An issue of shares refers to the creation of new shares in a company. These shares are allocated (or ‘allotted’) to a person or persons, who may be an existing or new shareholder in the company. An issuance is made in exchange for payment by the new shareholder(s) and is normally paid in cash straight away.
The typical issue of shares process starts with the prospective shareholder(s) applying to the company for shares in it, together with the relevant payment. The directors will then recommend that the existing shareholders in the company waive their right to pre-emption (the right to ‘first refusal’) on the issuance by passing a special resolution.
Once this special resolution has passed, the issue of shares is approved by the directors, who then update the company’s records, deliver the share certificates to the new shareholders, and submit the details of the allotment to Companies House.
An issue of shares usually takes 2-3 working days to complete. This includes the drafting of the documentation, the signing of the documents by the relevant persons, and the filing of the SH01 form at Companies House. A confirmation statement can optionally be submitted afterwards to immediately show publicly who holds the new shares.
You will need to provide us with your company name, registration number, and authentication code, together with the following information about your issuance:
If a confirmation statement has also been purchased with the order, we’ll also need you to confirm to us via email the date the documentation was signed.
If you are unsure about any of the above points, our team of company experts will be pleased to assist.
No. Whilst the words ‘issuance’ and ‘allotment’ are nowadays used interchangeably, they are technically different parts of the process. The issuance refers to the creation of the new shares, whilst the allotment refers to their allocation to the new shareholder(s). The introduction of the Companies Act 2006 means the issuance and allotment takes place almost simultaneously, hence the distinction between them is now less significant.
Any class of shares can be issued with this service, provided that the company’s articles of association make provisions for shares in that class. If your articles do not support multiple classes of shares, you can purchase our ‘Conversion to Multiple Share Classes’ service from the Company Secretarial Team from just £149.99 +VAT – for more information, call 0203 984 5385 or email firstname.lastname@example.org.
Pre-emption rights are the right of ‘first refusal’ that existing shareholders have for any new shares being issued. When new shares are to be issued, they must first be offered to those existing shareholders.
The existing shareholders have the option to either buy the new shares themselves (in proportion to the share capital they already own in the company) or waive their right to pre-emption and thus allow the shares to be issued the new holder(s) as originally planned.
The Companies Act 2006 provides automatic ‘statutory’ pre-emption rights for all companies, unless different restrictions are inserted to the company’s articles or where the statutory pre-emption rights are disapplied entirely.
Yes. New share certificates are included with this service and will be dispatched with the rest of the issue of shares documentation, together with instructions on how to execute them.
The form SH01 will report the issue of shares publicly on Companies House and must be submitted within 30 days of the issuance taking place. The filing of the SH01 is included with this service.
Details of who holds the new shares will then be included on the next confirmation statement that is submitted. You don’t normally need to submit a confirmation statement right after an issuance takes place, as you can simply wait until the company’s next confirmation statement becomes due and report it then.
However, it is considered good practice to submit one after an issue of shares takes place. This ensures the public record is up to date with the most recent details regarding the company’s ownership. This is particularly important when opening a bank account or applying to lenders.
If you wish the details of who holds the new shares to show on Companies House straight away, you can add the Confirmation Statement Service to your order, when completing the short application form, at the discounted price of £24.99 +VAT (including Companies House filing fee).
You can purchase our People with Significant Control (PSC) filing service if your PSCs need to be updated (due to this share issue) at Companies House. The fee for this service is £19.99 +VAT per notification.
Call our Company Secretarial Team on 0203 984 5385 or email us at email@example.com.
In general terms, there is no limit to the number of shares that can be issued. However, some companies may be limited in the total number of shares that can be issued – for example, companies with multiple classes of shares or those with provisions in their articles specifying a maximum number of shares permitted.
Generally, the recipient of the new shares should pay for them when they first apply to the company for their issuance. Most companies require full payment for new shares before they can be issued, although some companies’ articles are modified to allow partial or no payment, on the basis they will be paid later.
Stamp Duty on shares is a tax that is paid by a person buying shares from someone else - known as a share transfer. It does not apply to new issues of shares. It is usually payable when the consideration (amount paid) for the transfer is over £1,000. Payment should be made directly to HMRC within 30 days (late penalties apply).
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