Скачать или смотреть Assigning Shares In A Limited Company In The UK - Explained In 60 Seconds

Assigning shares in a limited company is important, but it’s easy to over-complicate it.

For most businesses, simple ordinary shares will suffice. Assigning 100 shares (each one the equivalent of a 1% share) is common with a nominal value of £1 per share.

📌 Full guide to assigning shares in a limited company: https://www.business4beginners.co.uk/...

#shorts #limitedcompany #companyformation #accounting #shareholders

What is a ‘Share’?
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A share, in a nutshell, is a piece of a company. Those who own one own a part of the business, and are thus entitled to some of the profits.

It’s like your limited company is a cake, and the slices are shares. You can cut as many slices as you want and divide them as you wish (or keep the entire cake for yourself!).

Everyone with a slice will own a piece of your cake.

Every limited company has to have at least one shareholder. However, that person can be an individual and may also be the director of the business.

What types of share are there?
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There are three main types of shares that a limited company can issue:

Ordinary shares

Ordinary shares have no special preferences or caveats attached. Everyone that has a share of your company will have full rights to dividends, voting rights and entitlement to capital should the worst happen.

Preference shares

Preference shares are ones where shareholders are given a fixed right to dividends and aren’t allowed to vote. This is good for businesses who want to get outside capital, without having any external stakeholders interfere with the day-to-day running of the business.

Alphabet shares

Alphabet shares can each have different voting rights, entitlements to dividends, etc. That means companies will sometimes issue B, C, D (and so on) shares to gain more control over the way company rights are managed.

Other share types also exist, including:

Cumulative preference shares, which means that unpaid dividends from one year can be carried on to the next by the shareholder.
Non-voting shares, which give the shareholder dividends but take away their right to vote at general meetings.
Redeemable shares, which are ones that the company will be able to ‘buy back’ at some point in the future, or in the case of an event such as leaving the company.
Management shares, which carry more voting rights and have a stronger influence during meetings.

For most, we’d recommend using ordinary shares for now. Issuing 100 shares of £1 each is usually the most straightforward way as it ensures each share is worth 1% of the business.

If you’re unsure or need further advice, speak to your accountant for full guidance based on your unique situation.

The process of assigning shares:
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Assigning shares in a limited company happens during the formation process. Usually, you'll decide how many shares you want to issue to who and for what amount before your company is formed.

The formation process will involve recording:

The number of shares that your company has
Your share capital, which is the total value of your shares
The names and addresses of all your shareholders

As well as listing the names and addresses of your shareholders, you also need to list information such as:

What percentage of dividends they receive from your company profits
Whether they can vote on company matters
How many votes they get

If you’re using an accountant or company formation agent (recommended). They’ll walk you through the process.

Don’t worry if you get things wrong, shares can always be added, removed, or changed in the future via your annual confirmation statement or a special resolution.

Shareholders agreements
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A shareholders agreement is a binding contract that defines the rights and responsibilities of share members and directors, the way the business should be managed, and the decision-making process.

It helps protect both parties and avoid any conflict further down the line, especially if more shares are created.

Resources
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Forming A Limited Company: https://www.business4beginners.co.uk/...
Recommended Company Formation Agents: https://www.business4beginners.co.uk/...
Recommended Accountants: https://www.business4beginners.co.uk/...
Gov.UK Guidance: https://www.gov.uk/make-changes-to-yo...

DISCLAIMER: The information contained in this video is for general information purposes only. Any reliance you place on such information is therefore strictly at your own risk. Always consult with a qualified accountant to get professional advice tailored to your individual situation.

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