Share numbers and certificates: how it all fits together

This guide explains how share numbering and share certificates work, why the rules are the way they are, and how Compaxit keeps everything in step so it always adds up. No jargon where we can help it.

Do your company's shares need numbers?

Not always. The law (Companies Act 2006, section 543) says every share must have its own number — unless all the shares (or all the shares of a class) are fully paid and rank equally with each other. Most small private companies tick both boxes, so their shares don't need numbers at all: the certificate simply says how many shares the person holds.

You do need numbered shares when:

• some shares are only partly paid, or
• different shares have different rights (so they don't rank equally), or
• you simply choose to number them — some companies like to.

Compaxit runs a company unnumbered by default, and you can switch a company to numbered whenever you need to. When you switch it on, we allocate numbers to the existing holdings for you.

Two different “numbers” — don't mix them up

This is the single thing that clears up most confusion. There are two separate numbering systems:

• Share numbers (the shares themselves) — 1, 2, 3, and so on. These identify individual shares. A shareholding is a set of them; for example Bob might hold shares 1 to 10 and 22 to 50. When shares are transferred, these specific numbers move to the new owner.
• Certificate numbers (the piece of paper) — for example LTD0001, LTD0002. These identify the certificate document, not the shares. They run in order, one per company, and are never reused. This is where your own house style lives: pick a prefix and Compaxit numbers every certificate that company issues the same way.

So a single certificate might read: “Certificate LTD0004 — Bob Smith — 10 Ordinary shares, numbered 1 to 10.” One is the paper's number; the other is the shares' numbers.

What a share certificate actually is

A certificate is evidence that someone owns shares — but it isn't the ownership itself. Legal ownership is set by the register of members, the company's official record. If the certificate and the register ever disagreed, the register wins. That's why Compaxit treats the register as the master and produces certificates from it: the two can never drift apart.

A share certificate must show the company's name and number, the shareholder's name (and every name, if shares are held jointly), the class of shares, how many shares, their nominal value, whether they are fully paid (or how much is paid), the share numbers if the shares are numbered, the certificate number and date issued, and a signature in line with the company's articles.

A few rules that shape how certificates work

• One class per certificate. You can't put Ordinary and Preference shares on the same certificate. Someone holding two classes gets two certificates.
• Joint holders get one certificate, naming everyone.
• You can split a holding across several certificates. Bob's 39 shares could sit on two certificates — one for 1–10 and one for 22–50 — which is perfectly normal.
• Part-transfer leaves a “balance” certificate. If Bob sells some of his shares, his old certificate is cancelled and he gets a fresh certificate for the shares he kept, while the buyer gets a certificate for the shares they bought.
• Two-month deadline. Certificates must be ready within two months of shares being allotted or a transfer being lodged. Compaxit can flag this for you.

What happens when the shares change — and how it stays balanced

Every time shares move, three things must stay in agreement: the register/holdings, the share numbers, and the certificates. Compaxit does all three together, in one action, so they can't fall out of step.

• Allotment (issuing new shares). We take the next share numbers, add them to the shareholder's holding, record the allotment, and issue the certificate — and the company's total issued capital goes up to match.
• Transfer (selling or gifting shares). Say Bob holds 1–10 and 22–50, and transfers five shares (numbers 6–10) to Alice. Compaxit splits Bob's 1–10 into 1–5 (kept) and 6–10 (moved), moves 6–10 to Alice, cancels Bob's old certificate, issues Bob a new one for the balance (1–5), and issues Alice a certificate for 6–10. The company's total is unchanged — the same shares, now owned differently.
• Sub-division / consolidation. If you split each £1 share into ten 10p shares, the count goes up, the value each goes down, the share numbers are re-issued, and old certificates are replaced with new ones. The total value of the company's capital doesn't change — it just comes in smaller pieces. Compaxit works out the new figures for you.

Whatever the action, Compaxit checks that everything reconciles: issued capital = the sum of all holdings = the sum of all share numbers = the allotments minus cancellations = the live certificates. If anything wouldn't add up, it stops you before it happens.

Numbering your certificates your way

Each company can have its own certificate style — a prefix and a number width — so, for example, LTD with four digits gives you LTD0001, LTD0002, and so on. Once set, every certificate that company issues follows the same pattern, no matter where it was created — whether from the shares screens or from the certificates area on the People page. Numbers are never reused; cancelled and replaced certificates stay in the log so you always have a full history.

In short

• Numbers on shares are optional for ordinary fully-paid companies, and required when shares are partly paid, unequal, or you choose to number them.
• The register is the truth; certificates are evidence produced from it.
• One certificate = one class; joint holders share one; you can split across several; a part-sale leaves a balance certificate.
• Compaxit updates holdings, share numbers and certificates together, and won't let the figures fall out of balance.