Issuing Shares Upon Registration

[PhilGibson]

Me and 2 partners have been running our company since April and now we're actually going to register it as a limited company.

Do we actually need to purchase shares? The company is already self-sufficient so really it needs no more money however we all want 1/3 shares each.

A brief explanation would be great.




Thanks,
Phil

 

[Scalloway]

You must have shares in a limited company. You only need to issue one share per partner and they can be £1 each. It is not uncommon for small companies to never receive this £2 and carry it as a debtor.

 

[Patifg]

when you pay up the shares where does that money sit?
ie if you had a compnay with say 50,000 shares at £1 each presumably the shareholders pay their money in which is held somewhere?
If you decide to withdraw from the company can you take your shares out and recoup your money?

 

[Scalloway]

The money from shares sits in the company's assets, bank, stock, debtors plant - just whatever it's spent on. You cannot withdraw shares from a company as money without a great deal of administrative hassle. Your only option is to sell them, which depends on finding a buyer who will pay your price.

It may better for a private company to have a low share capital, the balance of funding being lent to the company by its owners to make withdrawl easier.