Sub-division and consolidation of shares


Published by a ÀÏ˾»úÎçÒ¹¸£Àû Corporate expert
Practice notes

Sub-division and consolidation of shares


Published by a ÀÏ˾»úÎçÒ¹¸£Àû Corporate expert

Practice notes
imgtext

There are a variety of ways in which a limited company having a share capital may alter that share capital in accordance with the provisions of the Companies Act 2006 (CA 2006).

The restrictions in CA 2006 relating to alterations of share capital do not apply to unlimited companies. For further information on this type of company, see Practice Note: Unlimited companies.

Sub-division and consolidation

It is possible to sub-divide or consolidate all or any of the shares of a limited company having a share capital in accordance with CA 2006, s 618.

An alternative method of sub-dividing and consolidating shares is by scheme of arrangement approved by the court under CA 2006, Pt 26 or a restructuring plan under CA 2006, Pt 26A. A scheme of arrangement is a process generally used to facilitate mergers and takeovers or to restructure a company in financial difficulties. It is also possible to restructure a company in financial difficulties using a restructuring plan. For further information on schemes of arrangement, see Practice Note: Schemes of arrangement—nature and key statutory requirements.

Powered by Lexis+®
Jurisdiction(s):
United Kingdom
Related legal acts:
Key definition:
Consolidation definition
What does Consolidation mean?

Where a company increases the nominal value of its shares and reduces the number of shares in issue by consolidating holdings. For example, five 5p shares might be consolidated into one 25p share.

Read more

Popular documents

Issue of redeemable shares

Issue of redeemable sharesA limited company that proposes to issue redeemable shares must comply with the provisions of the Companies Act 2006 (CA 2006).Why do companies issue redeemable shares?A company may wish to issue redeemable shares so that it has an alternative way to return surplus capital

Sub-division and consolidation of shares

Sub-division and consolidation of sharesSTOP PRESS—Impact of the Retained EU Law (Revocation and Reform) Act 2023: This document contains references to retained EU law (REUL) and associated terms introduced by the European Union (Withdrawal) Act 2018 in connection with Brexit. From 1 January 2024,

Share certificates

Share certificatesShares in a company can be issued as certificated shares or uncertificated shares.Shares issued by private companies and unlisted public companies are usually held in certificated form, while shares in listed companies and AIM companies are usually held in uncertificated

Transfer of shares—law and procedure

Transfer of shares—law and procedureThere are a number of circumstances in which shares in a company may be transferred, eg upon a sale of the shares, through the transmission of the shares by operation of law (eg upon the death or bankruptcy of a shareholder), by gift or upon the granting or