Flexible Voting Rights & Capital Operations: Merge, Share Split & Share Regroup

Modified on Tue, 5 May at 3:59 PM

✨ Introduction

This feature improves how you manage shares with manual (flexible) voting rights in the DiliTrust Entities module (LEM).

In many companies, voting power is not strictly proportional to the number of shares held. This is known as flexible (or manually adjusted) voting rights — a governance model where shareholders are assigned custom voting rights that differ from the standard share-to-vote ratio.

Until now, companies using flexible voting rights faced a significant limitation: they were blocked from performing key capital operations such as mergers, acquisitions, share splits, and share regroupings directly within DiliTrust Entities.

This update removes those blockers. You can now:

✅ Perform merge and acquisition operations on companies with flexible voting rights
✅ Perform share split and share regroup operations while properly managing voting rights across all share types
✅ Disable manual voting rights when no manual adjustment has been applied
⚠️ Benefit from automatic validation that prevents operations resulting in negative or incompatible voting rights

⭐ What's New?

Previously, when manual adjustment of voting rights was enabled on a share, no capital operation (such as split, regroup, or merge) was allowed — even when it technically should have been. This update makes the system significantly more flexible and user-friendly.

✅ You can now perform split and regroup operations on shares with flexible voting rights, with the ability to assign specific voting rights per share type
✅ You can now perform merge and acquisition operations on companies that have manually adjusted voting rights
✅ You can disable manual voting rights on a share when no custom adjustment has been entered
⚠️ The system now automatically blocks operations that would create negative or inconsistent voting rights, ensuring data integrity

✅ Prerequisites / Getting Started

Before using this feature, please make sure the following conditions are met:

You have access to the DiliTrust Entities (LEM) module with sufficient permissions to perform capital operations.
The company you wish to operate on has its shareholding structure and share types fully configured in the platform.
If your company uses manually adjusted voting rights, be aware that these adjustments will be reset to default during a merge — see the Limitations section for full details.
You have reviewed the current voting rights configuration for all entities involved before launching any operation.

✍ Step-by-Step Guide

Performing a Merge / Acquisition Operation

Companies with flexible voting rights can now participate in merger and acquisition operations. Here is how to proceed:

Navigate to the relevant company within DiliTrust Entities.
Open the Capital Operations section and select Merge / Acquisition.
Select the target company and configure the operation parameters as usual.
You will see a platform warning: "All manual adjustments of voting rights will be defaulted. Please check the assigned voting rights after the operation and adjust them again if necessary." — take note of this before confirming.
The system automatically validates that the resulting voting rights configuration is not negative or incompatible. If the configuration is invalid, the operation will be blocked (see the Error Messages section below).
Confirm and validate the operation.
After the merge is complete, the resulting company will have its voting rights reset to standard proportional calculation. You may then re-enable and re-configure manual adjustments for the new entity if your governance requires it.

Performing a Share Split Operation

A share split divides existing shares into a greater number of shares. You can now assign specific voting rights to each share type resulting from the split:

Navigate to the relevant company in DiliTrust Entities.
Open the Capital Operations section and select Share Split.
Define the split parameters (ratio, applicable share categories).
For each share type involved (e.g. Full Ownership, Bare Ownership, Usufruct), assign specific voting rights for the resulting shares after the split.
The system automatically validates that the resulting voting rights are not negative or incompatible before you confirm.
Review the before/after summary displayed on screen to verify share counts and voting rights per shareholder.
Confirm and validate the operation.

Performing a Share Regroup Operation

A share regroup consolidates multiple shares into a smaller number. The process mirrors the share split, with voting rights assignable per share type:

Navigate to the relevant company in DiliTrust Entities.
Open the Capital Operations section and select Share Regroup.
Define the regroup parameters (ratio, applicable share categories).
For each share type involved, assign the appropriate voting rights for the consolidated shares.
The system automatically validates the configuration before allowing you to confirm.
Review the before/after summary to confirm the expected outcome for each shareholder.
Confirm and validate the operation.

Disabling Manual Voting Rights

You can now disable manual voting rights on a share, under one important condition:

✅ No manual adjustment has been entered on that share

If no custom voting value was applied, simply edit the share and uncheck the manual voting rights option. This gives you the flexibility to return to standard share behavior when it is no longer needed.

