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Prescribed particulars (of rights attached to shares)

Hi

I am doing the new style (AR01) Companies House Annual Return for my client.  There is a new question asking to disclose the particulars of rights attached to shares.  The company is a small family based business.  I wonder how much details I need to put in to satisfy the purpose.   Are there any "model" answer possible applicable to most small companies?

I also experience very slow access to the Comp Hse website.  Are you the same?

Any comments?  Thanks in advance.

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06th Oct 2009 11:10

prescribed particulars

There is no standard to the prescribed particulars part of the AR01 form and Companies House won't be able to advise you how to complete it.

Technically you need to refer to the company's articles of association and any shareholder agreements for this information.

At the least it should probably contain information on voting rights, dividend rights and distribution rights. 

Things to consider are:

Do all share rank equally?  What are the voting rights on a show of hands (normally one per shareholder)?  What are the voting rights on a poll (normally one per share)?  Do any shares get preferential dividend or distribution rights?

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07th Oct 2009 13:20

AR01 Prescribed particulars (of rights attached to shares)
Hi

I was also wondering how to complete this part. I contacted companies house by telephone and email. Their response was not very helpful. No model answer exists. I was referred to the companies articles. Here I found a statement that reads

'A director may vote as a director in regard to any contract or arrangement in which he is interested or upon any matter arising thereout,and if he shall so vote, his vote shall be counted and he shall be reckoned in estimating a quorum when any such contract or arrangement is under consideration'

Similar should be found in the articles of association.

Hope this helps. Do not bother with companies house. As usual they dont commit themselves or provide much help.

Richard Williams
RM Accountancy

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07th Oct 2009 15:04

Thanks

Thank you both mookgirluk and Richard of your practical advices.  I would put something similar as per Richard said in the meantime and hopefully someone will cover this at the next CPD course.

 

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By Anonymous
08th Oct 2009 13:37

Could you just put refer to articles of associations

I am also completing one of the new annual returns.

Does anyone think you could get away with 'see detailed Articles of Association'?  These are held at Companies House and are available on line. 

I am not sure.

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You can't refer to another document

I wanted to keep the description of my share classes very top level so I put "voting rights are in accordance with the Shareholder Agreement".  It was rejected by Companies House because they said "the application needs to be a standalone document without referring to another document".

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By Anonymous
08th Oct 2009 16:53

My first one to

I am just cutting and pasting the Share Capital section of the Articles but I am also unsure exactly what I should be doing. I wish I filed this last week.

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By Anonymous
09th Oct 2009 13:25

Prescribed Particulars

I too have found the Companies House website very ponderous since the beginning of the month.  As for the prescribed particulars issue the comment earlier about directors voting doesn't seem relevant to the question of shares and their voting rights. The SI states "the prescribed particulars are the voting rights attached to those shares" - I'm dealing with a simple private company and am going to put simply that "all shares have equal voting rights" and leave it at that.

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09th Oct 2009 14:02

SR02

Dear Mookgirl,

I have just come across this problem too; have searched the internet for specimen/model answers but yours was the only reference (I guess you will be quite famous in the next few months). I answered the question on Prescribed Particulars as follows:

"Ordinary shares:
- Voting: one share = one vote
- Dividends: divided on proportion of shareholding
- Full details in Articles of Association held at Registered Office"

Hope this helps,

Alick

Alick Campbell
Commercial Director
Moneygate Group Ltd.

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By Anonymous
13th Oct 2009 17:29

Voting Rights/Prescribed Particulars

Take a look at http://www.bhis.co.uk/votingrights.htm

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By DBSeear
14th Oct 2009 13:48

AR01 Prescribed particulars (of rights attached to shares)

In response to Richard Williams' comments, doesn't this refer just to the voting rights of a director in a directors meeting and hence is not voting rights attached to shares? And therefore not relevant to the completion of section F4 of AR01.

 

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14th Oct 2009 13:56

Prescribed Particulars

The "Prescribed Particulars....." relate to the rights of the class of shares and are nothing to do with directors voting rights. 

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14th Oct 2009 14:24

Wording for AR01

I had the same issue and there doesn't seem to be any standard wording for a standard company set up. I have devised some wording which you might like to take a look. Go to www.ashfield-accountancy.co.uk and click on Ashfield News. You will be able to cut and paste the wording I have devised if it suits your requirements. It is less than 4000 characters so Companies House should accept it !

