Disapplication

Company law - good practice - pre-emption rights.

Pre-emption rights give existing shareholders in a company the right to subscribe for their pro rata share of any new shares in that company issued for cash.

Pre-emption rights provide existing shareholders with protection against dilution of their investments.

In this context, disapplication means a formal permission for the company to make an issue of equity - within predetermined limits - that does not include pre-emption rights for existing shareholders.

Statement of Principles - Pre-Emption Group - UK

"The Statement of Principles provides guidance on the factors to be taken into account by companies and investors when considering the case for disapplying pre-emption rights and provides a basis for open, constructive and early communication between companies and shareholders."

The Pre-Emption Group.

See also

• An introduction to equity capital
• Company
• Company law
• Dilution
• Equity
• Equity capital
• Equity capital market (ECM)
• Good practice
• Intermediary
• Investor
• Law
• Listed company
• Pre-Emption Group (PEG)
• Pre-emption rights
• Rights issue
• Shareholders
• Shareholders' agreement
• Statement of Principles

Other resource

• Statement of Principles - the Pre-Emption Group