Share certificate for a limited company

What’s a share certificate for a limited company, and when should you use it?

Share certificates confirm that, as from a given date, the holder of the share certificate owns a part of the company to whom those shares relate.

The real legal proof of ownership is actually set out in the company’s official ‘register of members’ however, so it’s important to ensure consistency between the two and to keep the register of members up to date as well.

(Shareholders are called ‘members’ for these purposes.)

Share certificates must be provided to a new owner of shares within 2 months of those shares being issued.

They must be signed and dated by two directors or one director and the company secretary.

They must also be stamped with the company seal.

Usually, one certificate will suffice for all shares issued to one shareholder, although it is possible to issue split certificates.

Separate share certificates will be needed where one shareholder has acquired several difference classes of shares in the company.

Each class of share should be separately certificated.

There is no set format to share certificates.

However, a share certificate should include the following information:

• A unique share certificate number
• The company’s name and registered company number
• The registered address of the company
• The full name and home address of the shareholder
• The number of shares covered by the certificate
• The type, or class, of shares
• The extent to which the shares are paid up (usually they will be fully paid up)

All of which you will find in our template.

Some companies design their own branded certificates, ensuring they comply with the rules above.

What else might you need?

For more information on the different classes of shares and how to issue them, take a look at our guides to the different types of shares and our checklist for issuing and allotting shares.

You may also want our board minutes for issuing and allotting shares and you may need shareholder resolutions relating to the share issue too.

You’ll definitely need to ensure that you have a suitable shareholder agreement in place, or that you’ve prepared a deed of adherence to an existing shareholder agreement, if you’re onboarding shareholders on the same terms as existing ones. (We have templates for both of these.)

Take a look at your constitution (or articles of association) at the same time.

These are your company’s rule book and govern what you can and cannot decide when it comes to key matters like issuing new shares.

If your articles don’t contain the right authority for you to be able to do what you want with the new shares right now (don’t assume that they do, the basic model articles when you first incorporate your business often need to be revised – and even if you have revised them, it’s frequently the case that permissions contained within them may have expired).

If you haven’t got the permission you need, you’ll need to get a shareholder resolution passed to change the articles before you can go ahead.