Confused about shares

[Toon]

I'm completiing an annual return for the Companies House and am confused about what to put in for "Issued share capital details". I own a ltd company and, looking through my details of when the company was formed with "100 x Ordinary shares of 1 British Pounds".
However, another email states that when I transfered the director and secretary from the formation company to myself and my secretary that limited companies have 1 share!

Anyway, the company is fully owned by me (the director) and as far as I'm aware I have one share. But from the first email I received, there should be 100 shares.

The form asks for "class of share" so I know I put "ordinary" then it asks for number of shares issued, which I presume is 1. It then asks for Aggregate nominal value of issued shares - I dunno!

Help please.

 

[Toon]

Not to worry, luckily the formation company stores all of my information on their website so I logged in and checked.

So... I have 1 share and understand I have 99 floating around somewhere? If this is the case, shouldn't I have all the other 99 assigned to me or should I leave them. By only having one share, do I own 100% of the company? How do I sell the other shares (if I ever need to know)? And finally, will the "aggregate nominal value of issued share" be £1 or £100?

 

[Alpha]

From the top

Your company is currently setup with a 100 shares as the total available to issue. ( The authorised share capital)

The company has issued 1 share to you presumably with a nominal value of £1 therefore the aggregate nominal value is £1 ( ie total nominal value £1 divided by No. of shares in issue(1) ).

As you own all of the ISSUED share capital of the company( 1 share) you are the outright owner of the company.

You could potentially raise further capital for the company by issueing the other 99 shares but to if for example all of these shares were issued to someone else you would no longer have control of the company( as they own 99% of then shares and you have 1%)

Anything beyond the fact that you currently own 100% of the current issued shares for a small company is irrelevant unless you need to raise further capital for expansion AND know someone who is willing to invest money for a share of the company.

(I think thats answered your query)

 

[Toon]

Yeah, that's cool... thanks.

One question - Not that I'm planning on this any time soon, but if I wanted to sell a share, how do I do this? From what I understand, I can sell a share to anyone for any price I want right? So if I sold a share to someone, then we would both have one each meaning we both own 50% yeah?

 

[Alpha]

yes you could issue a share to someone at whatever price you agree on(slight difference to whatever price you want but just being pedantic!!!)

You would then have issued the share at £1 plus a share premium (The difference between the price they paid and the nominal value).

Dont forget that this money would belong to the company not you.

Finally yes you are correct in that you would then each own 50% of the company.

 

[gj]

There is an alternative for the future, which is that you issue shares now to yourself - say another 49 shares.

This then gives you the option later of either

1) the company issuing shares to someone else - the amount they pay over and above the nominal value being share premium as Alan says, and the money belonging to the company

or

2) Selling some of your then 50 shares, in which case the money is yours and you have made a gain on which there may be capital gains tax, depending on the amount of the gain.

Which option is best will depend on the circumstances at the time, but having a number of shares in your name with the possibility of selling some to give the correct proportionate share holding with a new eprson at least keeps the options open.

Graham

 

[Ozzy]

Just to build up on this...
If you wanted to sell some of the company to someone else, it is most likely that they will be looking to invest into the company to "expand" so the odds are that they will be looking to buy some of the authorised shares and not the shares from you (hence the money goes into the company). I only mention this incase you didn't pick up fully on Graham's comments.