Issue Share Certificates (UK)

Note: Want to skip the guide and go straight to the free templates? No problem - scroll to the bottom.
Also note: This is not legal advice.

Introduction

Share certificates are vital documents that play an important role in protecting the rights and entitlements of business owners and investors alike. Certificates serve as proof of ownership for shares in a company, ensuring shareholders are legally entitled to receive dividends and other benefits, as well as providing assurance to potential investors that the company they are considering investing in is legitimate and compliant with relevant regulations.

For business owners, issuing share certificates is essential to guarantee fair treatment among shareholders. By providing legal protection of ownership rights in this way, companies also meet their obligations under applicable laws - failing to issue these documents can bring hefty fines or other legal penalties.

Investors too benefit from the presence of share certificates; not only do they provide a tangible symbol of investment security but also enable individuals to prove their ownership should any disputes arise. Furthermore, by demonstrating that a company is both legitimate and compliant with regulation, share certificates can act as an incentive for investors to choose one company over another when making their decision.

At Genie AI we understand how important it can be for businesses to get this process right - from understanding what information needs to be included on the certificate itself through to handling its issuance correctly and ensuring compliance with relevant regulations. With our extensive experience helping businesses across numerous jurisdictions on share certificate related issues, we’ve developed a free template library which provides access high quality legal templates backed by millions of data points teaching our AI what constitutes market-standard practice - so you don’t have to pay a lawyer! We provide step-by-step guidance on best practice for issuing share certificates alongside detailed advice on how you can access our template library today so read on now if you’d like more information!

Definitions (feel free to skip)

Companies House: Government agency responsible for registering and dissolving companies in the UK, as well as collecting and storing company information.

Register of shareholders: A record of all shareholders and the number and class of shares held by each shareholder.

Annual return: A document filed with Companies House every year that includes details of the company’s registered shareholders, the number and class of shares held by each shareholder, and the total number of issued shares.

Financial Services and Markets Act 2000: Legislation that provides a regulatory framework for financial services in the UK, including the issuing of shares.

Companies Act 2006: Legislation that sets out requirements for company formation, operation, and dissolution in the UK.

Share certificate transfer form: A legal form that is used to transfer ownership of a share certificate from one person to another.

Share certificate cancellation form: A legal form that is used to cancel a share certificate.

Share certificate reissue form: A legal form that is used to reissue a share certificate.

Corporation Tax: A tax imposed on the profits of companies and other legal entities.

Stamp Duty: A tax imposed on certain transactions such as the transfer of shares.

Contents

• What is a share certificate?
• Requirements for issuing a share certificate in the UK
• Companies House filing requirements
• Register of shareholders
• Recordkeeping
• What information needs to be included on the share certificate
• Company name
• Number of shares
• Class of shares
• Shareholder’s name
• Shareholder’s address
• Date of issue
• Signature of authorized representative
• How do you issue a share certificate?
• Prepare the share certificate
• Execute the share certificate
• Notify Companies House
• What are the legal implications of issuing share certificates?
• Company Law
• Securities Law
• Contract Law
• What are the tax implications of issuing share certificates?
• Corporation Tax
• Stamp Duty
• What happens if the share certificate is lost, damaged or destroyed?
• Report the loss to Companies House
• Execute a new share certificate
• How do you transfer ownership of a share certificate?
• Execute a share certificate transfer form
• Notify Companies House
• Update the register of shareholders
• How do you cancel a share certificate?
• Execute a share certificate cancellation form
• Notify Companies House
• Update the register of shareholders
• How do you reissue a share certificate?
• Execute a share certificate reissue form
• Notify Companies House
• Update the register of shareholders

Get started

What is a share certificate?

• A share certificate is a document that certifies ownership of a certain number of shares in a company
• It is evidence of ownership of shares in the company and a legal document
• The share certificate also states the class and number of shares that the shareholder owns
• This document is usually issued by the company’s registrar
• Share certificates are important documents and should be kept in a safe place
• When you have completed this step, you should be familiar with what a share certificate is and what it represents.

