Sub-division and consolidation of shares


Published by a ³ÉÈËÓ°Òô Corporate expert
Practice notes

Sub-division and consolidation of shares


Published by a ³ÉÈËÓ°Òô Corporate expert

Practice notes
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There are a variety of ways in which a limited company having a share capital may alter that share capital in accordance with the provisions of the Companies Act 2006 (CA 2006).

The restrictions in CA 2006 relating to alterations of share capital do not apply to unlimited companies. For further information on this type of company, see Practice Note: Unlimited companies.

Sub-division and consolidation

It is possible to sub-divide or consolidate all or any of the shares of a limited company having a share capital in accordance with CA 2006, s 618.

An alternative method of sub-dividing and consolidating shares is by scheme of arrangement approved by the court under CA 2006, Pt 26 or a restructuring plan under CA 2006, Pt 26A. A scheme of arrangement is a process generally used to facilitate mergers and takeovers or to restructure a company in financial difficulties. It is also possible to restructure a company in financial difficulties using a restructuring plan. For further information on schemes of arrangement, see Practice Note: Schemes of arrangement—nature and key statutory requirements.

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Jurisdiction(s):
United Kingdom
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Key definition:
Consolidation definition
What does Consolidation mean?

Where a company increases the nominal value of its shares and reduces the number of shares in issue by consolidating holdings. For example, five 5p shares might be consolidated into one 25p share.

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