Class rights Definition

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GLOSSARY

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What does Class rights mean?

A company having a share capital may have separate classes of shares. A type of share will form a separate class if the rights attached to it differ from those attaching to other shares of the company. Different classes include ordinary shares, preference shares, deferred shares and redeemable shares.

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Practical steps involved in implementing growth shares

Practical steps involved in implementing growth shares What are growth shares and are they appropriate? Growth shares, also known as value shares or hurdle shares, are a special class of shares that have restricted rights. These rights are designed to allow employees only to participate in post-acquisition increases in the value of the company. For more detailed explanation of the key features of growth shares and when they are normally introduced by a company, see Practice Note: Growth shares (value shares). Key features of growth shares Growth shares are specially constituted and classified under the articles of association of the company as a separate class of shares from the existing shares in the company. They will be issued to selected employees and will be subject to the provisions of the articles of association and also either to the subscription agreement that each participating employee will be asked to sign or the option documentation that they enter into, where the employee acquires their growth shares via an option over...

Issue of redeemable shares

Issue of redeemable shares A limited company having a share capital may issue redeemable shares. Redeemable shares are a statutory concept contained in the Companies Act 2006 (CA 2006), which includes detailed provisions relating to the terms, manner, financing and timing of their redemption. A redemption of shares by a limited company having a share capital will be void unless it is carried out in accordance with CA 2006, Pt 18 (CA 2006, ss 658–737), which sets out the statutory framework within which a limited company is permitted to acquire its own shares. In addition, if such a company purports to redeem shares without complying with CA 2006, Pt 18, an offence is committed by the company and every one of its officers in default. A person guilty of such an offence is liable: • on conviction on indictment, to imprisonment for a term not exceeding two years or a fine (or both), or • on summary conviction in England and Wales, to imprisonment for a term not...

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Class rights provisions—articles

Class rights provisions—articles Add new definitions to ‘definitions’ article: A director • means any director appointed by holders of the A ordinary shares; B director • means any director appointed by holders of the B ordinary shares; A ordinary shares • means the A ordinary shares of [insert amount] each in the capital of the Company; B ordinary shares • means the B ordinary shares of [insert amount] each in the capital of the Company; eligible director • means a director who would be entitled to vote on the matter if proposed as a resolution at a meeting of directors; Add the following new clauses as required and renumber document accordingly: 1 Number of directors 1.1 The number of directors (excluding alternate directors) shall not be less than [two] in number[ nor more than [insert maximum number]] [ and shall be made up of [insert number] A directors and [insert number] B directors]. 2 Proceedings of directors 2.1 Subject to the provisions of these articles, the directors...

Content of Part 8 claim form—reduction of capital—court procedure

Content of Part 8 claim form—reduction of capital—court procedure TO BE INSERTED INTO A PART 8 CLAIM FORM (FORM N208) IN THE HIGH COURT OF JUSTICE BUSINESS AND PROPERTY COURTS [OF ENGLAND AND WALES OR in [BIRMINGHAM/BRISTOL/LEEDS/LIVERPOOL/MANCHESTER/NEWCASTLE/WALES] INSOLVENCY AND COMPANIES LIST (ChD) COMPANIES COURT In the matter of [INSERT NAME of company] [PLC OR LIMITED OR LTD] and IN THE MATTER OF THE COMPANIES ACT 2006 Claim no. [insert claim number] Fee Account no. [insert fee account no.] Help with Fees — Ref no. (if applicable) HWF-[insert rest of number] Claimant [insert name and address of company] Defendant(s) None The claim does [not] include [any] issues under the Human Rights Act 1998. Details of claim 1 The Claimant was incorporated on [insert date] under the Companies Act [1985 OR 2006 OR [insert other]] as a [private OR public] company [limited by shares OR [insert other]] under the name [insert company name on incorporation]. [Insert dates and details of any...

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