{"id":176580,"date":"2022-10-07T13:37:25","date_gmt":"2022-10-07T12:37:25","guid":{"rendered":"https:\/\/legalvision.co.uk\/?p=176580"},"modified":"2026-04-20T05:00:04","modified_gmt":"2026-04-20T04:00:04","slug":"create-new-class-shares","status":"publish","type":"post","link":"https:\/\/legalvision.co.uk\/corporations\/create-new-class-shares\/","title":{"rendered":"How Do I Create a New Class of Shares in England?"},"content":{"rendered":"\n<p>Creating a new class of shares involves issuing shares with different rights to existing shares, such as varied voting, dividend, or liquidation rights, to suit your company\u2019s structure or investor needs. To do this, you must follow a formal process, typically including obtaining shareholder approval and setting out the new class rights in the <a href=\"https:\/\/legalvision.co.uk\/corporations\/classes-company-shares\/\">company\u2019s constitution or governing documents<\/a>. This article explains how to create a new class of shares, the rights you can attach, and the steps your company must follow.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span style=\"font-weight: 400\">Rights Attached to Shares<\/span><\/h2>\n\n\n\n<p><span style=\"font-weight: 400\">Shares are certificates that indicate that the <\/span><a href=\"https:\/\/www.shareholderrights.co.uk\/rights-shareholder\/complete-list-shareholder-rights\"><span style=\"font-weight: 400\">holder has certain rights in a limited company<\/span><\/a><span style=\"font-weight: 400\">. There are three central rights that you can have in a company which are the right to:<\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span style=\"font-weight: 400\">participate in shareholder meetings through voting;&nbsp;<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400\">receive dividends; and&nbsp;<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400\">receive a portion of the proceeds arising from the sale of the company\u2019s assets following its wind-up (i.e. the value of the assets after you have met your liabilities).&nbsp;<\/span><\/li>\n<\/ul>\n\n\n\n<p><span style=\"font-weight: 400\">The default position is that all shareholders in the same company are equally entitled to all three rights but based on the portion of the shares they own.&nbsp;<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span style=\"font-weight: 400\">An Example<\/span><\/h2>\n\n\n\n<p><span style=\"font-weight: 400\">Consider the fictional company: CoCo Ltd.&nbsp;<\/span><\/p>\n\n\n\n<figure class=\"wp-block-table is-style-stripes\"><table><tbody><tr><td>\n<p><b>Name of Shareholder<\/b><\/p>\n<\/td><td>\n<p><b>Total Number of Shares<\/b><\/p>\n<\/td><td>\n<p><b>Name of Shareholders<\/b><\/p>\n<\/td><td>\n<p><b>Number of Shares Held (%)<\/b><\/p>\n<\/td><td>\n<p><b>Total Value of Assets Less Liabilities<\/b><\/p>\n<\/td><td>\n<p><b>Amount Declared in Most Recent Dividend Payment<\/b><\/p>\n<\/td><\/tr><tr><td>\n<p><span style=\"font-weight: 400\">CoCo Ltd<\/span><\/p>\n<\/td><td>\n<p><span style=\"font-weight: 400\">100<\/span><\/p>\n<\/td><td>\n<p><span style=\"font-weight: 400\">Karl<\/span><\/p>\n<\/td><td>\n<p><span style=\"font-weight: 400\">40 (40%)<\/span><\/p>\n<\/td><td>\n<p><span style=\"font-weight: 400\">\u00a31m<\/span><\/p>\n<\/td><td>\n<p><span style=\"font-weight: 400\">\u00a3100,000<\/span><\/p>\n<\/td><\/tr><tr><td>\n<p><span style=\"font-weight: 400\">Frederich&nbsp;<\/span><\/p>\n<\/td><td>\n<p><span style=\"font-weight: 400\">25 (25%)<\/span><\/p>\n<\/td><\/tr><tr><td>\n<p><span style=\"font-weight: 400\">Rosa&nbsp;<\/span><\/p>\n<\/td><td>\n<p><span style=\"font-weight: 400\">15 (15%)<\/span><\/p>\n<\/td><\/tr><tr><td>\n<p><span style=\"font-weight: 400\">Herbert<\/span><\/p>\n<\/td><td>\n<p><span style=\"font-weight: 400\">15 (15%)<\/span><\/p>\n<\/td><\/tr><tr><td>\n<p><span style=\"font-weight: 400\">Walter&nbsp;<\/span><\/p>\n<\/td><td>\n<p><span style=\"font-weight: 400\">5 (5%)<\/span><\/p>\n<\/td><\/tr><tr><td>\n<p><span style=\"font-weight: 400\">Guy&nbsp;<\/span><\/p>\n<\/td><td>\n<p><span style=\"font-weight: 400\">0 (0%)<\/span><\/p>\n<\/td><\/tr><tr><td>\n<p><span style=\"font-weight: 400\">Terry<\/span><\/p>\n<\/td><td>\n<p><span style=\"font-weight: 400\">0 (0%)<\/span><\/p>\n<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p><span style=\"font-weight: 400\">In CoCo\u2019s case, each shareholder\u2019s position is as follows:<\/span><\/p>\n\n\n\n<figure class=\"wp-block-table is-style-stripes\"><table class=\"has-fixed-layout\"><tbody><tr><td>\n<p><b>Shareholder<\/b><\/p>\n<\/td><td>\n<p><b>% of Voting Power&nbsp;<\/b><\/p>\n<\/td><td>\n<p><b>Portion of Dividend Owed<\/b><\/p>\n<\/td><td>\n<p><b>Portion of Proceeds of Sale of Assets in Wind-Up<\/b><\/p>\n<\/td><\/tr><tr><td>\n<p><span style=\"font-weight: 400\">Karl<\/span><\/p>\n<\/td><td>\n<p><span style=\"font-weight: 400\">40%<\/span><\/p>\n<\/td><td>\n<p><span style=\"font-weight: 400\">\u00a340,000<\/span><\/p>\n<\/td><td>\n<p><span style=\"font-weight: 400\">\u00a3400,000<\/span><\/p>\n<\/td><\/tr><tr><td>\n<p><span style=\"font-weight: 400\">Frederich&nbsp;<\/span><\/p>\n<\/td><td>\n<p><span style=\"font-weight: 400\">25%<\/span><\/p>\n<\/td><td>\n<p><span style=\"font-weight: 400\">\u00a325,000<\/span><\/p>\n<\/td><td>\n<p><span style=\"font-weight: 400\">\u00a3250,000<\/span><\/p>\n<\/td><\/tr><tr><td>\n<p><span style=\"font-weight: 400\">Rosa&nbsp;<\/span><\/p>\n<\/td><td>\n<p><span style=\"font-weight: 400\">15%<\/span><\/p>\n<\/td><td>\n<p><span style=\"font-weight: 400\">\u00a315,000<\/span><\/p>\n<\/td><td>\n<p><span style=\"font-weight: 400\">\u00a315,000<\/span><\/p>\n<\/td><\/tr><tr><td>\n<p><span style=\"font-weight: 400\">Herbert<\/span><\/p>\n<\/td><td>\n<p><span style=\"font-weight: 400\">15%<\/span><\/p>\n<\/td><td>\n<p><span style=\"font-weight: 400\">\u00a315,000<\/span><\/p>\n<\/td><td>\n<p><span style=\"font-weight: 400\">\u00a315,000<\/span><\/p>\n<\/td><\/tr><tr><td>\n<p><span style=\"font-weight: 400\">Walter&nbsp;<\/span><\/p>\n<\/td><td>\n<p><span style=\"font-weight: 400\">5%<\/span><\/p>\n<\/td><td>\n<p><span style=\"font-weight: 400\">\u00a35,000<\/span><\/p>\n<\/td><td>\n<p><span style=\"font-weight: 400\">\u00a35,000<\/span><\/p>\n<\/td><\/tr><tr><td>\n<p><span style=\"font-weight: 400\">Guy&nbsp;<\/span><\/p>\n<\/td><td>\n<p><span style=\"font-weight: 400\">0%<\/span><\/p>\n<\/td><td>\n<p><span style=\"font-weight: 400\">\u00a30<\/span><\/p>\n<\/td><td>\n<p><span style=\"font-weight: 400\">\u00a30<\/span><\/p>\n<\/td><\/tr><tr><td>\n<p><span style=\"font-weight: 400\">Terry<\/span><\/p>\n<\/td><td>\n<p><span style=\"font-weight: 400\">0%<\/span><\/p>\n<\/td><td>\n<p><span style=\"font-weight: 400\">\u00a30<\/span><\/p>\n<\/td><td>\n<p><span style=\"font-weight: 400\">\u00a30<\/span><\/p>\n<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n    <div class=\"my-7 lg:my-10 border-y-2 border-gray-100 py-7 lg:py-10 flex flex-col sm:flex-row items-start gap-10\">\n                    <img decoding=\"async\" class=\"w-52 mx-auto my-0! rounded\" src=\"https:\/\/img.legalvision.com.au\/wp-content\/uploads\/sites\/4\/2022\/09\/06164254\/uk-startup-manual-290x410-1.jpg\" alt=\"Front page of publication\"\n                 loading=\"lazy\" width=\"208\" height=\"298\">\n                <section>\n            <div class=\"text-2xl font-bold\">UK 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Similarly, the law will recognise all shares as being of the same class if the rights attached to the shares are the same, regardless of if you treat them as different classes.