Often many corporations find issuing new shares to be quite a hassle. However, by knowing exactly what to do, you’ll find yourself in a hassle free situation. The following is the procedure to issue new shares in a corporation;
·At a board meeting, all current members must consent to the issuing of shares.
·An SH01 form must be used to effectuate a return of allocation of shares.
·Create a board resolution, meeting minutes, and issue the new shareholder's share certificate(s).
·Include information on the fresh issue of shares in the company's confirmation statement.
·Within a month, notify Companies House of the new modifications.
Things to Consider before Issuing New Shares
There are questions to be answered and actions to be done before a business may proceed with issuing new shares. Before you start issuing shares, ask yourself the following questions:
·How much capital do I expect to raise?
·What is the maximum number of shares that the firm can issue?
·Is there anything I need to be aware of in terms of UK regulations?
Issuing New Shares
When it comes to issuing new shares, existing members will have to surrender their pre-emption rights in order to receive new shares. A letter of application should be delivered to the firm by potential members. The board of directors (or members) must approve the “allotment” and record it in the members' register if the articles demand it.
Return of allotment' must then be completed with the following information:
·The dates of the allotments
·Class, currency, and number of shares allotted
·The nominal value of each unit
·Amount paid, or due to be paid, per share
·Details of any non-cash considerations (payments), if appropriate
·Statement of capital reflecting the new allotment
·Details of any shares allotted in a currency other than pound sterling
·Particulars of rights attached to shares
·Signature of the company director or other authorised person