The statement of capital was introduced on 1st October 2009 when the Companies Act 2006 came into full effect. It also provides a brief summary of a limited company’s issued share capital at a certain date. All limited by shares companies are required to complete a Statement of Capital and Initial Shareholdings on Form IN01 during the company formation process.
A statement of capital is also required for companies limited by shares as part of their annual confirmation statement and whenever new shares are issued, bought back by the company, or otherwise changed.
What to include in a statement of capital
This document should include:
• Total number of issued company shares.
• Share class or classes (usually just ordinary shares).
• Total number of issued shares of each share.
• Total nominal value of each share class.
• Aggregate amount unpaid.
• Prescribed particulars of the rights attached to each class of share.
• Currency of the share value.
Most limited by shares companies are also set up with one class of share (ordinary). The statement will, therefore, declare that each share provides equal voting rights and equal claims to declared dividends.
Essentially, this then means that each shareholder’s proportion of voting rights and dividend payments will be determined by the number of shares they own. This becomes more complex when multiple share classes are issued.