Last updated: 31 August 2026
The share structure of a limited company determines who owns it and what rights different shareholders have. The number, nominal value and class of shares should be chosen to reflect the intended ownership and decision-making arrangements rather than simply using a large number of shares.
Number and nominal value of shares
A private company limited by shares must issue at least one share. Many straightforward companies use shares with a nominal value of £1, but other nominal values can be used.
The nominal value is not the market value of the company. A shareholder’s liability is normally limited to any amount unpaid on their shares. If a £1 share is fully paid, there is normally no further amount due on that share simply because the company later has debts.
Ordinary shares
Ordinary shares are commonly used for simple ownership structures. Their voting, dividend and capital rights depend on the rights attached to the class in the company’s articles and statement of capital.
Different share classes
A company can create different classes where there is a genuine need for different rights. Examples include non-voting shares, preference shares and alphabet classes such as A and B ordinary shares.
The rights must be drafted carefully. Different dividend rights, voting rights or restrictions on transfer can have significant legal and tax consequences, so bespoke structures should be reviewed by an appropriate adviser.
Changing the share structure later
A company may be able to allot new shares, transfer existing shares, subdivide or consolidate shares, or create new classes. The required approvals and filings depend on the company’s articles, existing shareholder rights and the transaction involved.
An allotment of new shares is normally reported to Companies House on form SH01 within one month. A transfer of existing shares is different: it is normally recorded through a stock transfer process and the company’s register of members rather than by filing SH01.
Get the structure right at formation
Choosing the intended ownership structure at the outset can reduce the need for corrective filings later. Our limited company formation service can accommodate straightforward and multiple-share-class formations. For bespoke rights or shareholder agreements, legal and tax advice may also be required.
For changes to an existing company, see our company administration service.
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.