Looking at the postings on this thread, the biggest unknown and concern appears to be (to paraphrase) "what happens to any unsold shares? Are they held and exercised by the board on behalf of the club?" Recognising this concern, we asked our legal advisors through this process to give us a definitive response and this afternoon we have received this from them:
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If the relevant resolutions are passed, the shares will be bought back by the company and held in treasury.
The Club’s name must be entered into the Club’s register of members as the member holding those shares.
The Club must not exercise any right (e.g. right to attend and vote at meetings) in respect of those shares and any purported exercise of such a right would be void. Treasury shares do not carry a right to receive dividends or other distributions of assets (including a distribution of assets on a winding up).
Therefore, treasury shares themselves have limited value. However, the advantage of having treasury shares is that they are effectively shares in hibernation i.e. on the shelf ready so when an appropriate investor comes along, they can be allotted accordingly.Provided the relevant resolution is passed,the directors will be authorised to allot the 117,000 treasury shares as and when they see fit and to be in the interests of the Club. Otherwise, you could cancel the shares in the meantime. However, when an investor comes along, you would need to create that vehicle of investment first increasing the share capital and then obtaining authority to issue and allot more shares.
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This says that until they are sold, they bestow no benefits on the holder of the shares - in this case the club. So there is no "inbuilt majority" for the board as a consequence of the shares existing and they will only become relevant once they have been bought when they effectively become the equivalent of any other issued share. I hope this helps explain the situation