Shares and shareholders

What is a share?

A share is a unit of ownership in a limited company . For example, a company may have 100 shares, each owned by different shareholders.

What is a shareholder?

Shares can be held by a person or a corporate body (such as another company). These shareholders, by owning one or multiple shares, own part of a limited company. Shareholders usually have voting rights in deciding how the company is run and appointing new directors .

Are shareholders required for my limited company?

A limited company (limited by shares) must have at least one shareholder. There’s no upper limit on the number of shareholders you can have within your company. A director can also be the sole shareholder, owning 100% of the company. The price of an individual share can be any value, and you can choose a low share value, such as £1.

Can anyone be a shareholder?

Anyone can own shares in a company, including a corporate body (such as another company).

Do I need more than one shareholder?

No, you need only one shareholder to register a company , and this person can be the sole director and shareholder if you are running a business independently, for example.

What is the difference between a shareholder and a director?

Shareholders own a stake in the company while directors are appointed to manage the company and conduct day-to-day tasks. In smaller companies, the director tends to be a shareholder — if not the sole shareholder.

How many shares are required when setting up a company?

When setting up a company, you must issue at least one share. Share values can vary but are often small. Typically, the value of a share is £1.

Can a company have different types of share?

Yes, and different classes of share can have different rights in terms of voting and dividends. For example, a company may have 10 Ordinary A Shares with sole voting rights and 90 Ordinary B Shares with no voting rights. The holders of the Ordinary A Shares would have a say in how the company is run by way of their voting rights.

What is the nominal value of a share?

The nominal value is how much a shareholder paid for the share and how much it is worth if the company is wound up. The share value can be as little as one penny but is usually £1. There is no upper limit on how much a share can be worth.