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Ordinary Share Capital on Incorporation

A client has incorporated a company using the Companies House service.

Unfortunately they set it up with £5,000 of share capital rather than £100 as advised.

Any recommendations as to how to correct?

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One way is to reduce the capital following the procedure for private companies under CA2006, which involves some paperwork, but fairly straightforward.

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Other ways

Presumably, you mean that £5,000 of shares were subscribed for.  Other possible ways of dealing with this are:

close the company and set up another with the correct share capital.  Incidentally, why £100.  Such a small amount is not going to impress anybody that the company is well capitalised, so why not just issue just £1?Not strictly correct, but just file the first Annual Return showing the desired share capital.  Neither Companies House nor anyone else will notice or object.

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As I see it £1 is not very

As I see it £1 is not very flexible if another shareholder were to be brought in later on. Thanks for the advice.

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£1 - 100 shares

Is there any reason why you can't have 100 penny shares making the share capital £1?

If Lloyds TSB shares are worth less than £1 why should our small companies have to pay more?

Some company formations default to £1 but most can be changed.

Hope this helps?

 

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Why not?

beanjuggler wrote:

As I see it £1 is not very flexible if another shareholder were to be brought in later on. Thanks for the advice.

Can't you issue another £1 share?

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Issue partly paid?

Whilst a subscriber is required to take up the shares indicated I think you might be able to get the directors to issue them as say 2p paid, leaving 98p as unpaid.  This can be left until the company is closed when they will be required to pay up the outstanding sum.

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Thanks everyone for all the advice.

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