Ordinary shares Definition

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GLOSSARY

/ˈɔːdɪn(ə)ri,ˈɔːd(ə)n(ə)ri/ /ʃɛː/

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What does Ordinary shares mean?

Securities which represent an ownership interest in a company.

If the company has also issued preference shares, both have ownership rights. Called common stock in the US.

Corporate

Ordinary shares are the default type of shares of a company (CA 2006, s 560). Generally, they carry voting rights, rights to dividends and a right to participate on a winding up in any excess assets. Companies may issue different classes of ordinary shares, each with their own distinct rights.

Pensions

Securities which represent an ownership interest in a company.

If the company has also issued preference shares, both have ownership rights. Called common stock in the US.

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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...

Discover our 24 Practice Notes on Ordinary shares

Irrevocable undertaking—shareholder—scheme of arrangement

Irrevocable undertaking—shareholder—scheme of arrangement The Directors [insert offeror's name] ([Offeror]) [insert address] [and] [The Directors] [[insert name of financial adviser] (the Adviser) [insert address]] [insert date] Dear Directors Proposed acquisition of [name of offeree] ([Offeree]) We understand that [Offeror] proposes to acquire (the Acquisition) [all] the issued [and to be issued] [ordinary] shares of [insert nominal value] each in [Offeree] (the Shares) for the consideration, and otherwise substantially on the terms and subject to the conditions, set out in the draft press announcement attached to this letter (the Announcement), subject to such amendments or additions to such terms and conditions as may be required by the City Code on Takeovers and Mergers (the Code), the Panel on Takeovers and Mergers (the Panel), the High Court of Justice in England and Wales (the Court) or any applicable law or regulation. We also understand that the Acquisition is expected to be implemented by way of a scheme of arrangement under...

Offer document—definitions (Appendix 5)

Offer document—definitions (Appendix 5) Appendix [5]—DEFINITIONS The following apply throughout this document unless the context otherwise requires: [Offeree] or the Offeree • [insert full name of offeree] PLC, a public limited company incorporated in [insert country of incorporation] with registered number [insert number] [Offeree] Directors • the directors of [Offeree] at the date of this document, as set out in paragraph [insert number] of Appendix [4] [[Offeree] Group • [Offeree] and its subsidiary undertakings] [[Offeree] Optionholders • holders of options in the [Offeree] Share Option Scheme [Offeree] Shareholders • holders of Shares [[Offeree] Share Option Scheme • any of [insert names of all the share option schemes operated by offeree]] [Offeree] Warrantholders • holders of [Offeree] Warrants [Offeree] Warrants • the warrants to subscribe for Shares issued under the [Offeree] share warrant instrument dated [insert date]] [Offeror] or the Offeror • [insert full name of offeror], a [public OR private] limited company [and a wholly owned subsidiary of [Offeror Parent]], incorporated in [England...

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