&nbsp;<\/span><\/p>\n\n\n\n<p><span style=\"font-weight: 400\">This means that if Guy and Terry wanted to become shareholders, but only on the condition that they obtain first choice on all dividends paid, CoCo would need to issue them a different class of shares. This is because the rights attached to the ordinary shares require that CoCo treat all shareholders of the same class of shares equally.&nbsp;<\/span><\/p>\n\n\n\n<p><span style=\"font-weight: 400\">The most likely reason CoCo would want to<\/span><a href=\"https:\/\/legalvision.co.uk\/corporations\/issue-shares-limited-company\/\"><span style=\"font-weight: 400\"> issue different shares<\/span><\/a><span style=\"font-weight: 400\"> to Guy and Terry is that they are prepared to invest money in CoCo.The exact nature of the rights attached to the shares depends entirely on the outcome of any such negotiations.&nbsp;<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span style=\"font-weight: 400\">An example:<\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span style=\"font-weight: 400\">Guy and Terry give CoCo Ltd \u00a31m in cash in exchange for 50 shares each;&nbsp;<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400\">for any dividend declared, Gury and Terry get \u00a32 for every \u00a31 given to the original shareholders;<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400\">in the event CoCo is wound up, Guy and Terry are entitled to the first \u00a31m arising from the proceeds of the sale of the company\u2019s assets; and<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400\">Guy and Terry have no voting rights.<\/span><\/li>\n<\/ul>\n\n\n\n<p><span style=\"font-weight: 400\">In the next quarter, CoCo\u2019s position would be as follows.&nbsp;<\/span><\/p>\n\n\n\n<figure class=\"wp-block-table is-style-stripes\"><table><tbody><tr><td>\n<p><b>Name of Shareholder<\/b><\/p>\n<\/td><td>\n<p><b>Total Number of Shares<\/b><\/p>\n<\/td><td>\n<p><b>Name of Shareholders<\/b><\/p>\n<\/td><td>\n<p><b>Number of Shares Held (%)<\/b><\/p>\n<\/td><td>\n<p><b>Total Value of Assets Less Liabilities<\/b><\/p>\n<\/td><td>\n<p><b>Amount Declared in Most Recent Dividend Payment<\/b><\/p>\n<\/td><\/tr><tr><td>\n<p><span style=\"font-weight: 400\">CoCo Ltd<\/span><\/p>\n<\/td><td>\n<p><span style=\"font-weight: 400\">200<\/span><\/p>\n<\/td><td>\n<p><span style=\"font-weight: 400\">Karl<\/span><\/p>\n<\/td><td>\n<p><span style=\"font-weight: 400\">40 (20%)<\/span><\/p>\n<\/td><td>\n<p><span style=\"font-weight: 400\">\u00a32m<\/span><\/p>\n<\/td><td>\n<p><span style=\"font-weight: 400\">\u00a3200,000<\/span><\/p>\n<\/td><\/tr><tr><td>\n<p><span style=\"font-weight: 400\">Frederich&nbsp;<\/span><\/p>\n<\/td><td>\n<p><span style=\"font-weight: 400\">25 (12.5%)<\/span><\/p>\n<\/td><\/tr><tr><td>\n<p><span style=\"font-weight: 400\">Rosa&nbsp;<\/span><\/p>\n<\/td><td>\n<p><span style=\"font-weight: 400\">15 (7.5%)<\/span><\/p>\n<\/td><\/tr><tr><td>\n<p><span style=\"font-weight: 400\">Herbert<\/span><\/p>\n<\/td><td>\n<p><span style=\"font-weight: 400\">15 (7.5%)<\/span><\/p>\n<\/td><\/tr><tr><td>\n<p><span style=\"font-weight: 400\">Walter&nbsp;<\/span><\/p>\n<\/td><td>\n<p><span style=\"font-weight: 400\">5 (2.5%)<\/span><\/p>\n<\/td><\/tr><tr><td>\n<p><span style=\"font-weight: 400\">Guy&nbsp;<\/span><\/p>\n<\/td><td>\n<p><span style=\"font-weight: 400\">50 (25%)<\/span><\/p>\n<\/td><\/tr><tr><td>\n<p><span