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leanne-jones
leanne-jones, Barrister
Category: Law
Satisfied Customers: 183
Experience:  Barrister
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A company with 4 classes of share. Ordinary, Ordinary A, B

Customer Question

A company with 4 classes of share. Ordinary, Ordinary A, B &C has 3
directors

Director A has 100 Ordinary c shares plus 50 ordinary shares

Director B has 100 Ordinary b shares plus 25 ordinary shares

Director C has 100 ordinary A shares plus 25 ordinary shares

The company has model articles. Question is who owns the company and what
happens if there is a dispute and directors b and c want director a out,
what claim does director a have against the company?

Any help would would welcome.
Submitted: 4 years ago.
Category: Law
Expert:  leanne-jones replied 4 years ago.
Hello - my name is Leanne and it will be my pleasure to assist you today.

They all own the Company, as they are shareholders.

But Director A has a total of 150 shares, B 125 and C 125.

So A has more than the others. If there is a dispute then it would be dealt with according to the Memorandum and Articles of Association.

This means that normally there would be an EGM to get rid of a Director. At an AGM you normally need 75% for a proposal to pass. Clearly here you would never get that.

So any dispute would be in accordance with the Articles etc which should set out what would happen in such an event.

Either the company would be valued and Director A is bought out or everything remains as it stands.

If I can be of any further help please do not hesitate to contact me.

Customer: replied 4 years ago.

There is no distinction in the memorandum and articles between classes of share, no certificates have been issued, i'm confused as to why these different classes exist and what effect they have in terms of control of the company. I thought class c shares gave no real voting rights or power?


 


 

Customer: replied 4 years ago.

There is no distinction in the memorandum and articles between classes of share, no certificates have been issued, i'm confused as to why these different classes exist and what effect they have in terms of control of the company. I thought class c shares gave no real voting rights or power?


Expert:  leanne-jones replied 4 years ago.
You have several types:

Ordinary shares
Non-voting shares
Redeemable shares
Preference shares
Deferred ordinary shares
Management shares

It really depends on how the class is defined. But the memo should say what class is for what and what rights are attached.

It will all be in the memo and articles.

I hope this clarifies for you.

Expert:  leanne-jones replied 4 years ago.
I'm just following up with you to see how everything is going. Did my answer help?


Leanne