Client company has say 100 shares in issue, of which 92 are A Ordinary shares; remaining 8 are B, C and D Ordinary shares. All have the same rights and values. Client now wishes to make a change which would leave only 90 A shares in issue along with the 8 B,C and D, and 2 E Ordinary shares. The authorised capital (pre Co. Act changes) includes A,B,C,D,E and F classes.
Would it be acceptable to issue 2 E shares as fully paid up, the consideration being the 2 A shares?
Replies (3)
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Share Swap
The simple answer is no. Without knowing what you are attempting to achieve by the restructure, it is impossible to advise.
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share swap
You cannot re-designate part of a class of shares. Class rights are governed by the articles of association and are applicable to the whole of that class. Class rights have to be altered by the articles of association and apply to the whole of that class.
As all shares have the same rights and values, I am not uncertain as to the overall objective. I also wonder what happened to the original ordinary share (s). Presumably they became the A Ordinary.
Depending upon the tax implications, it might be possible for the company to purchase two A Ordinary and issue two new E Ordinary shares. The other possibility instead of the company purchasing the shares, the A Ordinary Shares could be transferred (with holdover relief if necessary) to the required beneficiaries.