Shares are the elements that symbolize the ownership of a Limited Company. For a limited company, it is mandatory to issue one share at the least. Those who purchase and own these shares are called shareholders; each shareholder has an ownership of the respective company. Here are some of the important information about Limited Company Shares.
As a general practice, most of the limited companies raise their capital by issuing shares. There is no restriction in issuing shares (as a company, you can issue any amount of shares). A number of funds a company expects to raise by issuing shares is called Share Capital.
A shareholder’s liability to the company doesn’t exceed the number of shares owned by the respective shareholder. The number of profits and the powers of each shareholder is also determined considering the share ownership.
The actual market value of a share will be at variance with the total value of the shares issued by a company. However, in general, it is considered that each share has a value of £1.
Not all the shares are same!
Shares are issued in different forms. Each share type comes with different characteristics. Ordinary shares, Preference shares, Non-voting and Redeemable are the share types offered by the limited companies in the UK. Each variety of the shares is treated differently before the law.
It is a common practice among the companies in the UK to use ordinary shares when forming the company. Nevertheless, if a certain company has multiple shareholders, it can essentially consider issuing other types of shares as well depending on the necessity. If you are about to register a company in the UK and still cannot decide which type of shares are the best solution for you, it is recommended that you should seek some professional assistance.
You can issue one share, 100 or even more!
Depending on the present situation of the business, a company might offer a different number of shares. If you wish to retain the sole ownership of the company, you can simply issue one share and own it. However, after forming a company, you can absorb more owners to the company (if necessary) in the form of shareholders by issuing a large number of shares. Generally, companies prefer to stick to whole numbers when issuing shares; it allows the management to decide the ownership percentage precisely.
However, if necessary, a company can issue the shares after the company formation is done. In order to facilitate such practice, the respective company should coordinate with Companies House and submit a special document called form SH01. This particular form will be used to verify the variety of information about the company. The appointed company directors should take the responsibility of this process by signing the aforementioned form.
At the beginning, handling shares can be a complex task for some company owners. Under such circumstance, it is better to obtain the service of an experienced company formation agent and get the puzzled resolved!