Sometimes it is desirable to convert an existing share class into 2 or more different share classes.

An example would be to convert 100 Ordinary £1 Shares into:

  • 50 £1 'A' Ordinary Shares; and
  • 50 £1 'B' Ordinary Shares


Note: Since the nominal value and prescribed particulars of the new A and B shares are going to be the same as the old Ordinary shares, an equivalent result could be achieved by just converting half the shares into A shares and leaving the balance as the Ordinary shares.


To start the conversion process:


1. Click on the Share Classes tab and select the blue 'Share reorganisation' option.



2. This will bring up the below options.  Select 'Reclassify/convert shares' and click the green 'Next' button.



Note: You should check before carrying on that the conversion of the share class is in accordance with the company's articles of association.


3. Select convert the whole or part of a share class option.



4. Simply add the date of change and which share class is being changed. If there is only one share class it will default to this.  


5. Now you will be asked which shareholders' shares are being converted. Then click the green 'Next' button. See below.


6. Now add the 'New share class details'. If the new share class already exists select it from the dropdown list. If it does not yet exist select 'Create new' from the dropdown as per the below.


You will then need to give a class description e.g. A Ordinary


Note: Do not put the nominal value in the class description otherwise you will see the shares displayed as: A Ordinary £1.00 £1.00




Then add the Type of share. You can select this from a dropdown. This will usually be Ordinary.


Lastly, you will need to add the prescribed particulars. You can copy these from the existing prescribed particulars.


Where are the prescribed particulars found?


7. Before submitting the conversion you will be asked if approval is required, this allows you to create a summary document to be approved prior to creating the Companies House form.

  

Note: The approval feature is only available to subscribers of the software. What are the benefits of subscribing to Inform Direct? Pay as you go users will skip straight to the step below.



Note: Once pending, the approval for the action can be completed from the company dashboard tab.


8. You will now see a summary of the proposed transaction. If you want to see the full details click the View Details option. Once you are happy with everything click the green 'Submit' button.


Note: The submit button is green rather than red because Companies House cannot receive details electronically about converting shares. They require paper forms. Inform Direct will happily produce and pre-populate the correct form for you if required.


9. The final step of the wizard gives you the option to generate the correct form and several documents

  • SH08
  • Board minutes to recommend share reclassification
  • Share holders resolution
  • Written class consent.


Note: If you finish without generating the form or documents you will not get another opportunity. You must select which documents you wish to create.


What does form SH08 look like?  Remember that you will need to sign and send the form to Companies House.