Share split and Share cancellation

[sherimParticipant]

Dear Jonathan

I am trying to work out how to cancel/reduce shares after creating a new share split (meaning taking a company from 10,000 shares to 1 million with a 0.1p issue). After the share split one of the directors will have a 5,000 shares when the owner of the company would rather he have only have 3.500. I am not sure how you reduce or cancel the excess shares which will vest in him? Should the company buy these from him or should he gift them to the company? Is there a simple way to handle this?

Many, many thanks for any steer you can provide.

Sheri

[Jonathan LeaKeymaster]

Hi Sheri

The company can buy back and cancel shares for nil consideration with relevant board and shareholder consents, a buy back agreement and SH03 and SH06 statement of capital forms filed at Companies House. In any case, its hard to decipher exactly what the issues are and therefore to know how best to resolve them. Making mistakes with share capital can be very costly and you should seek specialist advice. Feel free to email an introduction and more information to us at wewillhelp@jonathanlea.net and one of the team will be able to fix a no cost no obligation 20 minute call with you to discuss the situation further and provide a suggested scope of work and quote for further assistance.

Jonathan

[sherimParticipant]

Hi Jonathan

Just a quick thank you for now for your speedy and helpful response. I will follow up with an email this evening.

Best wishes

Sheri

[Author]

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