Sometimes it is necessary to convert some or all of an existing share class into another share class.  The new share class can either be a pre-existing share class or a completely new share class. You can only convert shares into classes with the same nominal value. 

An example situation below starts with:

• 17,000 £1 'A' Ordinary Shares
• 14,000 £1 'B' Ordinary Shares;and
• 19,000 £1 Ordinary shares

The desired outcome is to convert the 17,000 'A' Ordinary shares and the 14,000 'B' Ordinary shares into Ordinary shares so there will be 50,000 'Ordinary shares.

To achieve this we will first need to convert the A shares into Ordinary shares and then repeat the same steps for the B shares.

To start the process:

1. Click on the Share Classes tab and select the blue 'Share reorganisation' option.

2. This will bring up the below options.  Select 'Reclassify/convert shares' and click the green Next button.

3. Select convert the whole or part of a share class option, if you are looking to edit the existing share class please select 'Change the name and or  the rights of a share class' for more detail on this please see How Do I Edit the Class Description? 

4. Simply add the date of change and which share class is being changed. If there is only one share class it will default to this. Then click the green 'Next' button.

5. Now you will be asked which shareholders' shares are being changed. Enter the full amounts for each shareholder and click the green 'Next' button.

6. Inform Direct will want to know what the old shares are being converted into:

• A new share class, or
• An existing share class

Please note: If the existing class you wish to select does not exist, this will be due to:

1. The nominal value is not the same 
2. The shares are paid in one class and unpaid in the other. - You can fix this by amending the paid amounts in the classes. 
3. These classes can have different rights/prescribed particulars; this would not be the cause.

7. The screen will then change to show the existing share class in to which the original shares are being converted.  If this is correct click the green 'Next' button.

8. Before submitting the conversion you will be asked if approval is required, this allows you to create a summary document to be approved prior to creating the Companies House form. 

Note: The approval feature is only available to subscribers of the software. What are the benefits of subscribing to Inform Direct? Pay as you go users will skip straight to the step below.

Note: Once pending, the approval for the action can be completed from the company dashboard tab.

9. You will now see a summary of the proposed transaction.  If you want to see the full details click the View Details option.  Once you are happy with everything click the green 'Submit' button.

 

Note:  The submit button is green rather than red because Companies House cannot receive details electronically about converting shares.  They require paper forms. Inform Direct will produce and pre-populate the correct form for you if required - see below

10. The final step of the wizard gives you the option to generate the correct form - Here SH08.

Note: If you finish without generating the form you will not get another opportunity.

What does form SH08 look like?  Remember that you will need to sign and send the form to Companies House.

11. To convert any remaining shares, repeat the above process. At Step 3 you should again answer No to the question 'Is this change for the whole of the share class?'.

Please note: You can safely complete this transaction if replicating a filing already made at Companies House. Inform Direct cannot submit this form electronically, so only a paper form is produced.