A share class is a designation applied to a specific type of security, for example common stock.
1) Find and Add Share Classes
i. A share class needs to be created before you can issue shares. Go to the Shares tab under Ownership, highlighted below, then "Classes" and click on the green “Add Share Class” button.
2) Create Share Class
|Approval Date||Date the Share Class was approved and noted to Companies House|
|Currency||GBP, EUR, Dollar etc - what is the designated share class currency|
|Nominal Value||The stated value of an issued share. Sometimes referred to as face value or par value. Disregards an item's market value and should not be confused with price per share.|
|Votes||assigns the number of votes that each share of a particular share class holds|
|Name||What is the title of the share class|
|Description||For admins to give shareholders a better understanding to the formation of the share class|
|Deferred||This share class will be left out from all fully diluted calculations.|
|Allow shareholders of this class access to||allows you to choose whether shareholders can navigate to the company area. If left empty, they will only get a summary of their shares.|
Further information on;
- Share Classes
Setting the nominal value in Capdesk will affect the computed share capital of the company (the part of the capital of a company that comes from the issue of shares). Share capital is calculated by multiplying the number of shares outstanding by the shares nominal value and is shown in the share class overview:
The “Votes” value assigned will be reflected in the cap table highlighted below.
The “Rights” field is not compulsory but it provides a brief and concise overview of the rights affiliated with a particular share class e.g., "Pre-emption rights on new share issuances.”
- Allow shareholders of this class access to
If ticked, shareholders will be able to view the cap table, news, documents and collaboration tabs. As long as a shareholder owns shares of an access granting class, they will have these privileges regardless of whether they also own shares of classes that do not grant access.
3) Liquidation Preference
Tick the “Liquidation preference” box to give preferential rights in the case of liquidation i.e. the share class gets part of the proceeds at a liquidation before other shareholders. If you tick this, you will see more fields:
Field value is the liquidation rank. A higher rank means higher priority, they get proceeds before other share classes of a lower, (or no preference), rank.
- Liquidation Preference Multiple
This value multiplies the investment for shareholders of this share class, (with liquidation preference) e.g., with an investment of 100 and a multiple of 2, the shareholder gets 200 before any remaining proceeds are distributed to shareholders (with lower seniority).
- Participates after preference
Checkbox is used if preferred- shareholders are to participate after the initial proceeds have been distributed. If there is no participation, shareholders will receive their liquidation preference, but nothing after that amount (i.e. they do not participate with their ownership ratio for the remaining amount. If this is ticked then you will see another checkbox:
- Has preference participation cap
Limits the participation. Ticking this box opens another field, “Participation Cap Multiple” to input how ‘long’ they participate.
4) Restricted Share Class
If you remove access, shareholders will only see your company listed in their portfolio, but they cannot navigate to the company area. They’ll be unable to view the cap table, news updates, documents, or any other section containing company information. As long as a shareholder owns shares of a class that grants access, they’ll be able to enter the company area - regardless of whether they also own shares of classes that do not grant access.
If you need further assistance, you can reach out to us by submitting a support ticket here.