The company secretarial team at Thomson Snell & Passmore has the breath of experience and knowledge to deal with more complicated or high value aspects of company secretarial work, such as the creation of new share classes and the issue and allotment of new shares.
Our client is a UK manufacturer and supplier of mechanical components. They are part of a group of companies whose parent company is based in Germany. The parent company was willing to inject cash to enable our client to purchase the building that it had been leasing for some time. Having taken tax advice, the proposed approach was for new shares to be issued to the parent company to represent the £2.8 million cash injection that it was making.
The German parent company wanted to ensure that the new shares would rank ahead of other shares as to dividends. In addition, to ensure that the new shares would be a less risky form of investment than ordinary shares, the parent company required the new shares to be fixed-income shares. It was therefore appropriate for the new shares to be ‘preference shares’ which involved the creation of a new share class.
As part of the work, the company secretarial team needed to prepare new articles of association to set out the exact nature of the preference shares and the rights attaching to them. Further, as our client had not updated its articles of association for over ten years, the company secretarial team took this opportunity to update the articles of association to ensure consistency with the Companies Act 2006.
The company secretarial team prepared and advised on the necessary documents to effect the share allotment and issue, including: a written resolution of the sole shareholder, notice to the auditors of the proposed written resolution, board minutes and Companies House forms.
The company secretarial team dealt with the filing requirements at Companies House on behalf of our client and updated our client’s statutory registers to reflect the changes. The last step was for the team to prepare the new share certificate and advise our client on its execution.