How to correct wrong issued share capital

Company set up with incorrect issued share capital

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Dear All

Have a newly acquired client who was incorporated with issued share capital of 1 share of £100k for no reason at all as far as I can see, just an error by the previous accountant.

Company has just begun to trade but dormant accounts filed to date show issued share capital and share capital not paid of £100k.

How best is this situation resolved so that issued share capital is 1 share of £1?

Many thanks for any help.

 

Replies (10)

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By Jdopus
16th Jul 2018 13:41

I'm not 100% sure on this, but frankly I would just correct it in the next confirmation statement and file a correction to the next set of filed accounts along with a note to the accounts mentioning that the previous dormant accounts were clearly filed in error.

If you want to cover yourself properly, you can amend the already submitted dormant accounts and confirmation statements in paper format with Companies House but if the company wasn't trading over this period it's probably unnecessary.

You could try ringing Companies House and asking their procedures on this.

Thanks (1)
paddle steamer
By DJKL
16th Jul 2018 14:10

Do you mean the company formation documents on Companies House show the issue of 1 share with a nominal value of £100,000 or that merely the accounts show this as the position?

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Replying to DJKL:
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By Accountancy Matters
16th Jul 2018 14:22

Both show the one share issued for £100k

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Replying to Accountancy Matters:
paddle steamer
By DJKL
16th Jul 2018 14:39

Would have to check but I suspect you need to do a share split to say 100,000 of £1 ord shares and then a capital reduction down to what your client wants,.

If the formation capital was set as 1 x £1000,000 ord share am not sure what else is available, however have never needed to do this so maybe someone else on here can comment re the art of the possible.

Thanks (2)
RLI
By lionofludesch
16th Jul 2018 14:51

If it's still dormant, consider having it struck off and start again.

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Replying to lionofludesch:
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By Accountancy Matters
16th Jul 2018 15:05

Sadly too late for that but thank you anyway

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Replying to Accountancy Matters:
RLI
By lionofludesch
16th Jul 2018 15:54

It's only "just begun to trade".

Could still be your easiest route.

Unless the client has £100k spare.

Thanks (1)
RLI
By lionofludesch
16th Jul 2018 14:52

So good I said it twice. ©

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By timothyvogel
16th Jul 2018 17:09

had exactly this case but at the other end. what happened is wrong share capital put on first annual return and formation, but the client just corrected it on all trading accounts and carried on years later when I got involved it was due to acrimonious shareholder dispute and one party tried to argue the point but the court said as it had been corrected in accounts and no one had complained they would have to lump it (the used posh legal language but that is the gist of it)

So do trading accounts with correct figure do next years with correct figure and you are home and dry. if questioned it is the principle of Estoppel

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Replying to timothyvogel:
RLI
By lionofludesch
16th Jul 2018 17:46

That's jolly interesting.

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