Companies Act 1993

Schedule 10: Interest class: principles

You could also call this:

"Rules for grouping shareholders with similar rights"

When you look at the law about companies, you need to understand what an interest class is. An interest class is determined by certain principles, which are explained in section 236A of the Companies Act 1993. You can find these principles in the schedule called 'Interest class: principles', which is part of this law.

You are in the same interest class as other shareholders if your rights are similar to theirs. This means you can work together on things that affect your common interest. On the other hand, if your rights are very different from those of other shareholders, you are in a different interest class. The important thing to consider is whether your legal rights against the company are similar or different.

If a company is considering a big change, like a merger, the rights of different shareholders might be affected differently. In this case, those shareholders would be in different interest classes, as explained in section 236A. This is because their rights would not be the same under the new arrangement.

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10Interest class: principles Empowered by s 236A

For the purposes of section 236A, an interest class may be determined in accordance with the following principles:

  • shareholders whose rights are so dissimilar that they cannot sensibly consult together about a common interest are in different interest classes:
    1. shareholders whose rights are sufficiently similar that they can consult together about a common interest are in the same interest class:
      1. the issue is similarity and dissimilarity of shareholders' legal rights against the company (not similarity or dissimilarity of any interest not derived from legal rights against the company):
        1. if the rights of different shareholders will be different under a proposed arrangement or amalgamation, then those shareholders are in different interest classes.