The decision by Royal Dutch Shell (RDSB) to tidy up its corporate structure has gone down well with the stock market.

It means that Shell will no longer have two classes of shares, currently A and B, and it will have a more streamlined corporate name.

Formed as a combination between Netherlands firm Royal Dutch Petroleum and the UK’s Shell in the early 20th century, the company has been incorporated in the UK with Dutch tax residence and a dual share structure since 2005.

The A shares are subject to 15% Dutch withholding tax on dividends and the B shares are exempt from this levy.

The plan will be put to vote at a meeting on 10 December and assuming it is approved by a 75% majority ‘Royal Dutch’ will also be dropped from the name.

The new single class of share (minus the withholding tax) will continue to be listed in Amsterdam, London and New York.

The primary listing will be on the London Stock Exchange meaning the stock will remain eligible for the FTSE 100. The simplification process should also make it easier for Shell to use its shares in acquisitions.

In 2018 another firm with Anglo-Dutch heritage, consumer goods giant Unilever (ULVR) flirted with shifting its domicile to the Netherlands, a move which would have seen it surrender its eligibility for inclusion in the FTSE indices. It backed down in the face of a significant investor backlash.

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