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TCGA92/S126(2)(a) includes what are probably the most common types of share reorganisation: bonus issues and rights issues. In both cases shares or debentures are allotted to existing shareholders or to the holders of a particular class of share in proportion to their existing shareholding. In a bonus issue the new shares and debentures are issued free. In a rights issue the shareholders have to pay for the new shares or debentures. »Ê¹ÚÌåÓýapp usual procedure in a rights issue is for the shareholders to be given a provisional letter of allotment which entitles them to subscribe for further shares in the company. For further detail on rights issues and letters of allotment see CG50292+.

From 1 December 2003 it is possible for listed companies incorporated in the United Kingdom to repurchase their own shares and hold them in treasury (CG50209). (For this purpose ‘listedâ€� includes shares dealt in on the Alternative Investment Market (AIM) of the London Stock Exchange.) »Ê¹ÚÌåÓýappre are special rules for bonus and rights issues where shares are held in treasury (see CG51750).