Shareholders are the owners of limited companies
What do shareholders do?
What are the liabilities of shareholders?
The amount of money a shareholder is liable to contribute towards any debts of a company is limited to the 'nominal' value of the share a shareholder holds and which has already paid against their 'paid up shares'.
In some circumstances, the shareholder has not paid, or partial paid for their shares. In these circumstances, the shareholder is liable to pay immediately the nominal value of these unpaid shares.
Who can be a shareholder?
How many shareholders can I have?
There is no limit on the number of shareholders a limited company can have, except that there must be at least one shareholder.
What is the difference between a director and a shareholder?
It is very common that a director is also the main, or only shareholder in the limited company
Is there a limit on the number of shares I can issue?
While there is no upper limit on the number, or value of shares a company can have, care must be taken that these should be 'paid up', otherwise shareholders will be liable for any debt the company builds up and consequently, cannot pay.
Can a company have different types of shares?
There can be many different types of share types within a company. Most companies issue 'Ordinary' shares initially and these usually provide equal rights to all shareholders, including voting rights, the issue of dividends and share capital rights.
However sometimes, especially where there are numerous shareholders, a company can issue different types of shares that all carry different rights within the company. The company's articles of association usually state how and when a company can issue multiple classes of shares.
How much are shares worth?
There are usually two valuations of how much a share is worth. The 'nominal' value of a share can be set upon the share being issued. In most cases, the 'nominal' value is £1.00. The nominal value of a share also sets the limits of liability on each shareholder.
The market value of a share will fluctuate . This is usually the value that is put on a share if it were to be sold at 'market rate'. This value will fluctuate based upon profitability, market conditions or trading styles of the company.
The difference between the nominal value of a share and its market value is commonly known as the share 'premium'.
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