Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Class rights definition

What does Class rights mean? In company law, class rights are the rights attached to a group of shares that carry identical entitlements (for example, to dividends, voting, redemption, conversion or return of capital). In practice, a company with a share capital may issue different classes where the rights attached to one type of share differ from those attached to other shares. Common classes include ordinary shares, preference shares, deferred shares and redeemable shares. The expression is descriptive, but variation and protection of class rights are governed by statute: in the UK by the Companies Act 2006 and in Ireland by the...

Class rights: identification, variation, class meetings, entrenchment, cancellation and Companies House filings under the UK Companies Act 2006 for companies with or without share capital

Published by a LexisNexis Corporate expert

Practice notes

A company with a share capital can issue several classes of share, each carrying distinct rights. A company without a share capital may likewise have different classes of member with varying entitlements. The presence of multiple share classes or categories of member within a company may result in class rights arising. Where class rights exist, they may only be altered in the manner allowed by the Companies Act 2006 (CA 2006).

Different types of shares

In a limited company that has share capital, every share must have a fixed nominal value (as mandated by CA 2006, s 542) and will generally be given a designation or name, for example ordinary shares of £1 each. The nominal (par) value is the fixed monetary figure by which a share is denominated and defines the shareholder’s liability to contribute to the company’s assets on a winding up. Any consideration paid or agreed to be paid on allotment above the nominal amount is share premium. The designation attached to a share commonly indicates the nature of the rights that come with it...

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Web page updated on 21/05/2026

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