Call our team +44 (0) 207 566 3939

BLOG

How many shares to issue?

How many shares to produce?

The issue of the number of shares to distribute is often a tricky question to ask of most small businesses and medium-sized businesses where there are between two and five shareholders concerned.

Although the circumstances of each individual is significant, there can be found a few advantages to distributing shares or to allot them. Let`s look at an example of a new company with a small number of shareholders who want to start contributing.

The three members of the company will be allocated just one share each. Here are the advantages:

• It should be easy for anyone to understand with fewer amounts of shares in issue.
• Having a small number of shares may make it easier to handle.
• Initial money required from the shareholders is limited.
At the other end of the spectrum, companies can customise hundreds or thousands of shares to shareholders of the three proposals. This method also has some benefits.
• The main advantage is the flexibility if, say, a shareholder wanted to sell part of their 100 shares. They can sell their shares for 100 while maintaining the rest. If all they had was one share, their options are much more limited!
• This flexibility may be also useful when you choose to allocate shares to existing shareholders or new shareholders. For example, if the intent is to allot more shares to certain individuals in future, then this can be achieved through the allocation of (say) 10 shares on top of their original 100.
• If there is a need in the funds to maintain the business, then a large number of shares can be issued at a premium or fee.
• Companies that have more shares – and the value of greater whole – look more substantial than those with less capital.
• When considering whether to lend, the bank may want to see a number of shares issued and that the funds are committed to the establishment of the company. This is more favourable as opposed to a heavy reliance on the making loans to companies.

In each of these examples, the shares of the ownership remain equal. Whether the trio of shareholders have three or one hundred shares of stock, each one will retain the voting rights in the company.

Your Virtual Office London are leaders in virtual office services including company formations and corporate address services.

Related Category Posts

Is a Virtual Office Right for Your Business?

Is a Virtual Office Right for Your Business?

Is a Virtual Office Right for Your Business? In this modern digital age, is it time to ditch the idea of a traditional office structure? Many new start-ups are adopting the 'lean' method of operation where they only use the bare bones of a company structure to...

read more
How To Become Mega-Productive with your Work Time

How To Become Mega-Productive with your Work Time

How To Become Mega-Productive with your Work Time PRODUCTIVITY. This has to be one of the most talked-about buzz-words of the 21st Century. There seems to always be a steady stream of great productivity strategies out there that people simply cannot get enough of....

read more
Top Tips For eBay and Amazon Online Sellers

Top Tips For eBay and Amazon Online Sellers

Top Tips For eBay and Amazon Online Sellers There is no denying that the invention of the internet has changed the face of work for the better. No longer do people need to be an employee and have to commute to a place of work every day to earn their living. Being a...

read more

Capital Office Ltd is registered in England and Wales: Registered Address: Kemp House 152 – 160 City Road London EC1V 2NX

Company Number: 06294297 | VAT No: 976201416 | ICO No: ZA084808 | Anti-money laundering registration number: XZML00000125126

© Copyright 2019 Capital Office Ltd - All Rights Reserved

Please click here to view the latest businesses using our address without authorisation.