Pre-Emption Rights in the UK: Allotment vs Transfer and How to Disapply Them
Pre-emption rights give existing shareholders the first chance to buy shares before they go to anyone else. In the UK there are two kinds. Pre-emption rights on allotment cover new shares the company issues and come from the Companies Act 2006. Pre-emption rights on transfer cover existing shares that a shareholder wants to sell, and they only exist if the company’s articles or shareholders’ agreement create them.
Both kinds protect the size of each shareholder’s stake. When new shares go to someone else without being offered to the existing shareholders first, their…
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