Mark Hill -Ashfield Accountancy Service

 

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15th Oct 2009 12:19

I am a luddite

I simply put 'full'

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By MonicaP
15th Oct 2009 19:21

Wording for annual return statement of capital

Hi there,

Thats a really interesting question you've raised.  I think the first thing to have to do is check the rights attaching to each share class in the articles of association.  These should things such as voting rights, dividends, rights on winding up etc.  If as will be the case for a large number of companies the articles are silent I would advise wording such as "full voting rights as set out in the articles of association".  I am yet to file my first annual return post 1st October changes but I hope this wording will be acceptable to Companies House.

I've seen some of the answers to your question and please please be careful of mixing up directors voting rights and shareholder voting rights and reiterating wording from Table A - depending on when your company is formed your company could be incorporated subject to the 1985 Act or the 1948 Act (and both have different table A's) and the statement of capital is asking for details on shareholder voting rights not directors voting rights. 

The first point should always be to check your articles of association and shareholders agreement.

Hope this helps.

Monica

 

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By DBSeear
16th Oct 2009 10:47

My initial interpretation

From my conversation with Companies House, the impresion that they gave me was that this section had been added to the AR following consultation with users of the information. They further said that the idea was that the user would then not have to purchase a copy of the Mem & Arts. Following from this (and I think they also confirmed it to me) any wording just along the lines of "please refer to the Articles" would not be acceptable.

Most of my client companies seem to have adopted Table A. If you include all the relevant sections of Table A (the subsection headed "VOTES OF MEMBERS" the text is too much to fit in the box provided by my software (I'm waiting for comments from software supprot to see what they say). In the meantime I'm completing my first AR under the new regime using Table A 1948 (CA 1976 Amended) and I have decided to condense "Voting rights" to the following:-

"On a show of hands every member present in person shall have one vote, and on a poll every member shall have one vote for each share of which he is a holder. On a poll votes may be given either personally or by proxy. A proxy need not be a member of the company".

Anyone have any comments on this? I think alot of the relevant section of Table A is procedual rather than rights & therefore need not be included.

For reference you can find copies of all Table A's here:-

http://www.companies-house.gov.uk/about/tableA/index.shtml

 

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16th Oct 2009 10:57

What uncertainty

Why are we all surprised about this - ie why have our institutes/CPE providers/software houses not been warning us that this potentially very burdensome requirement was coming?

If we have to trawl the Articles, (& Table A/Model Articles if relevant), and write some form pf precis then the annual Return Regime that was a straight-forward cross-check to CH filings, run report, cleint approves, press button to file has potentially muliplied in terms of the time required.

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16th Oct 2009 12:01

Voting Rights

My understanding is that simply putting "full" is not permitted and will result in the return being rejected by CH.  CH have indicated that just saying "as per articles" or one-word type entries will be spotted and rejected. The text used is supposed to be self explanatory to anyone viewing the annual return without reference to any other documents.

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16th Oct 2009 15:32

"Full Voting Rights" accepted

I have just had confirmation fom CH that they have accepted an annual return on which the rights are described as "Full Voting Rights".

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16th Oct 2009 16:04

Voting Rights - be cautious of Companies House "acceptance"

The fact that CH have accepted a return with "Full Voting Rights" does not necessarily mean that it is the "correct" wording to use. It is likely that CH are so snowed under with the 1st October changes, that they are not giving priority at the moment to checking annual returns.  Furthermore, even if Companies House are "happy" with a return and accept it, one must bear in mind that they do not undertake to check that what is entered for "Voting Rights" is actually correct.  You may find that the return, in future, is queried by either your client (if you are an accountant filing on behalf of a client) or a third party that has relied on the information.  Either way, I would have thought that it was inadvisable to attempt to shortcut the requirement to use appropriate wording.  Companies House have made it clear that the wording used must be such that the voting rights can be understood by anyone looking at the filed return without the need to look any further at previously filed documents. 

The exercise of drafting the wording is a one-off as, unless the articles are changed, the wording will be used in subsequent returns. Rather than viewing this drafting as lost time, I would have thought that it can be viewed as an opportunity to offer clients a chargeable service to review the terms of the articles and draft the appropriate wording.

