What classes of shares do you allow for?

Nine classes of shares are provided for in all standard companies. This anticipates and prepares the company for various changes to the composition of shareholders and other changes which may arise over the life of the company, avoiding the need for (and expense of) creating the most commonly needed classes of shares in future years.

The classes are:

  • ordinary shares with all normal dividend and voting entitlements. This is the class of share most commonly used in all types of companies.
  • A to F class shares – these all have the same right to receive a dividend at a rate different to that paid on the ordinary shares. These shares allow for dividend streaming. Although the holders of the same class of share must receive the dividends paid at the same rate, a different rate can be paid to the holders of different classes. For example, if there is a holder of A, B and C class shares, the holder(s) of A class shares may receive a dividend of 10 cents per share; those holding B class shares may receive no dividend; and those holding C class shares may receive a dividend of 50 cents per share. Those rates can be altered for each dividend payment. These shares do not confer any entitlement to vote.
  • G and H class redeemable preference shares – these generally do not confer an entitlement to vote, but do confer an entitlement to receive dividends in priority to all other shareholders. These shares can be redeemed at the Company’s option.

Other than ordinary shares, no classes are entitled to share in the surplus assets in a winding up of the company.