Share re-designation – written class consent to variation of class rights

Written Class Consent

CO.RECLASS.06
This Written Class Consent is the relevant shareholder consent required by section 630 Companies Act 2006 in order to vary class (shareholder) rights following a re-classification of shares.

Following a re-classification of shares, if each new class of shares is to have new rights attaching to them, then shareholder consent is required. This involves complying with any relevant provisions in the company’s articles with regard to the variation of class rights and, in the absence of any such provisions, obtaining the written consent of three quarters in nominal value of the issued shares of the relevant share class or obtaining a special resolution passed at a separate class meeting (section 630 Companies Act 2006).

This class consent has been drafted on the basis of written statutory compliance, seeking the consent of three quarters in nominal value of the issued shares of the relevant class of shares. A simple example of this may be where 2 shareholders hold 100 ordinary shares in a company and these shares are re-classified into 50 A & 50 B shares, each of the A & B shares to form 2 new classes of shares with different rights.

The original ordinary shareholders will need to give their consent via a class consent procedure before the new rights can be assigned to the A & B shares. Note that this is a complicated procedural area of the law, for further details see our Guidance Notes – Re-classification of shares and class consents. It is also strongly advised that you consider seeking independent legal advice.

This Class Consent is 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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