Ian Burgess
BHIS Ltd.
www.bhis.co.uk

 

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16th Oct 2009 16:13

Generous clients

Ian,

I take on board what you say about CH maybe challenging the voting rights later but, given the fact that the erudite menbers of AWeb are unclear on what is required just imagine the rubbish CH willbe receiving from directors who prepare their own and from accountants who would never think about considering this sort of issue.

You say it is a one-off excercise but that is a one-off excercise that would apply to every Ltd company, and even then will be very subjective and probably need reviewing in later years when there have been precedents set on what is or is not correct form here.

It may be that you have a client base that would be prepared to treat this as an extra service, I know my clients, who are in large number very small Ltd companies, (some in recession-hit cash flow problems), would never be convinced that this is an "added value" service that they should pay more for.

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16th Oct 2009 16:18

Who are the users

A further thought:

Who are the users who would gain from this, in a small company context:

- the owner/directors? - they have absolutely no interest in this, to them it is just so much red-tape

- banks? surely they will not rely on AR data when making lending decisions

- potential acquirers - likewise, even in a tiny company situation the minimum due diligence would go beyond relying on AR data

 

This looks to me like a complete nonsence in the context of a Companies Act that was supposed to be based on small companies with add-ons where needed for larger companies.

 

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By Anonymous
26th Oct 2009 17:19

Any problems with this wording?

We are thinking about using the following wording which would appear to be suitable for most of the companies that we act for being based on Table A.

"All shares issued are non-redeemable and rank equally in terms of (a) voting rights - one vote for each share; (b) rights to participate in all approved dividend distributions for that class of share; and (c) rights to participate in any capital distribution on winding up."

This appears to provide all of the information that CH seem to want in (a) to (d) of their online filing guidance.

Can anybody see any problems with this?

 

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By Anonymous
26th Oct 2009 17:32

Any problems with this wording

As one of the many anons above I can now say that CH failed to respond within their stated service times to my submission that just said "all shares have equal voting rights" which I interpreted, perhaps wrongly of course, that they were having a good look!  Anyway they have now confirmed the return has been accepted......  As for your proposed wording, as I understand it the AR statement is only concerned with voting although the rest of the words that you proferred seem non-contentious and might well be suitable for the other occasions when the full details are required, such as share issue.

 

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By Anonymous
16th Nov 2009 14:59

Any problem with this wording?

The text below comes directly from the guidance notes on the Companies House web filing site, it seems that they are expecting more than just voting rights:

Note 6: Prescribed particulars (of rights attached to shares)

(a) particulars of any voting rights, including rights that arise only in certain circumstances;
(b) particulars of any rights, as respects dividends, to participate in a distribution;
(c) particulars of any rights, as respects capital, to participate in a distribution (including on winding up); and
(d) whether the shares are to be redeemed or are liable to be redeemed at the option of the company or the shareholder and any terms or conditions relating to redemption of these shares.

 

I think that the wording below - quoted in the post of 26/10/09 probably is all required

"All shares issued are non-redeemable and rank equally in terms of (a) voting rights - one vote for each share; (b) rights to participate in all approved dividend distributions for that class of share; and (c) rights to participate in any capital distribution on winding up."

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16th Nov 2009 16:28

Only Voting Rights?

IRIS instructions are that everything beyond the first of these, ie voting rights, is optional.

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16th Nov 2009 16:40

"Voting Rights" - for Annual Returns, "Prescribed Particulars" f

There is a great deal of confusion regarding "Voting Rights" and "Prescribed Particulars" by users of our company secretarial software, so much so that we have drafted a guide on our website that hopefully clarifies matters - take a look at http://www.bhis.co.uk/votingrights.htm

Ian Burgess
BHIS Ltd.
www.bhis.co.uk

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By Anonymous
19th Nov 2009 23:15

Bhis guidance Voting rights/ prescribed particulars

The guidance on the Bhis link mentions that there has been an amendment to Companies Act 2006 so that it is now only necessary to provide voting rights on the Annual Return.  Does anyone know when was it amended - can you give details of the new legislation please?

