Last updated: 31 August 2026
Share capital is the nominal value of the shares a company has issued. It records part of the company’s ownership structure, but it should not be confused with the company’s market value, cash balance or overall financial strength.
What is share capital?
For a company limited by shares, the statement of capital records the number and class of shares, their nominal value and the amount paid or unpaid on them. Shareholders’ liability is normally limited to the amount unpaid on their shares.
Common share classes
Ordinary shares
Many small companies use a single class of ordinary shares with equal voting, dividend and capital rights.
Non-voting, preference and alphabet shares
Other classes can be used where different rights are genuinely required. The exact rights must be set out properly in the company’s constitutional documents and statement of capital.
Using different classes purely to achieve a tax result can create legal and tax risks. Bespoke structures should be reviewed professionally.
Choosing a share structure
A simple one-owner company may need only one share, while a company with several owners may choose a number that makes the intended percentages easy to represent. What matters is that the structure accurately reflects ownership and the rights agreed between the parties.
Changing share capital
Companies can make changes such as allotting new shares, transferring existing shares, subdividing or consolidating shares and creating new classes. The approvals and filings vary depending on the transaction and the company’s articles.
New allotments are normally reported to Companies House on form SH01 within one month. A transfer of existing shares is not the same as an allotment and generally requires the company’s register of members to be updated.
Public companies
Public limited companies are subject to additional statutory capital requirements before they can commence business or borrow. Those rules do not apply in the same way to ordinary private limited companies.
Need help with shares?
If you are forming a new company, our limited company formation service can accommodate straightforward share structures and multiple share classes where appropriate.
For an existing company, our company administration service can help with routine Companies House share filings. Bespoke rights, shareholder agreements and tax planning should be reviewed by the relevant professional adviser.
This article is for general information only and reflects the position at the date it was last updated. It does not constitute legal, tax, accounting or other professional advice and should not be relied upon as such. Fees, rules and deadlines may change. You should seek advice from a suitably qualified professional before acting on anything covered here.