Requirements for issuing a share certificate in the UK

• Ensure that the company’s Articles of Association permits the issue of share certificates
• Obtain the approval of the Directors to issue the certificates
• Ensure that the share capital is fully paid up
• Prepare the certificate in accordance with the Articles of Association
• Ensure that the certificate is signed by the Directors or other authorised representatives
• Check that the register of members has been updated
• When these requirements have been met, you can move on to the next step which is to fulfill Companies House filing requirements.

Companies House filing requirements

• File a copy of the certificate at Companies House within one month of the date of issue
• You must include a statement of capital with the certificate
• You must confirm the date the company was incorporated
• Ensure the correct company name and registration number is included
• Once the documents are filed at Companies House, you can check off this step and move on to the next one.

Register of shareholders

• Create a register of shareholders and document the company’s current shareholders
• Include the name, address, and number of shares they own
• Use a spreadsheet to track this information
• Make sure to update the register of shareholders whenever a new shareholder is added
• When all current shareholders are listed, this step is complete and you can move on to the next step.

Recordkeeping

• Ensure you maintain an up-to-date register of shareholders
• Ensure you have the correct details of each shareholder, including their address and the number of shares they hold
• Keep a copy of all issued share certificates and a record of the date they were issued
• Maintain records of the transfer of shares
• Ensure the register of shareholders is updated when changes are made
• When all of the above is complete, you can check off this step and move on to the next step.

What information needs to be included on the share certificate

• Include the company name, company number, date of issue, class of shares, and the number of shares issued
• The number of shares should be stated in both words and figures
• The name and address of the shareholder should also be stated
• Include the par value of the shares and the amount paid
• The signature of the director should be included
• Once all the necessary information has been included, you can check this off your list and move on to the next step.

Company name

• Determine which company the share certificates are being issued for.
• Record the company name and the company registration number in the share certificates.
• Confirm that the company name and registration number are correct before issuing the share certificates.

Once you are sure the company name and registration number are correct, you can check off this step and move on to the next step.

Number of shares

• Decide how many shares you want to issue.
• If you want to issue more than one class of shares, decide the number of shares for each class.
• Enter the total number of shares you want to issue in the ‘Total number of shares’ field on the share certificate form.
• Enter the number of shares for each class in the ‘Number of shares of each class’ field on the share certificate form.
• You can check off this step when all the numbers have been entered in the form.

Class of shares

• Determine the class of shares that you want to issue.
• The class of shares will determine the rights and privileges of the shareholders.
• Consider consulting a lawyer if you are unsure of the type of share class to issue.
• Decide which rights and privileges each class of shares should have, such as voting rights, dividend rights, and other rights.
• Once you have determined the class of shares and the rights and privileges of each class, you can check this off your list and move on to the next step.

Shareholder’s name

• Obtain the full name of each shareholder.
• Make sure to check the spelling of the names so the certificate is accurate.
• Enter the shareholder’s name on the share certificate.
• Once you have entered the name of each shareholder, you can check this off your list and move on to the next step.

Shareholder’s address

• Collect the address of the shareholder from the company’s records
• Check that the address is up-to-date and correct
• Update the address in the company records if necessary
• When you are certain that the address is correct and up-to-date, you can check this step off your list and move on to the next step.

Date of issue

• Record the date of issue on the share certificate
• Use the date the certificate is signed as the date of issue
• Once the date of issue is recorded, you can check this off your list and move on to the next step.

Signature of authorized representative

• Obtain a signature from the authorized representative of the company.
• Make sure you have the correct documents and forms filled out before obtaining the signature.
• Once the signature is obtained, check this off your list and move on to the next step.

How do you issue a share certificate?

