Q&As

Are private companies permitted to have shares with a nominal value that is a fraction after a sub-division?

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Published on LexisPSL on 21/04/2015

The following Corporate Q&A provides comprehensive and up to date legal information covering:

  • Are private companies permitted to have shares with a nominal value that is a fraction after a sub-division?
  • Articles of association
  • Companies Act 2006
  • Shares' nominal value
  • Companies House requirements

Articles of association

Before proceeding with any sub-division of shares the company’s articles of association will need to be reviewed to ensure that there is no restriction in doing so. Although it is not necessary to have a specific article allowing a sub-division it is possible to have a restriction.

If there is a ban on sub-dividing shares within the articles these will need to be amended by special resolution to remove this restriction.

Companies Act 2006

Under section 618 of the Companies Act 2006 (CA 2006):

'(1) A limited company having a share capital may—

(a) sub-divide its shares, or any of them, into shares of a smaller nominal amount than its existing shares, or

(b) consolidate and divide all or any of its share capital into s

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