 

On another note I've purchased an Annual Return filed mid October with a made-up-to date of 3 October.  It has the following info in the Statement of Capital:

Number allotted  100

Aggregate nominal value   100

Amount paid 0,

Amount unpaid 0,

Prescribed particulars None,

Full details of shareholders as at 03/10/2009 is blank.  

It was advertised as a full list!  Full of holes? 

 

MM

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24th Nov 2009 14:32

Prescribed particulars (of rights attached to shares)

I have now filed a few Annual Returns and have used the wording "Shares have full voting rights" and these have been accepted by CH.  I then rang to confirm that the wording I had used was acceptable and they confirmed "yes" but when I initially asked for guidance they refused.

 

Good luck!

 

Linda

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01st Dec 2009 11:45

Yet more time wasted

Yet another wadge of unnecessary form filling. Yet another deadline date for major changes. Yet another bunch of civil servants justifying their existence and adding jack to the sum of the worlds accumulated wisdom.

I've just filed my first AR01 and used the following wording:

"Voting rights: Each ordinary share carries the right to one vote to be exercised in accordance with sections 54 to 63 of the Articles Of Association.
Dividend & Distribution rights: Each ordinary share carries rights to dividends & distributions (including on winding up) pro-rata to the total number of ordinary shares in issue. These rights are governed by sections 102 to 108 and section 117 of the Articles Of Association."

This was after trawling the web; finding no help whatsoever; referring to the Articles and making up my own; being logged out of the CH website because I was taking too long (luckily I'd pasted it into word because I saw them coming); and then finding out from Linda above that they'll accept "Full Voting Rights"!!

I'm not sure that that last response of "Full Voting Rights" will hold water for very much longer though. Surely these hypothetical people (Lets face it - non-existant) who want to know all this stuff need to be provided with the full monty and as this is contained in text that runs way over the alloted space then my reply was a compromise.

And has the last hour been charged to the client? I know what the response will be. And it will be in Olde English.

 

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08th Jan 2010 10:45

How about

All shares rank parri passu and have unrestricted rights.

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08th Jan 2010 11:02

Statement of capital (Prescribed particulars of rights attached

The exact answer of course depends on the Articles, but for a "model answer applicable to most small companies" I have been using the following:

(a) and (c) One vote per share, with residual interest

(b) Equal rights to dividends

(d) No option to redeem

 

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By mohan1
08th Jan 2010 11:02

The rights attached to all shares rank pari passu

Assuming that the company has not issued any shares other than ordinary shares. maybe "The rights attached to all shares rank pari passu" should be adequate.

I do not see what significant adverse consequences can result if the above is inadequate.

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By Anonymous
08th Jan 2010 11:09

any old tosh

is "accepted" by Co Ho in the sense it is not rejected.  'twas ever thus.  Have you seen some of the accounts that are not rejected??!!  The only things they check are that boxes have been filled, and that (in the case of accounts) the non-audit requirment clause is inserted (and, in th ecase of hard copy accounts filed, that a signature is there - another reason for filing online!!).

The lack of rejection does not of course mean the filings are compliant with the law.

Assuming there is just one class of share with equal rights, then frankly whatever nonsense is written, I cannot foresee there would be any repercussions of any practical significance at all.  So I certainly would not agonise over it.   Something along the previous posters brief comment is more than adequate for purpose.  If some standard template emerges, all well and good.  But don't spend any time at all in worrying about it.

Of course, if there is more than one class of share, some care is required, as it is possible to foresee (however extremely remote) that something just possibly might arise from materially wrong commentary even in a close held company.

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08th Jan 2010 11:12

I am a luddite too!!

I just put "Full". CH rejected it saying they needed details of voting rights - I sent the AR back again with a big red circle round "Full" and a red note saying that this information had been provided and they accepted it.

What a waste of everybody's time.

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By okevin
08th Jan 2010 11:28

.

I just put the words "As per Articles of Association"!

Nobody has complained so far! LOL.

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By Anonymous
08th Jan 2010 15:20

Prescribed particulars

My company formation agents suggested the following wording which applies to most small companies - "Ordinary shares have full rights in the company with respect to voting, dividends and capital distributions".

