Allocation of shares

Allocation of shares

When a limited company is incorporated, it must issue, or allocate, at least one share to one shareholder. However, most limited companies have many more shares in issue and these are allocated by agreement of the relevant parties, i.e. those who are, or will be, the majority shareholders.

As well as the shares allocated at the time of incorporation, limited companies can also issue further new shares if, for example, they are seeking to raise finance from either new investors or existing shareholders, either of which can be an individual or a corporate entity.

Shareholders should always be aware that, as well as enjoying the benefits of any dividends paid to them, each shareholder will also have a certain obligation should the company fail or be put into liquidation.

121 Company Formation offers an allocation of new shares service to ensure the process is carried out correctly and that Companies House are informed

How does the allocation of shares process happen?

Once an order has been made, with the required information for the share allocation, we will complete a return of allotments via form SH01 to Companies House. Upon approval, we will release an electronic set of new share certificates and memorandum and articles of association and form SH01.
The process can take up to 24-48 working hours.

Please note

The allotments of shares will not be updated with Companies House only when you submit a confirmation statement. If share issues are needed to open a business bank account or another immediate purpose, we will recommend filing a confirmation statement.

Meanwhile, you can use the new set of share certificates, your amended mem & arts, and your original form SH01 to prove the share allocation, as well as any private sale contracts you may have drawn up.

  •   Filling a confirmation statement to record the share allocation based on request.
  •   The new set of documents are sent electronically. Printed set documents will be made available at a cost fee.

121 Company Formation also offers a confirmation statement service to assist you to keep the company’s records at Companies House up to date.

How can I order the allocation of shares service and how much does this cost?

You can order this service directly from our website or, if you would prefer to seek further advice, please email us at [email protected]

The cost of the allocation of shares service is £49.99.

FREQUENTLY ASKED QUESTIONS

Each limited company must have at least one shareholder but it is permitted to have as many as it wishes.
No, there is no limit to the maximum number of issued shares that an individual can hold and, in the case of many smaller companies, one shareholder will hold 100% of the issued share capital.
No a limited company can issue just one share and, if you intend to own the company by yourself, then this will suffice. However, if you wish to bring on board other shareholders, perhaps new investors, family members or business partners, you can issue as many shares as you wish in order to allocate each shareholder a value in the company. However, more often than not, 100 shares will be sufficient for a private limited company.
Yes, this is permitted for companies that are registered in England and Wales (different laws apply to companies registered in Scotland) but in order to also become a director, they must be over the age of 16.

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