Redemption of Shares

Overview

The Redemption of Shares feature allows you to record the buy-back or cancellation of redeemable share certificates. This process is crucial for managing share capital adjustments and maintaining accurate corporate records. Redemption decreases issued capital and is automatically reflected in the register of members and related records.

What you'll learn:

• How to redeem shares in the platform
• The effects of redemption on share capital and ownership
• How the platform updates your records after redemption

Important: Full Certificate Redemption Only

You can only redeem entire share certificates. To redeem a portion of the shares, perform a Share Certificate Split first.

Example: Redeeming Partial Shares

If Shareholder A holds Redeemable Certificate 2 with 10,000,000 shares and you need to redeem 2,000,000 shares:

1. Conduct a Share Certificate Split:
   • Certificate 3: 8,000,000 shares
   • Certificate 4: 2,000,000 shares
2. Redeem Certificate 4.

Performing a Share Redemption

Step 1: Navigate to the Share Certificate

1. Go to the company's Capital Structure
2. Open the specific Share Certificate you wish to redeem

Step 2: Open Redemption Action

1. Click Actions
2. Select Redeem

Step 3: Enter Redemption Details

Enter the following information:

• Redemption Price: Enter the price per share (e.g., €1)
• Redemption Date: Select the effective date of redemption

Step 4: Confirm Redemption

1. Review the redemption details carefully
2. Verify the redemption price and date
3. Confirm that you're redeeming the correct certificate
4. Click Redeem to record the transaction

The redemption has been recorded. The certificate is marked as redeemed, and the company's capital structure and registers are automatically updated.

Understanding Share Redemption

A share redemption occurs when a company buys back or cancels redeemable shares from shareholders. Redeemed shares are treated as cancelled and reduce the issued share capital.

Key Effects of a Share Redemption

• Number of Issued Shares Decreases – The redeemed shares are removed from circulation
• Share Capital Decreases – Issued share capital is reduced by the nominal value of the redeemed shares
• Ownership Percentages Change – Remaining shareholders' ownership percentages increase proportionally
• Certificate Status Changes – The redeemed certificate is marked as redeemed in the system
• Cap Table Updates – The cap table automatically reflects the new ownership structure

Redeemable Shares

Shares must be designated as redeemable in the share class settings to be eligible for redemption. This is typically configured when the share class is created or can be updated in the share class settings.

Practical Example

What Happens Next

After completing a share redemption:

• The certificate is marked as redeemed in the certificates list
• The company's capital history is automatically updated to reflect the redemption
• The share register is updated to show the reduced number of issued shares
• The cap table reflects the new ownership percentages for remaining shareholders
• Share capital is updated to reflect the reduction
• The transaction appears in the capital actions history

Related Topics

• Capital Actions Overview – Learn about other capital actions you can perform
• Share Certificate Split – Learn how to split certificates before partial redemption
• Share Certificates – Understand how share certificates work
• Cap Table – View how share redemptions affect ownership visualization