Creating a new class of shares

by Practical Law Corporate

A practice note providing an overview of the procedures for a company with share capital to create a new class of shares under the Companies Act 2006 (CA 2006). This practice note examines the two most straightforward methods for achieving this: the allotment and issue of new shares with different rights and the conversion of existing shares into a new class through re-designation. The guidance details the necessary steps for each method, covering shareholder resolutions required to authorise an allotment, the process for amending the company's articles of association to define class rights, and considerations for dealing with statutory pre-emption rights. For share conversions, this practice note explores the process for re-designation and the critical need to obtain class consent for any variation of rights. It also addresses post-transaction administrative requirements, including necessary filings with the Registrar of Companies.