Class B Shares

Class B Shares

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I have a question regarding B Shares in a private Ltd company.

Can anyone tell me if the following rules can apply to these types of shares:

  • Dividends can be paid on an infrequent basis separate to their more fortunate fellow ordinary A shares
  • Company can request these shares back at any time without payment
  • Has no voting rights
  • Cannot be transfered

Have a client who wants to pay dividends but not at the same rate or time as their own shares.  They want to retain full control of the company and be able to withdraw the shares from the other party at anytime without buying the shares back.  The other party would be happy with this arrangement.  Is this viable?

Any answers please.

Replies (3)

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By andy.partridge
22nd Mar 2014 08:37

Briefly

My understanding is that Class B shares can have whatever rights the company chooses to bestow on them, subject to its Memorandum and articles.

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By TerryD
24th Mar 2014 11:18

Exactly as above

I agree with the above. A company can, subject to its Articles, issue shares with whatever rights it likes - but the ability to cancel the shares without buying them back would be unusual. Presumably the issuees will be expected to pay for the shares in the first place? HMRC might well think such an arrangement is merely a device to call salaries "dividends".

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By 1stcallaccounts
25th Mar 2014 18:25

Thanks for the comment.

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