Allocation of shares gone wrong

[SLF]

Hi, I hope you can help me with some advice on the following problem.

I formed a limited company online using the online company as the co sec at the time. They also did my annual return.

After they did my annual return, they mentioned in an email that I had made an error and given 1000 shares to my company instead of to me personally. They said I would need to use a J30 stock transfer form to correct this. They said it was illegal to hold shares in a company name.

Error 1 - I had used the company name instead of my own personal name (but the form field said 'corporate name' which confused me and caused me to put the co name down in the first place. The second field was for 'Authorising Person Name' so I put my own name in there. That's how and why it happened.

What should I have put in those 2 fields?

Error 2 - I appear to have given 1000 shares to the company but in fact I now realise I should have given just 1 share to myself from the 1000 available. They are £1 each.

So, if possible I would want to transfer the shares out of the company name (corrects the first error) and give myself one share and leave 999 unallocated. Can I do that and if so how? It's not a big problem to leave it as 1000 shares @ £1 ea in my name, but if I can reduce it to £1, then I presume my liability is lessened, is that right? Is it worth doing? Sales & Purchases are always paid for immediately so my current liabilities are always very low at any one time.

Also, how do I show this on the balance sheet? I didn't make any physical payment to the company for these shares.

This error was only highlighted to me when they did the annual return yet they were the Co. Sec at the time (been sacked since!!) - shouldn't they have been responsible for checking such things?

 

[JGOffshore]

Are you saying that you set a company up and then issued the shares to that same company? I'm not su7re how any online software could have done that. If ou have allotted 1,000 shares to a different company then their is nothing illegal or unusual about that.

Don't worry about the (lack of) payment for the moment. You can allot shares but not receive payment for them. All it means is that if the company goes bust you would have to pay £1,000.

 

[SLF]

That's right, I merely entered my company name into the field titled 'corporate name' instead of my own personal name. Therefore, the shares are in the name of the company I set up, instead of in the name of an individual (me). But according to the online formation company, that is illegal (not that I meant to do that!) and I think that as Co. Sec THEY should have checked and spotte that error upon assigning them as Co. Sec (which was when I set the company up, so all done at same time). Felt I was ripped of in the respect of the Co. Sec. bit.

 

[JGOffshore]

That's right, I merely entered my company name into the field titled 'corporate name' instead of my own personal name. Therefore, the shares are in the name of the company I set up, instead of in the name of an individual (me). But according to the online formation company, that is illegal (not that I meant to do that!) and I think that as Co. Sec THEY should have checked and spotte that error upon assigning them as Co. Sec (which was when I set the company up, so all done at same time). Felt I was ripped of in the respect of the Co. Sec. bit.

I think you have a point. There is no way any Companies House approved software would/could/should allow you to do this. It isn't so much illegal as impossible. It's like you putting your own name on a birth certificate as your own father. Daft.

Drop me a PM with details of the company and I'll have a root around the Companies House mainframe to see exactly what they have on record and advise you what can be done.