Abolition of authorised share capital

The concept of authorised share capital will be discontinued for companies incorporated from 1 October 2009. This means that there will no longer be a limit set on the number of shares that can be issued.  If shareholders do wish to seek controls on the issue of shares, then the articles can be amended by special resolution to adopt this restriction.

For existing companies, the authorised share capital provisions in its memorandum will be treated as a restriction in its articles unless removed or amended.

Going forward, for new and existing companies, a statement of capital must be filed at Companies House each time a company makes any changes to its issued share capital. The statement also forms part of any Annual Returns with a made up to date on or after 1st October 2009.

The circumstances which require a statement of capital to be filed (in addition to the appropriate form) are:

• Allotment of shares
• Notice of consolidation, sub-division of shares or re-conversion of stock into shares or redemption of redeemable shares;
• Redenomination of shares;
• Reduction of capital as a result of redenomination;
• Cancellation of re-purchased shares or, (for plcs), immediate cancellation of shares re-purchased into treasury;
• Subsequent cancellation of shares held in treasury by a plc;
• Cancellation of shares held by or for a plc in accordance with s662 of the CA 2006.

There will be certain circumstances where a company needs to file a ‘standalone’ statement of capital, such as accompanying a reduction of capital (either via the ‘solvency statement’ route or as confirmed by a court) and (in some circumstances) when re-registering from an unlimited to a limited company.

The statement of capital must show with regards to the issued capital:

• the total number of shares of the company;
• the aggregate nominal value of those share;
• for each class of shares:
  
  a) prescribed particulars of the rights attached to the shares;
  b) the total number of shares of that class;
  c) the aggregate nominal value of shares of that class; and
  d) the amount paid up and the amount (if any) unpaid on each share (whether on account of the nominal value of the share or by way of premium).