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How to add another shareholder to a Limited Company?

How do I add another shareholder to a Ltd Company?

During the lifetime of a company, you may find it can be beneficial to invite another shareholder into the company. You may want to create another share without transferring any existing shares. In effect you are creating a new share of the company.

When a new share is created you without any shares actually being transferred you just need to complete the SH01 form from companies House. Since the Companies Act 2006 companies no longer have an “authorised share capital” that consists of shares that have not been issued. This means shares must be issued by filling in the form SH01 which is obtained from Companies House.

Why would I want to issue more shares?

Circumstances change and there can be many reasons why you would want to create a new share for a new subscriber to the company.

  • Family member joins the company
  • A business partner is brought in
  • A staff member has been promoted

How many shares should I issue?

This would depend on how much of a percentage you would want them to own. So for example if there is just one shareholder with one share, and you are looking to bring in a new shareholder that has 50% of the shares you would issue another single share. So both shareholders have 1 share each, equating to an equal share of the company (505)

If your Ltd Company has used all the issued shares from the authorised share capital, you will have to issue new shares by creating them.

Why use Your Virtual Office London?

If you are an existing director or shareholder of a Limited Company and you are needing advice on how to issue more shares we can help assist you. Our Company Formation experts have vast amount of experience in forming companies and providing advice to small businesses. We provide a wide array of services to small businesses, including virtual office services, call answering, mail forwarding and registered office services.

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