Classes of Shares
Posted on by Ceri John
Upon incorporation your company, like most others, probably created and issued the standard “ordinary shares”.
At the time it was the simplest option and allowed you to get your company up and running, but since then have you considered whether your share class and structure is appropriate?
Maybe you would like to issue shares to a family member or a friend but you’re afraid of what that would mean for your holding in the business?
Or you are worried how a new shareholder or new shares might affect your company and the running of the business?
Perhaps you’re concerned of the problems it could create should you ever fall out with the new shareholder?
BIRR Legal Services will consider all these issues and can help you create a new share class.
Companies create and issue new shares all the time with some of the more popular reasons including;
- To have the ability to pay dividends at different rates to different classes of shareholders, or to some shareholders to the exclusion of others.
- To restrict the voting rights of certain shareholders in the company.
- To provide special rights to certain shareholders, for example, the power to appoint or remove directors.
- To give preferential capital rights to certain shareholders, for example, the holders of “A” shares may be entitled to a repayment of capital on a winding up of the company before the holders of any other class of shares.
- To require the consent or approval of certain shareholders to certain company transactions, for example, the sale of the company’s business or a major asset.
- To facilitate the operation of share allotment or share transfer restrictions, for example, giving a right of first refusal to a certain class of shareholders.
Call BIRR Legal Services Now for a FREE consultation and information on how we may be able to help you restructure your share capital and classes to suit your company.
Categories: Company Secretarial Services, Information