Board Minutes – Reclassification of shares and variation of class rights

These Board Minutes – Reclassification of shares & variation of class rights can be used where a class of shares is reclassified and the class rights attaching to those shares are proposed to be varied at the same time.

When reclassification is commonly used

The process of converting shares from one class into another is called reclassification, redesignation or renaming of shares.

Companies may seek to reclassify their shares following a sale or reorganisation, or for administrative, historical or family reasons where shareholders choose or need to hold different classes of shares.

Why class rights may also be varied

Reclassification is often accompanied by a variation of rights attaching to the newly reclassified shares.

This may allow for different voting rights, rights to dividends or rights to capital on a winding up.

Companies Act requirements referred to in this process

• Assigning a new name or other classification to any class or description of shares requires the company to notify the Registrar in accordance with section 636 of the Companies Act 2006.
• For the purposes of complying with section 636, the company will need to pass an ordinary resolution to approve the reclassification procedure, unless the articles stipulate an alternative procedure.
• Altering or varying the rights attaching to shares also requires the company to seek the consent of the relevant existing shareholders in accordance with section 630 of the Companies Act 2006.

Articles amendments and related templates

This procedure requires the company’s existing articles of association to be amended by special resolution to include the newly reclassified shares and the new rights attaching to them.

See our Shareholder resolutions – share reclassification and Revised articles of association following a share reclassification.

What these board minutes cover

These Board Minutes go through the procedural requirements that the board will need to follow during the reclassification process.

Board Minutes – Reclassification of shares and variation of class rights is part of Corporate. Just £38.50 + VAT provides unlimited downloads from Corporate for 1 year.