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By jafair
08th Jan 2010 16:11

A&B shares

"Full" is not enough.  the minimum for ordinary shares as suggested above is something like: " Full voting rights; Full dividend rights and full rights to a capital distribution upon winding up".  If you have different classes of shares (and many have different shares so husbands and wives can have different dividends), then you need to copy the paragraph which may be in share capital in the old form of memorandum and may be in the articles covering rights to dividends.  I also have some clients where the children hold a class of shares which are entitled to dividends but have no voting rights and also clients where A shares take precedence over B shares upon a winding up.

So there is no model answer, but you need to know the rights for tax planning and retirement planning anyway so its not a waste of time to go back to the company's constitution.

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08th Jan 2010 16:31

Simpllification

So do I

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30th Jan 2010 14:09

BUREACRATIC CLAPTRAP

Hi

I am not an accountant I am just a normal guy that needs to have a company as to invoice as I work over seas and there needs to be company invoicing etc. I have been reading the comment above with such interest. I have had my AR rejected twice this year and 3 times last year. I have a friend who is a solicitor and she advised I should look at my articles, having thoroughly scanned them I find shockingly there is nothing in my articles which covers the voting rights. So I am going to resubmit the AR with the following:

"All shares have full and equal voting rights in all circumstances"

Hope this works as I am fed up that I have to pay another £30 pounds everytime I send CH this form, which by the way contains only information that they already have on file. Would it not just be simpler to use forms to advise changes, and then just sign off each year that nothing has changed since the previous year, this is how things are done overseas, why do us britsih keep on insisting on letting the authorities treat us as children.

By the why does any one know if I have the rights to claim back a repayment on all the registration fees that I have paid this year and last year. If I do can anyone advise how to do it , as I am sure that I am not the only person suffering in this way and that CH must be making a fortune. 

 

 

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By jafair
01st Feb 2010 19:21

Companies House fees

I am sure you only have to pay once to file a return and the fee is held over to your credit if the form is bounced.  The companies house call centre is 0303 1234500, and they're pretty helpful on the whole.  Another thought - you could always pay an accountant to file your return which leaves you free to run your business.

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By Joss
18th Jun 2010 16:26

OK how about this?

I have just submitted this for my prescribed particulars of shares:

The company's Articles of Association are drawn from table A of the Companies Act 1985, as amended. Please refer to Table A and to the Articles of Association for information regarding the prescribed particulars of shares.

I reckon that covers it? I am not a qualified company secretary and I think I risk breaching the limits of my professional indemnity as an accountant if I attempt to be. The Companies Acts have been drawn up and then amended over many years. How can CH expect us to provide a comprehensive and legally correct answer in this box without possibly overlooking something. I think this box is very dangerous and could potentially mislead the users of these returns.  We should refer users to the Articles of Association at all times.

Joss

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Digested answers - quick reference article

As you can see from the popularity of this item (c50k hits in October 2010), this issue has caused a lot of grief for AccountingWEB.co.uk members and the wider business population. Thanks to oscaripco for raising it in the first place, and to all the participants in this discussion over the past year who have shared their advice.

We asked Jennifer Adams FCIS to compile the advice presented here and elsewhere into a shorter digest article. So if you just want a quick answer on what to put in the relevant section of the form, please have a look at her article Rights and particulars: How to fill in form AR01.

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By Joss
11th Nov 2010 11:15

Companies House Guidance now says...

Source on 11/11/2010: http://www.companieshouse.gov.uk/about/gbhtml/gp2.shtml

6. What information does Companies House require about share capital?

Every company with a share capital must complete a statement of capital as part of the annual return. This includes:

a) the total number of shares of the company;

b) the aggregate nominal value of the shares;

c) tor each class of shares:

the voting rights attached to the sharesthe total number of shares of that class; andthe aggregate nominal value of shares of that class, and

d) the amount paid up and the amount (if any) unpaid on each share (whether on account of the nominal value of the share or by way of premium).

If a company has converted shares into stock, it must give the corresponding information in relation to that stock, stating the amount of stock instead of the number and nominal value of the shares.

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14th Dec 2013 12:06

I usually put "each fully

I usually put "each fully paid ordinary share has one vote and qualifies pari passu in respect of dividends and capital distributions".

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In simple cases (i.e. where there is only one class of shares) I just say "ranking pari passu in all respects", which, unless I am missing anything, says it all, and further elaboration would be superfluous.

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