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When setting up a limited company consider creating different classes of shares to allow the flexibility for different rights to be attributed to different shareholders. For example, dividends must be paid out in accordance with shareholdings. By creating different classes of shares it is possible to declare a dividend for one class and not for another, or to declare different dividends for different classes of shares. This allows the flexibility to extract profits in a tax-efficient manner.

Likewise, attaching different voting rights to different shares allows the decision making to be vested in one person but for another person to receive a greater share of profits.
 
Example:
The Smith family are shareholders in their family company, Smith Ltd. Mr Smith holds 100 A class shares. These have full voting rights but no right to assets on a winding up.

Mrs Smith has 100 B class shares. They have no voting rights and no right to assets on a winding up.

Mr and Mrs Smith’s sons, James and John, hold 50 C class shares each. They have no voting rights but have a right to a share of the assets on winding up.

Having different classes of shares allows Mr Smith to retain full control over the decision making and provides the flexibility to declare dividends for each class of share. On a winding up, the assets would be shared equally between the children.