How to Issue New Shares in a UK Private Company (SH01 Form)

Issuing new shares is one of the most common corporate actions in a UK private limited company. It happens at every funding round, every option exercise, and every founder restructuring. The mechanics are governed by the Companies Act 2006 and a single statutory form — the SH01 — that must be filed with Companies House within one month of the allotment. This guide walks through the seven steps from board decision to filing, in the order they actually happen.

Step 1. Confirm Authority to Allot — Companies Act 2006, s.550 / s.551

Before directors can lawfully allot shares, they must hold the authority to do so.

• For a private company with only one class of shares, the directors generally have authority by default (Companies Act 2006, s.550), unless restricted by the articles.
• For any other private company (multiple share classes, or where articles otherwise restrict directors), the members must pass an ordinary resolution under s.551 specifying the maximum nominal amount that may be allotted and the date by which the authority must be exercised (max 5 years).

Source — Companies Act 2006, s.551: https://www.legislation.gov.uk/ukpga/2006/46/section/551

If your articles are the unmodified Model Articles (SI 2008/3229) and you have one class of shares, you are covered by s.550. If not, prepare and pass the s.551 resolution before the board meeting.

Step 2. Comply With or Disapply Pre-emption — s.561 / s.570

Section 561 requires that new shares be offered first to existing ordinary shareholders pro rata. Either:

• Comply by sending a written 14-day pre-emption offer to each existing ordinary shareholder, then accepting their take-up before allotting any balance externally; or
• Disapply by special resolution under s.570 (general disapplication, tied to s.551 authority) or s.571 (specific disapplication for a named allotment).

A wholly-owned subsidiary or a single-member company can disapply trivially under s.569.

Step 3. Hold the Board Meeting — Resolve to Allot

Once authority is in place and pre-emption is observed (or disapplied), call a directors’ meeting. The board minutes should record:

• The number of shares to be allotted, the class, and the nominal value.
• The price (cash or non-cash consideration; if non-cash, the form of consideration).
• The identity of each allottee.
• That the directors are satisfied authority and pre-emption have been complied with.
• That the allotment is to take effect on a stated date.

If using non-cash consideration, ensure the board records the directors’ valuation of the consideration. Section 583 requires that shares may not be allotted at a discount to nominal value.

Step 4. Issue Share Certificates Within Two Months — s.769

Under Companies Act 2006, s.769, the company must complete share certificates and have them ready for delivery within two months of the date of allotment. The certificate must show:

• The name and registered number of the company.
• The class of shares and the number allotted.
• The nominal value and the amount paid up.
• The name of the allottee.
• The certificate number.

For dematerialised shares (CREST), this is replaced by an entry in the relevant register.

Step 5. Update the Register of Members — s.113

Under s.113, the company must keep a register of members. After every allotment, a new entry must be made showing:

• The allottee’s name and address.
• The number of shares allotted, by class.
• The date of allotment.
• The amount paid (or treated as paid).

Companies Act 2006, s.554 requires the entry to be made within two months of the allotment. The register of members is one of the company’s statutory books and must be available for inspection.

Step 6. File the SH01 Form Within One Month — s.555

This is the critical step. Under Companies Act 2006, s.555, every allotment of shares must be reported to Companies House on form SH01 — Return of allotment of shares, within one month of the date of allotment.

The SH01 captures:

• Date(s) of allotment.
• Class of shares allotted, number, nominal value, and currency.
• Amount paid (or treated as paid) per share, and amount unpaid.
• Whether the consideration was cash or non-cash. If non-cash, a description.
• A statement of capital after the allotment — listing every class, total nominal value, total aggregate amount paid up, and the rights attached to each class.
• A statement that the resolutions and pre-emption procedures of the Companies Act 2006 have been complied with.

Source — Companies House SH01 form: https://www.gov.uk/government/publications/return-of-allotment-of-shares-sh01

You can file SH01 either by post or via the Companies House Web Filing service. There is no fee for SH01 filings.

Step 7. Update PSC Register if Control Has Shifted — s.790D

Issuing new shares can change who is a Person with Significant Control (PSC). Under Part 21A of the Companies Act 2006 (s.790A et seq.), the company must keep a PSC register identifying anyone who:

• holds, directly or indirectly, more than 25% of the shares;
• holds, directly or indirectly, more than 25% of the voting rights;
• has the right to appoint or remove a majority of directors;
• exercises or has the right to exercise significant influence or control.

If the allotment causes a person to acquire (or to lose) PSC status, the company must update its internal PSC register and file the change at Companies House on form PSC01–PSC09 (or via the confirmation statement) within 14 days. This is separate from SH01.

Practical Timeline Summary

Common Mistakes — Gyoseishoshi View

• Forgetting pre-emption. A founder issues 100 shares to a co-founder for £100 without offering them to the original 50% shareholder first. This is a contravention of s.561 and is voidable.
• SH01 filed late. No filing penalty applies but the issue cannot be properly evidenced on the register, which delays subsequent corporate actions and triggers questions on diligence.
• Statement of capital wrong. The SH01 statement of capital must reflect the position after the allotment and must list every class. A common error is reporting only the new class.
• Non-cash consideration without valuation evidence. Where IP, services, or assets are exchanged for shares, the directors should record their valuation methodology in the board minutes. Section 593 valuation rules do not apply to private companies, but evidence of value protects directors against later challenge.
• Forgetting to update the register of members. The Companies House register is not the legal source — it is the company’s own register that constitutes evidence of membership. Both must be aligned.

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Disclaimer

This article provides legal information, not legal advice. MmowW Scrib🐮 is a document preparation service operated by a licensed Gyoseishoshi (行政書士) office in Japan. We are not UK solicitors or barristers.

Sources

• Companies Act 2006, s.555 (return of allotment): https://www.legislation.gov.uk/ukpga/2006/46/section/555
• Companies House — Form SH01: https://www.gov.uk/government/publications/return-of-allotment-of-shares-sh01
• Companies Act 2006, s.551: https://www.legislation.gov.uk/ukpga/2006/46/section/551
• Companies House — issuing shares guide: https://www.gov.uk/limited-company-formation/shares-and-shareholders