Share Capital and Share Ownership
What is share capital?
■ Legal nature of Shares: ownership confers a complex bundle of rights (s 33 + s 456
CA 06)) including: the right to vote, a rt to declared dividends and the return of
surplus capital.
■ Classes of shares: different rts attach- depending on issue of shares see in a bit
■ Registration of a share in name of shareholder makes a member
What is share ownership?
■ Share ownership does NOT confer an interest in co assets: there is no
“unobjectionable definition of shares”
■ Share capital of a limited company-belongs to the company- this is for benefit of
creditors
■ Shares are “personal property” s 541 CA 2006
■ Shares are issued by the Directors: who may issue or allot if authorised by articles or
by ordinary resolution s 551 CA 06
■ and no need for private co to have an authorised share capital-articles can restrict
authority of directors to issue new shares (we saw this in earlier weeks on directors
duties)
Par or nominal value
■ Shares must have a fixed nominal value- s 542
■ Par or nominal value: share capital of a co: £100 made up of 100 x £1 shares-£1 is
nominal value Share premium: shares may be issued at a premium- say £1.25- £.25=
premium
Acquiring shares
■ By allotment or share issue: company allots shares to shareholders (issues)
■ By transfer: from existing member
■ Public co shares are freely transferable
■ Private co- subject to articles: pre-emption rts
■ Directors may refuse to register-discretion- need reasons s771
Balance Sheet
■ Share premium account s 610: That part of shareholders’ funds (shown separately on
the balance sheet formed of the premium paid for new shares above their nominal
value. It forms part of a company’s non-distributable reserves
■ Capital redemption reserve: A reserve fund into which profits are allocated for the
purpose of redeeming or buying back shares in the company. S 733
■ Statement of capital ss 9 and 10 CA06
■ S 9: a statement of capital and initial shareholdings must be submitted to the
registrar on application for registration of a co.
■ Corporate Capital -shares
■ Shares
■ (i). Ordinary
What is share capital?
■ Legal nature of Shares: ownership confers a complex bundle of rights (s 33 + s 456
CA 06)) including: the right to vote, a rt to declared dividends and the return of
surplus capital.
■ Classes of shares: different rts attach- depending on issue of shares see in a bit
■ Registration of a share in name of shareholder makes a member
What is share ownership?
■ Share ownership does NOT confer an interest in co assets: there is no
“unobjectionable definition of shares”
■ Share capital of a limited company-belongs to the company- this is for benefit of
creditors
■ Shares are “personal property” s 541 CA 2006
■ Shares are issued by the Directors: who may issue or allot if authorised by articles or
by ordinary resolution s 551 CA 06
■ and no need for private co to have an authorised share capital-articles can restrict
authority of directors to issue new shares (we saw this in earlier weeks on directors
duties)
Par or nominal value
■ Shares must have a fixed nominal value- s 542
■ Par or nominal value: share capital of a co: £100 made up of 100 x £1 shares-£1 is
nominal value Share premium: shares may be issued at a premium- say £1.25- £.25=
premium
Acquiring shares
■ By allotment or share issue: company allots shares to shareholders (issues)
■ By transfer: from existing member
■ Public co shares are freely transferable
■ Private co- subject to articles: pre-emption rts
■ Directors may refuse to register-discretion- need reasons s771
Balance Sheet
■ Share premium account s 610: That part of shareholders’ funds (shown separately on
the balance sheet formed of the premium paid for new shares above their nominal
value. It forms part of a company’s non-distributable reserves
■ Capital redemption reserve: A reserve fund into which profits are allocated for the
purpose of redeeming or buying back shares in the company. S 733
■ Statement of capital ss 9 and 10 CA06
■ S 9: a statement of capital and initial shareholdings must be submitted to the
registrar on application for registration of a co.
■ Corporate Capital -shares
■ Shares
■ (i). Ordinary
