Board Minutes – Share redesignation & new class rights

Board Minutes – Reclassification of shares and variation of class rights

CO.RECLASS.03

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

The process of converting shares from one class into another is called reclassification, redesignation or renaming of shares. Companies may seek to re-classify their shares following a sale or re-organisation of a company or simply for administrative, historical or family reasons with shareholders choosing or needing to hold different classes of shares. This is often accompanied by a variation of rights attaching to the newly re-classified shares to allow for different voting rights, rights to dividends or rights to capital on a winding up etc.

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 in order to approve the re-classification 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.

This procedure requires the company’s existing articles of association to be amended by special resolution to include the newly re-classified shares and the new rights attaching to them. See our Shareholder resolutions – share reclassification and Revised articles of association following a share reclassification .

These Board Minutes go through the procedural requirements that the board will need to follow during the re-classification process and are in open format. The requisite details should be inserted into the highlighted fields or the wording can be adjusted to suit your purposes. Wording in square brackets is optional. If it is required, then the brackets should be deleted and the wording within them retained. If the wording is not required, then it can be deleted.

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