What Does It Mean to Issue Shares?
Issuing shares means creating and allocating new shares that did not previously exist. These are added to the company’s share capital and given to new or existing shareholders.
Common reasons to issue shares:
- Raising funds from investors
- Onboarding a new partner or co-founder
- Offering equity to employees or directors
- Rebalancing ownership structure
Issuing new shares differs from transferring existing ones, which involves moving shares from one person to another.
Step-by-Step: How to Issue Shares in a UK Company
Step 1: Check the Company’s Authority
You must confirm that your company has the legal authority to issue new shares. This usually involves:
- Reviewing the Articles of Association
- Checking if shareholder approval is needed
- Ensuring you’re not breaching any shareholder agreement or pre-emption rights
Dragonfly Associates can assist with this review where included in your compliance support.
Step 2: Obtain Shareholder Approval
In most cases, directors need permission from shareholders to issue new shares. This is typically granted by:
- An ordinary resolution (simple majority), or
- A special resolution (75% majority), depending on your Articles
We help prepare resolution templates and board minutes as part of our legal and secretarial services.
Step 3: Allot the New Shares
Once authorised, the company can issue shares by:
- Deciding the number and class of shares
- Assigning nominal value and consideration (if applicable)
- Recording the allotment in board minutes
You must then issue new share certificates to the recipients and update your statutory registers.
Step 4: File a Return of Allotment (SH01)
You must file Form SH01 with Companies House within 1 month of the share allotment. This form includes:
- Number of shares issued
- Share class and nominal value
- Amount paid or unpaid
- Details of currency and consideration
We handle this filing for clients using our company management service, subject to agreement.
When Should You Issue Shares?
- Raising seed or growth capital
- Formalising new business partnerships
- Adjusting ownership in a restructuring
- Employee share schemes (e.g., EMI options or bonus shares)
Each scenario may require tax and legal guidance. We collaborate with your advisers to ensure compliance and strategic alignment.
Key Considerations
- Dilution: Existing shareholders’ ownership will be reduced unless they’re issued additional shares
- Tax: Certain allotments may trigger tax obligations for recipients or the company
- Pre-emption Rights: These give current shareholders the first right to buy new shares before they’re offered to others
We help clients plan share issuances with full awareness of these factors.
Frequently Asked Questions
Can I issue shares to myself?
Yes, if authorised, directors can issue new shares to themselves or others, provided they follow legal procedure and document it properly.
Is there a minimum value for issuing shares?
Shares can be issued at any nominal value (e.g., £1 or £0.01), but pricing should reflect fair consideration where appropriate.
Do I need to inform Companies House?
Yes. The SH01 form must be filed within 1 month of any share allotment.
Structure Ownership Strategically
Issuing new shares is a strategic and legal decision. It can fuel growth, realign incentives, or help attract key partners—but only if done properly.
Dragonfly Associates supports UK companies with legal review, resolution drafting, share register updates, and SH01 filings as part of our company secretarial and compliance services—subject to agreement.
To issue shares legally and confidently, contact our team to get started.
