definition of offering shares to UK public under s.85 FSMA is wide or narrow?
Wider, beyond 755
42
How many tests complied w/ in s.85 FSMA = prospectus needed
just 1/2
43
How is any cap on allotting shares removed for non '85 companies + provision
By SR (21(1))
44
What two sections apply to treasury shares, despite it being a transfer
561 + 573
45
MA 26(5)
Ds have power to refuse transfer of shares
46
If authority arises to allot under 550, what are PMM
CA '85 files OR w/ CH within 15 days
47
Time to send share certificates to new Ms + provision
2 months, 769(1)
48
If authority granted to allot under 551, what are PMM
File OR within 15 days
49
If shares allotted, what are PMM
Form SH01, statement of capital, M reg updated, share certificates sent, and consider if PSC position changed
50
Is pre-emption included in MA for transfer of shares?
No
51
Common feature of ordinary shares
1 vote/share, right to dividend and surplus on wind up
52
What are convertible shares
Option to convert into different class
53
What section excludes 561 for securities paid for otherwise than in cash
565
54
What must be in a prospectus
Sufficient info for informed assessment
55
If issuing new share class, what must happen
Amend AoA to deal w/ new rights
56
Common features of participating preference shares
Participate w/ Ms in surplus dividends (after fixed dividend), and surplus assets
57
What are redeemable shares
Company intends to buy back/cancel in future
58
Must CA '06 file anything to do with authority to allot under 550? Why
No - no need to pass OR to use 550
59
Mnemonic for procedure to allot + issue
Cats And Dogs Nibble Bones
60
What are the tests for when s.85 FSMA applies?
Offering shares to UK public or shares admitted to trading on UK market
61
How are shares actually allotted
By BR, after any required GM
62
560 defines what
Equity securities
63
If it is a specific allotment which allows them to display 561 under 571, what must Ds do
Give written consent + reasons + amount to be paid w/ justification
64
Four possible company record PMM for allotting shares
Board + GM minutes, sending share certificates, updating M reg, and updating PSC reg
65
Common features of preference shares
Priority on payment of dividend/surplus, and presumed to be cumulative
66
Form to file w/ CH if shares allotted
SH01
67
For what companies was there a cap on allotting shares
Companies under '85
68
Why are participating preference shares OSs under 561
Right to participate in dividend WITHOUT a fixed amount - varies year to year
69
Provision on updating PSC reg if new PSC
790M
70
Can authority to allot be revoked, even if given in AoA? provision
Yes - 551(8)
71
When is a prospectus not required, despite s.85 complied w//?
Offer exempt, or securities exempt
72
What are paid up shares
Full price paid
73
What two kinds of offers are not offers to the public for 755
Private concern (e.g. to family members), or direct offers to individuals
74
Two considerations on allotment
Offer to the public + prospectus
75
If cap has been removed, what are the two PMM
File new AoA, and file SR/OR (depending on if CA '85 or '06)
76
Where are the rights of pre-emption for allotting equity securities
561
77
What restriction on transfer of shares is in MA
Ds power to refuse under MA 26(5)
78
Is a cap on allotting shares still required
No
79
What kind of company cannot use 550 w/o OR first
'85 company
80
Common features of deferred shares
No voting rights nor dividend, sometimes surplus profits after dividend, but usually no rights at all
81
Provision on filing statement of capital if shares allotted
555(3)
82
How is 561 generally disapplied (provision too)
By SR/AoA per 570(1)
83
What is allotment
Person unconditionally entitled to be registered as M
84
What kind of C and per what provision cannot offer to the public
Priv, 755
85
What happened to the cap on allotting shares for companies under '85 when '06 came in (+ provision)
Deemed to be included in AoA (28(a))
86
Which kind of shares usually has no rights at all
Deferred shares
87
How is cap on allotting shares removed for '85 companies
By OR
88
Time to update M reg when shares allotted + provision
2 months (554(1))
89
How are ordinary shares defined in 560
Those OTHER THAN shares w/ capped right to dividends AND capital payments
90
Time to file SH01 w/ CH + provision
One month - 555(2)
91
Where is specific allotment, which diapplies 561?
571
92
Where are the tests for if prospectus needed and approved by FCA before shares can be allotted
s.85 FSMA
93
s.85 FSMA has how many tests and for what
Two tests for if prospectus required to allot shares
94
What two sections must not have been triggered if there is a new share class
550 + 569
95
565
561 does not apply to securities paid for otherwise than in cash
96
Why do rights of pre-emption exist
As allotment = diluting existing shares
97
What two things are required to transfer shares
Stock transfer form + stamp duty
98
When does M get legal title from transfer of shares
Once registered
99
What is transferring
C between S + purchaser, and company is NOT a party
100
What is the disapplication of pre-emption under 570 attached to?
General authority under 551
101
Provision on telling CH of new PSC + time
790VA, within 14 days of change
102
What to check for 'cap' in allotting shares'
Is there a cap, has it been removed/changed, and have shares been issued up to the cap
103
What are the restrictions on transfer of shares
Subject to AoA
104
551(1) gives what
General authority by OR for Ds to allot§
