Company Shareholders

Company Shareholders

When a limited company is formed it creates share capital, and the law dictates that all limited companies must have at least one shareholder. Company shareholders are often also called members.

A company can have any number of shareholders and they can hold any number of shares. Unlike the company directors and secretaries, there is no restriction on the residency or nationality of company shareholders.

When a company is incorporated, you can either act as a shareholder yourself or you can have a nominee shareholder. Some choose to have a nominee shareholder so that their corporate privacy is protected and they are not identified as shareholders of the companies they have set up. Often nominee shareholders are companies that hold shares on behalf of investors.

Each year, Companies House requires that every limited company in the UK file an annual return to them. This has to include:

• List of main shareholders of company
• Registration Details
• Share Capital Structure
• Shareholder's Details Include:
• Shareholder Name & Address
• Class of Shares
• Number of Shares
• Issued Capital
• Shareholding

It is recommended for companies that have more than one shareholder, that they have a shareholder agreement. This is a document that contains the rules by which the ownership of the company is held and is there to:

• State the powers of the company shareholders

• Provide a basis for resolving disputes in the event of disagreements arising among the company shareholders

• Outline the limits and procedures for all the company shareholders and how the company is to be operated

• State what should happen in the event of one of the company shareholders death

• Prevent a situation where changes in one company shareholders circumstances can affect the other shareholders in the company or detrimentally affect the company.

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