The Ultimate Guide to Setting up a Limited Company

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10 - Allocating shares

Simple share allocations

When allocating shares for a small limited company it is best practice to keep matters as simple as possible. You should issue the minimum number of shares possible to achieve the percentage of ownership that the shareholders require. When registering a company shares are usually issued as £1 shares. The following table will gives some examples on how to issue shares:

Complex share allocations

As Companies House and most formation agents use £1 shares it is not possible to implement complex shareholder apportionment. For instance where directors require shareholdings to decimal places (i.e. Shareholder A 26.5%, Shareholder B 26.25%, Shareholder C with 52.25%).

Most people setting up a limited company will never have to worry about this. However, if you have a requirement to allocate shares with complex fractions or you anticipate this will happen with your business in the future it is better to set your company up with a lower share value (i.e. £0.10 or £0.01 shares). TheCompanyWarehouse.co.uk can support this, you just need to give us a call on 0800 0828 727 if this is something that you need.

Example share allocations for a UK limited company

Example How many shares to issue
Single company director who owns 100% of the company 1 share issued to the company director
Two company directors who want to split ownership of the company 50/50 2 shares issued. 1 to each company director
Two company directors with a 60/40 split in ownership of the company 10 shares issued. 6 to the person who will own 60% of the company and 4 to the person who will own 40%
One company director who will own 75% of the company and an investor who will own 25% 100 shares issued. 75 to the company director and 25 to the investor.

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