{"id":10703,"date":"2023-09-27T20:15:56","date_gmt":"2023-09-27T19:15:56","guid":{"rendered":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/?p=10703"},"modified":"2024-05-17T15:39:34","modified_gmt":"2024-05-17T14:39:34","slug":"issue-multiple-share-classes","status":"publish","type":"post","link":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/issue-multiple-share-classes\/","title":{"rendered":"How to issue multiple share classes when setting up a company"},"content":{"rendered":"
The vast majority of new companies are set up with a single class of shares known as \u2018ordinary\u2019 shares. This class provides equal voting and dividend rights to all shareholders, proportional to the number of shares they hold. However, if you want to vary the rights of shareholders, you can issue multiple share classes when setting up a company (or at any time thereafter).\u00a0<\/span><\/p>\n In this post, we explain the reasons why some companies issue different types of shares, before going on to discuss the steps required to form a company with multiple share classes online. \u00a0<\/span><\/p>\n The rights of company shareholders are determined by the types (classes) of shares they own, and how many. There are several share classes available, each of which carries specific rights, thus enabling companies to provide different rights to different shareholders, if required. \u00a0<\/span><\/p>\n Most companies have only ordinary shares. This share class is entirely suitable for the majority of small companies, particularly those with only one or two shareholders who participate equally in the business.\u00a0<\/span><\/p>\n Setting up a company with ordinary shares keeps things simple and is much easier to manage. However, some companies have more complex ownership structures, which may necessitate the use of multiple share classes.\u00a0<\/span><\/p>\n Understanding limited company shares<\/span><\/a>\n Why do companies use multiple share classes?<\/span><\/a>\n What rights do shareholders of a company have?<\/span><\/a>\n <\/p>\n By issuing multiple share classes, you can vary the rights of shareholders in your company. These rights include:<\/p>\n There are many reasons why companies may choose to vary shareholders\u2019 rights and create different types of shares, whether during or after incorporation. For example:<\/p>\n It\u2019s easy to overlook these types of considerations when you\u2019re setting up a company for the first time – especially when going into business with close friends or family members who you trust implicitly. But this does leave the door open to potential disputes further down the line.\u00a0<\/span><\/p>\n Therefore, unless each and every shareholder in your new company is going to participate equally in the business, you should consider issuing multiple share classes during the company formation process.<\/p>\n Can I transfer shares to my spouse?<\/span><\/a>\n Benefits of a Save As You Earn (SAYE) share scheme<\/span><\/a>\n Can I sell shares in a private limited company?<\/span><\/a>\n <\/p>\n You can, of course, create different types of shares after incorporation to reflect the changing needs of your business. However, it\u2019s much harder to change the rights of existing shareholders after the fact, so bear this in mind.<\/p>\n At Quality Company Formations, we offer a range of packages to suit every type of company. This includes our specialist Multiple Share Class Company Package<\/a>, which is ideal for setting up a company with more than one class of share and bespoke articles of association.\u00a0<\/span><\/p>\n Using our 4-step company formation process<\/a>, you can form a company with multiple shares online in under 24 hours. Simply choose a company name, select and pay for the package, and spend 5-10 minutes entering the following information on our company registration form:<\/p>\n You will also be required to upload your own articles of association – the standard \u2018Model\u2019 articles<\/a> can only be used by companies incorporating with ordinary shares.\u00a0<\/span><\/p>\n If you do not have suitable articles of association, please contact our Company Secretarial Team on 0203 984 5389 to purchase bespoke articles using our Drafting Service.<\/p>\n\t\t For further guidance on the information you need to enter on the application, please read our\u00a0Company Formation Checklist<\/a>. You can also call or chat online with our friendly UK-based team if you are unsure about anything or need additional help.\u00a0<\/span><\/p>\n Can you set up a limited company with one person?<\/span><\/a>\n How long does it take to set up a limited company?<\/span><\/a>\n What happens after you set up a company?<\/span><\/a>\n <\/p>\n Upon completing your registration form, we will perform a free pre-submission review and then send it to Companies House for approval. In most cases, applications are approved within 24 hours.<\/p>\n When your company has been successfully incorporated, we will send you a full set of digital and printed company formation documents. This includes the certificate of incorporation, memorandum and articles of association, and share certificates.\u00a0<\/span><\/p>\n You will also enjoy access to our Online Client Portal, where you can view and manage your company details, as well as free support from our team of experts for the lifetime of your company.\u00a0<\/span><\/p>\n If you have any questions about this post or need help setting up a company with multiple share classes, please leave a comment below or get in touch with our company formation team.\u00a0<\/span><\/p>\n"},"excerpt":{"rendered":" The vast majority of new companies are set up with a single class of shares known as \u2018ordinary\u2019 shares. This class provides equal voting and dividend rights to all shareholders, proportional to the number of shares they hold. However, if you want to vary the rights of shareholders, you can issue multiple share classes when…<\/p>\n","protected":false},"author":10,"featured_media":10713,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false},"categories":[141],"tags":[],"class_list":["post-10703","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-shares-shareholders","category-141","description-off"],"acf":[],"yoast_head":"\nSetting up a company with different types of shares<\/h3>\n
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How to set up a company with multiple share classes online\u00a0<\/span><\/h3>\n
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Thanks for reading\u00a0<\/span><\/h3>\n