A private company limited by shares registered in England and Wales in 2018 has voting ordinary shares and non-voting preference shares in issue. Its articles contain no authority for the directors to allot shares and impose no enhanced majority for granting that authority. No members' resolution granting allotment authority is in force.
The board proposes to issue further ordinary shares for cash to a new external investor under a fresh subscription, not by exercising existing subscription or conversion rights. The investment is not part of a court-sanctioned restructuring. The company asks its solicitor what is needed before the directors exercise the statutory power to allot.
Which advice on allotment authority is correct?