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University of Law PSC Financial and Business Skills
Exam||Verified Exam!!!||, 2026/2027 – Professional
Skills Course Solicitor Training Competency
Assessment||Newest Exam!!!
What must be done if an OR is passed concerning share
issues? - Answer-Must be filed on Companies House with
15 days (ss 551(8)(9, 29 and 30 CA).
This is a rare example where an OR must be filed.
What are pre-emption rights? - Answer-The statutory pre-
emption rights dictate that generally, on an issue of new
shares, they must first be offered to the existing members
on the same or more favourable terms, in proportion of
their existing shareholders. They have a 'right of first
refusal' for a period of at least 14 days (ss 561-562 CA)
When can the statutoty pre-emption rights be altered? -
Answer-These rights can be:
- carried or removed for private company by contrary
provisions in the articles (s 567 CA), either on
incorporation, or subsequently by SR, the MAs do not vary
statutory rights
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- disapplied by SR of the members (ss 560, 570 and 571
CA)
- formally waived in relation to a specific issue (if all the
members intended to decline the offer).
What is the rationale behind pre-emption rights? - Answer-
They are designed to protect company members, where
the effect of issuing shares would weaken their control of
the company. This is because where new shares are
issued, there is potential for an individual's percentage
shareholding to decrease.
Clodagh has 55 of the 100 voting shares in a private
limited company, which has unamended MAs.
What would be the consequences if a further 20 shares
were issued to a new shareholder, for cash? - Answer-
Clodagh's shareholding would be reduced to
approximately 46%, so she could no longer pass or block
ORs. On the facts, the statutory pre-emption rights would
apply to protect her, she would have first refusal on 11
(55%) of the new shares.
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What can be done to ensure greater protection of the
statutory pre-emption rights? - Answer-Greater protection
will be granted if the company's articles provide for pre-
emption of any issues of shares (e.g for both cash and
non-cash consideration)
Groth and Emanuel Limited is a private limited company,
incorporated on 28 December 2015, with unamended
MAs. It has 50k ordinary shares and 50k preference
shares, and wishes to issue 20k new ordinary shares for
cash.
Will authority be required, and will the pre-emption rights
apply? - Answer-Authority will be required as the company
has more than one class of shares (before and after
issue). The pre-emption rights apply but may be
disqualified by SR or waived if all of the shareholders
agree.
If the shares were issued for non-cash considerations (eg
transfer of property), the pre-emption rights would not
apply. However, it would be an SPT if a director or
, 4|Page
connected person was buying the shares and the value of
the asset(s) was substantial.
What are the ways shares can be issued?
How MUST shares be issued in private companies with
unamended MAs? - Answer-Shares may be issued fully
paid or partly paid.
For private companies with MAs, MA21 states that they
must be fully paid.
How are shares commonly issued? - Answer-Shares are
usually issued at a premium (ie a price exceeding their
base/nominal/par value).
How should any premium paid on shares be recorded on
company accounts? - Answer-Any premium paid must be
shown in the shares premium account on the balance
sheet (s 610 CA).
University of Law PSC Financial and Business Skills
Exam||Verified Exam!!!||, 2026/2027 – Professional
Skills Course Solicitor Training Competency
Assessment||Newest Exam!!!
What must be done if an OR is passed concerning share
issues? - Answer-Must be filed on Companies House with
15 days (ss 551(8)(9, 29 and 30 CA).
This is a rare example where an OR must be filed.
What are pre-emption rights? - Answer-The statutory pre-
emption rights dictate that generally, on an issue of new
shares, they must first be offered to the existing members
on the same or more favourable terms, in proportion of
their existing shareholders. They have a 'right of first
refusal' for a period of at least 14 days (ss 561-562 CA)
When can the statutoty pre-emption rights be altered? -
Answer-These rights can be:
- carried or removed for private company by contrary
provisions in the articles (s 567 CA), either on
incorporation, or subsequently by SR, the MAs do not vary
statutory rights
,2|Page
- disapplied by SR of the members (ss 560, 570 and 571
CA)
- formally waived in relation to a specific issue (if all the
members intended to decline the offer).
What is the rationale behind pre-emption rights? - Answer-
They are designed to protect company members, where
the effect of issuing shares would weaken their control of
the company. This is because where new shares are
issued, there is potential for an individual's percentage
shareholding to decrease.
Clodagh has 55 of the 100 voting shares in a private
limited company, which has unamended MAs.
What would be the consequences if a further 20 shares
were issued to a new shareholder, for cash? - Answer-
Clodagh's shareholding would be reduced to
approximately 46%, so she could no longer pass or block
ORs. On the facts, the statutory pre-emption rights would
apply to protect her, she would have first refusal on 11
(55%) of the new shares.
,3|Page
What can be done to ensure greater protection of the
statutory pre-emption rights? - Answer-Greater protection
will be granted if the company's articles provide for pre-
emption of any issues of shares (e.g for both cash and
non-cash consideration)
Groth and Emanuel Limited is a private limited company,
incorporated on 28 December 2015, with unamended
MAs. It has 50k ordinary shares and 50k preference
shares, and wishes to issue 20k new ordinary shares for
cash.
Will authority be required, and will the pre-emption rights
apply? - Answer-Authority will be required as the company
has more than one class of shares (before and after
issue). The pre-emption rights apply but may be
disqualified by SR or waived if all of the shareholders
agree.
If the shares were issued for non-cash considerations (eg
transfer of property), the pre-emption rights would not
apply. However, it would be an SPT if a director or
, 4|Page
connected person was buying the shares and the value of
the asset(s) was substantial.
What are the ways shares can be issued?
How MUST shares be issued in private companies with
unamended MAs? - Answer-Shares may be issued fully
paid or partly paid.
For private companies with MAs, MA21 states that they
must be fully paid.
How are shares commonly issued? - Answer-Shares are
usually issued at a premium (ie a price exceeding their
base/nominal/par value).
How should any premium paid on shares be recorded on
company accounts? - Answer-Any premium paid must be
shown in the shares premium account on the balance
sheet (s 610 CA).
