A share simply represents an individual member’s interest in a company.  The total value of a company’s shares is called its share capital.  Shares are either usually held in public limited companies or private limited companies. These shares give a member certain rights, for example may give a right to a dividend and voting rights within the company. The nature of those rights depends on the class of share; and what has been specified in the Articles of Association.

A minimum of one share must be issued at incorporation and a company can alter the value of the share capital, issue further shares and cancel shares (although the latter can be difficult).

From October 2009, the new Companies Act no longer requires companies to have an authorised share capital and maximum level of share capital that it may issue. Although it may still choose to set a maximum level if it wishes in the articles of association.

Allotment of shares refers to when a person acquires the right to be a shareholder by the board and has a contractual right to the shares, but he is not yet a shareholder.  Issued share capital refers to the process whereby a shareholder takes shares in a company and this is complete once they are registered as a shareholder, which then allows them to exercise the rights associate with these shares.

Companies can issue shares on the basis that payment will be taken and called for at a later date; this is either known as called-up or uncalled share capital. The total value of all paid shares is called paid-up share capital, although most shares are generally issued fully paid.

For more help and assistance when forming your company with Wisteria Formation, call our UK customer support team on 0844 893 0808.

To begin your online company formation once you have decided on your company share capital please go to www.wisteriaformations.co.uk.