style=\"font-weight: 400\">Terry<\/span><\/p>\n<\/td><td>\n<p><span style=\"font-weight: 400\">50 (25%)<\/span><\/p>\n<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p><span style=\"font-weight: 400\">Each shareholder\u2019s position is as follows:&nbsp;<\/span><\/p>\n\n\n\n<figure class=\"wp-block-table is-style-stripes\"><table><tbody><tr><td>\n<p><b>Shareholder<\/b><\/p>\n<\/td><td>\n<p><b>% of Voting P<\/b><\/p>\n<p><b>ower&nbsp;<\/b><\/p>\n<\/td><td>\n<p><b>Portion of Dividend Owed<\/b><\/p>\n<\/td><td>\n<p><b>Portion of Proceeds of Sale of Assets in Wind-Up<\/b><\/p>\n<\/td><\/tr><tr><td>\n<p><span style=\"font-weight: 400\">Karl<\/span><\/p>\n<\/td><td>\n<p><span style=\"font-weight: 400\">40%<\/span><\/p>\n<\/td><td>\n<p><span style=\"font-weight: 400\">\u00a340,000<\/span><\/p>\n<p><span style=\"font-weight: 400\">&nbsp;<\/span><\/p>\n<\/td><td>\n<p><span style=\"font-weight: 400\">\u00a3400,000<\/span><\/p>\n<\/td><\/tr><tr><td>\n<p><span style=\"font-weight: 400\">Frederich&nbsp;<\/span><\/p>\n<\/td><td>\n<p><span style=\"font-weight: 400\">25%<\/span><\/p>\n<\/td><td>\n<p><span style=\"font-weight: 400\">\u00a325,000<\/span><\/p>\n<\/td><td>\n<p><span style=\"font-weight: 400\">\u00a3250,000<\/span><\/p>\n<\/td><\/tr><tr><td>\n<p><span style=\"font-weight: 400\">Rosa&nbsp;<\/span><\/p>\n<\/td><td>\n<p><span style=\"font-weight: 400\">15%<\/span><\/p>\n<\/td><td>\n<p><span style=\"font-weight: 400\">\u00a315,000<\/span><\/p>\n<\/td><td>\n<p><span style=\"font-weight: 400\">\u00a315,000<\/span><\/p>\n<\/td><\/tr><tr><td>\n<p><span style=\"font-weight: 400\">Herbert<\/span><\/p>\n<\/td><td>\n<p><span style=\"font-weight: 400\">15%<\/span><\/p>\n<\/td><td>\n<p><span style=\"font-weight: 400\">\u00a315,000<\/span><\/p>\n<\/td><td>\n<p><span style=\"font-weight: 400\">\u00a315,000<\/span><\/p>\n<\/td><\/tr><tr><td>\n<p><span style=\"font-weight: 400\">Walter&nbsp;<\/span><\/p>\n<\/td><td>\n<p><span style=\"font-weight: 400\">5%<\/span><\/p>\n<\/td><td>\n<p><span style=\"font-weight: 400\">\u00a35,000<\/span><\/p>\n<\/td><td>\n<p><span style=\"font-weight: 400\">\u00a35,000<\/span><\/p>\n<\/td><\/tr><tr><td>\n<p><span style=\"font-weight: 400\">Guy&nbsp;<\/span><\/p>\n<\/td><td>\n<p><span style=\"font-weight: 400\">0%<\/span><\/p>\n<\/td><td>\n<p><span style=\"font-weight: 400\">\u00a350,000<\/span><\/p>\n<\/td><td>\n<p><span style=\"font-weight: 400\">\u00a3500,000<\/span><\/p>\n<\/td><\/tr><tr><td>\n<p><span style=\"font-weight: 400\">Terry<\/span><\/p>\n<\/td><td>\n<p><span style=\"font-weight: 400\">0%<\/span><\/p>\n<\/td><td>\n<p><span style=\"font-weight: 400\">\u00a350,000<\/span><\/p>\n<\/td><td>\n<p><span style=\"font-weight: 400\">\u00a3500,000<\/span><\/p>\n<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p><span style=\"font-weight: 400\">Guy and Terry want different rights in the company compared to the original shareholders. A new class of shares must be issued to give effect to these rights. Otherwise, if you issue more ordinary shares, you would prejudice the current shareholders, as CoCo is treating the new shareholders differently.&nbsp;<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span style=\"font-weight: 400\">Creating a New Class of Shares&nbsp;<\/span><\/h2>\n\n\n\n<p><span style=\"font-weight: 400\">There are two ways to create a new class of shares:<\/span><\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li><span style=\"font-weight: 400\">allot a new class of shares (as in our above example); or&nbsp;<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400\">convert existing shares into a new class.