Important: If manual adjustments were already applied, you must first correct or reset them before the option to disable manual voting rights becomes available.

❌ Error Messages & What to Do

If a capital operation would result in inconsistent or negative voting rights, the system will automatically block the transaction to protect data integrity.

You will see the following message:

Impossible transaction. The voting rights resulting from this operation are incompatible.

If you encounter this message, here is what to do:

✋ Review the current voting rights configuration for the shares involved
✍ Adjust the manual voting rights if needed to ensure the resulting values are valid
✅ Retry the operation once the structure is valid and compatible

✨ Tips & Best Practices

✔️ Always review your voting rights configuration before performing any capital operation — especially for mergers, where manual adjustments will be reset.
✔️ Document your current voting rights settings before a merge so you can re-apply them accurately to the resulting entity.
✔️ Use the before/after summary screen during split and regroup operations to double-check voting rights distribution across all share types and shareholders before confirming.
✔️ Re-configure flexible voting rights immediately after a merge to avoid any governance discrepancies in the period following the operation.
✔️ Disable manual voting rights when no longer needed to keep your share configuration clean and return to standard behavior.
✔️ Coordinate with your legal team when performing operations involving Bare Ownership and Usufruct share types, as voting rights allocation in these cases may have specific legal implications.

⚠ Limitations & Known Constraints

Voting rights are reset during a merge: If a company involved in a merger has manually adjusted voting rights, all those adjustments will be cleared as part of the operation. The resulting entity reverts to standard proportional voting rights. You must manually re-apply any adjustments after the merge is completed.
No automatic carry-over of flexible voting rights in a merge: The platform does not automatically transfer or recalculate custom voting rights from pre-merge entities to the post-merge entity. This is by design to prevent incorrect data.
Split and regroup require manual voting rights input: During a split or regroup, the platform will not automatically suggest or pre-fill voting rights for new share types — you must enter these values manually.
Negative voting rights are blocked: The system will reject any operation that would result in negative or logically incompatible voting rights.
Manual voting rights cannot be disabled if adjustments exist: You must first reset any applied adjustments before the option to disable manual voting rights becomes available.
This feature applies to DiliTrust Entities (LEM) only and is not available in other DiliTrust modules.

❓ FAQ

What are flexible (manually adjusted) voting rights?

Flexible voting rights allow companies to assign voting power to shareholders in a way that is not strictly proportional to the number of shares held. This is common in complex governance structures where certain shareholders have enhanced or limited voting power regardless of their ownership percentage.

What happens to my manually adjusted voting rights when I perform a merge?

They will be reset to default. The platform will display a warning message before you confirm the operation: "All manual adjustments of voting rights will be defaulted. Please check the assigned voting rights after the operation and adjust them again if necessary." Make sure you have documented your current settings before proceeding.

Can I re-apply flexible voting rights after a merge?

Yes. Once the merge is complete, the resulting entity supports manual voting rights adjustments. You can re-enable and re-configure flexible voting rights for the new company directly within DiliTrust Entities.

Do share split and regroup operations also reset voting rights?

No. For split and regroup operations, the system now allows you to assign specific voting rights per share type during the operation itself. This gives you full control over the voting rights configuration of the resulting shares, without a blanket reset.

What share types are supported in split and regroup operations?

The platform supports the main share ownership types, including Full Ownership, Bare Ownership, and Usufruct. Each type can have its own voting rights configuration after the operation.

Why is my operation being blocked with an "Impossible transaction" message?

This means the resulting voting rights from the operation would be negative or logically incompatible with your current share structure. Review and adjust your voting rights configuration, then retry the operation.

Can I disable manual voting rights on a share?

Yes — but only if no manual adjustment has been applied to that share. If custom values already exist, you must reset them first before being able to disable the manual voting rights option.

I don't see the option to perform a merge on my company — why?

Make sure you have the correct user permissions to perform capital operations in the LEM module. If the option is still unavailable, please contact your DiliTrust administrator or reach out to our support team.

Where can I find more information about the screen layouts for these operations?

You can refer to the design mockups here: Figma — Flexible Voting Rights Improvements (Q2 2026).