Redesignation of shares – shareholder resolutions

Shareholder Resolutions – share reclassification

CO.RECLASS.04
These Shareholder Resolutions – share reclassification consist of (1) an ordinary resolution to effect the reclassification of shares; and (2) a special resolution to adopt new articles of association to set out the rights of the newly reclassified 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.

If the share reclassification involves converting shares into a new class, then the articles will also need to be amended in order 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. Note that if the conversion involves a variation to any of the class rights attached to the shares that are to be converted, then shareholder consent will be required. See our Guidance Note – reclassification of shares and class consent and our Written Consent to variation of class rights.

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. Note that 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.

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.

These Shareholder Resolutions 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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