Q&As

If a private limited company with different classes of shares is re-registered as an unlimited company, are all the holders of the different classes of shares made fully liable for all the company’s debts and obligations? What would be the effect of such re-registration on the different class rights of the shares?

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Produced in partnership with Louise Wolfson
Published on LexisPSL on 23/12/2020

The following Corporate Q&A produced in partnership with Louise Wolfson provides comprehensive and up to date legal information covering:

  • If a private limited company with different classes of shares is re-registered as an unlimited company, are all the holders of the different classes of shares made fully liable for all the company’s debts and obligations? What would be the effect of such re-registration on the different class rights of the shares?

If a private limited company with different classes of shares is re-registered as an unlimited company, are all the holders of the different classes of shares made fully liable for all the company’s debts and obligations? What would be the effect of such re-registration on the different class rights of the shares?

An unlimited company is a company which does not have any limit on the liability of its members (section 3(4) of the Companies Act 2006 (CA 2006)). It does not have to have a share capital, but it may do so (CA 2006, s 102(3)(b)).

The procedure for registering a private limited company as an unlimited company is set out in CA 2006, ss 102–104. The assent of all members of the company to re-registration as an unlimited company is required under CA 2006, s 102(1)(a).

CA 2006, s 103 sets out how to apply for re-registration and the documents that must accompany the application. CA 2006, s 102(3)(b) makes it clear that an unlimited company may have a share capital. The application to re-register from limited to unlimited must contain:

  1. a statement of the company’s proposed name on re-registration

  2. the prescribed form of assent to the company being registered as an unlimited company authorised by or on behalf of all the members. The form prescribed for these purposes is set out in the Companies

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