What is a statement of capital?

There are a few important terms that you need to look out for when forming a company, one being the ‘statement of capital’. This was introduced under the Companies House Act 2006 and implemented on the 1st of October 2009. Whereas now, you can have as many shareholders in a company as you please, before the implementation of the changes there was a maximum limit (authorised share capital).

The statement of capital is made up of information that shows a brief overview of a company’s share capital, various share classes, the amount invested in the company and all rights attached to shares that have been issued.

Information provided on each share:

• Currency
• Number of shares in the company
• Value of each share
• Types of shares (4 main share types: Redeemable, Preference, Ordinary and Cumulative)

The owners of a limited company; the first shareholders are also known as subscribers. This title doesn’t carry any duties, but is simply used to highlight that they are the original shareholders.

What does the statement of capital require from the subscriber?

• Address from each subscriber

• The full name/s and each subscriber

• Number of shares owned by each subscriber

What is the share capital (included in the statement of capital)?

The share capital of any company is the value of shares that have been allocated.

• 1 share worth £1 – share capital is £1
• 10 share worth £1 – share capital is £10
• 10 shares worth £10 – share capital is £100

How many shares are you allowed to allocate?

There are no caps on the number of shares you can allocate. Although this may sound exciting, it’s important to note that shareholders are liable to pay any unpaid shares that they own, so it’s wise to start off with a small share and work your way up.