Classes of shares

A company may need to create new classes of shares for a variety of reasons:

To have the ability to pay dividends at different rates to different classes of shareholders, or to some shareholders to the exclusion of others

To give preferential capital rights to certain shareholders, for example, the holders of “A” shares may be entitled to a repayment of capital on a winding up of the company before the holders of any other class of shares

To restrict the voting rights of certain shareholders in the company

To facilitate the operation of share allotment or share transfer restrictions, for example, giving a right of first refusal to a certain class of shareholders

To provide special rights to certain shareholders, for example, the power to appoint or remove directors

To require the consent or approval of certain shareholders to certain company transactions, for example, the sale of the company's business or a major asset

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