Capital and share reorganisation
During the lifetime of a company, it will often need to restructure the format of its capital by the issue of new shares to include new investors or new classes of shares with different class rights with different voting and dividends rights for each class of shares. It may be necessary to sub-divide or consolidate shares where the nominal value needs to reflect the market or floatation value. Where capital is in excess of requirements or the balance sheet needs to be re-aligned or capital needs to be released to reserves to pay dividends to encourage investors in these cases a reduction of capital may be required.
The company may at some time need to purchase its own share from an existing shareholder to prevent the shares being sold to a third party. All these changes however will require documentation and may also require alteration to companys Articles of Association to grant authority to the directors to alter the capital structure.