Standard Resolutions for Disapplication of Pre-emption Rights

Pre-emption rights give existing shareholders in a company the right to subscribe for their pro rata share of any new shares in that company issued for cash, providing them with protection against inappropriate dilution of their investments.

Pre-emption rights are enshrined in law and, under the Companies Act 2006, may be disapplied only by a special resolution of shareholders at a general meeting of the company. Whilst not undermining the importance of pre-emption rights, a degree of flexibility is appropriate in circumstances where issuance of equity securities on a non-pre-emptive basis would be in the interests of companies and their owners. The Pre-Emption Group assist in this process.

The Pre-Emption Group publish guidance on the disapplication of pre-emption rights and monitor and report on how this guidance is applied.

Following a recent review of market practice, the Financial Reporting Council published a template resolution proposing two separate resolutions for the disapplication of pre-emption rights, each permitting issues of up to five per cent of a company’s issued share capital on a non-pre-emptive basis.

The template resolutions represent good practice and are drafted for companies incorporated in the UK but companies with premium listings incorporated outside the UK should adopt resolutions in an appropriate form.

Companies are encouraged and expected to use the template resolutions for meetings held after 1 August 2016.

The template consists of two separate resolutions to disapply pre-emption rights:

* for up to five per cent of the issued share capital; and

* for an additional five per cent for transactions which the board determines to be an acquisition or other capital investment as defined by the Pre-Emption Group’s Statement of Principles.

When the additional five per cent disapplication authority is used, companies should disclose, in the announcement regarding the issue, the circumstances that have led to its use and describe the consultation process undertaken. In addition, the Statement of Principles provides that companies are expected, where they have undertaken a placing using the disapplication of pre-emption rights, to publish in the next annual report:

* the actual level of discount achieved;

* the net proceeds raised;

* how those net proceeds were used; and

* the percentage increase in issued share capital due to non-pre-emptive assurance for cash over the three-year period preceding the issue.

The template is designed to provide additional certainty that the relevant share issue has been properly authorised.

The template requires the board of a company to determine that the additional authority will be used in the appropriate way. A board minute evidencing the directors’ determination will therefore be required and worded correctly should suffice for these purposes (assuming the directors are acting in good faith and in furtherance of their statutory duties).

As the majority of companies will have held their AGM by 1 August 2016, these new resolutions are unlikely to be tested until 2017 at the earliest.


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Please note our offices will be closed from Friday the 23rd December and will reopen on Wednesday the 4th January 2017

Fife Business Awards 2017


There’s still plenty of nail biting to go, but the first leg of the eagerly anticipated Fife Business Awards 2017 is over, with the shortlist announced for each of the 11 categories.  Here at CCW we are delighted that a number of our clients appear on the nomination list, a list that spans an intriguingly diverse range of businesses, from veg producers and craft brewers to signmakers and technical manufacturers.  It just goes to show the breadth of enterprise in Fife – it’s what these highly regarded awards are all about.

With categories from Most Enterprising Start Up to Success through Innovation, the awards are carefully designed to be relevant to organisations both large and small (similarly reflected in our own client list) and three companies have now been shortlisted for each award category.  That makes a total of 33 Fife businesses already singled out as potential prizewinners.  The shortlist is as follows:

Most Enterprising Start Up Company
• Bay Solutions Ltd
• Influx Recruitment Limited
• TaxAssist Accountants

Best Performing Business (Under 50 Employees)
• Kingdom Maintenance
• Sephra Europe
• Silverdyke Park

Best Performing Business (Over 50 Employees)
• Avenue Care Services
• Brand Rex-Limited
• Ingenico

Developing the Young Workforce
• CR Smith
• Independent Mobile Phone Consultants
• Realm Construction Ltd

Excellence in People Development
• Fairmont, St Andrews
• Fife Fabrications
• Kettle Produce

Success Through Sustainability
• Fife Fabrications
• Ivan Wood & Sons
• Kettle Produce

Excellence in Tourism
• Morton of Pitmilly
• Rufflets Hotel
• Silverdyke Park

Success through Export
• Eden Mill
• Ingenico
• Sephra Europe

Excellence in Customer Services
• Bright and Beautiful
• Byron Hairdressing
• Eclipse (IP)

Success through Innovation
• Fife Fabrications
• John Young Signs
• Peeltech

Excellence in Food & Drink
• Fairmont St Andrews
• Scottish Food Guide
• The Adamson

Organised by the Fife Chamber of Commerce with Business Gateway Fife, these awards are a serious showcase for everything the commercial sector of Fife can offer to clients, customers, employees and investors, and that is the principal reason CCW celebrate the awards each year.

All will be revealed at the gala dinner on Friday 31st March which will be held at Rothes Hall, Glenrothes, hosted by celebrity broadcaster, Grant Stott.  Last year’s event saw around 300 guests attending, testament to the fact that these awards are now a real highlight of the Fife business calendar.  We’re looking forward to both supporting and celebrating our clients, and indeed the whole of Fife’s business community.

For further information about the Fife Business Awards, please visit