Revised Articles of Association following share reclassification

These Articles of Association may be adopted by a company following a reclassification of its shares and a variation of the rights attaching to the newly reclassified shares.

When new articles may be needed

New articles of association will need to be adopted to incorporate the rights of the newly reclassified shares.

Provided the correct procedural steps are followed to reclassify a company’s shares, the company can adopt new articles for this purpose.

See our Guidance Note – reclassifying shares & class consents.

Important legal point

The adoption of new articles must only be made in accordance with company law rules.

There are protections against changes that increase the liability of individual shareholders, vary the rights of any class of shareholders or otherwise prejudice minority shareholders.

What these articles do

These Articles of Association provide for two new classes of shares, A & B shares, and provide for the transition from a single shareholding group to two new classes or groups of shares.

The articles are based on our Modified Model Articles (Private Company Limited By Shares).

Key features included

• A & B shareholders;
• A & B directors;
• the appointment and removal of A & B directors;
• variation of class rights;
• pre-emption rights on the issue of new shares;
• payment of dividends and other distributions for two shareholding groups;
• decision making by shareholders for two shareholding groups;
• voting rights for two shareholding groups;
• quorums for meetings;
• class meetings; and
• written resolutions for two shareholding groups.

Adding specific rights

If there are any specific rights relating to a class of shares that a company wishes to include, these can be drafted into the articles.

Note, however, the consequential changes this may trigger in other clauses within the articles of association.

Revised Articles of Association following share reclassification is part of Corporate. Just £38.50 + VAT provides unlimited downloads from Corporate for 1 year.