Statement of capital - a complex issue?
The statement of capital is a new concept introduced by
the Companies Act 2006 and is intended to provide a "snapshot" of a
limited company`s issued share capital at any given point in time.
It forms an integral part of many Companies House forms and as such
all companies limited by shares will be required to complete a
statement of capital at many stages of the company`s life. For
example, following any alteration to the company`s share capital
and in its annual return.
The information required in a statement of capital is as
(a) the total number of shares in the
(b) the aggregate nominal value of those
(c) for each class of shares:
− prescribed particulars of the rights attached to the
− the total number of shares of that class,
− the aggregate nominal value of shares of that class;
(d)the amount paid up and the amount (if any) unpaid on each
share (whether the nominal value or any
For companies with simple share histories completing the
statement of capital is unlikely to pose any problems. However, we
often hear complaints that having to describe the rights attached
to shares is particularly onerous on companies with a complex share
structure. Although rights attaching to shares can be found in
documentation already filed at Companies House, for example in a
company`s Articles of Association, it is not sufficient for a
company to state that the share rights are those "set out in the
Articles of Association" or words to that effect or to say "share
rights are the same as those already in issue". Companies House has
issued guidance that such wording will be rejected.
Where a company has a more complex share history, having to
state the amounts paid up and unpaid on each share may prove
problematic where it is difficult to identify the amount of premium
paid up on each share. To be able to do this a company`s share
premium records would have to be, and would have to have been,
tracked for each share. As share premium may differ from share
issue to share issue, a company may have a number of shares in
issue, within the same class, that have different paid up
Companies House and the Institute of Chartered Secretaries
and Administrators are currently working together to try reach a
solution to this problem. However, it is generally acknowledged
that the Department of Business, Innovation and Skills will need to
review these difficulties in the future.
In the meantime, the guidance issued to companies is that
they must do "what they can" to fill in all sections of the
statement of capital and to provide a "pragmatic allocation of
their share premium reserve between shares or classes of shares".
For further assistance on completing the statement of capital,
please contact a member of Rollits` Corporate Team.
Posted on: 22/09/2010
This article is for general guidance only. It provides useful information in a concise form. Action should not be taken without obtaining specific legal advice.
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