Are you going to bring in new money and issue shares? We teach you all about new issue of shares!
If you need new capital in your company, you can make a new issue of shares. A new issue means that you issue new shares against cash payment from the investors. The main rule is that all existing shareholders have the right to subscribe for the shares in a new issue in relation to the number of shares they already own (this is called a rights issue), but it is possible to direct the issue to one or more other individuals or companies, provided 2/3 of the shareholders are for such an arrangement. A private placement will dilute the existing shareholders' holdings as the total number of shares increases.
How does a new issue go?
It is the shareholders in your company who decide on the new share issue at a general meeting, usually following a proposal from the board. PocketLaw helps you produce the documents required for the issue. After that, you must update the share register in the company and register the issue with the Swedish Companies Registration Office within six months of the shareholders deciding on it.
Start by answering a number of questions in our preparatory guide, which will help you determine if there is anything in addition to the preparation of documents for the issue itself that you need to do. It can e.g. be to update the articles of association so that you can issue a new class of shares or because the number of shares in the company exceeds the stipulated maximum ceiling. The guide also prepares you by giving you other important information that you need, e.g. on the requirements for participation and votes at the general meeting that decides on the issue.
Important time aspects
If not all shareholders in the company will be represented at the Extraordinary General Meeting who will decide on the new share issue and are OK with a simplified process, the Board must first call the shareholders at least two weeks before the meeting is held. If you also have to change your articles of association prior to the new share issue, you must, however, call at least four weeks in advance.
The auditor of the company needs to be involved in a cash issue before it is decided at an extraordinary general meeting, this is because the board must prepare a written statement about what has happened in the company since the last annual report was submitted. The auditor must then comment on this, provided that not all shareholders in the company are represented at the meeting and are OK with no written statement being produced).
Remember that investors often need some time to subscribe for and pay for the shares after the meeting has decided on the terms of the issue, which you should include in the schedule.
The rights issue must be notified to the Swedish Companies Registration Office for registration within six months of the shareholders' decision, otherwise the rights issue will not apply.
This is how PocketLaw can help you build better businesses
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Jurisprudence continues to develop as new requirements are introduced. We want to grow with your company and will continue to have "the ear against the rails" to be able to update you on how the development takes place so that you have time to act in time.
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