ACCA Applied Skills · Corporate and Business Law (Global) · Share capital
Brightwell Ltd's directors want to issue shares for cash without offering them to existing members first. Under the standard company law model, which step is a valid way of achieving this?
Pre-emption rights can be removed only through the articles excluding them or by the members passing a special resolution disapplying them. Directors' minutes, auditor opinions on price or a single major shareholder's consent are not enough to override other members' rights.
- AMembers pass a special resolution disapplying pre-emption rights, or the articles exclude themCorrect
- BThe directors record a board minute stating that the issue is in the company's interest
- CThe auditors certify that the issue price is a fair price
- DThe largest shareholder gives written consent on behalf of all members
Explanation
Pre-emption rights can be disapplied by the articles or by a special resolution of the members. A board minute, an auditor's view on price, or one shareholder's consent cannot remove other members' statutory rights.
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