By
August 26, 2026
What is a share structure in a UK limited company?
A share structure explains how a UK limited company’s ownership is divided between its shareholders. It records how many shares the company has issued, who owns them, their nominal value and the rights attached to each class of share.
Choosing the right share structure is important because it can affect ownership, voting power, dividends, decision-making and what happens if the company is sold.
A private company limited by shares must have at least one shareholder. There is no statutory maximum number of shareholders, and a shareholder can also serve as a company director.
Each shareholder owns a certain number or percentage of the company’s issued shares. For example, if a company issues 100 shares and one person owns 60, that shareholder owns 60% of the issued share capital.
A company’s share structure normally includes:
Share capital should not be confused with the market value of the business. A company with 100 shares valued at £1 each has nominal share capital of £100, even if the business itself is worth considerably more. GOV.UK guidance
The nominal value is the basic legal value assigned to each share. Common nominal values include £1, £0.10 and £0.01.
For example, if a company issues 100 shares with a nominal value of £1 each, its total nominal share capital is £100.
The nominal value is not necessarily the price someone would pay to purchase the share. A share may later be sold or issued for more than its nominal value, depending on the company’s circumstances and valuation.
Any unpaid nominal value may represent part of the shareholder’s financial liability if the company is wound up. This is one reason many small UK companies choose a relatively low nominal share value.
A company with one shareholder may issue a single ordinary share worth £1. That shareholder owns 100% of the company.
The company could also issue 100 ordinary shares to the same person. The ownership result is still 100%, but having more shares can make it easier to transfer smaller ownership percentages later.
A company may issue 100 ordinary shares, with each shareholder receiving 50 shares. Each person would own 50% of the company.
Although this appears simple, a 50/50 structure can create a deadlock if the shareholders disagree. A shareholders’ agreement can establish a process for resolving disputes.
A company may divide 100 ordinary shares as follows:
Their respective ownership percentages would be 70%, 20% and 10%.
A share class is a category of shares carrying a particular set of rights. Most small private limited companies use one class of ordinary shares.
Companies can create different classes where shareholders need different voting, dividend or capital rights. The rights attached to each class should be clearly stated in the company’s articles of association and its statement of capital.
Common share classes include:
Ordinary shares usually provide voting rights, entitlement to dividends and a share of any remaining capital if the company is wound up. The precise rights depend on the company’s constitutional documents.
Preference shares may give their holders priority when dividends are paid or capital is returned. They may have limited or no voting rights.
These shares may allow someone to receive dividends without having the same voting influence as ordinary shareholders.
Redeemable shares can be bought back by the company under agreed terms, subject to the Companies Act 2006 and the company’s articles.
A company may create share classes such as A ordinary shares, B ordinary shares and C ordinary shares. Each class can carry different rights, provided those rights are properly documented.
Alphabet shares are sometimes used where a company wants flexibility over voting or dividends. However, tax and legal advice should be obtained before creating such arrangements.
The rights attached to a share class may cover:
Companies must provide prescribed particulars explaining the voting, dividend, capital and redemption rights attached to each class when submitting a statement of capital. Companies House guidance
A statement of capital is a snapshot of a company’s issued share capital at a particular time. It is submitted to Companies House when a company limited by shares is incorporated and after certain changes to its share structure.
It includes information such as:
The statement of capital does not replace the company’s internal register of members.
There is no single share structure suitable for every company.
A sole-owner company may begin with one ordinary share. However, issuing 100 shares can make future percentage calculations and ownership transfers more straightforward. For example, transferring 15 out of 100 shares would represent 15% of the company.
Before choosing the number of shares, consider:
The number of shares is less important than ensuring that the ownership percentages and attached rights accurately reflect the agreement between the shareholders.
Yes. A UK limited company may change its share structure by:
The company must follow its articles of association, the Companies Act 2006 and any shareholders’ agreement. Depending on the change, shareholder resolutions and Companies House filings may also be required.
Companies House must normally be notified within one month when new shares are allotted. Other changes to the share structure may need to be reported within 21 days. GOV.UK guidance on changing shares
Issuing new shares increases the company’s total number of shares. Unless existing shareholders receive a proportional allocation, their ownership percentages may be diluted.
For example, suppose a company has 100 issued shares:
If the company issues 25 new shares entirely to a new investor, there will be 125 shares in total. Shareholder A’s ownership will fall from 60% to 48%, while Shareholder B’s ownership will fall from 40% to 32%.
The new investor will own 20%.
Before issuing shares, directors should check the company’s articles, their authority to allot shares and whether existing shareholders have pre-emption rights.
Issuing shares creates new shares in the company. This normally increases the total issued share capital and may dilute existing ownership.
A share transfer moves existing shares from one shareholder to another. It does not normally change the total number of shares issued by the company.
Both transactions should be properly documented, and the company’s register of members must be updated. Share certificates may also need to be issued or replaced.
No. Shareholders own shares in the company, but the company is a separate legal person that owns its own assets.
A shareholder does not personally own a percentage of the company’s bank balance, equipment or property. Their rights arise from the shares they hold and the company’s constitutional documents.
The share structure shows how ownership and share rights are organised.
A shareholders’ agreement is a private contract between some or all of the shareholders. It may cover:
The shareholders’ agreement should be consistent with the company’s articles of association.
A carefully planned share structure can:
An unsuitable structure can lead to unexpected dilution, voting deadlocks, dividend disputes or difficulties when a shareholder wants to leave.
Yes. A private company limited by shares can have one shareholder who owns 100% of its issued shares. The same person may also be the company’s director. GOV.UK shareholder guidance
Not necessarily. A company can create non-voting shares, provided the rights are properly defined and the necessary legal procedures are followed.
Potentially, if the company has different share classes with appropriately drafted dividend rights. Dividend decisions must also comply with company law and tax requirements.
A company may redenominate shares into another currency, subject to the required legal process and Companies House filings.
No. Share capital is based on the nominal value of the issued shares. It does not show the commercial or market value of the company.
Companies House records include information about shareholders, share capital and people with significant control. However, the company’s own register of members is the primary legal record of its shareholders.
A share structure explains how ownership of a UK limited company is divided and what rights each shareholder receives. It includes the number, value and classes of shares, together with the voting, dividend and capital rights attached to them.
A straightforward company may need only one class of ordinary shares. A business with several founders, investors or different ownership arrangements may require a more carefully designed structure.
Because changes to share capital can have legal, tax and financial consequences, companies should consider obtaining professional advice before creating multiple share classes, issuing new shares or changing shareholders’ rights.
This article provides general information and does not constitute legal, tax or financial advice.
