class rights

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Rights that attach to a clearly defined class of share (e.g. preference shares) or are conferred upon a person for so long as he is a holder of any shares. In the latter case shareholders become a class in their own right. Typical class rights would relate to dividends, return of capital on a winding-up, or the right to appoint a director to the board. Class rights may only be altered either in accordance with a clause in the constitutional documents of the company (see articles of association) or with the consent of the class affected (Companies Act 2006 s 630). Shareholders from the class affected who did not agree to the alteration and who hold not less that 15% of the issued shares of the class may apply to court to have the change cancelled within 21 days (Companies Act 2006 s 633).

Subjects: Law.

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