Company Formation Specialists

What is Share Capital?

It is traditional for a private United Kingdom Limited company to be incorporated with an authorised share capital of 100 ordinary shares of £1 each of which only 2 are issued. This provides for the normal start up situation of 2 people starting out business with one share each giving them joint control.

What is Authorised Share Capital?

The amount of share capital stated in the memorandum of association is the company's 'authorised' or 'nominal' capital. This is Typically £100 but can be higher or lower and is usually decided on prior to company registration. It can however be altered at a later date quite easily.

Is there a maximum and minimum Share Capital?

There is no maximum to any company's authorised share capital. The minimum for a private limited company is one. However, a Public Limited Company must have an authorised share capital of at least £50,000 (and, if it is trading, issued capital of £50,000).

What is Issued Capital?

Issued capital is the value of the shares issued to shareholders. This means the nominal value of the shares rather than their actual worth. The amount of issued capital cannot exceed the amount of the authorised capital.

How are shares transferred to new owners?

To transfer shares in a private or unlimited company, a seller must complete and sign the appropriate section of a 'stock transfer form', and pass it, together with the share certificate, to the new owner. Top Of Page

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