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New class of shares - no resolution filed

Previous accountant filed only SH01 form and not the special resolution

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This happened in a small company with only a husband and a wife.

Back in 2016 a new class of shares was issued (resulting in 100 Ordinary Shares and 100 Ordinary A Shares with the same rights) and form SH01 filed at Companies House.

At the same time wife transferred 50 of her Ordinary shares to husband and herself was alloted 100 Ordinary A Shares shares.

As a new accountant, do I file the special resolution to Companies House dated back in 2016 regarding issue of a new class of shares? Will there be any penalty for late filing?

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By Matrix
02nd Apr 2019 20:46

Were the articles amended?

If not then I would tell the client that there is, and only ever has been, one class of shares.

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to Matrix
03rd Apr 2019 09:42

I'd put it slightly differently.

Did the Articles permit two classes of shares ?

If not then I would tell the client that there is, and only ever has been, one class of shares.

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04th Apr 2019 17:22

I think it was a standard articles, in the shares section it says:
21. Further issues of shares: authority

21.1 The following paragraphs of this Article 21 shall not apply to a private company with only one class of shares.
21.2 Subject to Article 21.1 and save to the extent authorised by these articles, or authorise from time to time by an ordinary resolution of the shareholders, the directors shall not exercise any power to allot shares or to grant rights to subscribe for, or to convert any security into, any shares in the company.
21.3 Subject to the remaining provisions of this Article 21 and to Article 22 (Further issues of shares; pre-emption rights) and to any directions which may be given by the company in general meeting, the directors are generally and unconditionally authorised, for the purpose of section 551 of the Companies Act 2006 to exercise any power to offer or allot, grant rights to subscribe for or to convert any security into; otherwise create, deal in, or dispose of. any shares in the company to any person, at any time and subject to any terms and conditions as the directors think proper.

There was no amendment filed but the company paid different amounts of dividends to shareholders in those different classes without any waivers issued.

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to deeagle.co.uk
04th Apr 2019 17:39

deeagle.co.uk wrote:

There was no amendment filed but the company paid different amounts of dividends to shareholders in those different classes without any waivers issued.

Oh dear.

Those dividends - or at the very best interpretation, part of them - were unlawful.

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to lionofludesch
04th Apr 2019 19:44

The client argues that the Articles were amended but not successfully delivered to Companies House, lost in post or else. I am thinking of submitting a late resolution of changing the articles along with the new articles showing clearly new classes of shares, dated where SH01 form was filed electronically... any ideas on this solution? Would there be any penalties for that?

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By Matrix
to deeagle.co.uk
04th Apr 2019 20:28

I don’t think it is about penalties but ethics.

You are running a new practice (good, professional website), don’t compromise your professional integrity or clients will always try and get the better of you.

Were there sufficient reserves for waivers? Have tax returns been filed with these dividends? I assume so.

Unless the owner or the previous accountants can find the paperwork then there is no new class. If the SH01 was filed electronically then I would assume that nothing was sent by post and, as I assumed in my original reply and proved to be correct, the previous accountant did not know what they were doing.

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By MC1
05th May 2019 18:23

This is not my area of expertise but is it not the case that the date the resolution is passed (and not the date that it is filed) is the effective date?

According to a quick google search, apparently this case seemed to indicate that:
http://www.bailii.org/ew/cases/EWHC/Ch/2016/2983.html

I haven't read the case so it might be completely irrelevant but thought I would include the link in case it helps.

What do the others think the penalties for late filing would be?

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