• Have the authorized representative sign the share certificate in the presence of a witness.
• Have the witness also sign the certificate.
• Check that all necessary details are included in the share certificate, such as the name of the company, share type, and number of shares being issued.
• Issue the share certificate to the recipient.

You can check this off your list and move on to the next step once the share certificate has been issued to the recipient.

Prepare the share certificate

• Obtain the company’s share certificate template and a blank share certificate
• Fill in the company’s name, company registration number and the date on the share certificate
• Enter the shareholder’s name, address and the number of shares to be issued
• Enter the name of the person signing the certificate
• Sign and date the certificate in the presence of a witness
• Make sure to keep a copy of the share certificate and keep it safely in the company’s records

You will know you are finished with this step when the share certificate is filled in with all the necessary information, signed and dated by the signatory, and a copy is kept in the company’s records.

Execute the share certificate

• Ensure the share certificate is signed by the company’s directors
• Have the company’s secretary countersign the share certificate
• Make sure the share certificate is dated
• Send the share certificate to the shareholder
• Keep a copy of the share certificate for the company’s records

Once the share certificate is signed, countersigned, dated and sent to the shareholder, you can check this step off your list and move on to notifying Companies House.

Notify Companies House

• Send a notification to Companies House of the new shares issued
• Include the new share certificate and a copy of the register of members
• Send the notification to the Registrar of Companies at Companies House
• Wait for Companies House to confirm receipt of the notification
• Once confirmation is received, the new share issue can be considered complete and the next step can be taken.

What are the legal implications of issuing share certificates?

• Understand that when you issue share certificates, you are creating legal documents that bind the company and the shareholders
• Research the Companies Act 2006 to determine what information must be included on the share certificates
• Ensure the share certificates include the company name and number, the class of shares, the date of issue, the number of shares, the name of the shareholder, and the rights associated with the shares
• Make sure you include the signature of the authorised signatory (usually the company secretary) on the certificates
• Check that all information is correct before issuing the certificates
• When you have issued the certificates, keep a copy of them with the company records
• Once you have ensured all the legal implications of issuing share certificates have been considered and complied with, you can check this off your list and move on to the next step.

Company Law

• Check that the company is registered with the Companies House in the UK.
• Ensure you have written resolutions of the board of directors approving the issue of the share certificates.
• Have the company secretary sign and certify the share certificates.
• File Form SH01 with the Companies House to register the issue of the share certificates.
• Once the form is accepted, you can check this step off your list and move on to the next step: Securities Law.

Securities Law

• Draft the share certificates: include the company name, class of shares, the number of shares being issued, the date of allotment, the amount paid up, the date of issue, the amount of uncalled capital, and the signature of a director of the company.
• Ensure share certificates comply with the Companies Act 2006 and all relevant regulations.
• Prepare and sign a register of members and register the share certificates.
• Keep the original share certificates in a secure place.
• Once all the above steps are complete, this step is complete.

Contract Law

• Draft a shareholders agreement that sets out the rights and obligations of the shareholders
• Seek legal advice to make sure that the shareholders agreement is legally binding and complies with the relevant laws
• Ensure that the agreement is signed by all shareholders and the company
• File the shareholders agreement with Companies House
• Keep a copy of the shareholders agreement in the company’s records
• Once the shareholders agreement has been drafted and signed, you can move on to the next step.

What are the tax implications of issuing share certificates?

• Determine the type of share being issued to determine the tax implications.
• Consider the state of residence of the shareholders and the company.
• Consider the company’s tax position and the potential for double taxation.
• Calculate the amount of stamp duty, if applicable, to be paid.
• File a stock transfer form with Companies House.
• Calculate any capital gains tax implications for the shareholders.

Once all the above steps have been completed, you can check this off your list and move on to the next step - Corporation Tax.

Corporation Tax

• File a CT600 form with HMRC within 12 months of the end of the accounting period in which the shares were issued
• Pay any tax owed as soon as possible
• Keep a copy of your CT600 form and any supporting documents
• You’ll know when you can check this step off your list when HMRC has accepted the CT600 form and the tax has been paid.

