Alphabet shares let you pay one shareholder without paying everyone the same — but only if the classes, articles and paperwork are right. We'll tell you if it fits your company.
Here's a question we get most weeks. An owner has a company with two (or three) shareholders — maybe a spouse, a family member, or a co-founder — and they want to pay one of them a dividend without handing the same amount to everyone else. Perhaps the spouse has unused basic-rate band going to waste, or one founder needs cash this year and the other doesn't. The worry is always the same: "Is that even allowed, or do all the shareholders have to get the same?"
If everyone holds the same single class of ordinary shares, you genuinely are stuck — every share gets the same dividend per share, full stop. But that's exactly the problem alphabet shares are designed to solve. This guide focuses on the dividend mechanics; for the full picture of what alphabet shares are and how they're taxed, start with our alphabet shares pillar guide.
Dividends are declared per share class, not per shareholder. So a company with alphabet shares — A shares, B shares, C shares, and so on — can pay a different dividend on the A shares than on the B shares. It can pay one class generously and pay another class nothing at all. That isn't a loophole or a workaround; it's the entire point of having separate share classes in the first place.