Share redesignation is used to change the share class while maintaining a record of the changes. A share redesignation involves converting existing shares from one share class to another.
Note: if you don't require a complete transaction record of the changes you may perform share amendment, if you require a detailed record of the share change of class, read on.
In our example the Entity originally authorized and issued Common shares in June 2021. In October, the Entity issued Preferred shares in place of Common Shares.
The Original Capital Authorization and Share Issuance
Step One - Authorize the New Share Class
- Click Add in the lower right-hand corner of the Authorize Capital section. The Authorize Share Capital window opens.
- In the Authorize Share Capital window, complete the following fields:
- Pick the Date the capital is authorized
- Select the Capital Type (usually Equity) from the drop-down list provided
- Select (or type) the Prefix in the field provided
- Add any Additional Properties, Ledger Notes or Comments, if required
- Click OK when done
The new share Capital is authorized and displayed.
Step Two - Convert the Share Class
- Click the By Class tab, then click the ... to the left name of the of the holder of the class C shares then click Convert For ...
- From the dialogue box displayed (Common in this example), enter the following:
- Pick a Date from the date-picker
- In the Transferor Name field, type the name of the Shareholder who currently holds the Class C shares
- To convert all Common shares to Preferred, simply click the small number at the lower right-hand of the Amount field
- Click the Convert to Class drop-down and choose Preferred (the new share class created above)
- Type the amount of shares After the Conversion in the field provided. (In this example, the number of Preferred shares = the number of Common shares, so we'll type 5000 to match the number of shares in Amount field)
- Type Pursuant to share re-designation in the Ledger Note field
- Click OK to save your changes
Capital and All Transactions now looks like this:
Step Three - Deauthorize the Original Share Class
- Click the ... to the right of the Properties column of the original share class, and choose Deauthorize. The Deauthorize Share Capital Class dialogue box opens.
- Click the Date field and use the date picker to choose an appropriate date. In the Ledger Note field type De-authorization pursuant to share re-designation and click Ok to save and deauthorize the share class.
The Authorized Capital and Capital Holders now look like this: