Class rights and variation of class rights

Published by a ��˾��ҹ�� Corporate expert

Practice notes

In-house

Class rights and variation of class rights

Published by a ��˾��ҹ�� Corporate expert

Practice notes

In-house

A company having a share capital may have different classes of share, with different rights attaching to each class. A company without a share capital may have separate classes of member holding different rights.

The existence of different classes of share or different classes of member in a company may give rise to the existence of class rights. If class rights exist, they may only be varied as permitted by the Companies Act 2006 (CA 2006).

Different types of shares

Shares in a limited company having a share capital will always have a fixed nominal value (as required by CA 2006, s 542) and will usually be given a designation (or name), eg ordinary shares of £1 each.

The nominal (or par) value represents the fixed monetary amount by which a share is denominated and represents the shareholder's liability to contribute to the assets of the company on its winding up. Any excess paid or agreed to be paid for the share on its allotment over and above its nominal value is share premium.

The

Jurisdiction(s):

United Kingdom

Key definition:

Class rights definition

What does Class rights mean?

A company having a share capital may have separate classes of shares. A type of share will form a separate class if the rights attached to it differ from those attaching to other shares of the company. Different classes include ordinary shares, preference shares, deferred shares and redeemable shares.

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