Shares & Shareholders

A person or corporate body that owns shares in a limited company. If there is more than one shareholder, each shareholder owns a piece of the company and has a say in how it is run. Shareholders are entitled to receive a share of any profits.

Anyone, including another company (known as a corporate shareholder).

You will need to have at least one to set up a limited company.

Shareholders own the company and tend only to involve themselves in major decisions that occur infrequently. Directors manage and run the business, dealing with everyday responsibilities and decision-making.

Absolutely. As long as the individual is at least 16 years old and is not an undischarged bankrupt or a disqualified director.

It is a unit of ownership. The percentage of ownership depends on the number of shares issued. So, for example: if a company has 2 shares of equal value, each represents 50% ownership; 4 shares of equal value represent 25% ownership, and so on and so forth.

You must issue at least one share during the company formation process. There is no longer any restriction to the maximum number that can be issued.

Most companies keep things simple and have ordinary shares that carry equal value and voting rights for each shareholder. It is possible to issue different types (classes) of shares, and the three most common ones are preference, cumulative and redeemable.

It has a nominal value and an actual (market) value. The nominal value is the amount a shareholder pays for it, or has to pay if the company is being wound up. The actual value may vary from this amount. Typically, a share will have a nominal value of £1.00.