The Return of Allotment of Shares is the name of Companies House form SH01. This form must also be completed if you issue (‘allot’) new shares after company formation. It should then be delivered to Companies House within one month of an allotment.
There are many reasons why people choose to issue new shares after company formation, such as:
- Raising additional capital from investors.
- Repaying borrowings
- Funding a new project.
- Awarding a bonus share to employees in place of a cash bonus.
How to complete a Return of Allotment of Shares
The Return of Allotment (form SH01) requests the following information:
- Registered name and number of the company.
- Date of allotment.
- Details of the new shares.
- Details of shares issued for non-cash payments, if any.
- Statement of capital.
- Prescribed particulars of the new shares.
- Authorising signature.
This form can be filed at Companies House online via WebFiling Service or by post. There is also no need to provide the names of new shareholders on the form. This information should be included when you file your next confirmation statement (previously called an ‘annual return’). It is considered best practice to file a confirmation statement as soon as you can after the allotment.
Generally, directors have the authority to allot new shares if the company has only one class of share, unless they are prohibited by the articles of association. To allot new shares in a company with more than one share class, the director must be authorised by the articles or by special resolution of the existing shareholders.
Before allotting new shares, it is important to check the articles of association and shareholders’ agreement for pre-emptive rights. If any such provision is in place, the existing shareholders have the right to purchase new shares before anyone else.