Shares and Shareholders: 5 Quick Company Formation Tips

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All UK Private Limited Companies must have at least one shareholder – so it’s an important appointment to get right (and to get it right first time as errors made at the formation stage aren’t easily fixed). Here are some pointers to make sure you get off to the perfect start:

Make sure you have the correct information

You require the following information for each shareholder appointment:

  • Name – keep in mind when opening a new business bank account the shareholder name needs to match that on the passport or driving license
  • Address – this can be any address that the shareholder has permission to use (it doesn’t need to be the registered office or residential address)
  • 3 pieces of security information – we ask for the shareholder’s eye colour, town of birth and telephone number

You can appoint another business as a shareholder

This is known as making a ‘corporate appointment’. To do this you will need the following information:

  • Company name
  • Name of the authorising person from the company
  • The company’s registered office address

Age doesn’t matter

There is no minimum age for a shareholder.

Don’t go mad when allocating shares

Our ordinary shares are defaulted at one share worth £1 – you can increase the share value to any amount that you wish. However, it’s worth noting that the value of shares held per shareholder will eventually need to be paid into the business’s bank account, and it’s far easier to add new shares (via the Return of Allotment of shares) to a company than it is to remove unwanted shares.

Consider your share split

It’s possible that you’ll wish to divide shares up amongst a number of shareholders. There are a number of ways to do this, but similarly to the above point, we recommend keeping things simple at the start. If you want a 50/50 split between two shareholders, allocate one share each. If you want a 75/25 split, go with three shares to one. In short, go with a low share total in the early stages.

Thanks for reading – if you have any questions about shares, shareholders or anything else to do with the company formation process, leave a comment and we’ll be in touch.

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By Rachel Simoyan at MadeSimpleFind Rachel on Google+

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