<\/span><\/li>\n<\/ol>\n\n\n\n<p><span style=\"font-weight: 400\">The exact nature depends on the company\u2019s constitution. However, there are some general rules all companies will likely need to follow.&nbsp;<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span style=\"font-weight: 400\">Allotment&nbsp;<\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><span style=\"font-weight: 400\">Constitutional Authority&nbsp;<\/span><\/h3>\n\n\n\n<p><span style=\"font-weight: 400\">You must first check that there are no restrictions in the company\u2019s constitution on allotting new shares in general or new shares of a new class.&nbsp;<\/span><\/p>\n\n\n\n<p><span style=\"font-weight: 400\">If there is, the company must amend its constitution through a special resolution. Otherwise, any attempt to create a new class will be ineffective.&nbsp;<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span style=\"font-weight: 400\">Passing Resolution&nbsp;<\/span><\/h3>\n\n\n\n<p><span style=\"font-weight: 400\">CoCo\u2019s directors need to give the shareholders a resolution granting them the power to allot a new class of shares. Unless otherwise stated, an ordinary resolution will be sufficient. In practice, the ordinary resolution should specify the rights attached to the newly issued shares.&nbsp;<\/span><\/p>\n\n\n\n<p><span style=\"font-weight: 400\">While not always necessary, you may wish to amend the articles of association to determine the exact rights associated with each class of shares.&nbsp;<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span style=\"font-weight: 400\">Pre-Emption Rights<\/span><\/h3>\n\n\n\n<p><span style=\"font-weight: 400\">In some cases, the law of pre-emption might apply. This ensures that existing shareholders can subscribe for a portion of the newly allotted shares that would preserve their portion of ownership in the company. You should speak to a solicitor to ensure you comply with all relevant laws relating to pre-emption rights and that you follow your company\u2019s constitution.&nbsp;<\/span><\/p>\n\n\n\n<div  class=\"box box--icon box--info\">\n    <p dir=\"auto\"><strong>Key Statistics<\/strong><\/p>\n<ol dir=\"auto\">\n<li><strong>95%<\/strong>: Private limited companies make up over 95% of UK corporate bodies on the register, where creating new share classes offers key flexibility for governance and funding.<\/li>\n<li><strong>75%<\/strong>: A special resolution requiring at least 75% shareholder approval is needed to amend articles and create a new class of shares under the Companies Act 2006.<\/li>\n<li><strong>40%<\/strong>: Around 40% of companies on the UK register file the smallest accounts, highlighting the prevalence of smaller firms that benefit from tailored share classes for investor attraction and control.<\/li>\n<\/ol>\n<p dir=\"auto\"><strong>Sources<\/strong><\/p>\n<ul dir=\"auto\">\n<li><a href=\"https:\/\/www.gov.uk\/government\/statistics\/companies-register-activities-statistical-release-april-2024-to-march-2025\/companies-register-activities-april-2024-to-march-2025\" target=\"_blank\" rel=\"noopener noreferrer nofollow\">UK Government Companies Register Activities Statistical Release 2024-2025<\/a><\/li>\n<li><a href=\"https:\/\/dwfgroup.com\/en\/news-and-insights\/insights\/2025\/1\/allotting-and-issuing-new-shares-for-private-limited-companies-in-england-and-wales\" target=\"_blank\" rel=\"noopener noreferrer nofollow\">DWF Group on allotting shares and Companies Act 2006 ss 550-551<\/a><\/li>\n<li><a href=\"https:\/\/pmc.ncbi.nlm.nih.gov\/articles\/PMC9366833\/\" target=\"_blank\" rel=\"noopener noreferrer nofollow\">PMC article on empirical evidence for UK corporate database (2022 data, relevant