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Reclassification of shares

Reclassification of shares

Reclassification means shares change share class, for example from A to B shares.

What is reclassification of shares?

Reclassification means shares change share class, for example from A shares to B shares. It changes the shares' rights, such as voting rights or the right to a dividend.

 

When is it used?

Reclassification usually requires support in the articles of association and is decided by the owners. The change must be recorded as a share ledger event so the share ledger always reflects the correct share class.

Record events in the share ledger
Henrik Kristensen, NVR
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Related terms

Conversion of shares

Conversion of shares means shares are converted from one share class to another.

Share class

Share class refers to different types of shares in a company, e.g. A and B shares, with different rights.

Voting rights

Voting rights are a shareholder's right to vote at the general meeting, often depending on share class.

Articles of association

The articles of association are the basic rulebook that governs how a limited company operates.