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Issuing new shares

Issuing new Shares in the capital of a company (sometimes also referred to as stock, for example in relation to US companies). Shares in a company give to the holders, known as shareholders, rights in relation to that company such as to vote, to receive dividends and to a return of capital. Holders of shares in a company own that company and the company, not its shareholders, owns the company's assets. is one of the key ways of raising additional finance for your A private company limited by shares incorporated and registered in England and Wales. . However, you should not assume you can issue Shares in the capital of a company (sometimes also referred to as stock, for example in relation to US companies). Shares in a company give to the holders, known as shareholders, rights in relation to that company such as to vote, to receive dividends and to a return of capital. Holders of shares in a company own that company and the company, not its shareholders, owns the company's assets. to whoever you want. There are a range of legal restrictions and considerations to bear in mind, and it is vital that you follow the correct legal process. This section contains guidance on to whom you can issue Shares in the capital of a company (sometimes also referred to as stock, for example in relation to US companies). Shares in a company give to the holders, known as shareholders, rights in relation to that company such as to vote, to receive dividends and to a return of capital. Holders of shares in a company own that company and the company, not its shareholders, owns the company's assets. , the checks and decisions you need to make and the legal process you must follow.

company-secretarial-shares-and-admin

How to issue new shares

  1. 1.How can my company issue new shares?

Steps to take before issuing new shares

  1. 2.What should I do before my company issues new shares?
  2. 3.What is a subscription letter?
  3. 4.Does a subscriber for new shares have to sign a subscription letter before being issued new shares?
  4. 5.When should my company invite a subscriber to send a subscription letter?

To whom my company is allowed to issue new shares

  1. 6.If my company wants to issue new shares, do I have to offer them first to existing shareholders?
  2. 7.Can my company issue shares to some but not all of my company's existing shareholders?
  3. 8.Can my company issue new shares to someone who is not a shareholder?

Board and shareholder approval of share issues

  1. 9.What director and shareholder approvals will I need for my company to issue new shares?

Pre-emption rights

  1. 10.How should my company offer new shares to existing shareholders in accordance with their pre-emption rights?
  2. 11.How can my company disapply pre-emption rights?

Whether shares must be issued for cash

  1. 12.Does my company have to issue shares for cash?
  2. 13.When might my company want to issue new shares for cash?
  3. 14.When might my company issue shares other than for cash?

How many shares to issue

  1. 15.If my company issues new shares, what percentage of my company should a shareholder receive for their money?

Payment for shares

  1. 16.How much must a shareholder pay for his new shares?
  2. 17.How do I value a non-cash payment which my company receives in return for issuing new shares?
  3. 18.How and when must my company receive payment for shares?

Issuing a new class of share

  1. 19.Why might my company wish to issue a new class of share?
  2. 20.If my company issues a new class of share, what rights will they have?
  3. 21.What extra steps will I need to take if my company wishes to issue a new class of share?

Steps to take after issuing new shares

  1. 22.What steps do I need to take after issuing new shares?
  2. 23.How and when must my company issue share certificates to shareholders?
  3. 24.What should I do if an issue of new shares affects the persons with significant control of my company (PSCs)?
  4. 25.What documents do I need to file at Companies House after issuing shares?
  5. 26.What company registers do I need to update after issuing shares?

Written board resolution approving the pre-emptive offer of further ordinary shares

Use this template written board resolution where directors of your company want to approve a pre-emptive offer of further ordinary shares to existing shareholders. A pre-emptive offer means that where you are issuing new ordinary shares for cash, you are required to offer the new shares to existing shareholders on identical or more favourable terms in proportion to their existing shareholdings. This written resolution assumes that your company has not disapplied pre-emption rights. This template generates a written board resolution in which the directors approve circulation of the letter offering shares to existing shareholders, and the associated offer of shares. By using this template, you minimise the risk of disputes with existing shareholders and ensure you comply with relevant company law.
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Step-by-step guide to paper EH06 form

This is a guide to completing the paper EH06 form, which you will need to file following the allotment and issue of new shares if your company keeps its register of members on the Companies House Central Register. This will enable Companies House to update the register. The register of members must be updated as soon as possible, and at the latest, within two months of issuing the shares. If your company fails to keep and accurately maintain a register of members, both the company itself and every officer at fault for the failure commits a criminal offence punishable by a fine. For further guidance on your company's record-keeping obligations, including guidance on keeping your registers on the Central Register, see our Q&A on Maintaining a company's books and records . For further guidance on the process for issuing new shares, see our Q&A on Issuing new shares .
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