Variation of share class rights is allowed by passing a special resolution for limited company.
Every share has its own rights attached to it. The rights typically cover matters such as voting rights, rights to dividends and rights to a return of capital on winding up. This will be referred to as class right in this article.
Procedure for variation of shares rights
Your company’s articles of association may set out class rights and provisions for altering or varying those rights.
If your company’ articles of association do not contain provisions for varying the rights, your company can vary them either by obtaining consent from the shareholders of at least three quarters in nominal value of the issued shares of that class excluding any treasury shares, or by the members of that class passing a special resolution at a separate general meeting.
You must deliver a copy of the special resolution to Companies House.
You must also deliver a Form SH10 called notice of particulars of variation of rights to Companies House within one month of the date of variation.
Objection to variation of shares rights
If your shareholders of not less than 15% of the aggregate of the issued shares of the class in question, disregarding any treasury shares in the class, did not consent to the variation of the class right, they are entitled to apply to the court to cancel the variation.
They must make the application no later than 21 days after the consent was given, or the resolution passed. The court may confirm or cancel the variation and your company must deliver a copy of the court order to Companies House no more than 15 days after it is made.