DO Alphabet Shares for Divindends need reporting via confirmation statment

[clamp1988]

Have recently filed SHO1 allotment of alphabet shares woth the Companies House solely for the purpose of dividends, do they need to be reported via filing an amended confirmation statement or can wait till the next statement

 

[DWS]

If you were only changing the class of shares from Ordinary to Alphabet should it not have been the SH08 form? Probably also a special resolution and change to the articles.
You can submit a new Confirmation Statement if you want but as long as the above is done i usually just update on the next CS when it is due.

 

[clamp1988]

@DWS The articles allows to issue such shares and these are new share issued. previously there was just 1 Ordinary shareholder and now 2 alphabet shares have been issued divided 1 to the existing ordinary shareholder and 1 to another person.

 

[DWS]

The articles allows to issue such shares and these are new share issued. previously there was just 1 Ordinary shareholder and now 2 alphabet shares have been issued divided 1 to the existing ordinary shareholder and 1 to another person.

No problem then, you must have used bespoke articles when the Company was set up then or had them amended since.

 

[clamp1988]

No problem then, you must have used bespoke articles when the Company was set up then or had them amended since.

For clarity we have filed SHO1 and informed CH and they have accepted the Form. We then filed an amended confirmation statement to notify the distribution of these new share, the CH normally sends a confirmation or rejection within a couple of days but they have sent neither.

 

[DWS]

For clarity we have filed SHO1 and informed CH and they have accepted the Form. We then filed an amended confirmation statement to notify the distribution of these new share, the CH normally sends a confirmation or rejection within a couple of days but they have sent neither.

It sometimes takes a few days to show, but CH is just a notice board, just because they accept something does not make it legally binding.
As I said main thing is to make sure the Articles are correct, and resolutions passed, as far as I am aware model Articles need amending.

 

[clamp1988]

It sometimes takes a few days to show, but CH is just a notice board, just because they accept something does not make it legally binding.
As I said main thing is to make sure the Articles are correct, and resolutions passed, as far as I am aware model Articles need amending.

This is in the AA

Powers to issue different classes of share

(1) Subject to the articles, but without prejudice to the rights attached to any existing share,the Company may issue shares with such rights or restrictions as may be determined byordinary resolution.

(2) The Company may issue shares which are to be redeemed, or are liable to be redeemedat the option of the Company or the holder, and the directors may determine the terms,conditions and manner of redemption of any such shares.

 

[DWS]

This is in the AA

Powers to issue different classes of share

(1) Subject to the articles, but without prejudice to the rights attached to any existing share,the Company may issue shares with such rights or restrictions as may be determined byordinary resolution.

(2) The Company may issue shares which are to be redeemed, or are liable to be redeemedat the option of the Company or the holder, and the directors may determine the terms,conditions and manner of redemption of any such shares.

That to me means that yes the Articles do allow for the creation of new share classes.
But once created the Articles need amending to show this and you cannot amend them without passing a special resolution.
I can only say what I advise and do for my clients, at least this way I am happy that the Dividends issued will not be challenged by HMRC
If you are happy with how you have done things then no problem.

 

[clamp1988]

That to me means that yes the Articles do allow for the creation of new share classes.
But once created the Articles need amending to show this and you cannot amend them without passing a special resolution.
If you are happy with how you have done things then no problem.

I understand that the special resolution is recorded within the company minutes/books and is done internally but when you say the Articles need amending - is this something that needs filing at the CH.

 

[clamp1988]

In hindsight I am thinking since new alphabet shares are given 1 each to husband and wife would it just be better to maybe issues 9 more ordinary shares and give 2 to wife and 7 to husband so the wife doesnt need to be classed as a PSC. Forget about the alphabet shares altogether. saves rewriting the Articles.

 

[UK Contractor Accountant]

As I said main thing is to make sure the Articles are correct, and resolutions passed, as far as I am aware model Articles need amending

2. When Articles Do Not Need Rewriting

• Model Articles: If your company uses the standard Model Articles (under the Companies Act 2006), they generally allow directors to issue new shares with different rights by passing a board resolution and/or a special resolution, without needing a full rewrite.

 

[DWS]

2. When Articles Do Not Need Rewriting

• Model Articles: If your company uses the standard Model Articles (under the Companies Act 2006), they generally allow directors to issue new shares with different rights by passing a board resolution and/or a special resolution, without needing a full rewrite.

I did say amending not a full rewrite.