Stamp Duty

• Stamp Duty applies to the issue of new shares in a company.
• Calculate the amount of Stamp Duty due by multiplying the amount of shares issued by the relevant rate of Stamp Duty.
• Pay the Stamp Duty due to HMRC.
• You can check this off your list once you have paid the Stamp Duty due to HMRC.

What happens if the share certificate is lost, damaged or destroyed?

• Notify the company’s registered office and transfer agents in writing of the lost, damaged or destroyed share certificate
• Provide the company with a statutory declaration that sets out the relevant details of the lost, damaged or destroyed share certificate
• Pay any fees associated with the replacement of the share certificate
• Wait for the company to produce a new share certificate
• When the company has produced a new share certificate and you have received it, you can check this off your list and move on to the next step: Report the loss to Companies House.

Report the loss to Companies House

• Notify Companies House of the loss by completing the relevant form
• Check with your company’s governing documents to see if any other steps need to be taken
• Ensure that the completed form is sent to Companies House
• Once the form is sent, Companies House will update the register of members and send a confirmation of the update
• This step is complete when the confirmation of the update has been received from Companies House.

Execute a new share certificate

• Ensure the company has the authority to issue new share certificates
• Refer to the company’s Articles of Association to check the correct procedure for issuing new certificates
• Ensure the company’s register of members is updated to reflect the new issue of share certificates
• Print the appropriate number of share certificates
• Assign the new certificates to the correct shareholders
• Check to make sure the certificates are accurately completed
• Ensure the company’s register of members is updated to reflect the new certificates

You’ll know you can check this step off your list and move on to the next step when all of the new share certificates have been printed, assigned to the correct shareholders, and the company’s register of members has been updated to reflect the new issue.

How do you transfer ownership of a share certificate?

• Have the buyer sign the back of the share certificate.
• Have two witnesses sign the back of the share certificate.
• Make sure the buyer and the two witnesses have their names and addresses printed on the back of the share certificate.
• Make sure the buyer and the two witnesses have signed the share certificate transfer form.
• Send the share certificate and the signed transfer form to the company’s registrar.
• Once the registrar registers the transfer, the process is complete.

You can check this off your list and move on to the next step when you have received confirmation from the registrar that the transfer has been registered.

Execute a share certificate transfer form

• Obtain a transfer form from the company’s registrar
• Fill in the transfer form with the name and address of the new shareholder
• Sign the transfer form as the current shareholder
• Have the transfer form witnessed by a third party
• Send the transfer form to the company’s registrar
• The company’s registrar will process the transfer and update their records
• Once the transfer is complete, the company will issue a new share certificate to the new shareholder

You will know that you can check this step off your list and move on to the next step when you receive the updated share certificate from the company’s registrar.

Notify Companies House

• Fill out form SH01 and submit to Companies House
• Include a copy of the share certificate(s)
• Keep a record of the submission and payment
• You will receive an email confirmation that your form has been accepted by Companies House
• Once you receive the confirmation that your form has been accepted, you can move on to the next step

Update the register of shareholders

• Obtain a list of shareholders from the company’s records
• Update the register of shareholders to include the name, address, and number of shares held by each shareholder
• Ensure that the register of shareholders is accurate, up-to-date, and easily accessible for review
• Notify shareholders of any changes to their holding
• Make a note of the date when the register of shareholders was last updated
• Once you have updated the register of shareholders, you can check this off your list and move on to the next step of notifying Companies House.

How do you cancel a share certificate?

