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Do I need to amend the articles after subdivision?

Client wants to subdivide the £1 ordinary shares into 10 x 10p shares but not the £1 A class shares

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A client has 2 x £1.00 ordinary shares with full voting rights and then 4 x £1 A shares with no voting rights.

They are looking to subdivide the ordinary shares 10 / 1 (10p nominal value) - but the A shares would ideally remain as £1.

I have read the amended articles (issued when the A shares were alloted by a prior accountant) and can see nothing to prohibit this but wonder if the articles would then need to be updated to reflect the change in nominal value of the ordinary shares.

Thank you in advance.

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By The Dullard
13th May 2022 17:53

Do the articles mention the what shares they are and what their nominal values are? Modern articles usually stay pretty silent.

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By More unearned luck
14th May 2022 13:50

Since there are two classes of share in issue with differing rights, it seems unlikely that this company's arts are silent.

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By The Dullard
16th May 2022 10:56

With post-2006 articles, the rights of shares can be specified in a resolution, without needing to be incorporated into the articles. Multiple such resolutions are, of course, a possibility, and the company is required to maintain a register.

Article 22(1) of the model articles (which are otherwise silent about shares, save for article 22) reads:
"Subject to the articles, but without prejudice to the rights attached to any existing share, the company may issue shares with such rights or restrictions as may be determined by ordinary resolution."

In this case, the ords would probably be the subscriber shares which the articles no longer need to mention and the A ords could have been issued subsequently with just a resolution.

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Replying to The Dullard:
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By EllaB
16th May 2022 09:16

Hello

Yes in the introduction it says 'ordinary shares means the ordinary shares of £1 each in the capital of the company'

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By The Dullard
16th May 2022 10:57

So, you're asking if you can subdivide the ordinary shares into 10p shares and leave the bit that you've just quoted there? No, I don't think you can.

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By EllaB
18th May 2022 16:14

Thank you.

That was my thought but I am grateful for the clarification.

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