150 5 Equity and Shareholders’ Capital
reholders right of pre-emption;^84 the authorisation to acquire own shares;^85 re-
duction in the subscribed capital;^86 the reduction of subscribed capital by com-
pulsory withdrawal of shares;^87 and reduction in the subscribed capital by the
withdrawal of shares acquired by the company itself.^88- Where there are several classes of shares, the decision by the general meeting is
in many cases subject to a separate vote for each class of shareholder whose
rights are affected by the transaction. Such rules apply to increase in capital,^89
reduction in the subscribed capital,^90 as well as redemption of the subscribed
capital or its reduction by withdrawal of shares.^91 Depending on the governing
law, they may also influence the exercise of pre-emptive rights.^92 - The change of legal capital such as share capital may require a change of
articles of assocation and may, depending on the law that governs the entity, be
subject to further restrictions.^93 The European legal capital regime does not
“prejudice the provisions of Member States on competence and procedure
relating to the modification of the statutes or of the instrument of
incorporation”.^94 - The decision rights are complemented by information rights. There are
particular rules on the waiving of pre-emptive rights, on consideration other
than cash, and on share buybacks. (a) When the consideration comes in a form
other than cash, the Second Directive requires “one or more independent ex-
perts appointed or approved by an administrative or judicial authority” to create
a report. The report must describe the assets and the methods of valuation, and
indicate whether the resulting valuations “correspond at least to the number and
nominal value, or where there is no nominal value, to the accountable par and,
where appropriate, to the premium on the shares to be issued for them”.^95 (b)
Before the right of pre-emption is restricted or withdrawn by decision of the
general meeting, the “administrative or management body shall be required to
present to such a meeting a written report indicating the reasons for restriction
or withdrawal of the right of pre-emption, and justifying the proposed issue
price”.^96 (c) Member States may subject share buybacks to the condition that
the company complies with appropriate reporting and notification require-
(^84) Article 29(5) of Directive 77/91/EEC (Second Company Law Directive).
(^85) Article 19(1) of Directive 77/91/EEC (Second Company Law Directive).
(^86) Article 30 of Directive 77/91/EEC (Second Company Law Directive). See also Article 32.
(^87) Article 36 of Directive 77/91/EEC (Second Company Law Directive).
(^88) Article 37 of Directive 77/91/EEC (Second Company Law Directive).
(^89) Article 25(3) of Directive 77/91/EEC (Second Company Law Directive).
(^90) Article 31 of Directive 77/91/EEC (Second Company Law Directive).
(^91) Article 38 of Directive 77/91/EEC (Second Company Law Directive).
(^92) Article 29(2)(b) of Directive 77/91/EEC (Second Company Law Directive).
(^93) For English law, see section 617 of the Companies Act 2006.
(^94) Article 14 of Directive 77/91/EEC (Second Company Law Directive).
(^95) Article 10 of Directive 77/91/EEC (Second Company Law Directive).
(^96) Article 29(4) of Directive 77/91/EEC (Second Company Law Directive).