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difference number of shares but same dividend level required

two shareholders. They both want £3000 dividend in total. But one owns 4 shares and the other 6 shares.  I have set them up as A ordinary shares. Is it possible to amend one shareholder to have B shares and declare the A and B shares at different amounts per share so that it comes to £3000 each in total?



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By imbs
21st Dec 2012 15:00

please ignore this question!

an identical question has been asked a few questions down on the list with answer from Euan



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21st Dec 2012 15:05

Not sure I would do that...

Just have 6 additional Ordinary A shares issued to the main shareholder and 4 additional Ordinary B shares issued to the minority shareholder. These should be both issued and paid up. Valuation is up to you, I normally set these up at the time of initial registration so that they are just 1 pound shares.

Alternately have half of each shareholders shareholding exchanged for Ordinary A and Ordinary B shares respectively (this needs more work to avoid a capital gains charge arising).

Both the Ordinary A and Ordinary B should have equivalent voting rights (i.e. pari passu) to the original Ordinary shareholding. Thus the overall percentage of shares held is constant, but the shareholders can now nominate dividends to each class of share (Ordinaries, Ord A or Ord B)

Board meetings could then distribute profits solely based upon % shareholding (Ordinaries only), to the majority shareholder (Ordinary A only) or to the minority shareholder (Ordinary B only).

Don't forget the board minutes and the dividend vouchers...


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By imbs
21st Dec 2012 15:07

so i will have to amend the articles of association then isnt that correct?

I think I can just used the model articles but amend the wording in the share holding seciton and rights?

Are there any tax implications on the shareholder changing his shares from A to B because he is currently classed as an A ord shareholder?

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28th Dec 2012 07:25

reporting share issues etc.

How about:  Issue non-voting (to preserve A’s control) redeemable (at par at the company or holder’s option, so you can report value on form 42 as face value and nil benefit) ‘B’shares; this can normally be done by passing a written resolution, maybe using a form from the Companies House web site.

Changing company articles:  I doubt there is a problem there, why not tell us what you think it is.

Tax:  Share issues, re-categorising etc. should be reported on form 42, P11D and tax returns.  If you value the benefit as nil, best to give details in the white space of the tax return.

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