Section 160 | Meaning of “ordinary shares”

(1)For the purposes of section 158(1)(a) “ordinary shares” means shares other than restricted preference shares.

(2)For the purposes of subsection (1) restricted preference shares are shares that meet each of conditions A to E.

(3)Condition A is that the shares are issued for consideration which is or includes new consideration.

(4)Condition B is that the shares do not carry any right to conversion into shares or securities other than a right to conversion into—

(a)shares to which section 164(1) applies,

(b)securities to which section 164(2) applies, or

(c)shares or securities in the relevant company's quoted parent company (see section 164(3) to (7)).

(5)Condition C is that the shares do not carry any right to the acquisition of shares or securities.

(6)Condition D is that the shares—

(a)do not carry a right to dividends, or

(b)carry a restricted right to dividends (see section 161).

(7)Condition E is that the shares, on repayment, do not carry rights to an amount exceeding the new consideration mentioned in subsection (3) except so far as those rights are reasonably comparable with those generally carried by fixed dividend shares listed on a recognised stock exchange.