Which share class is best when forming a private limited company?


There are different share classes, I’m told, but I don’t know a lot about them. I basically just want whichever ones are best/simplest for an average limited company. Could someone please advise?



You can set up a limited company with a variety of different share classes, but most people just issues ordinary shares. This class of share carries equal voting rights, dividend rights and capital rights.

Each shareholder in a company is required to purchase at least one issued share but they can purchase multiple shares to reflect their percentage of investment or control. For each ordinary share held, the shareholder will have:

  • The right to cast one vote at general meetings
  • The right to receive a share of profits as dividend payments
  • The right to receive capital distribution if the company is wound up

Dividend payments and capital distribution are worked out by the percentage of ownership represented by each share. For example, if one share represents 10% ownership of the company, the shareholder is entitled to 10% of profits and capital distribution for each share they hold.

2 years ago

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