Simple to use -
Designed for the needs of the Accountant Solicitor & Company Secretary
There has been a lot of confusion regarding the new Companies Act requirement to report on "Voting Rights" and "Prescribed Particulars of rights attached to Shares", especially in relation to the Annual Return (AR01) and Return of Allotment of Shares (SH01). Below is an attempt to clarify matters.
Statement of Capital
The new Companies Act imposes a requirement to produce a "Statement of Capital" as part of an Annual Return and also a Return of Allotment of Shares which includes a section for either "Voting Rights" or "Prescribed Particulars of rights attached to Shares".
"Prescribed Particulars of rights attached to Shares"
Companies House guidance notes define what information is to be included within "Prescribed Particulars of rights attached to Shares" as follows:
a. particulars of any voting rights, including rights that arise only in certain circumstances;
b. particulars of any rights, as respects dividends, to participate in a distribution;
c. particulars of any rights, as respects capital, to participate in a distribution (including on winding up); and
d. whether the shares are to be redeemed or are liable to be redeemed at the option of the company or the shareholder and any terms or conditions relating to redemption of these shares.
"Voting Rights"
"Voting Rights" are defined by Companies House as the first of the above four paragraphs of the "Prescribed Particulars":
a. particulars of any voting rights, including rights that arise only in certain circumstances.
When to use "Voting Rights" and when to use "Prescribed Particulars of rights attached to Shares"
The original Companies Act 2006 stated that both an Annual Return and a Return of Allotment of Shares required the same "Statement of Capital" that included the full "Prescribed Particulars of rights attached to Shares". However, the legislation was amended such that the full "Prescribed Particulars of rights attached to Shares" is required for every statement of capital on Incorporation, return of allotment, cancellation of shares etc and the shorter "Voting Rights" is all that is required for an Annual Return.
Exact wording of "Voting Rights" and "Prescribed Particulars of rights attached to Shares"
Many users ask what wording they should use within these sections. Unfortunately, it is not possible to give suggested wording as, ultimately, the wording must reflect what is contained within the Company's Articles. For "Voting Rights" used in an Annual Return of a simple company with a single class of shares, it may well be possible to comply with a single sentence to the effect that all shares rank equally etc., however, we understand from Companies House that it will not be acceptable to refer to the articles without repeating the information and that the wording must be self explanatory and not just refer to previously filed information.
Voting Rights