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No rights on winding up etc

No rights on winding up etc

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Hi

I've just taken on a new client where it is a very small one man band company which the director incorporated themselves using an online formation agent.

On checking the incorporation documents at Companies House the prescribed particulars of the one issued share are:

One share = one vote, equal rights to dividends, so long as there are no rights attached to share on winding up etc or redemption rights.

I understand what the above means but my question is why would a standard company formation not leave the rights on winding up as standard for the shares?

Is there some benefit to this as it is not the only time I've seen it.

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By johngroganjga
14th Jul 2015 13:59

Is the above wording a literal quote, in which case is is appallingly drafted?

It makes no sense for a company to have not a single shareholder entitled to its assets on a winding up.

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By TTID
14th Jul 2015 14:48

Slightly different but pretty much the same......

Hi John,

Thanks I wasn't sure if I'd missed a trick somewhere!!

The literal quote as per the incorporation documents is:

"One share equals one vote, each having rights to dividends. So long as there are no rights attached to shares on winding-up etc or redemption rights."

And yes I agree it makes no sense but sometimes you see these things and it makes you wonder if someone knows something that you don't.

Thanks to you, my sanity has been restored!!

 

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