trends)<\/a><\/li>\n<\/ul>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><span style=\"font-weight: 400\">Converting Existing Shares<\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><span style=\"font-weight: 400\">Passing a Resolution&nbsp;<\/span><\/h3>\n\n\n\n<p><span style=\"font-weight: 400\">The directors will need to present a resolution to the shareholders that dictate:<\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span style=\"font-weight: 400\">which shares the company will convert;&nbsp;<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400\">what you will call the shares; and&nbsp;<\/span><\/li>\n\n\n\n<li><span style=\"font-weight: 400\">the rights attached to this new class of shares.&nbsp;<\/span><\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span style=\"font-weight: 400\">Obtaining Class Consent&nbsp;<\/span><\/h3>\n\n\n\n<p><span style=\"font-weight: 400\">If there are already different classes of shares in existence and only one class of shares is changing, you must obtain the consent of that class in particular.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span style=\"font-weight: 400\">Post-Allotment Requirements&nbsp;<\/span><\/h2>\n\n\n\n<p><span style=\"font-weight: 400\">For both an allotment and conversion, certain information, including copies of the resolutions passed and details of the rights attached to the new class of shares, must be supplied to Companies House. The deadlines vary between 15 and 30 days, depending on the circumstances.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span style=\"font-weight: 400\">Kinds of Share Classes<\/span><\/h2>\n\n\n\n<p><span style=\"font-weight: 400\">You may find it helpful to know that the law does not recognise the rights attached to shares based on their name. Therefore, you can call your shares whatever you want to call them. This is why a company may have Class A, B, and C shares. They are alphabet shares because the name says nothing about the rights attached to them.&nbsp;<\/span><\/p>\n\n\n\n<p><span style=\"font-weight: 400\">At the same time, you may hear references to terms like <\/span><a href=\"https:\/\/legalvision.co.uk\/corporations\/ordinary-redeemable-preference-shares\/\"><span style=\"font-weight: 400\">preference shares<\/span><\/a><span style=\"font-weight: 400\">, non-voting shares, and convertible shares. These have specific rights attached to them.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span style=\"font-weight: 400\">Key Takeaways&nbsp;<\/span><\/h2>\n\n\n\n<p><span style=\"font-weight: 400\">To create a new class of shares or to convert existing shares into a new class, you must follow the rules set out in your company\u2019s constitution. For most companies, this involves the directors putting a resolution to the shareholders authorising the allotment or conversion. If the company\u2019s articles prohibit the allotment of new classes of shares, you must amend the constitution through a special resolution. The directors then need to deliver certain documents to Companies House.&nbsp;<\/span><\/p>\n\n\n\n<p><span style=\"font-weight: 400\">If you need help creating a new class of shares in England, our experienced <\/span><a href=\"https:\/\/legalvision.co.uk\/corporate-lawyers-lp\/\"><span style=\"font-weight: 400\">commercial lawyers<\/span><\/a><span style=\"font-weight: 400\"> can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today at <a href=\"tel:+448081968584\" class=\"AVANSERnumber dynamic-number\">0808 196 8584<\/a> or visit our <\/span><a href=\"https:\/\/legalvision.co.uk\/membership\"><span style=\"font-weight: 400\">membership page<\/span><\/a><span style=\"font-weight: 400\">.