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WHAT ARE CONVERTIBLE PREFERENCE SHARES?

Preference shares are often expressed to be convertible, which means that they can be coverted into a different class of shares, usually ordinary shares.

The conversion may be done by way of a formula (for example by reference to a ratchet) or at a fixed rate and the date on which the shares can be converted may be, for example, a specific date or after a certain period of time.

This can be a complex area - please ring 08456 800 727 for advice.

The issue of preference shares is regulated by company law (in particular the Companies Act 2006), the Articles of Association of a company and any shareholders agreement entered into by the relevant shareholders.


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