Can I issue preference shares under the Cleardocs Constitution? What should I bear in mind?
Yes, it is possible to issue preference shares under the Cleardocs Constitution — but you need to be careful and to seek professional advice. The Cleardocs Constitution provides for a range of share classes which confer different rights and restrictions in different combinations. Those share classes include a form of redeemable preference share. If you are considering registering a company with any form of restricted or preference shares, then you, the company, and the company’s directors and shareholders, need to carefully consider the implications. For instance, the shares may be treated as debt provided to the company rather than capital, as is explained below. The rights and restrictions attaching to shares will be important to, and are likely to be reviewed by, stakeholders such as: • Government regulators — who assess the company’s debt and equity ratios, net asset position, cash needs and surplus liquid funds requirements and so on. • Banks and other financiers — who assess the
