Companies Act 2014 section 1023

Interpretation and supplemental provisions in relation to section 1022

Section 1023 provides key definitions used in the pre-emption rights rules for PLCs and sets out how directors may disapply or modify those pre-emption rights, including the procedures and safeguards that must be followed.

• Defines "equity security", "relevant shares" and "relevant employee shares" for the purposes of the pre-emption rights provisions applicable to PLCs
• Allows directors with a general authority to allot shares to be given power — through the articles or a special resolution — to disapply or modify pre-emption rights, either generally or for a specified allotment
• Any power to disapply or modify pre-emption rights expires when the underlying authority to allot shares is revoked or expires, but may be renewed by special resolution for a period no longer than the renewed allotment authority
• A special resolution to disapply or modify pre-emption rights for a specified allotment must be recommended by the directors, who must circulate a written statement explaining their reasons, the consideration to be received, and their justification for that amount — knowingly or recklessly including false or misleading information in that statement is a category 3 offence