Do custom articles need to be updated when creating a new class of shares?

If a company has bespoke articles (i.e., more than just the default “model articles”), they may need to be updated when the company creates a new class of shares but it will depend on how the articles are constructed. If the articles explicitly set out the individual classes of shares and their associated rights, it is likely that the articles will need to be amended.

If a company has adopted bespoke articles that are constructed in such a way that multiple share classes are caught by the same definition and share the same rights, the articles may not need to be amended. 

For example, the Vestd Platform articles have been drafted in such a way that all classes of ordinary shares are caught by the definition “A Shares”, so if a new class of ordinary shares is created, the articles do not need to be amended. 

Equally the model articles allow a company to create, with appropriate authorisation,  whatever classes of shares they wish without requiring the articles to be redrafted.

If you are unsure as to whether your articles will require any amendments, it is best to consult the lawyer who drafted them.


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