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Any corporate lawyers around? I'm stuck!

(2 Posts)
MarionCole Tue 07-Dec-10 14:42:13

So section 755 of the Companies Act says that private companies cannot make offers to the public.

But they do, so how do they do it? Where is the exemption that I cannot find?

For example, limited companies go to business angels / private equity companies for investment, they don't all convert to plc status before doing so.

I'm confused! Any guidance will be extremely gratefully received.

prh47bridge Tue 07-Dec-10 15:56:41

Going to business angels or private equity companies for investment is NOT making an offer to the public. If you look at section 756 you will see that it is not an offer to the public if it is a private deal between the company and the individual or entity to whom they are offering shares which will not result in shares being made available to third parties. It is also not an offer to the public if it is made to people who are already connected to the company such as employees or members of their families. It is only an offer to the public if any Tom, Dick or Harry can buy shares.

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