161. Approval of company required for issue of shares by directors

Despite anything in a company’s constitution, the directors must not, without the prior approval of the company in general meeting, exercise any power of the company to issue shares.

Approval for the purposes of this section may be confined to a particular exercise of that power or may apply to the exercise of that power generally; and any such approval may be unconditional or subject to conditions.

Any approval for the purposes of this section continues in force until —

The directors may issue shares even though an approval for the purposes of this section has ceased to be in force if the shares are issued pursuant to an offer, agreement or option made or granted by them while the approval was in force and they were authorised by the approval to make or grant an offer, agreement or option which would or might require shares to be issued after the expiration of the approval.

Section 186 applies to any resolution whereby an approval is given for the purposes of this section.

Any issue of shares made by a company in contravention of this section is void and consideration given for the shares is recoverable accordingly.

Any director who knowingly contravenes, or permits or authorises the contravention of, this section with respect to any issue of shares shall be liable to compensate the company and the person to whom the shares were issued for any loss, damages or costs which the company or that person may have sustained or incurred thereby; but no proceedings to recover any such loss, damages or costs may be commenced after the expiration of 2 years from the date of the issue.