Shareholder Resolutions – share reclassification

These Shareholder Resolutions – share reclassification consist of:

• an ordinary resolution to effect the reclassification of shares; and
• a special resolution to adopt new articles of association to set out the rights of the newly reclassified shares.

Ordinary resolution to reclassify the shares

When converting shares by way of a reclassification, it is necessary to pass a shareholder resolution to assign a new name, designation or classification to the relevant shares.

This could be either the same as an existing class of shares or a new classification.

The Companies Act 2006 does not specify that a special resolution is required to change the classification, therefore an ordinary resolution is deemed to be sufficient unless the articles require a higher majority.

Special resolution to adopt new articles and set new rights

If the share reclassification involves converting shares into a new class, then the articles will also need to be amended to incorporate the rights attaching to the new class of shares.

Any alteration to the articles will require a shareholders’ special resolution to effect the changes.

Where class rights are varied

If the conversion involves a variation to any of the class rights attached to the shares that are to be converted, shareholder consent will be required.

See our Guidance Note – reclassification of shares and class consent and our Written Consent to variation of class rights.

How these resolutions fit into the overall process

These resolutions form part of a procedural process involving board minutes where the resolutions are proposed, an adjournment in the meeting to pass the resolutions and then the meeting is reconvened.

The resolutions will need to be passed either as written resolutions or at a general meeting.

The standard format for these are contained in our Shareholders' Resolutions subfolder.

Companies House filings referred to in this process

A copy of the special resolution and the amended articles of association must be filed at Companies House within 15 days of being passed.

Companies House Forms SH08 (notice of name or other designation of class of shares) and SH10 (notice of particulars of variation of rights attached to shares) will also need to be filed.

Shareholder Resolutions – share reclassification is part of Corporate. Just £38.50 + VAT provides unlimited downloads from Corporate for 1 year.