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[Blaka]

A UK company can change its share structure by passing a special resolution following the rules in the Companies Act 2006. This includes things like increasing or decreasing share capital, reclassifying shares, or combining/dividing shares.

To start the changes the directors suggest the alteration and approve it in a board meeting. Then, shareholders get a notice for a general meeting, where the special resolution is discussed. The notice tells about the proposed changes to the share structure.

During the general meeting shareholder vote on the special resolution, and it usually needs a 75% majority to pass. After approval the resolution has to be sent to Companies House within 15 days.

If the company plans to increase share capital, there are specific rules about existing shareholders pre-emption rights. These rules make sure current shareholders have the chance to buy new shares before others can.

 

[IB DD]

In changing the capital structure of the company, pre emption rights is important for shareholders because it would afford the chance for the ownership structure not to be diluted by external persons coming in to buy shares and putting the original financiers of the business in disadvantage.

 

[Ben Kempton]

In changing the capital structure of the company, pre emption rights is important for shareholders because it would afford the chance for the ownership structure not to be diluted by external persons coming in to buy shares and putting the original financiers of the business in disadvantage.

There are many legal aspects of capital structuring that we must try to understand. This is due to the fact that a company's debt is also considered as well in regards to capital structuring in equation to total assets owned by the company. This also involves understanding the role of the company's representatives when it comes to creating a much better capital structure. This also involves business lawyers as well.