Can I issue additional shares in my company after incorporation?

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I want to set up a company on my own as the only director and shareholder, but I want to give myself the option of selling shares later on - perhaps to family or friends because a number of them have expressed an interest in investing in the business if it is successful.

What I don’t really understand is the share structure of companies - if I am the only shareholder on the registration application, does that mean I can only create one share for myself? How do I sell shares to other people later on?

Answers

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Yes, you can create more shares after company formation, even if you only issue one share to yourself during the incorporation process. Before doing so, you need to check the articles of association for restrictions - authorised share capital, pre-emption rights of existing shareholders, and the director’s power to allot. These are optional clauses that can be included incorporation - if you adopted Model articles in their entirety, these provisions will not exist.

To create more shares after company formation, you will have to complete a Return of Allotment of Shares (Companies House form SH01) and send it to Companies House within one month of issuing the shares. You will need to add the following details to this form:

  • Company name and registration number
  • Date of allotment
  • New share details - class, currency, quantity, nominal value, amount paid or to be paid per share
  • Statement of capital to include new shares
  • Prescribed particulars (rights) attached to shares
  • Director’s signature or online authorisation

You can download this form and post it, or you can complete it online via Companies House WebFiling.

You do not have to sell all of the new shares when you issue them - you can keep them yourself and sell them at a later date if you wish.

a year ago
 

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