The Ultimate Guide to Setting up a Limited Company

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9 - Company shareholders

Shareholder rules

Every limited company must have at least 1 shareholder. There are no restrictions on who can be a company shareholder. 

What's the difference between a shareholder and a director?

The shareholders of a limited company are the people that own that business.

The directors of a limited company are responsible for running the company. It is quite usual in small companies for the directors and shareholders to be the same people.

Shareholder addresses

As with company directors shareholders have to provide an address but this can be the service address. There is no requirement for the shareholders to show their usual residential address.

If you are having additional shareholders who are not directors (or the company secretary) you will have to specify an address for that shareholder. Again this does not have to be the usual residential address BUT whatever address is supplied will appear on the incorporation documents on the public record.

Finding shareholders address in companies house records

Fig 1.

How to find shareholders addresses in incorporation documents on the Companies House website.

https://beta.companieshouse.gov.uk/

Finding shareholders address in incorporation document

Fig 2.

We can see that this company shareholder used a residential address by looking at their incorporation documents which are available from the government website.

Shareholder voting rights

Although in practice the directors of a company take care of the day to day running of the business it is the shareholders that actually own the company. When it comes to important decisions the consent of the shareholders is required. This is done by convening a ‘shareholders meeting’ in which the shareholders will vote on the matter at hand.

Most companies are setup so that every shareholder has equal voting rights in proportion to their shareholding in the company. This will be the case unless you set your company up with different classes of shares and amend the voting rights for the different share classes (for instance having a class of shares with no voting rights at all). For many matters decided by the shareholders an ‘ordinary resolution’ is required to be passed at a vote. This requires a simple majority to be passed (i.e. greater than 50%).

For other matters such as a resolution to change the company name the Companies Act requires a special resolution to be passed at a shareholders meeting. A special resolution requires 75% of the votes cast in order to be passed.

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