Company shareholder information must be kept up to date at Companies House. Therefore, if changes are made to shareholders after incorporation – these must be reported.
Companies House displays the names and shareholdings of all company owners on public record. The first shareholders, who are also referred to as ‘subscribers‘, must also provide a service/contact address. However, any shareholders who join a company after incorporation do not have to provide address details.
Update shareholder information
If the details of any shareholders change after company formation, or new shareholder join a company after its incorporation, you must report this information to Companies House when you file your next annual confirmation statement (formerly known as an ‘annual return’). There is no requirement to file an early statement. Unless you would like this information to be updated on public record immediately. (although it is often beneficial to do so, and is considered good practice).
Do I need to tell Companies House if a shareholder changes address?
There is no need to inform Companies House if a shareholder’s contact address changes. Only the subscribers and shareholders who qualify as a people with significant control (PSCs) need to inform of changes to the contact address.
Do I have to tell Companies House when a shareholder joins or leaves a company?
When a shareholder leaves a company after incorporation, you must inform Companies House on the next annual confirmation statement. You will need to state the date they ceased to be a member. You must also report the sale (transfer) of their shares on the same confirmation statement.
When a new shareholder joins a company after incorporation, you must provide Companies House with their name on the next annual confirmation statement. If the new shareholder purchases existing shares from another shareholder, this information should also be reported on the next statement. However, if the company creates new shares for a new shareholder, you will also need to file a ‘Return of Allotment of Shares’ with Companies House within 1 month of the allotment.
What happens if a shareholder dies?
The shares of deceased shareholder form part of their estate. It is the executors of the estate who have the authority to determine what to do with the shares, although they are often bequeathed to family members, unless other arrangements are stipulated in a shareholders’ agreement. For many businesses with multiple shareholders, it is preferable to allow the shares of a deceased member to be purchased by the remaining shareholders, thus minimising disruption and ensuring the business continues to operate in its usual manner.
The family members of a deceased shareholder may not possess the required skills and knowledge to make important business decisions if they are unfamiliar with the affairs of the company; therefore, their input and decision-making power could be detrimental to the future of the company. This is one of the reasons why shareholders’ agreements are so important.
It is wise to plan ahead for such eventualities. This can protect the interests of both your family and your company. Which can ensure a fair and advantageous outcome for all parties involved.