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A subscriber is a founding member of a limited 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 company, become members, and have their names entered in the company’s register of members.
The subscribers of a limited by shares company are known as shareholders. They may or may not also be directors. When a limited by shares company is formed, each subscriber is required to take at least one share in the company.
The subscribers of a limited by guarantee company are known as guarantors. They may or may not also be directors. When a limited by guarantee company is set up, each subscriber is required to guarantee a fixed sum of money to the company.
The nominal value of shares or guarantees determines the limit of each member’s financial liability to the company.
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 is there any limit to the number of shareholders or guarantors a company has after incorporation. If a company wishes to impose any such restrictions, the articles of association must be amended accordingly.
Who can be a subscriber?
Any individual person or corporate entity can be a subscriber or member of a limited company. 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 by 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’ only applies to the first members who join a company upon its incorporation and whose names are listed on the memorandum of association.
Can I be a subscriber of more than one company?
Yes, you can be a subscriber or member of more than one company at any given time.
Are subscribers’ details available to the public?
Companies House adds the names of all shareholders and guarantors to the public register of companies, whether they become members during or after incorporation.
Subscribers must also provide a contact address for Companies House. However, there is no need to update these address details if they change after company formation.
Furthermore, directors are responsible for entering the details of every shareholder or guarantor in the company’s statutory register of members, which must be kept at the registered office or SAIL address.
Shareholders and guarantors who become members of a company after incorporation do not have to provide address details to 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 new shareholder or guarantor joins a company
- an existing shareholder or guarantor leaves a company
- a member changes their name
These changes should be reported to Companies House on the next confirmation statement (previously called an annual return). It is also possible to update the confirmation statement early if you wish for changes to members’ details to be added to the public register immediately.
What is the liability of a limited company subscriber?
Shareholders and guarantors are protected by ‘limited liability’, which restricts their financial obligation to a company to a fixed amount. Shareholders are liable for the nominal value of their shares. Guarantors are liable for the nominal value of their guarantees. Typically, the nominal value of shares and guarantees is set at just £1.
Members are legally required to contribute the value of their shares or guarantees when the company ‘calls up’ these funds. This request is usually made when members join a company, but some companies only call up share capital or guarantees when the funds are required to pay off business debts.