Share Issuance/Share Restructuring

There are many reasons why having shares of only one class is not appropriate for certain companies.

Some businesses may wish to have an “alphabet share structure” whereby different levels of dividend are distributed to different classes of share (A,B,C,D etc.) according to the wishes of the Board. These are commonly used to incentivise employee shareholders.

Alternatively, it may be appropriate to have preference shares, which carry a preferential right to a dividend, but do not carry voting rights unless the dividend is not paid – these can be used to pay departing shareholders “on the drip”.

UK company law allows for perfect flexibility in determining the rights of shares – whether participating in dividends or not, getting a preferential dividend, receiving a fixed dividend, receiving a lesser dividend after other share classes have been paid out, having voting rights or not.

We have extensive experience of advising on different share structures, putting them into place, and advising on their impact in respect of shareholder class rights.