Conversion of shares

by Practical Law Corporate

A practice note that describes the process for converting issued shares from one class into another, also known as re-designating shares, under the Companies Act 2006, where the issued share capital and nominal value of the shares remain the same post-conversion. It outlines the reasons why a company may need to undertake a share conversion, such as following a share transfer or a corporate sale. This note examines the relevant statutory framework, including the procedure for re-designating shares by passing the necessary shareholder resolutions, amending the company's articles of association, and navigating the requirements for a variation of class rights. It also discusses procedural matters, including the required filings at Companies House and necessary administrative updates to the register of members. Additionally, this note addresses more complex situations, including the interaction between a conversion and a consolidation and sub-division of shares, and the specific considerations when seeking to convert non-redeemable shares into redeemable shares.