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span style=\"font-weight: 400\">Frequently Asked Questions<\/span><\/h2>\n\n\n\n<div class=\"schema-faq wp-block-yoast-faq-block\"><div class=\"schema-faq-section\" id=\"faq-question-1665145298710\"><strong class=\"schema-faq-question\"><strong>What is a new class of shares?<\/strong><\/strong> <p class=\"schema-faq-answer\">A class of shares is any number of shares with the same rights and privileges attached to them in terms of voting and rights to dividends and capital upon winding up. If you wish for some shareholders to have rights that differ from others, you must create a new class of shares.\u00a0<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1665145318216\"><strong class=\"schema-faq-question\"><br \/><strong>What is the process of creating a new class of shares?<\/strong><\/strong> <p class=\"schema-faq-answer\">The shareholders must authorise it via a resolution and in accordance with the company\u2019s constitution. The directors must follow specific laws related to pre-emption rights and file the relevant particulars with Companies House.\u00a0<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1776657421066\"><strong class=\"schema-faq-question\">How do you create a new class of shares in the UK?<\/strong> <p class=\"schema-faq-answer\">You typically create a new class by passing shareholder resolutions, amending the articles of association and setting out the rights attached to the new shares before issuing them.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1776657426418\"><strong class=\"schema-faq-question\">Can a company create multiple share classes?<\/strong> <p class=\"schema-faq-answer\">Yes. A company can create multiple share classes, such as ordinary, preference or non-voting shares, each with different rights and restrictions tailored to its needs.<\/p> <\/div> <\/div>\n","protected":false},"excerpt":{"rendered":"<p>Creating a new class of shares involves issuing shares with different rights to existing shares, such as varied voting, dividend, or liquidation rights, to suit your company\u2019s structure or investor needs. To do this, you must follow a formal process, typically including obtaining shareholder approval and setting out the new class rights in the company\u2019s<a href=\"https:\/\/legalvision.co.uk\/corporations\/create-new-class-shares\/\">Continue reading <span class=\"sr-only\">&#8220;How Do I Create a New Class of Shares in England?&#8221;<\/span><\/a><\/p>\n","protected":false},"author":13522,"featured_media":3182,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_relevanssi_hide_post":"","_relevanssi_hide_content":"","_relevanssi_pin_for_all":"","_relevanssi_pin_keywords":"","_relevanssi_unpin_keywords":"","_relevanssi_related_keywords":"","_relevanssi_related_include_ids":"","_relevanssi_related_exclude_ids":"","_relevanssi_related_no_append":"","_relevanssi_related_not_related":"","_relevanssi_related_posts":"176457,174852,174935,172627,172122,1443","_relevanssi_noindex_reason":"","editor_notices":[],"footnotes":""},"categories":[28],"tags":[20,97,343,531],"class_list":["post-176580","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-corporations","tag-small-business","tag-issue-shares","tag-classes-of-shares","tag-shares"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.5 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>How Do I Create a New Class Shares | LegalVision UK<\/title>\n<meta name=\"description\" content=\"As a business owner, you may decide to create a new class of shares for your company. 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