ACCA · Question 14 · Capital and the financing of companies
Section A
In a private limited company with only one class of shares, the directors wish to allot new shares to raise capital. There are no restrictions in the company's articles of association. Do the directors need the prior authorization of the shareholders to allot these shares?
Answer options:
Yes, they must obtain an ordinary resolution from the shareholders.
Yes, they must obtain a special resolution from the shareholders.
No, directors of a private company with one class of shares have automatic authority to allot shares unless the articles state otherwise.
No, directors always have unlimited power to allot shares in any company.
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