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taxadvisor.uk, Chartered Certified Accountant
Category: Tax
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Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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I have a limited company with 3 share classes: Ordinary

Resolved Question:

I have a limited company with 3 share classes:

Ordinary - 3 SHares
Ordinary Class B - 1 Share
C Ordinary - 3 Shares.

After reading up and doing some research, I realise that I should only have 1 share class,
Ordinary (of which I want a to have a total of 8 shares).

How do I go about doing this?
Submitted: 3 years ago.
Category: Tax
Expert:  taxadvisor.uk replied 3 years ago.
Hello and welcome to the site. Thank you for your question.

Please advise
- if you are the only shareholder and that all holdings are in your name;
- do all classes of shares carry same rights?
- what was the rationale for having three classes of shares in the first instance.

At present you have 7 shares in issue.. you wish to have a total of 8 shares and in one class.. is it your intention to issue an additional share?

Many thanks
Customer: replied 3 years ago.

Currently I have 2 Ordinary Shares.
My wife has 1 Ordinary Share and 1 Class B Share.
My mother, father and father in law have a class C share each.


 


I started contracting via a ltd company since October 2013 and as I had already had PAYE earnings that had taken me above the 40% threshold, I paid my wife dividends via the class B share.


 


I intend to pay my parents and father in law dividends as of next tax year. This money will not be paid back to me or my wife in any way shape or form.


 


I recently read about the Arctic Systems case and after researching, the advice seems to be that having multiple share classes is not recommended.


 


I want to move to a situation where I have a single ordinary share class with the following allocation:


 


Me : 3 shares
Wife: 2 shares.
Mum : 1 share.
Dad: 1 Share.
Father In Law : 1 Share.


 


So I will need to issue an additional share.


 


Currently share class B has no voting rights and share class C has no voting and no entitlement to distributions. However, I am happy to effectively have those restrictions waived and all shares to be ordinary voting shares.

Expert:  taxadvisor.uk replied 3 years ago.
Amir, thank you for your reply.

I will revert to you with my recommendation/action to take in the morning.
I hope this is acceptable.

many thanks
Expert:  taxadvisor.uk replied 3 years ago.

Amir, thank you for your detailed reply and your patience in receving my answer.

Basically, you wish to rename various classes of shares into one class ie. Ordinary shares.

You need to pass an ordinary resolution and rename the Class B and Class C shares into ordinary shares. They will then carry the rights of ordinary shares.

You file Form SH08 at Companies House.

More information on the form and guidlines for completing form SH08 can be found here

Form SH08

http://www.companieshouse.gov.uk/forms/generalForms/SH08_notice_of_name_or_other_designation_of_class_of_shares.pdf

Guidance on completing form SH08

http://www.companieshouse.gov.uk/infoAndGuide/faq/SH08Checklist.shtml

Allotment of new shares (one additional share)

Complete and file Form SH01..it can be downloaded here

http://www.companieshouse.gov.uk/forms/generalForms/SH01_return_of_allotment_of_shares.pdf

I hope this is helpful and answers your question.

If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.

Customer: replied 3 years ago.
Can I file the SH08 form online?
Expert:  taxadvisor.uk replied 3 years ago.
Amir, thank you for your reply.

It appears you are unable to file Form SH08 online.

You will have to download the form, complete the sections as appropriate, print the document and send it by post.

Forms that can be filed online are listed here

http://www.companieshouse.gov.uk/forms/introduction.shtml

I hope this is helpful and answers your question.

If you are happy and there are no more issues I will appreciate if you would kindly rate the service I provided to ensure I get credited for it.

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