Subscribers are the first shareholders in a limited by shares company, or the first guarantors in a limited by guarantee company. They are called ‘subscribers’ because they subscribe (add their names) to the memorandum of association during the company formation process. By doing so, they are agreeing to form the business and become members of that company.
If the subscribers are setting up a limited by shares company, they must each take at least one whole share. If they are setting up a limited by guarantee company, they must each guarantee a fixed sum of money to the company. The value of their shares or guarantees is the limit of their liability for company debts.
How many subscribers does a limited company need?
You need at least one subscriber to set up a private limited company. There is no statutory restriction to the total number of subscribers a company has, nor any such limit to the number of shareholders or guarantors who can join a company after incorporation.
Who can be a subscriber?
Any person or corporate entity can be a subscriber or member. Human subscribers are referred to as ‘natural’ shareholders or guarantors. Non-human subscribers are referred to as ‘corporate’ shareholders or guarantors.
Can a company director also be a subscriber?
Shareholders and guarantors can also be appointed as directors. This is very common, especially when a company is set up with just one or two people. This means that one person can set up and manage a company on their own.
What is the difference between a subscriber and a member?
Company shareholders and guarantors are collectively referred to as ‘members’. The term ‘subscriber’ is only used to describe the first members who join a company on incorporation and whose names are listed on the memorandum of association.
Can I be a subscriber to more than one company?
Yes, you can be a subscriber or member of more than one company at the same time.
Are subscribers’ details available to the public?
The names of all shareholders and guarantors are disclosed on public record when they join a company during or after incorporation.
Subscribers must also provide a contact address for Companies House. There is no need to update this these address details if they change after company formation.
Shareholders and guarantors who become members of a company after incorporation do not have to provide a contact address for Companies House, unless they also qualify as a person with significant control (PSC).
Does Companies House have to be notified if subscribers’ details change?
Companies House must be notified when a member joins or leaves the company and if a member changes their name. These changes should be reported to Companies House when the next confirmation statement is filed. This document replaced the annual return on June 30th 2016.
What is the liability of a limited company subscriber?
Shareholders and guarantors are protected by limited liability. This is a form of financial protection. Shareholders are liable for the nominal value of their shares. Guarantors are liable for the nominal value of their guarantees. The nominal value of shares and guarantees is normally £1.
Members are legally required to contribute the value of their shares or guarantees when the company asks them to do so. This request is usually made when they join the company, but it can also be at a later date if the company calls up on the share capital.