• Obtain a share certificate cancellation form from the company’s registrar
• Complete the form, providing details of the certificate to be cancelled and the shareholder’s name
• Sign and date the form
• Return the form to the company’s registrar, along with the certificate to be cancelled
• The registrar will then update the register of shareholders and cancel the certificate
• You will know that the step is complete when the registrar confirms that the certificate has been cancelled and the register of shareholders has been updated

Execute a share certificate cancellation form

• Ensure that the company’s Articles of Association allow for the issue of share certificates
• Prepare a share certificate form on behalf of the company
• Fill in the details of the shareholder including their name, address, and the amount of shares that have been purchased
• Sign and date the share certificate form
• Make sure to include a unique certificate number for each shareholder
• Enter the details of the share certificate in the company’s statutory books
• Once all of the above steps have been completed, the share certificate should be issued to the shareholder

You’ll know when you can check this off your list and move on to the next step when the share certificate form has been completed and the certificate has been issued to the shareholder.

Notify Companies House

• Notify Companies House of the cancellation of the certificates immediately after the form has been executed
• Make sure to include a copy of the executed cancellation form with the notification
• Keep copies of the notification and the executed cancellation form
• You can check this off your list once the Companies House has received the notification and the executed cancellation form

Update the register of shareholders

• Prepare a register of shareholders showing the names and addresses of all shareholders, the number of shares each holds and the date each became a shareholder
• Update the register whenever a shareholder changes their name or address, or when new shares are issued
• Keep up-to-date records of all changes, including the names and addresses of those who have ceased to be shareholders
• When the register is updated, you can check this off your list and move on to the next step: How do you reissue a share certificate?

How do you reissue a share certificate?

• Obtain and complete a share certificate reissue form
• Ensure the form is signed by the shareholder or their authorised representative
• File the form with the company’s registered office
• Send the company’s Articles of Association to the shareholder
• Issue the replacement certificate to the shareholder
• Record the reissue of the certificate in the register of shareholders
• When all of the above steps have been completed, you can move on to the next step, which is to execute a share certificate reissue form.

Execute a share certificate reissue form

• Obtain a share certificate reissue form from Companies House
• Fill in the form with the required details, including the company name, company number, and the details of the shareholder to whom the new certificate should be issued
• Ensure the form is signed by the company secretary
• Submit the form to Companies House
• Once you receive confirmation that the form has been accepted, you can check this off your list.

Notify Companies House

• Create a notification form to Companies House, using Form SH03
• Send the form and the relevant documents to Companies House
• You can check you have completed this step when you have received an acknowledgement from Companies House.

Update the register of shareholders

• Create a list of all shareholders, including their names, addresses and the amount of shares they hold
• Enter the list of shareholders into the Register of Members or the Register of Allotments
• Make sure the information is accurate, up-to-date and easily accessible
• When done, you can check this off your list and move on to notifying Companies House.

FAQ:

Q: What is the difference between UK and US share certificates?

Asked by Abigail on April 3rd, 2022.
A: Share certificates issued in the United Kingdom and in the United States have different requirements, procedures, and laws governing them. In the UK, a company must create a share certificate when issuing new shares and must keep records of all share certificates issued. The company must also register all share certificates with Companies House. In the US, a company must issue a stock certificate when issuing new securities. The certificate must include the name of the issuer, the class of stock being issued, the number of shares being issued, and any other information required by the state in which the corporation is registered. There are also differences in how these certificates are taxed and how long they remain valid.

Example dispute

Lawsuits Involving Share Certificates

• A plaintiff may raise a lawsuit involving a share certificate if they believe they have been wronged in some way by the company which issued the share certificate.
• The plaintiff may argue that the company has violated the terms and conditions of the share certificate, or that the company has failed to adhere to legal regulations or civil laws.
• The plaintiff may also argue that the company has engaged in fraud, or misrepresented the value of the share certificate in some way.
• The plaintiff may seek damages for this wrongdoing, or may seek a settlement in the form of an agreement to return the share certificate and receive compensation for the losses incurred.
• Damages may be calculated based on the difference between the actual value of the share certificate and what the plaintiff expected from it.

Templates available (free to use)

Lost Share Certificate Indemnity
Share Certificate Private Or Public

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