Class Shares

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Whilst most UK limited companies usually have one class of share, it is possible for a company to have two or more distinct groups of equities in existence at any one time by creating additional classes of shares. The individual rights relating to each class of share could potentially differ in one or more of the following ways:

    Their voting rights.

    Whether they can receive dividends.

    Pay-outs received on winding up.

There is a requirement that the Articles of Association refer to the class shares and their respective rights in relation to Dividends, Voting and Capital, we generally therefore arrange for replacement Articles of Association to be filed at Companies House, such Articles also being compliant with the Companies Act 2006


Statutory Companies House returns are generally filed electronically on your behalf and we will require the Company Authentication Code for this purpose

Updated Statutory Registers are not included

Changes in share ownership will not be visible on public record until a confirmation statement is filed at Companies House.

Class Shares - Frequently asked Questions
There is some statutory protection given to the holders of a class of shares against the rights on their shares being altered. A minority class of shares, or a class of non-voting shares, would otherwise be vulnerable to the rights on those shares being altered by the majority (e.g. by altering the articles by special resolution). This is known as a variation of class rights. The following is a summary of the main statutory provisions:
CA 2006, sec630 provides that class rights may be varied only in accordance with the articles or if either:
(a) the holders of three-quarters in nominal value of the issued shares of that class consent in writing to the variation; or
(b)a special resolution (75% majority) is passed at a separate general meeting of the holders of that class to sanction the variation.
CA 2006, sec633: The holders of not less than 15% of the issued shares of the class (being persons who did not consent to or vote in favour of the resolution for the variation), may apply to the court to have the variation cancelled.

An individual Shareholder can hold more than one class of share in the same company and benefit from the rights which pertain to the multiple groups.

Tax can be a motivation in family companies, for instance- Family-owned companies often issue shares to spouses and other family members to allow the distribution of profits in such a way that allows them to utilise lower tax rates or take advantage of the £2000 annual dividend exemption. Classes of shares can be created for each family member as required and different dividends voted for each class of share. The shares issued need not have any voting rights.

Always seek legal and taxation advice on these matters. The consequences of not doing so can be expensive. If not done correctly, company owners can jeopardize the right to Entrepeneur’s Relief when they sell a company or pay higher rates of tax on distribution of profits or even lose control of their own companies.