All these different names, what do they mean?! They are all terms used for the people or organisations that own shares in a limited company. ‘Members’ and ‘shareholders’ are those who take shares in a company at any time; ‘subscribers’, on the other hand, is a term that is only used for the first shareholders of a company, therefore, unless you take shares in a company at the time of its incorporation and put your name on the Memorandum of Association, you will be called a member or shareholder, not a subscriber.
In order to incorporate a private limited company, you will require a minimum of one subscriber. There is no limit to the number of subscribers a limited company has at the time of incorporation or the number of shareholders/members the company has at any time thereafter. When you are registering a new company online with Companies House or a formation agent, you must state whether the subscriber is a person or a company. You should supply the name and address of each subscriber or, in the case of corporate subscribers, you will supply the personal details of the authorising individual who is acting on behalf of the corporate subscriber. You should also state the currency and class of each share taken, the number of shares held and 3 unique personal details in place of a signature.
Shareholders’ limited liability
The owners of a limited company are generally not involved with the day-to-day running of the business, unless they are also appointed as a director of the company. Shareholders’ will deal with significant issues relating to the company and, as the owners of the business, their financial responsibilities and liabilities are limited to the value of shares they take in the company. This basically means, if the company fails or has any debts, the company itself is responsible for this, not the shareholders themselves – they will only be liable to pay for the shares they agreed to take. This financial protection is one of the biggest advantages of running a business as a limited company.
If you would like to register a limited company or require further information, please visit our main website and take a look through our comprehensive FAQs section and additional blog topics where you will find a great deal of useful advice and guidance.