Share capital: classes, allotment, currency, and how to change things

This guide clears up a common source of confusion: the difference between a share class and the shares in issue, and what is really involved when you want to change your share capital.

A class and its shares are two different things

A share class is a definition: its name (e.g. Ordinary), its nominal (par) value per share, and its currency. Creating a class does not create any shares.

The number of shares in a class is the total that has been allotted (issued) to shareholders. So a class you have just created shows zero shares until you issue some into it. To add capital, you issue shares — which updates the register of members and maps to the SH01 you file at Companies House within a month.

In Compaxit, use Issue shares to allot into an existing class, or to define a brand-new class and issue into it in one step. There is no such thing as “authorised but unissued” capital any more — that idea was abolished in 2009 — so a class only really exists once it has shares.

Shares in more than one currency

A UK company can denominate its shares in any currency, and can hold different classes in different currencies — one class in pounds, another in dollars or euros (Companies Act 2006, section 542). Compaxit lets you set the currency when you create a class, and the statement of capital keeps each currency separate.

Changing a nominal value

The nominal value of shares that are already in issue is not a free edit — changing it is a sub-division or consolidation of shares, and you file an SH02. Compaxit handles this through its sub-divide / consolidate tool, which keeps the numbers and the register in step. You can still freely set the nominal value on a class that has no shares issued yet.

Changing a currency (redenomination)

Changing the currency of shares already in issue is a redenomination (Companies Act 2006, sections 622–628). It needs a members' ordinary resolution stating the conversion (spot) rate and date, and notice to Companies House on form SH14 within one month — missing that is an offence. Sometimes a small capital reduction follows to round the new nominal values. As with nominal value, you can freely set or change the currency on a class that has no shares issued.

Correcting or removing a class

You can always correct a class name. For a class with no shares in issue, you can also change its nominal value and currency freely, or remove it entirely if you created it in error. A class that has shares cannot simply be deleted — you would first reduce the shares (a cancellation or buy-back, SH06). Compaxit only offers the Remove option on empty classes, to keep the register honest.