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Share Allocation

I am not sure if this is a subject raised before (and after typing this up, I will have a proper look) but a very quick/simple question.

Father and Mother are directors in a Company. Own equal shares and receive annual dividends. First child is now working for the Company but is not a share holder. Second child has no intention of working for the Company nor indeed is she a share holder. If the two children (over 18) become shareholders to enable them to receive dividends, how is the best way to do so. Gift some of the existing shares from the parents or alternatively, issue some B shares. Either way, what are the practicalities ? A simple Companies House procedure ? Call an EGM ?

Thank you in advance.


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11th May 2012 16:21

Check the Articles of Association

You would firstly need to check the company's Articles of Association to see if there are any restrictions on share allotments or transfers, i.e. check that the directors have the authority to allot shares or if there are any pre-emption rights on share allotments etc.

If not, then the parents can either transfer some of their shares by completing stock transfer forms or can, in their capacity as directors, allot shares in the company to their children. If carrying out an allotment, the children would usually sign share application forms applying for shares in the company and then the board would approve the allotments by way of holding a board meeting or by passing written resolutions. The return of allotment should then be filed at Companies House within one month of the date of allotment.

I hope this helps.

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