How many shares do I have to issue?

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I’m trying to get a new dance startup off the ground here in Hackney. I have never formed a company before, and it all seems relatively straight-forward. I was wondering, however, about shares. If I set up a company limited by shares, I’m curious how many shares I need to issue. I am running this business by myself at present, or at least I will when it gets up and moving. So, I don’t really see the need to issue more than one share. Can someone please tell me whether I can issue just one, or if there is a rule as to how many shares I must issue?

Answers

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Hi,

The minimum number of shares you can issue is one. Lots of new companies are set up with just one share.

The law imposes no upper limit to the number of issued shares you have - unless you choose to include such a clause in your articles of association - so you can always create more shares at a later date if you want to sell some of your business to other people to raise capital or grow the company.

However, if you are already considering the possibility of bringing in other people, it may be better to issue more shares from the start. 10 is a good number because it’s easy to work out the percentage value of each share, i.e. one share = 10% of the company. You can own all of these shares yourself, but it just gives you the option of quickly selling shares whenever you like, without having to go through the process of creating more after you’ve registered your company.

Each issued share will have a nominal value of £1. The cumulative nominal value of all issued shares dictates your personal liability for company debts. Bear this in mind before issuing too many shares!

a year ago
 

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