{"id":4054,"date":"2022-06-16T05:52:32","date_gmt":"2022-06-16T04:52:32","guid":{"rendered":"https:\/\/legalvision.co.uk\/?p=4054"},"modified":"2023-11-12T22:11:05","modified_gmt":"2023-11-12T22:11:05","slug":"differential-voting-rights-uk","status":"publish","type":"post","link":"https:\/\/legalvision.co.uk\/corporations\/differential-voting-rights-uk\/","title":{"rendered":"What are Differential Voting Rights in England?"},"content":{"rendered":"\n

As a company looking to issue shares<\/a>, you may consider issuing certain shares with differential voting rights<\/em> (DVR<\/strong>). Shares with differential voting rights give superior voting rights to certain classes of shareholders and can be helpful in several situations. Above all, they give certain members more significant control over the company’s strategy while helping prevent a hostile takeover.<\/p>\n\n\n\n

This article will explain differential voting rights, how they work, and some of the pros and cons of issuing DVRs.<\/p>\n\n\n\n

What are Differential Voting Rights?<\/h2>\n\n\n\n

Essentially, DVRs form part of the company’s share capital. Moreover, they refer mainly to shares with superior or inferior voting rights<\/a> within ordinary equity shares. Equity shares are distinct from preferred shares. For instance, preferred shares have priority regarding the company’s profits and assets, but they do not carry voting rights. In the UK, you may find differential rights overlap with a ‘dual-class’ share structure. <\/p>\n\n\n\n

Usually, shares with fewer voting rights accompany more excellent dividend rates. In contrast, shares with greater voting rights will carry a lesser dividend rate. Furthermore, ordinary shareholders, such as investors who invest purely for returns, are usually more likely to accept lesser voting rights for higher dividend rates. Those who are more likely to have superior voting rights within their shares include: <\/p>\n\n\n\n