MEMBERS/SHAREHOLDERS (PUBLIC COMPANIES AND UNLIMITED LIABILITY COMPANIES)
Terminology | The member(s)/shareholder(s) are the person(s) or entities which will, collectively, own the company.
In the case of a public company, the 'members' and 'shareholders' are one and the same person(s) or entities. However in the case of an unlimited company having no share capital, there are no 'shareholders' as such. Rather, such a company simply has 'members'. Nevertheless, for convenience, the expression 'members/shareholders' is frequently used in this website. If you are forming an unlimited company having no share capital, please read such references as being references simply to 'members'.
The initial member(s)/shareholder(s) of a company are known as the 'subscribers'. The persons who sign the memorandum of association (i.e. the 'subscribers') are deemed to have agreed to become members of the company, and on its registration are required to be entered as members in its register of members - section 22 of the Companies Act 1985. (UKcorporator will complete the register of members appropriately for you in this regard, based on the information which you provide.)
| | Number | The type of company you are forming, (namely, a public company or alternatively an unlimited company) is required to have at least two members. If a public company (or an unlimited company) carries on business for more than 6 months with less than two members, a member during this period may be held personally liable for the company's debts - section 24 of the Companies Act 1985. Furthermore, a public (or unlimited) company may be wound up by the court if at any time the number of members is reduced below two - section 122(1)(e) of the Insolvency Act 1986.
For practical reasons, UKcorporator will only cater for up to 6 members/shareholders.
| | Who may be a member/shareholder | A director or company secretary of a particular company, may also be a member/shareholder of that company.
A member/shareholder need not be a natural person. For example, a company or Scottish firm may be a member/shareholder.
Under the Companies Act 1985, there is no restriction on any or all of the members/shareholders being from an overseas country (i.e. outside the United Kingdom in terms of residency, domicile, citizenship, place of incorporation or all or any of those concepts). Nevertheless, this general proposition may be subject to any applicable foreign investment rules which may apply from time to time.
| | Where shares are to be held in trust | | UKcorporator is here referring to the situation where shares are to be held in trust from the outset (i.e. from the moment the company is registered). Shares, like any other property, may be held in trust. This means that the legal owner (whose name typically appears as the owner of the shares in the Register of Members) holds them in trust for the beneficial owner/s. | | England and Wales | | In the case of a company the registered office of which is located in England or Wales, the law provides, in effect, that trust interests are not to be included in the register of members maintained by the company or in the records maintained by Companies House- section 360 of the Companies Act 1985. Accordingly, when providing member/shareholder details to UKcorporator, you should refrain from inserting any words suggesting a trust, even if a trust will in fact exist. For example, when inputting shareholder/member details into this web-site, do not type 'William Smith, as trustee for the Smith Family Trust' - rather, in this example, you should simply type 'William Smith'. (Note:- If you use the function in UKcorporator whereby you can tick or select a box to indicate that company officers, such as directors, which you previously nominated, will also be member(s)/shareholder(s), the issue referred to in the previous two sentences will not arise.) | | Scotland | Again, although the legal position is different in the case of companies having their registered office in Scotland, you should nevertheless refrain from inserting any words suggesting a trust, even if a trust will in fact exist. For example, when inputting shareholder/member details into this website, do not type 'William Smith as trustee for the Smith Family Trust' - rather, in this example, you should simply type 'William Smith'. (Note:- If you use the function in UKcorporator whereby you can tick or select a box to indicate that company officers, such as directors, which you previously nominated, will also be member(s)/shareholder(s), the issue referred to in the previous two sentences will not arise.)
Companies having their registered office in Scotland (as opposed to England and Wales) are permitted to include reference to trusts in their Register of Members - this is because the prohibition in section 360 of the Companies Act 1985 only applies to English and Welsh companies. Nevertheless, UKcorporator is not presently configured to receive these details via the website and suggests that, if trust interests are desired to be shown in the Register of Members, they be noted there by hand. A reminder about this appears in the Document Signing and Lodging Instructions, which UKcorporator will print for you. |
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