Share capital: overview
A practice note that provides an overview of the key provisions in the Companies Act 2006 (CA 2006) regulating a company's share capital. This practice note examines the statutory framework, including the rules on altering share capital through methods such as allotment, redenomination, redemption, and buybacks of shares. It explores the cardinal principle of maintenance of capital, which exists primarily to protect a company's creditors, and discusses the related restrictions on distributions and financial assistance, highlighting the distinctions between the rules for public and private companies. The note also covers requirements concerning classes of shares, the variation of class rights, and the transfer of shares. Furthermore, it addresses obligations relating to shareholder information, including the register of members, the People with Significant Control (PSC) regime, and disclosure requirements for listed companies under the Disclosure Guidance and Transparency Rules (DTR). This resource also details the abolition of bearer shares under the Small Business, Enterprise and Employment Act 2015 (SBEEA 2015).
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