A share class conversion is the process of converting issued shares from one class of shares to another.
Whether you’re converting shares for an investment round, a good leaver, or to consolidate share classes, you can complete the process on Vestd.
However, due to the complex nature of share class conversions, there are some additional steps you will need to take.
Please ensure you have read and understood this guide before you begin.
Generally speaking, shareholders in the share class that is being converted need to authorise the conversion. If you have a pass rate of 75%, then the votes should come from the share class in question, and 75% of the shareholders in the share class would need to authorise the conversion.
However, many of our customers have different articles and shareholders’ agreements with unique voting structures attached to them, so we believe it’s in your best interests to have the final say, meaning you will need to manually pass any required shareholders' resolution.
To start the process, log in to Vestd and go to Share capital > Share class conversions > Create new...
Before you begin, we will ask you to confirm your governance settings for share class conversions.
However, due to the fact that the shareholders' resolution is set to a manual pass, you will need to ensure you have the signatures of any must-sign shareholders (i.e. those whose consent is needed for this specific matter) before passing the resolution.
Once the housekeeping is out of the way, creating the share class conversion is really straightforward:
- Select the shareholder whose shares are being converted
- Confirm you agree to manually pass any resolutions
- Select the class of shares to be converted
- Enter the number of shares to be converted
- Select the share class they are being converted to
Depending on your governance settings, you may be asked to include a directors' and shareholders' resolution.
You can either generate new resolutions to send for signing, upload signed resolutions to the platform, or select the signed resolutions from your company documents folder.
The same will be asked of you for an SH08 and SH10 too, and whether you need us to file the paperwork with Companies House for you.
Then, enter the share class conversion transfer date, along with any additional comments and whether the conversion was part of an investment round.
Once complete, click Next to save the conversion details. Don't worry, nothing is sent out at this point, and you can review everything on the next page.
Finally, please double-check all the information is correct, and when you're happy to continue click Start conversion to send out the resolutions.
If no resolutions are required, you will click Convert to complete the conversion.
To manually pass the shareholder resolution go to Secretarial & admin > Resolutions and click the link under the Reason column for the appropriate resolution. Here you can check the signing status and use the Approve and pass button to manually pass it.
Once the resolutions have passed, we'll automatically email you the new share certificate to sign and issue to the shareholder.
Our team, content and app can help you make informed decisions. However, any guidance and support should not be considered as 'legal, tax or financial advice.'