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Practical steps involved in implementing growth shares

Practical steps involved in implementing growth shares What are growth shares and are they appropriate? Growth shares, also known as value shares or hurdle shares, are a special class of shares that have restricted rights. These rights are designed to allow employees only to participate in post-acquisition increases in the value of the company. For more detailed explanation of the key features of growth shares and when they are normally introduced by a company, see Practice Note: Growth shares (value shares). Key features of growth shares Growth shares are specially constituted and classified under the articles of association of the company as a separate class of shares from the existing shares in the company. They will be issued to selected employees and will be subject to the provisions of the articles of association and also either to the subscription agreement that each participating employee will be asked to sign or the option documentation that they enter into, where the employee acquires their growth shares via an option over...

Issue of redeemable shares

Issue of redeemable shares A limited company having a share capital may issue redeemable shares. Redeemable shares are a statutory concept contained in the Companies Act 2006 (CA 2006), which includes detailed provisions relating to the terms, manner, financing and timing of their redemption. A redemption of shares by a limited company having a share capital will be void unless it is carried out in accordance with CA 2006, Pt 18 (CA 2006, ss 658–737), which sets out the statutory framework within which a limited company is permitted to acquire its own shares. In addition, if such a company purports to redeem shares without complying with CA 2006, Pt 18, an offence is committed by the company and every one of its officers in default. A person guilty of such an offence is liable: • on conviction on indictment, to imprisonment for a term not exceeding two years or a fine (or both), or • on summary conviction in England and Wales, to imprisonment for a term not...

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Written resolution—completion of investment agreement—members—newco

Written resolution—completion of investment agreement—members—newco Company number: [insert number] The companies act 2006 Private company limited by SHARES Written resolutions OF [insert company name] Limited (the Company) Circulated on [insert circulation date] Pursuant to Chapter 2 of Part 13 of the Companies Act 2006 (CA 2006), the directors of the Company propose that Resolution 1 [and] [[insert number(s) of any additional proposed ordinary resolutions]] below be passed as [an] ordinary resolution[s] and that Resolutions 2 [ [and OR ,] 3 [insert number(s) of any additional proposed special resolutions]] below be passed as [a] special resolution[s]. ordinary resolution[S] 1 THAT subject to and conditional on the passage of Resolution 2, the directors are generally and unconditionally authorised, for the purpose of section 551 of the Companies Act 2006 and generally, to exercise all and any powers of the Company to allot shares and to grant rights to subscribe for, or to convert any security into, shares in the Company to any person, at...

Unapproved share option agreement—standalone deed for employee

Unapproved share option agreement—standalone deed for employee This AGREEMENT is made on [insert date of execution of the share option agreement] Parties 1 [insert name of company whose shares are being granted under option] (registered number [insert registered number of company]) whose registered office is at [insert registered address of company] (the Company);[and] 2 [insert name of option holder] of [insert address of option holder] (the Option Holder) [and] 3 [[insert name of grantor (if different from company)] of [insert address of grantor] (the Grantor)] Background (A) [The Company has agreed to grant to the Option Holder as at the date of this Agreement an Option to acquire Shares on the terms set out in this Agreement. OR The Company and the Grantor intend that, as at the date of this Agreement, the Option Holder be granted an Option to acquire Shares on the terms set out in this Agreement.] (B) [The Company will satisfy the exercise of the Option by transferring or procuring the...

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What details should a company record in the PSC register?

What details should a company record in the PSC register? A company’s people with significant control (PSC) register must never be empty. The company must, using the prescribed wording, update its register as regards any general circumstances or investigative steps that it is currently engaged in. This may be as simple as confirming that there are no registrable PSCs or RLEs in relation to the company. It is therefore likely that any register should have an open section in which to record such information. Once a particular PSC or RLE comes forward or is otherwise identified (or being actively investigated), it would seem appropriate to open up a ledger or account against that individual or entity's name. Information required under CA 2006, s 790K can then be entered accordingly, as can any other official wording as to the investigation or enforcement process in relation to that individual or entity: • Required particulars (including type of control): ◦ PSCs: name, date of birth, nationality, country or...

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Private Client weekly highlights—17 April 2025

This week’s edition of Private Client highlights includes: (1) Changizi v Changizi, where a non-exempt beneficiary’s share of estate was liable for IHT under Re Ratcliffe; (2) Argyll and Bute Council v RF (by his litigation friend, the Official Solicitor), in which the Court of Protection refuses an application for recognition and enforcement of a Scottish Guardianship order; (3) Abbasi v Newcastle upon Tyne Hospitals NHS Foundation Trust; Haastrup v King’s College Hospital NHS Foundation Trust, in which the Supreme Court held that anonymity for clinicians in withdrawal of treatment cases involving children should normally be of limited duration; (4) Companies House launches a new voluntary identity verification service; (5) Armstrong v Bhattacharya, which highlights the importance of clear, contemporaneous documentary evidence and a consistent case in circumstances where a person wishes to demonstrate that ownership of a property differs to that which is recorded at HM Land Registry; (6) Tedford v Clarke, in which the court held that although a Will was badly drafted, it was not meaningless and...