Shares and Shareholders: How Many Shares to Issue

Shares are the units of ownership in a limited company, and shareholders are the people or companies that hold them. Each share has a fixed nominal value, often £1, and the number you hold sets your share of the votes and dividends. Most new UK companies start with 100 ordinary shares of £1, which makes every percentage easy to read. Anyone holding more than 25% is a person with significant control (PSC) and appears on the public register.

This guide explains how shares work, how many to issue when you form a company, the difference between share classes, and how to add or move shares later.

What Is a Share in a Limited Company?

A share is a unit of ownership. If a company has 100 shares and you hold 60, you own 60% of it. Ordinary shares usually give three rights:

• A vote at general meetings, typically one vote per share, used for decisions such as changing the company name or appointing directors.
• Dividends, a share of the profits the directors decide to pay out.
• Capital, a share of what is left if the company is wound up after paying its debts.

Owning shares does not make you responsible for the company’s debts beyond what you agreed to pay for your shares. That is the “limited” in limited company. See sole trader vs limited company for how this differs from working for yourself.

Nominal Value and Share Capital

Every share has a nominal value (also called par value) fixed when it is issued: £1, £0.10 and £0.01 are common. Multiply the number of shares by the nominal value and you get the company’s issued share capital. 100 shares of £1 is £100 of share capital.

The nominal value is not what the shares are worth. A successful company with £100 of share capital can be worth millions; the value comes from the business, not the figure on the certificate. What nominal value does fix is each shareholder’s liability: once a shareholder has paid it, they owe nothing more.

How Many Shares Should You Issue When Forming a Company?

UK law needs at least one share and one shareholder. Beyond that, choose a number that makes ownership easy to divide now and later:

Three points to keep in mind:

• Avoid one share. A single share cannot be split, so bringing in a partner later means issuing new shares rather than transferring part of yours.
• Keep the total paid low. Shareholders commit to paying the nominal value, so 10,000 shares of £1 means £10,000 owed to the company. A small nominal value avoids that.
• Think about the 25% line. Anyone above 25% becomes a PSC. That is a disclosure point, not a problem, but it is worth knowing when you set the split.

CorpAssist’s formation form asks for the number of shares and lets you choose a nominal value of £1, £0.10 or £0.01 per share. A person checks the split before anything is filed.

Ordinary Shares and Other Share Classes

Most small companies only need ordinary shares. Other classes exist for specific needs:

• Ordinary shares: one vote per share, dividends and capital rights. The default for almost every new company.
• Alphabet shares (A, B, C ordinary): ordinary shares split into classes so directors can declare different dividends on each. Common in family companies; take tax advice first.
• Preference shares: a fixed dividend paid before ordinary shareholders, often without votes. Used by some investors.
• Non-voting shares: dividends and capital rights without a vote, sometimes given to employees or family members.

Different classes need articles of association that describe each class’s rights. Standard model articles assume one class of ordinary shares.

Shareholders, Directors and PSCs: Who Is Who?

Shareholders own the company; directors run it. In a one-person company you will usually be the only shareholder, the only director and the only PSC. In larger companies the roles separate. The duties of directors are explained in what a company director does.

Shareholders do not have to verify their identity just for holding shares, but a shareholder with more than 25% is a PSC and must. See do shareholders need verification and PSC verification explained.

Shareholder names are public for companies whose shares are not traded: Companies House shows them in the confirmation statement. Home addresses of shareholders are not required on the register.

Issuing and Transferring Shares After Formation

1. Issuing new shares (allotment). The directors allot new shares, using authority in the articles or from the shareholders. You file a return of allotment (form SH01) at Companies House within one month, with an updated statement of capital. Existing shareholders may have a right to be offered new shares first.
2. Transferring existing shares. A shareholder gives or sells shares to someone else using a stock transfer form. The company updates its register of members, and the change goes on the next confirmation statement. Stamp duty is usually due when the price is over £1,000.

Either way, update the PSC register if someone crosses or drops below 25%, and issue new share certificates. If you file the confirmation statement through CorpAssist (£89.99 including the £50 Companies House fee), we include shareholder changes in the same filing.

Frequently Asked Questions

Official guidance: shareholders and guarantors on GOV.UK. For share schemes, investment or dividend planning, speak to an accountant or solicitor.

Next: the information you need to register a company or form your company.