UK Company Formation - Several Share Classes

UK Company Formation – Several Share Classes

UK company formation having a single class of shares is straightforward and can be completed by any company formation agent. It is also attainable to find a company with various classes of share. This can be a much more sophisticated method, which can be ordinarily supplied by corporate law firms and providers of company secretarial services.

You will discover several causes why you could choose to type a company with a lot more than 1 class of share.

You may, for example, want numerous classes to ensure that:

  • you may have total handle over the quantity and timing of dividend payments to every shareholder,
  • specific shareholders have no voting rights or enhanced voting rights,
  • specific shareholders have no proper to a return of capital on winding up,
  • certain shareholders obtain preferential treatment like the correct to a fixed dividend or a return of capital ahead of other shareholders.

Ordinary shares are normally divided into ‘A’ ordinary, ‘B’ ordinary, ‘C’ ordinary, and so on classes if these classes are to possess broadly precisely the same rights, with slight variations such as possessing the ability to declare a various dividend on every class. As an additional instance, if a class of shares receives preferential treatment for example the proper to fixed dividends or return of capital ahead of other shareholders then those shares are normally labeled as ‘preference’ shares. It must be noted that the name of a share class is intended to become descriptive only, it doesn’t dictate the rights attached …

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