Form with which a corporation may alter the amount of outstanding shares issued by the corporation.
Change Class Of Shares In Broward
State:
Multi-State
County:
Broward
Control #:
US-0034-CR
Format:
Word;
Rich Text
Instant download
Description
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FAQ
Shares can be converted from one class to another by way of special resolution or by lodging a notice with ACRA. However, non-redeemable preference shares cannot be converted into redeemable preference shares.
This process is most commonly referred to as a 'redesignation', 'reclassification', or 'renaming' of shares. It involves converting issued shares from their existing class, i.e. 'type' or 'classification', to a different one.
Share classes are a way of assigning different rights to different stockholders. They can address issues such as voting authority, dividends and rights to the company's assets and capital.
The shares of Class A common stock may be converted into shares of Class B common stock at any time on a share for share basis, and several shareholders (A shareholders) will convert their Class A common stock into Class B common stock immediately after the transaction ("initial conversion").
A company can create any number of classes of shares of common stock. The decision is usually made to concentrate voting power within a certain group of people.
Companies may divide their ordinary shares into different classes (e.g. “A” and “B”) with different rights attached to each class. Preference shares confer certain preferential rights on the holder, which are superior to those of ordinary shares.
Subject to shareholders consent, a company can create many different classes of ordinary shares. Known as alphabet shares, (A, B, C etc.) this impacts on shareholders: Entitlement to dividends.
How to change classes of shares. If the directors wish to change the classes of shares described in the articles, or any of the rights attached to a class of shares, an amendment to the articles (see Amending your articles) of the corporation will be required. A special resolution of the shareholders is needed.
Different Classes of Shares. After a company gains the consent of its current shareholders, it can create infinite classes of shares. These classes of shares are typically alphabetised and often contain varied rights to suit a specific company structure.
A company should set out the classes of shares which it has the power to issue, and the rights attaching to those classes, in its articles of association; if the desired classes are not set out therein, the articles must be amended properly to include them.