Shareholders

What is a Company Shareholder?

A shareholder is an individual or entity that owns shares in a company limited by shares. Shareholders are the owners of the company and may have specific rights, such as voting on key company decisions or receiving dividend payments. Companies limited by guarantee, in contrast, have guarantors instead of shareholders.

Key Features of Shareholders

• Ownership:

  • A company limited by shares must have at least one shareholder, who can also be a director.

  • There is no maximum number of shareholders.

  • If there is only one shareholder, they own 100% of the company.

• Share Value and Liability:

  • Shares can be issued at any price (e.g., £1 per share).

  • Shareholders are liable only for the unpaid amount on their shares if the company shuts down.

• Share Classes and Rights (Prescribed Particulars):

  • Shareholders’ rights vary based on the class of shares issued.

  • Rights include voting power, entitlement to dividends, and whether shares can be redeemed for money.

Issuing Shares

When registering a company, the Statement of Capital must include:

• Number of shares issued and their total value (share capital).

• Details of shareholders, including their names and addresses.

For example, a company issuing 500 shares at £1 each has a share capital of £500. Share capital reflects the nominal value of issued shares, not the company's market worth.

Shareholder Transparency

• Most companies must report their shareholders annually to Companies House.

• Exceptions include:

  • Companies engaged in sensitive activities (e.g., animal testing).

  • Publicly listed companies, as shareholder details change frequently.

For most private companies, shareholder information is publicly available and may include individuals or organisations.

Companies Limited by Guarantee

Companies limited by guarantee are a distinct structure with guarantors instead of shareholders. Guarantors:

• Control the company and make decisions.

• Do not take profits; funds are retained within the company or used for specific purposes.

• Agree to pay a guaranteed amount if the company cannot pay its debts, ensuring limited liability.

Useful Data for Corporate Structures

Combining shareholder data with the Significant Controllers Register can reveal ownership hierarchies and identify controlling individuals or organisations within corporate structures.

Recent Legislation and Context

• Companies Act 2006:
  Governs the definition of shareholders, issuance of shares, and their rights.

• Corporate Transparency and Register Reform (2023):
  Enhances reporting requirements for shareholders and improves transparency regarding beneficial ownership.

• The People with Significant Control (PSC) Register:
  Introduced under the Small Business, Enterprise and Employment Act 2015, this register complements shareholder data by identifying individuals with significant control.

Useful Links for Further Reading

• Companies House: Shareholder Guidance Provides detailed information on reporting and registering shareholders, including templates for statements of capital.

• The Companies Act 2006 Comprehensive legislation outlining the rights, responsibilities, and processes for shareholders and company structures.

• PSC Register: Guidance Explains how shareholder data intersects with the PSC register to reveal ultimate control and ownership structures.