Dave Mess
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How to issue shares

How to issue shares

Hello accountancy experts.

I've recently founded a small company selling software. I issued 100 shares (£1 each) to myself on formation. I now want to issue 8.5% to someone I want to bring into the company. The shares are instead of a salary, he will receive annual dividends.

I've got the SH01 form, and I have a share certificate which I made myself. Do I just need to fill in the form and issue the new shareholder a certificate? Also, can I issue half a share?

Many thanks for your help. Dave.

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By Old Greying Accountant
18th Nov 2011 21:57

To give someone 8.5% ...

... you would need to issue 9.28961 shares!

I suggest you issue them 17 shares and yourself a further 83, this would give the desired holdings.

You articles will tell you how to issue shares, you will at minimum need a board minute alloting the new shares, assuming the directors have the power to do so.

(9 shares would give them 8.25688%, 8 would give them 7.4074%, and 10 would be 9.0909%)

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19th Nov 2011 00:37

*I'm sole shareholder. Do I still need to record board minutes?

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19th Nov 2011 08:12

Yes

you do.

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23rd Nov 2011 11:38

Did you get any tax advice?

This arrangement could put your "employee" squarely within the Employment Related Securities regime.

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25th Nov 2011 16:20

dividend amounts

Have you thought about the way dividends work?  If all the shares are the same type and you want to pay him £1,700 in dividends (on 17 shares) you will get £18,300 on your 183 shares.  Is this what you intended?

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