By
August 25, 2026
What types of shares can a UK company issue?
A UK company limited by shares can issue different classes of shares with different voting, dividend and capital rights.
The most common types are ordinary, preference, non-voting, redeemable and deferred shares. A company can also create customised classes, provided the rights are clearly defined in its articles of association and company records.
A share can give its holder rights relating to:
The name of a share class does not determine its legal effect. The rights written into the company’s articles and share terms are what matter.
Ordinary shares are the most common type issued by UK private limited companies.
They normally provide:
Ordinary shareholders are usually paid after creditors and any shareholders with priority rights.
A simple owner-managed company often issues only ordinary shares.
Non-voting shares normally allow the holder to receive dividends or participate in capital without having full voting rights.
They may be used for:
Some non-voting shares may still provide voting rights in specific circumstances, such as when their class rights are being changed.
Preference shares usually give their holders priority over ordinary shareholders when dividends are paid.
They may provide:
The precise rights depend on the terms of the shares. A preference dividend is not guaranteed simply because the shares are called preference shares.
Cumulative preference shares allow unpaid preference dividends to accumulate.
If the company cannot pay the dividend in one year, the outstanding amount may be carried forward and paid in a later year before ordinary shareholders receive dividends.
The company’s articles or share terms must clearly establish this right.
With non-cumulative preference shares, an unpaid dividend does not normally carry forward.
If no dividend is declared for a particular period, the shareholder generally loses the right to receive that period’s dividend.
Redeemable shares are issued on terms allowing or requiring the company to buy them back at a future date or following a specified event.
Redemption might take place:
A company must follow the legal rules on issuing and redeeming these shares. A company cannot normally have only redeemable shares in issue.
Deferred shares have fewer or postponed rights compared with other classes.
Their holders may receive:
Deferred shares are sometimes created during reorganisations or when existing shareholders’ rights are being restructured.
Alphabet shares are separate classes identified by letters, such as:
Each class can have different dividend, voting or capital rights. Alternatively, the classes may have similar rights but allow the company to declare different dividends for each class.
Alphabet shares are often used in family companies or businesses with several owners. They must be structured carefully because dividend arrangements can have tax consequences.
Growth shares are designed to give the holder a right to participate in the company’s future growth above an agreed threshold.
They may be used for:
The valuation, tax treatment and rights attached to growth shares can be complex, so professional advice is usually appropriate.
Some companies create special classes for founders or management.
These shares might include:
“Founder shares” and “management shares” are descriptions rather than fixed statutory categories. Their actual rights must be documented.
Yes. A company can issue shares carrying:
Different voting rights can help founders retain control while allowing other people to invest. However, the structure should be clearly drafted to prevent ownership disputes.
Yes. Different share classes may receive:
Dividends can only be paid from distributable profits and must comply with the rights attached to each class.
Yes, but it may require:
The company must normally notify Companies House within one month of issuing additional shares.
They can. Different dividend rights, employee shares, transfers at undervalue and changes to share rights may create tax consequences.
Share classes may also affect eligibility for certain investment tax-relief schemes. Not every type of preference, redeemable or restricted share will qualify.
Professional advice may be appropriate before creating a complex structure.
Many small owner-managed companies begin with one class of ordinary shares providing equal voting, dividend and capital rights.
Additional classes may be useful when:
Avoid creating multiple classes unless there is a clear commercial reason.
Before issuing shares, decide:
A UK company can issue ordinary, non-voting, preference, cumulative preference, redeemable, deferred and customised share classes.
The most important consideration is not the class name but the voting, dividend and capital rights attached to it. A simple ordinary-share structure may suit a small company, while businesses with investors, employees or multiple founders may require carefully drafted share classes.
