To ‘allot’ shares in a private company limited by shares simply means to increase the share capital in a company by issuing new shares after incorporation. The ‘Return of allotment of shares’ is the form you are required to complete and deliver to Companies House within one month of any allotment. Issuing new shares is commonplace for many limited companies and it can be for a number of different reasons, such as: raising additional capital from investors, repaying borrowings, funding a new project, and awarding a bonus share to employees in place of a cash bonus.
The Return of allotment of shares (form SH01) requests the following information:
- The registered name and number of the company.
- The allotment dates.
- Details of the shares allotted, including: the class, currency and number of shares; the nominal value of each share; and the amount paid or unpaid on each share.
- Details of any non-cash payments for the shares, for example, awarding bonus shares, or shares given in exchange for anything other than cash.
- A statement of capital detailing the company’s issued share capital at the date of the return.
- The prescribed particulars attached to each share.
- An authorising signature on behalf of the company.
There is no need to provide the name of any new shareholder in this form; this information will be included in the company’s next Annual Return. Once received by Companies House, the details included in the return of allotment will be added to the public register.
Generally, the directors will have the authority to allot new shares in a company with only one class of share, unless a provision in the company’s articles of association states otherwise. To allot new shares in a company with more than one class of share, the director’s will require either authorisation from a provision in the company’s articles or by special resolution by the existing shareholders. Before allotting any new shares, it is important to check the company’s articles of association and any shareholders’ agreement for any clause affording pre-emptive rights to existing shareholders. If any such provision is in place, this means existing shareholders have the right to any new shares issued in the company ahead of an incoming shareholder.
The return of allotment may be filed with Companies House using their WebFiling Service or by post.