What is a statement of capital?

Step Five of how to register a company name: choosing your company share structure and what information you need to provide

When forming a private company limited by shares you’ll come across the ‘statement of capital’.

A statement of capital is made up of the following:

  • Share information
  • Subscriber (or shareholder) information

Share information

This includes:

  • The number of shares in the company
  • The currency of the shares
  • The value of the shares
  • The type of shares (there are 4 main types: Ordinary, Preference, Cumulative and Redeemable)

In a limited company the initial shareholders (these being the owners of the company) are known as subscribers. No extra duties come with being a subscriber, it’s simply a name used to demonstrate that they were shareholders at incorporation. A company must be formed with at least one subscriber (there’s not a maximum).

Subscriber information

The following subscriber information is required in the statement of capital:

  • The name/s of the subscriber/s
  • The number of shares held by each subscriber
  • The address of each subscriber

If this information makes up the statement of capital, what is the share capital?

A company’s share capital is the total value of shares that have been allocated. For example:

  • If a company issued 1 share worth £1 the share capital would be £1
  • If a company issued 10 shares worth £1 the share capital would be £10
  • If a company issued 10 shares worth £10 the share capital would be £100

Is there a recommended amount of shares to allocate?

The total number of shares you allocate and their value is up to you. However, it’s worth noting that shareholders are liable for any unpaid shares that they have, so starting off with a small share capital – £1 share worth £1 for example – is recommended.

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