The statement of capital is the information used to show an overview of your company’s share capital. It also describes what share classes that you have and the amount of money invested into your company. It also explains what shareholder rights are attached to the shares that you have issued.
The statement of capital was introduced through the Companies House Act 2006 and came into effect from the 1st of October 2009. Previous to this act a company had a maximum set limit of authorised share capital. The new act meant that a company could now have as many shareholders as they wanted without restriction.
The requirements for your statement of capital were revised and updated in 2016. The new forms specifying the information required were issued on 30th June 2016. The statement doesn’t in itself list who owns all of the shares in detail, but you may be required to submit a full list of shareholders details to Companies House for their records along with your statement of capital. This is a requirement for companies limited by shares, but if you have a company that is an LLP or is limited by guarantee, it isn’t a requirement.
The 2016 changes also mean that companies need to submit the total amount unpaid on the company’s shares. When shares are issued, they may be awarded without the shareholder needing to pay for them at the time of issue. It can be the case that the shares were only partly-paid shares, leaving a per cent of the shares unpaid. It is up to your company if you choose to call in all unpaid shares and partly-paid shares at a later date when your company may need a cash injection.
Companies House will need to know the total of all of your unpaid shares, so it is simply a case of adding up the value of all unpaid shares and the unpaid amount of partly-paid shares to get a figure.
The information you need to provide on each share you issue:
- Currency that the share was sold under
- Number of shares issued in the company
- Value of each share
- Type of shares (Redeemable, Preference, Ordinary and Cumulative)
- The owners of a limited company (company directors): the first shareholders (subscribers) that were needed at the time of your company formation
The statement of capital also requires the original subscribers (first shareholders) to submit the following information:
- The address of each subscriber
- The full name of each subscriber
- The number of shares owned by each subscriber
The actual share capital is the value of the shares that have been allocated. So for example, if one company share is worth £1.00 and if you own 10 shares you will have a share capital of £10.00. If you set your share value at £10.00 per share and you own ten shares, then your share capital will be £100.00, and so on.
You are allowed to issues as many shares in your company as you wish. There are no imposed caps on the number of shares that you can issue. While this may sound wonderful, you must remember that your shareholders will be liable to pay for any unpaid shares owned, so in most cases new companies will start off small with just a limited amount of shares, to begin with, and may choose to issue more further down the line once the company has been established and is growing successfully.