How do I issue more shares in my company?

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I own a business in the East Midlands that I formed last year. At that point in time, I was the sole shareholder in my company, and so I only registered it with Companies House for a single share. Now, I would like to bring on another shareholder - a dear friend who has been with me from the beginning and proven he deserves a proper share in the company. So, just out of curiosity, how am I supposed to issue more shares in my company? I am merely curious as to what the process is like.

Answers

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You can create more shares in your limited company at any time by completing a Return of Allotment of Shares (Companies House form SH01). This must be filed with Companies House - either by post or through WebFiling - within a month of the allotment. This information will be registered and updated on the public record shortly afterward.

Form SH01 should be completed with the following information:

  • Name of the company.
  • Company registration number.
  • Date of allotment .
  • Details about the new shares - Quantity, class, currency, nominal value, and sum paid or due to be paid on each share.
  • Details of non-cash consideration - i.e. any non-cash payment accepted as payment for the shares.
  • Statement of capital.
  • Prescribed particulars of rights attached to shares.

It is entirely up to you how many new shares you want to create and how many of them you want to sell to other people. Bear in mind that you should continue to own over 50% of your company’s issued shares if you want to retain a majority ownership of the business.

New shareholders details will be provided for Companies House on the next annual return but your company’s statutory register of members should be updated immediately.

a year ago
 

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