Limited companies issues share certificates to their shareholders when they purchase shares after company formation. This document certifies ownership of a share from a particular date. It is essentially a receipt of ownership.
Recording original shareholders (subscribers)
The Companies Act 2006 prescribes that a company must issue a share certificate when any shares are allotted (issued). There is no legal requirement to provide certificates to the subscribers (original shareholders) who set up the business and become members during the company formation process. This is because their details are recorded in the statement of capital and memorandum of association.
Details required in a share certificate
A share certificate should contain the following information:
- Certificate number.
- Company name and registration number.
- Name and address of the shareholder.
- Issue date of share.
- Number and class of shares held.
- Amount paid or owed on each share.
- Execution by Company (signature either by two Directors, one Director and one Secretary, or one Director and Witness).
- Company seal (if applicable).
Safekeeping of share certificates
Banks and lenders may ask to see these certificates when you open a business account or apply for a loan. For this reason, you should ensure their safekeeping at all times.
Rapid Formations provides digital and printed copies of certificates as part of the company formation process. A PDF version of each one will be sent to you on the day of incorporation, so you can save them to your computer and print them at any time.