Multiple
share classes
Companies may want to issue shares of different classes for
various reasons:
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- To give different
voting rights to different shareholders or groups of shareholders eg:
the 'A' shares could have the right to vote but 'B' shares have no voting
rights.
- To give different
income rights to different shareholders or groups of shareholders eg:
'A' shares could be entitled to a fixed dividend every year whilst 'B'
shares could only be entitled to a dividend if the directors decided
to declare one.
- To give different
capital rights to different shareholders or groups of shareholders eg:
the holders of 'A' shares may be entitled to a repayment of the capital
on a winding up of the company before the holders of any other class
of shares receive any payment of capital.
- To facilitate the
operation of share issue or share transfer provisions eg: all 'A' shares
could be offered to the other holders of 'A' Shares to give them the
chance to acquire them before they are offered to the holders of 'B'
shares.
- To provide special
rights to a shareholder or group of shareholders eg: 'A' Shares could
have the right to appoint and remove a director, and enhanced voting
rights on any resolution to remove the director that they have appointed.
- To give consent
provisions to a shareholder or group of shareholders eg: the consent
of the holders of the 'A' shares may be required if the sale of the
company's business or a majority of the company's assets is proposed.
Multiple share classes
are often used by:
- 'husband
and wife' companies – see also our note on the Arctic
Systems case.
- companies which
are owned by two or more groups of people eg: Mr and Mrs A and Mr and
Mrs B set up a company.
- to give special
rights to specific groups of people eg: investors or employees.
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Oswalds'
service
Our multiple share classes service includes:
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- redesignation of
the authorised share capital into different shares, including any necessary
increase of share capital and the preparation and filing of all necessary
minutes, resolutions and statutory forms.
- 6 bound copies
of the memorandum and articles of association.
We can also provide
documentation to issue and
allot any new shares that are required. An additional fee will be
payable.
Next step
Our fees for the creation of multiple share classes start at £385
+ VAT.
Additional fees for the issue and allotment of shares, when combined with
this service, start at £50 + VAT.
For more information please contact our Corporate Legal Services team
using the links on the box in the right or ORDER
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